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Missionary Benedictine Sisters, Inc. v. Hoffman, LLC

United States District Court, D. Nebraska

May 4, 2015

MISSIONARY BENEDICTINE SISTERS, INC., Plaintiff,
v.
HOFFMAN, LLC, Defendant and Third-Party Plaintiff FREDERICKSEN ENGINEERING, INC., VOLKMAN PLUMBING & HEATING, INC., and LONNIE ROBINSON d/b/a R&R Mechanical Insulation, Third-Party Defendants
v.
VOLKMAN PLUMBING & HEATING, INC., and AMCO INSURANCE COMPANY, Third-Party Plaintiffs
v.
LONNIE ROBINSON d/b/a R&R Mechanical Insulation, and ENGINEERED CONTROLS, INC., Third-Party Defendants

MEMORANDUM AND ORDER

RICHARD G. KOPF, Senior District Judge.

This matter is before the court on motions for summary judgment (Filing Nos. 121, 130) filed by Lonnie Robinson doing business as R&R Mechanical Insulation ("Robinson" or "R&R"). Robinson also requests leave to amend one of the motions for summary judgment (Filing No. 153). The motions are directed at a third-party complaint (Filing No. 78) filed against Robinson by Hoffman, LLC ("Hoffman") and a second amended third-party complaint (Filing No. 148) filed against Robinson by Volkman Plumbing & Heating, Inc. ("Volkman"), and AMCO Insurance Company ("AMCO").

I. PROCEDURAL BACKGROUND

This action was commenced on September 23, 2011, in the District Court of Madison County, Nebraska, by Missionary Benedictine Sisters, Inc. ("MBS"), a Nebraska non-profit corporation, against Hoffman, a Wisconsin limited liability company which is wholly owned by a Wisconsin corporation (Filing Nos. 1-1, 7). In its complaint, MBS alleged that it "is the owner of real property and building improvements known as the Immaculata Monastery located at 300 North 18th Street, Norfolk, NE (herein, Monastery')"; that "[o]n or about March 28, 2007, [MSB] and [Hoffman] entered into a written contract pursuant to which [Hoffman] agreed to perform an extensive renovation project on the Monastery... [and] to act as general contractor, designer and engineer for all aspects of the renovation project (herein, Project')"; that "[s]everal months after moving back into the Monastery [in May 2009], the occupants of the Monastery began noticing deficiencies and defects relating to the HVAC system and other mechanical systems..., including... that the system fails to dehumidify the air in the interior of the Monastery which in turn has resulted in the formation of significant amounts of mold"; that "[i]t has also been determined that the equipment and machinery comprising the mechanical systems... greatly exceeds that which would be necessary to meet the needs of a building of the Monastery's size and type; thus, [MSB] has been inappropriately overcharged"; and that "[b]eginning in July and August of 2009 and thereafter, the occupants of the Monastery began observing numerous defects and deficiencies in the construction and design of the renovation work by [Hoffman], including... defective gasket work, defective air handler units, defective flooring, defective insulation, defective bathroom vents, negative building pressure, and defective water heaters" (Filing No. 1-1, at CM/ECF pp. 2-3, ¶¶ 3, 4, 8-10). MSB sued Hoffman to recover damages "in excess of $250, 000.00" for alleged breach of contract, negligence, and professional negligence (Filing No. 1-1, at CM/ECF pp. 4-5, ¶¶ 11-21).

Hoffman removed the action to this court on October 19, 2011, on the basis of diversity jurisdiction (Filing No. 1). Following removal, Hoffman obtained a stay of proceedings to allow time for mediation, as provided by the parties' contract (Filing No. 21). The stay was twice extended upon the joint motion of Hoffman and MBS (Filing Nos. 23, 26).

On October 1, 2012, Hoffman answered and filed a third-party complaint against Fredericksen Engineering, Inc. ("Fredericksen"), a Wisconsin corporation, and Volkman, a Nebraska corporation (Filing No. 28).[1] Hoffman alleged that it "entered into a contract... with Fredericksen, pursuant to which Fredericksen... was to act as a design consultant with respect to the HVAC components of the project, " and that it also "entered into a subcontract... with Volkman, pursuant to which Volkman was to perform construction services related to the Monastery's plumbing and HVAC components... [and] also [be] responsible for the design and implementation of the HVAC control system" (Filing No. 28, at CM/ECF pp. 7-8, ¶¶ 44, 46). Hoffman claimed that it had expended $945, 674.38 "to perform various remediation and repair work on the Monastery" and to "attempt[ ] to resolve this dispute with MBS" (Filing No. 28, at CM/ECF p. 9, ¶ 52), and it sought to recover this amount, plus any additional future damages, from both third-party defendants based on theories of breach of contract, negligence, indemnity, contribution, and subrogation (Filing No. 28, at CM/ECF pp. 9-17, ¶¶ 53-76 ( re Fredericksen), 77-100 ( re Volkman)).

