Zurich Am. Ins. Co. v. Steve Ayers Constr. Co.

• Docket Number: 1:19-cv-4807-MLB
• Decision Date: 01 February 2022
• Citation: Zurich Am. Ins. Co. v. Steve Ayers Constr. Co., 1:19-cv-4807-MLB (N.D. Ga. Feb 01, 2022)
• Parties: Zurich American Insurance Company, as subrogee of The Westin Peachtree Plaza, Plaintiff, v. Steve Ayers Construction Co., Inc. and Smyrna Rigging Co., Inc., Defendants.
• Court: U.S. District Court — Northern District of Georgia

1

Zurich American Insurance Company, as subrogee of The Westin Peachtree Plaza, Plaintiff, v. Steve Ayers Construction Co., Inc. and Smyrna Rigging Co., Inc., Defendants.

No. 1:19-cv-4807-MLB

United States District Court, N.D. Georgia, Atlanta Division

February 1, 2022

OPINION & ORDER

MICHAEL L. BROWN, UNITED STATES DISTRICT JUDGE

This matter involves a fire that occurred at the Westin Peachtree Plaza Hotel in 2018. After paying an insurance claim Plaintiff Zurich Insurance Company sued in subrogation Defendants Steve Ayers Construction Co., Inc. (“SAC”) and Smyrna Rigging Co., Inc. (“SRC”), claiming they caused the fire while welding on the hotel roof. (Dkt. 1.) There are a bunch of motions before the Court. Defendant SAC moves for summary judgment. (Dkt. 71.) It also seeks sanctions against Plaintiff for alleged spoliation of evidence. (Dkt. 88.) Plaintiff filed its own motion for spoliation sanctions and also moves to exclude at trial certain evidence Defendant SAC's fire causation expert relied upon. (Dkts. 70; 69.) Plaintiff also seeks to exclude certain testimony and opinions from that expert and another expert retained by Defendant SAC. (Dkts. 68; 77.) Defendant SRC moves to join Defendant SAC's motions. (Dkt. 109.) The Court addresses each.

I. Summary Judgment

A. Legal Standard

Federal Rule of Civil Procedure 56 provides that a court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is material if it “might affect the outcome of the suit under the governing law.” W. Grp. Nurseries, Inc. v. Ergas, 167 F.3d 1354, 1360 (11th Cir. 1999) (citing Anderson, 477 U.S. at 248). A factual dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 1361 (citing Anderson, 477 U.S. at 248).

The party moving for summary judgment bears the initial burden of showing the court, by reference to materials in the record, that there is no genuine dispute as to any material fact. Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The nonmoving party then has the burden of showing that summary judgment is improper by coming forward with “specific facts” showing there is a genuine dispute for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing Fed.R.Civ.P. 56(e)). Ultimately, there is no “genuine issue for trial” when “the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” Id. (citing First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289 (1968)). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson, 477 U.S. at 247-48. A district court must “resolve all reasonable doubts about the facts in favor of the non-movant[] and draw all justifiable inferences in his or her favor.” Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993) (alteration adopted) (quoting United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1437 (11th Cir. 1991)).

B. The Court's Use of Proposed Facts and Responses

The Court draws the facts largely from the parties' submissions. In support of its motion for summary judgment, Defendant SAC filed a statement of undisputed material facts (Dkt. 71-1). See LR 56.1(B)(1), NDGa. Plaintiff responded to Defendant SAC's statement of material facts (Dkt. 91). See LR 56.1(B)(2)(a). Plaintiff also filed a separate statement of facts that it contends are material and present genuine issues for trial (Dkt. 92). See LR 56.1(B)(2)(b). Defendant SAC responded to Plaintiff's statement of additional facts (Dkt. 100). See LR 56.1(B)(3).

The Court uses the parties' proposed facts and responses as follows. When a party does not dispute the other's fact, the Court accepts it for purposes of summary judgment and cites the proposed fact and corresponding response. When one side admits a proposed fact in part, the Court includes the undisputed part. When one side denies the other's proposed fact in whole or in part, the Court reviews the record and determines whether a fact dispute exists. If the denial lacks merit, the Court deems the fact admitted so long as the record citation supports it.

If a fact is immaterial, it is excluded.^[1] If a fact is stated as an issue or legal conclusion, it is excluded. See LR 56.1(B)(1)(c). Where appropriate, the Court modifies one party's fact per the other's response when the latter better reflects the record. Finally, as needed, the Court draws some facts directly from the record. See Fed. R. Civ. P. 56(c)(3) (“The court need consider only the cited materials, but it may consider other materials in the record.”).

