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National Fire Insurance Company of Hartford v. Johnson Controls Fire Protection LP

United States District Court, S.D. Florida

August 9, 2019

NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, Plaintiff,
v.
JOHNSON CONTROLS FIRE PROTECTION LP, formerly known as SimplexGrinnell LP, a foreign limited partnership, Defendant.

          ORDER GRANTING MOTION TO DISMISS

          ROBIN L. ROSENBERG UNITED STATES DISTRICT JUDGE.

         THIS MATTER is before the Court on Defendant's Motion to Dismiss the Amended Complaint. Mot., DE 28. The motion is ripe for review. See Pl. Resp., DE 29; Def. Reply, DE 30. In addition, the Court heard oral argument on the Motion on August 8, 2019. DE 33. At the Motion Hearing, the parties and the Court agreed that the Amended Complaint should be dismissed with leave to amend. The Court informed the parties that a written order would follow to document the Court's analysis of the Amended Complaint.

         I. Background

         This dispute arises out of more than $700, 00 worth of water damage caused to the building project known as Marina Village at Grand Harbor Tower II in Vero Beach, Florida (“Marina project”). See Am. Compl., DE 27, 2-4. The damage occurred when Plaintiff National Fire Insurance Company's (“National Fire”) insured, Empire Roofing (“Empire”), was performing work on the Marina project. Id. While working on the Marina project, one of Empire's employees stepped on a fire sprinkler system pipe, which ruptured, causing substantial water damage. Id. Plaintiff alleges that the rupture occurred because the fire sprinkler system utilized PVC[1] piping, which “had been significantly weakened.” Id. Plaintiff National Fire then paid the full restoration costs of the damage, on behalf of their insured, Empire, to Marina, and obtained a release of liability from Marina. Id.

         National Fire has alleged through its first Complaint and its Amended Complaint that Defendant Johnson Controls (“Johnson”), formerly known as SimplexGrinnell, was responsible for the damage to the Marina project by virtue of Johnson's work conducting “annual inspections and testing of the fire protection system” at the Marina project. See id.; Compl., DE 1. As a result, Johnson allegedly owes National Fire damages. See Id. According to the Amended Complaint, “Johnson Controls knew or should have known that the use of the PVC piping in fire protection application posed a variety of risks to property and human life, but failed to notify the building owner despite a clear duty to do so.” Id. at 3.

         Accordingly, on February 13, Plaintiff National Fire filed this action against Defendant Johnson, alleging claims for negligence and contribution. Compl., DE 1. Defendant then moved to dismiss the Complaint for failure to state a claim. DE 10. The Motion was briefed, see Pl. Resp., DE 12; Def. Reply, DE 15, and referred to Magistrate Judge Maynard for a Report and Recommendation, DE 11.

         In the first Motion to Dismiss, Defendant Johnson Controls argued that the Complaint had not properly alleged that Defendant owed any duty of care to Plaintiff. DE 10, 5. From Defendant's perspective, because Johnson Controls “could not possibly owe a duty to a party it had no knowledge of and could have reasonably foreseen would step on and crush a plastic fire sprinkler pipe, National Fire instead states SimplexGrinnell owed a duty to 1) the owners of Marina Village and 2) members of the public in general.” Id. at 6 (emphasis in original). In addition, Defendant argued that “Florida law does not recognize a right to statutory contribution in a breach of contract case.” Id. at 8. As a result, Defendant contended that Plaintiff could not maintain a contribution action against Defendant, because Defendant's relationship with Marina (the victim of the tort that Defendant and Plaintiff were alleged to have committed jointly) is based on a contract. Id.

         In its response to this first Motion to Dismiss, Plaintiff argued that it had properly alleged a subrogation action, whereby National Fire “stepp[ed] into the shoes of the Marina Village.” Pl. Resp., DE 12, 3; see also Id. (“National Fire holds the same rights - no greater and no less - than the underlying plaintiff [Marina].”). Plaintiff's Response did not directly address Defendant's argument that Defendant owed no duty to Empire, and instead, repeated the Complaint's allegations of Defendant's alleged wrongdoing as to Marina. See Id. (“By stepping in the shoes of Marina Village…”); id. at 4 (“National Fire paid off the entire debt in order to restore Marina Village…”); id. at 5 (“Johnson Controls owed a duty of reasonable care to Marina Village.”); id. at 6 (“National Fire now ‘stands in the shoes' of Marina Village…”).

         Based on this briefing, Judge Maynard issued her Report and Recommendations (the “Report”), that the Motion to Dismiss be granted and that the Complaint be dismissed. Report, DE 18. First, Judge Maynard found that National Fire could not plead a contribution claim against Johnson, because a “tortfeasor only may seek contribution from another tortfeasor for tort damages. Here, however, there is a legal bar that protects Johnson Controls from being sued for the tort of negligence. . . . Simply put, a plaintiff may not pursue a tort theory of relief where a contract created the duty to act.” Id. at 4 (emphasis in original). In this case, the victim's claims against Johnson could only arise in contract pursuant to the independent tort doctrine. See Id. As a result, because a claim for contribution relies on the commission of a tort by the joint tortfeasors, Plaintiff could not proceed with its contribution claim against Johnson. As Plaintiff has acknowledged, “National Fire holds the same rights - no greater and no less - than the underlying plaintiff [Marina].” Resp., DE 12, 3. Marina could not proceed in a tort action against Johnson Controls, so neither can National Fire. See generally Report, DE 18, 3-6.

         Judge Maynard then considered whether National Fire could plead a claim for negligence against Johnson. Id. at 6. “As this Court explain[ed] above, a contract defines the duty of care that Johnson Controls owed to Marina Village. Consequently, National Fire may not frame Johnson Controls' performance of its contractual duties in negligence terms.” Id. at 7. Consequently, the Report also recommended dismissing National Fire's negligence claim. Id. Notably, Judge Maynard stated that she “under[took] the above Independent Tort Doctrine analysis on the assumption that National Fire has the right of subrogation to stand in the shores of Marina Village to sue Johnson Controls for negligence.” Id. at 8 (emphasis added).

         The Court adopted the Report on June 14, but granted Plaintiff leave to amend “to allege any other claims Plaintiff may have.” Order, DE 25, 2. Plaintiff's Amended Complaint followed, alleging one count for equitable subrogation. Am. Compl., DE 27. Defendant promptly moved to dismiss the Amended Complaint, arguing that “(1) equitable subrogation is not an independent cause of action, and National Fire has not asserted any underlying claim on behalf of Marina Village; and (2) even if National Fire had plead an underlying claim, its subrogor Marina Village has no viable tort or contract claim against [Defendant]”. Mot., DE 28, 2.

         II. Motion to Dismiss Standard

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). See Fed. R. Civ. P. 8(a)(2) (requiring “a short and plain statement of the claim showing that the pleader is entitled to relief”). Although this pleading standard “does not require ‘detailed factual allegations,' . . . it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (alteration added) (quoting Twombly, 550 U.S. at 555). Pleadings must contain “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do, ” Twombly, 550 U.S. at 555 (citation omitted), and must provide sufficient facts to “give the defendant fair notice of what the … claim is and the grounds upon which it rests, ” id. Indeed, “only a complaint that states a plausible claim for relief survives a motion to dismiss.” Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556). To meet this “plausibility standard, ” a plaintiff must “plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678 (alteration added) (citing Twombly, 550 U.S. at 556).

         At the motion to dismiss stage, the “plaintiff's factual allegations are accepted as true. . . . However, conclusory allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent ...


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