On October 23, 2012, Volkman answered Hoffman's third-party complaint and filed its own third-party complaint against Lonnie Robinson doing business as R&R Mechanical Insulation ("Robinson"), a Nebraska resident, and Engineered Controls, Inc. ("Engineered Controls"), a Nebraska corporation (Filing No. 39).[2] Fredericksen answered Hoffman's third-party complaint on October 26, 2012, (Filing No. 46).

In its third-party complaint, Volkman alleged that it "subcontracted the insulation portion of the work on the Monastary Renovation to... [Robinson] pursuant to Purchase Order No. 1490 attached [to the third-party complaint]" (Filing No. 39, at CM/ECF p. 7, ¶ 60), and that "[i]f as alleged by Hoffman the insulation work at the Monastery Renovation was not properly performed and resulted in damage to the [MBS] and/or Hoffman, Robinson has breached his agreement to perform his insulation work on the Monastery Renovation in a good and workmanlike manner, and/or has negligently performed his work under the insulation subcontract with Volkman" (Filing No. 39, at CM/ECF p. 8, ¶ 62). Similarly, Volkman alleged that it "subcontracted the controls portion of its subcontract work to Engineered Controls" (Filing No. 39, at CM/ECF p. 9, ¶ 69), and that "[i]f as alleged by Hoffman the work on the HVAC controls on the Monastery Renovation was not properly performed and resulted in damage to the [MBS] and/or Hoffman, Engineered Controls has breached its agreement to perform its work at the Monastery in a good and workmanlike manner, and/or has negligently performed its work under the subcontract with Volkman" ( id., ¶ 71).

On November 21, 2012, Engineered Contols answered Volkman's third-party complaint (Filing No. 56). On December 19, 2012, Robinson answered Volkman's third-party complaint (Filing No. 60).

On February 1, 2013, MBS filed a Rule 41(a)(2) motion for the voluntary dismissal, with prejudice, of its claims against Hoffman (Filing No. 66). Hoffman, Fredericksen, Volkman, and Engineered Controls all consented to the motion, but Robinson did not ( id.; Filing No. 68). The motion was granted by the court on February 6, 2013 (Filing No. 69), but no judgment was entered.

On March 18, 2013, Volkman filed a Rule 41(a)(2) motion for the voluntary dismissal, with prejudice, of its claims against Engineered Controls (Filing No. 72). Hoffman and Fredericksen consented to the motion, but Robinson did not ( id.; Filing No. 74). The motion was granted by the court on April 22, 2013 (Filing No. 77), but no judgment was entered.

On March 21, 2013, Hoffman filed a Rule 41(a)(2) motion for the dismissal, with prejudice, of its claims against Fredericksen (Filing No. 73). Volkman and Engineered Controls consented to the motion, but Robinson did not ( id.; Filing No. 75). The motion was granted by the court on April 22, 2013 (Filing No. 77), but no judgment was entered.

On May 10, 2013, Hoffman filed a Rule 41(a)(2) motion for the dismissal, with prejudice, of its claims against Volkman (Filing No. 79). Volkman and Engineered Controls consented to the motion, but Robinson did not ( id. ). The motion was granted by the court on June 10, 2013 (Filing No. 84), but no judgment was entered.

Also on May 10, 2013, Hoffman filed third-party complaint against Robinson and Volkman filed an amended third-party complaint against Robinson (Filing Nos. 78, 80). Hoffman and Volkman both claim a right to indemnification, contribution, and subrogation, and seek to recover damages for "sums paid... to make repairs and/or make repairs on the Project and to settle the dispute with MBS" ( id. ). Robinson answered both pleadings on May 20, 2013 (Filing Nos. 81, 82). Discovery followed.

On December 12, 2014, Robinson filed a motion for summary judgment on Hoffman's third-party complaint (Filing No. 121). The motion is supported by a brief (Filing No. 122), index of evidence (Filing No. 123), and supplemental index of evidence (Filing No. 133). Hoffman responded to the motion on January 16, 2015, with a brief (Filing No. 135) and index of evidence (Filing No. 136). Robinson filed a reply brief on January 23, 2015 (Filing No. 139).

On January 13, 2015, Robinson filed a motion for summary judgment on Volkman's amended third-party complaint (Filing No. 130).The motion is supported by a brief (Filing No. 131), index of evidence (Filing No. 132), and supplemental index of evidence (Filing No. 134). Volkman responded to the motion on February 6, 2015, with a brief (Filing No. 143) and index of evidence (Filing No. 144). Robinson filed a reply brief on February 13, 2015 (Filing No. 149), together with an index of evidence (Filing No. 150).

On February 6, 2015, Volkman filed an unopposed motion to amend its thirdparty complaint to add AMCO Insurance Company ("AMCO") as a third-party plaintiff in order "to address R&R's concerns about the real-party in interest on the claims asserted by Volkman" (Filing No. 142). The court granted the motion on February 9, 2015 (Filing No. 145 (text order)), and the second amended third-party complaint was filed on February 13, 2015 (Filing No. 148). Robinson answered this pleading on February 27, 2015 (Filing No. 154).