C. Background Facts

In 2018, a company known as SLC owned the Westin hotel. (Dkts. 71-1 ¶ 9; 91 ¶ 9; 92 ¶ 2; 100 ¶ 2.) It contracted with Defendant SAC for various construction projects including the installation of a handrail on the hotel roof. (Dkts. 71-1 ¶ 1; 91 ¶ 1.) Defendant SAC, in turn, subcontracted with Defendant SRC to install the handrail. (Dkts. 71-1 ¶ 2; 91 ¶ 2; 92 ¶ 12; 10 ¶ 12.) Defendant SRC prepared the plans to install the handrail, prefabricated the handrail in its own metal shop, and brought it to the hotel for installation. (Dkts. 71-1 ¶¶ 3-4; 91 ¶¶ 3-4.) Defendant SRC also supplied its own employees to perform the work and did the work according to its own plans and methods of installation. (Dkts. 71-1 ¶¶ 5, 6; 91 ¶¶ 5, 6.) Every morning before Defendant SRC started working on the railing, it contacted Stacey Flannigan (one of Defendant SAC's employees) to get on the roof. (Dkts. 71-1 ¶ 7; 91 ¶ 7.) Mr. Flannigan checked to make ensure Defendant SRC had fire extinguishers and fall protection but was not involved in the installation process. (Dkts. 71-1 ¶ 8; 91 ¶ 8.)

On March 15, 2018, Defendant SRC was at the Westin performing so-called “hot work” (welding and grinding) on the roof as part of the handrail installation project. (Dkts. 71-1 ¶ 12; 91 ¶ 12.) While they were doing so, a fire started and burned within and through the hotel's laundry lint exhaust shaft. (Dkts. 71-1 ¶ 10; 91 ¶ 10.) Plaintiff contends Defendant SRC started the fire by allowing a spark from welding or grinding to fall into the laundry lint exhaust shaft and ignite accumulated lint within the laundry system. (Dkts. 71-1 ¶ 13; 91 ¶ 13.) For their part, Defendants contend the hotel had a problem with dryer lint which may have caused the fire (as it had several times before). They also claim the hotel's fire suppression system failed to work properly, thus allowing the fire to spread more than it should have.

Plaintiff Zurich claims it insured the Westin and indemnified the hotel for losses from the fire totaling $894, 803. (Dkts. 71-1 ¶ 15; 91 ¶ 15.) The breakdown of the payments is described in Plaintiff's statement of loss. (Dkts. 71-1 ¶ 16; 91 ¶ 16.) One payment for $269, 617 was for two laundry folder machines damaged in the fire. (Dkts. 71-1 ¶ 19; 91 ¶ 19.) Plaintiff also paid Marriott $435, 819 ($454, 421 minus $18, 602 in ironer repairs) in replacement value for personal property and equipment damaged at the hotel without any deduction for depreciation. (Dkts. 71-1 ¶ 29; 91 ¶ 29.) Finally, it paid Marriott $27, 286 in replacement value for VAT flooring in the laundry room, which was at least six years old, without deducting for depreciation. (Dkts. 71-1 ¶¶ 30-31; 91 ¶¶ 30-31.)^[2] After making the payments, Plaintiff brought this subrogation lawsuit against Defendant SAC for breach of contract and against both Defendant SAC and Defendant SRC for negligence. (Dkt. 1.)

D. Discussion

1. Negligence

Plaintiff sued Defendant SAC for negligence, alleging Defendant breached its duty by (acting through Defendant SRC) to cause the fire in the laundry system. (Dkt. 1 ¶ 22.) “It is well established that to recover for injuries caused by another's negligence, a plaintiff must show four elements: a duty, a breach of that duty, causation, and damages.” Collins v. Athens Orthopedic Clinic, PA, 837 S.E.2d 310, 312 (Ga. 2019). The lack of a genuine issue of material fact on any of the elements requires entry of summary judgment for the defendant. Patterson v. Wright, 840 S.E.2d 762, 763 (Ga.Ct.App. 2020). Defendant SAC argues it is entitled to summary judgment because there is no genuine issue of material fact as to duty. (Dkt. 71-2 at 11.)

Under Georgia law, “[a] person who engages an independent contractor is generally not responsible for any torts committed by the independent contractor.” Green v. Home Depot U.S.A., Inc., 627 S.E.2d 836, 839 (Ga.Ct.App. 2006); see also O.C.G.A. § 51-2-4. An employer, however, can be held liable for an independent contractor's negligence:

(1) When the work is wrongful in itself or, if done in the ordinary manner, would result in a nuisance;

(2) If, according to the employer's previous knowledge and experience, the work to be done is in its nature dangerous to others however carefully performed;

(3) If the wrongful act is the violation of a duty imposed by express contract upon the employer;

(4) If the wrongful act is the violation of a duty imposed by statute;

(5) If the employer retains the right to direct or control the time and manner of executing the work or interferes and assumes control so as to create the relation of master and servant or so that an injury results which is traceable to his interference; or

(6) If the employer ratifies the unauthorized wrong of the independent

...