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Peoples Gas System v. Posen Construction, Inc.

United States District Court, M.D. Florida, Fort Myers Division

June 26, 2018

PEOPLES GAS SYSTEM, a division of Tampa Electric Company, a Florida corporation Plaintiff,

          OPINION AND ORDER [1]


         This matter comes before the Court[2] on Defendant Posen Construction, Inc.'s Motion to Dismiss the Complaint (Doc. 10) and Motion to Take Judicial Notice (Doc. 11) filed on February 27, 2018. After the Court granted Plaintiff Peoples Gas System's Unopposed Motion for Extension of Time to Respond (Docs. 14; 15), Plaintiff filed a Request for Judicial Notice (Doc. 16) and Response to Posen's Motion to Dismiss (Doc. 17) on March 27, 2018. These matters are now ripe for review.


         This is an action under Florida's Underground Facility Damage Prevention and Safety Act, Fla. Stat, §§ 556.101-106 (the “Act”). Peoples Gas System (“PGS”) owns and maintains natural gas distribution facilities throughout Florida, including a natural gas pipeline in Lee County. (Doc. 1 at 2). Posen is a road construction contractor. (Id.). In 2009, the Lee County Board of County Commissioners solicited bids for a lane expansion/drainage system project in east Fort Myers, Florida. (Id. at 3). Posen submitted a bid and was awarded general contractor of the project. (Id. at 4). Construction began in August 2009. (Id.).

         PGS maintained the pipeline underneath the project, which provided natural gas to Lee County residents. (Id.). This was a “critical line” and required caution when working around it. (Id.). PGS marked the pipeline with flags and paint and installed testing stations. (Id. at 5). As the project continued, the parties learned that, at certain locations, construction would be impossible unless PGS removed the pipeline ahead of Posen's work. (Id. at 4).

         In October 2010, Posen submitted a request to Sunshine One, which is a notification system by which excavators obtain the location of underground utilities before excavating. (Id. at 8). Fla. Stat. § 556.101(2). PGS alleges that Posen's request violated the Act because it failed to describe the specific areas for excavation, as required by the statute. (Id. at 9). In November 2010, Posen's roadway superintendent, Greg Menuez, directed his subordinate, Mark Santos, to dig and till the ground located at testing stations 452-456 with a Bomag mixer. (Id.). PGS alleges that Menuez knew that the gas main was not properly marked. (Id. at 9-10). When Santos operated the mixer, he struck and ruptured the pipeline, which caused a natural gas fire. (Id. at 10). Santos suffered severe injuries. (Id. at 10).

         This incident triggered several years of litigation. First, in 2011, Santos sued PGS and Posen in Florida state court. (Docs. 1 at 12; 11-1). Several years later, Santos voluntarily dismissed Posen as a defendant to the action. (Doc. 11-3). In 2017, Santos and PGS ultimately settled. (Doc. 1 at 12). Around the same time Santos filed his state action, PGS sued Posen in federal court for the same incident, seeking damages for the cost to repair its pipeline and facilities under claims of negligence. (Doc. 11-4). In response, Posen filed counterclaims against PGS. (Doc. 16-1). The parties ultimately settled and stipulated for dismissal with prejudice. (Doc. 16-2).

         Now, PGS sues Posen under § 556.106(2)(a) and makes an alternative claim for statutory indemnity under the Act. (Doc. 1). In essence, Posen asserts both counts are duplicative because, under both counts, PGS relies on the Act to receive the same remedy: indemnification for the settlement amount it paid to Santos (Docs. 1 at 12-13; 10 at 7). Posen moves to dismiss the complaint for failure to state a claim, and both parties move the Court to take judicial notice of court filings.[4] (Docs. 10; 11; 16). For the reasons set forth below, Posen's Motion to Dismiss (Doc. 10) is granted.


         When considering a motion to dismiss under Rule 12(b)(6), the court must accept all factual allegations as true and view them in a light most favorable to the plaintiff. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This preferential standard of review, however, does not permit all pleadings adorned with facts to survive to the next stage of litigation. The Supreme Court has been clear on this point - a district court should dismiss a claim where a party fails to plead facts that make the claim facially plausible. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the court can draw a reasonable inference, based on the facts pled, that the opposing party is liable for the alleged misconduct. See Iqbal, 556 U.S. at 678. This plausibility standard requires “more than a sheer possibility that a defendant has acted unlawfully.” Id.(citing Twombly, 550 U.S. at 557 (internal quotation marks omitted)).


         Posen presents two arguments as grounds for dismissing both counts of the Complaint. (Doc. 10 at 6-13). First, it argues that the damage PGS seeks is not a “loss” under the statute. (Id. at 10-13). Second, it asserts there is no statutory right to indemnification under the Act. (Id. at 7-10). PGS avers that it has a right to indemnification under the broad language of the statute. (Doc. 17 at 12-14). For the reasons stated below, the Court agrees with Posen.

         As a preliminary matter, Florida substantive law binds the Court on these state law issues. The Eleventh Circuit summarized the precedent:

In rendering a decision based on state substantive law, a federal court must decide the case the way it appears the state's highest court would. Where the state's highest court has not spoken to an issue, a federal court must adhere to the decisions of the state's intermediate appellate courts absent some ...

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