On February 23, 2015, Robinson filed a motion for leave to amend its motion for summary judgment against Hoffman to include certain arguments that were made in its motion for summary judgment against Volkman (Filing No. 153). Hoffman, Volkman, and AMCO objected to the motion on March 9, 2015 (Filing No. 156).[3] Robinson replied on March 16, 2015 (Filing No. 162).

On March 13, 2015, Robinson filed an unopposed motion for leave to file an amended answer to Hoffman's third-party complaint to assert several affirmative defenses (Filing No. 159). The motion was granted that same day (Filing No. 160 (text order)), and the amended answer was filed on March 16, 2015 (Filing No. 161).

II. DISCUSSION

"The 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 material fact is one that "might affect the outcome of the suit under the governing law, " and a genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether a genuine issue of material fact exists, the evidence is to be taken in the light most favorable to the nonmoving party, Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970), and the court must not weigh evidence or make credibility determinations, Anderson, 477 U.S. at 249.

A. Hoffman's Claims Against Robinson

Hoffman alleges in its third-party complaint that "[a]ll parties to this litigation other than Lonnie Robinson d/b/a R&R Mechanical Insulation ("R&R") have entered into a multi-party settlement agreement which resolved certain claims at issue in this litigation" (Filing No. 78, at CM/ECF p. 1, ¶ 1). MBS's claims relating to Robinson's insulation work are summarized as follows:

13. Among other things, MBS alleged that the purported problems with the Monastery were due to design and performance defects in the Monastery's HVAC system. Examples of the alleged defects asserted by MBS include that the HVAC system was improperly designed and installed in that some of the units in the system were oversized and piping was placed too close to walls or obstructions. Because of the pipes' proximity to other obstructions, MBS alleged that the pipes were not properly insulated. MBS alleged that this lack of insulation caused significant amounts of condensation to form on the exterior of the pipes. MBS alleged that this excess condensation caused water damage to the ceiling tiles, walls, floors, and various other portions of the Monastery and contributed to the humidity issues in the building.
14. Among other things, MBS' allegations stated that the purported problems with the Monastery resulted in uncomfortable living conditions and caused condensation which, in turn, caused water damage to the ceiling tiles, insulation, walls, floors, and various other portions of the Monastery.
15. Further, MBS alleged that the increased humidity caused mold to form in various portions of the Monastery. MBS alleged that the mold migrated throughout the monastery and was released and dispersed into the atmosphere within the Monastery.

(Filing No. 78, at CM/ECF pp. 3-4, ¶¶ 13-15). Hoffman alleges that "[a]s a proximate result of MBS's allegations, ... Hoffman performed or paid for others to perform various remediation and repair work on the Monastery... [and] has also incurred various costs and expenses in resolving this dispute with MBS, including the incurrence of obligations under the multi-party settlement agreement" (Filing No. 78, at CM/ECF p. 4, ¶ 18). Two settlement documents are in the record as Exhibits 23 and 24 to the deposition Miles Girouard (Filing No. 123-2).

The first settlement document is an agreement which provides for the payment of $1.9 million to MBS "from several sources including monies paid from various insurance companies, " in consideration for which MBS "releases, waives, and forever discharges any and all claims, demands, and causes of action, whether based in law or in equity, known and unknown, against Hoffman, FEI [Fredericksen], Volkman, EC [Engineered Controls], and their respective parents, subsidiaries, affiliates, suppliers, dealers, shareholders, subcontractors, officers, representatives, employees, agents, successors, and any and all insurance companies providing insurance for Hoffman, FEI, Volkman and EC, ... arising out of or relating to the MBS Claims and/or the Project, including but not limited to any claims for warranty express or implied" (Filing No. 123-2, at CM/ECF p. 8, ¶¶ 1-2, 4). The agreement further provides that "Hoffman, FEI, Volkman, and EC release, waive, and forever discharge MBS with respect to any and all liens, claims, demands, and causes of action arising out of or relating to the MBS Claims and/or the Project, whether based in law or in equity, " but "[t]his release expressly does not apply to any claims that Hoffman, FEI, Volkman or EC may have against Lonnie Robinson d/b/a R&R Mechanical Insulation" ( id., ¶ 5). The agreement "confers no rights, benefits, defenses, or causes of action in favor of any third parties or entities" (Filing No. 123-2, at CM/ECF p. 9, ¶ 7). "The Parties do not admit liability...." (Filing No. 123-2, at CM/ECF p. 8, ¶ 6).

The second settlement document is an agreement entered into by Hoffman, Fredericksen, Volkman, and Engineered Controls, in which responsibility for the $1.9 million settlement payment to MBS is apportioned as follows:

a. Hoffman's Insurer, Zurich agrees to pay Five Hundred Thousand dollars ($500, 000)[;]
b. Hoffman agrees to pay One Hundred Fifty Thousand dollars ($150, 000);
c. Volkman's Insurer, Allied[4] agrees to pay Three Hundred Fifty Thousand ...

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