Lexington Ins. Co. v. Johnson Controls Fire Prot. Ltd. P'ship
Lexington Ins. Co. v. Johnson Controls Fire Prot. Ltd. P'ship
Opinion of the Court
Plaintiffs Lexington Insurance Company, Starr Surplus Lines Insurance Company, Certain Underwriters at Lloyds, subscribing to policy B0801 15304U15, Allied World Assurance Company, Ltd., Zurich American Insurance Company, Chubb Insurance Company, Chubb Custom, General Security Indemnity Company of Arizona, Continental Casualty Company, and Brookdale Senior Living, Inc. ("Brookdale" and collectively with the preceding named-plaintiffs, "Plaintiffs") brought this action against Johnson Controls Fire Protection Limited Partnership formerly known as Tyco SimplexGrinnell or SimplexGrinnell Limited Partnership ("Defendant") for breach of contract and negligence. Defendant moves to dismiss for failure to state a claim on which relief can be granted. For the reasons stated below, Defendant's motion (Docket No. 22) is denied .
Background
The following facts are taking from Plaintiffs' amended complaint and are assumed true at this stage in the litigation. (Docket No. 18). On November 19, 2015, Plaintiffs' insured, Brookdale, entered into a contract with the Defendant. The contract required Defendant to maintain and regularly inspect the sprinkler systems on Brookdale's property. In addition, the contract provided:
To the fullest extent permitted by law, [SimplexGrinnell] shall defend, indemnify and hold harmless [Brookdale] ... from and against [ ] damages, losses and expenses, including, but not limited to, reasonable attorneys' fees, arising out of or resulting from performance of the Work, provided that the claim, damage, loss or expense is attributable to ... injury to or destruction of tangible property (other than the Work itself) but only to the extent caused by the negligent acts or omissions of [SimplexGrinnell.]
Upon Plaintiffs' information and belief, prior to February 15, 2016, the sprinkler system required maintenance because a compressor was failing to properly pressurize the attic's dry sprinkler system. Defendant initially replaced the smaller compressor with a larger compressor in an attempt to rectify the problem. This larger compressor, however, also had a problem keeping the system pressurized. Defendant became aware that the compressor was not the cause of the problem and began looking for leaks in the attic's sprinkler system.
On or about February 15, 2016, one of Defendant's technicians was at Brookdale's property. Upon Plaintiffs' information and belief, the technician was performing repairs related to the pressurization issue in the attic's sprinkler system. While the *64technician was performing this work, a clapper valve in the dry system opened and released water into the system at a rate of 100 pounds per square inch. The technician subsequently allowed the sprinkler system to run for approximately nine minutes. As a result, a pipe fixture failed, which enabled water to escape into Brookdale's property causing extensive water damage. The fitting that failed evidenced signs of oxidation, caused by condensation which was permitted to accumulate inside the pipe by the dry sprinkler's defective pressurization system.
Plaintiffs allege that the damage was caused by Defendant's failure to adequately maintain Brookdale's dry sprinkler system from known weather conditions then existing, namely low temperatures.
Standard of Review
A defendant may move to dismiss, based solely on the complaint, for a plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion to dismiss, a complaint must allege "a plausible entitlement to relief." Bell Atl. Corp. v. Twombly ,
In evaluating a motion to dismiss, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. American Airlines, Inc. ,
*65Discussion
1. Contract Claim
To state a breach of contract claim, "plaintiffs must prove that a valid, binding contract existed, the defendant breached the terms of the contract, and the plaintiffs sustained damages as a result of the breach." Brooks v. AIG SunAmerica Life Assur. Co. ,
a. Valid, Binding Contract
Plaintiffs' Amended Complaint states that, "[Brookdale] hired [Defendant] to provide maintenance to, and regular inspections of, its sprinkler systems located on the Property." (Docket No. 18 ¶ 17). Further, Plaintiffs note that "[o]n or about November 19, 2015, the Insured and SimplexGrinnell entered into a contract entitled 'Service Contractor Agreement Between Brookdale Senior Living Inc., and Joes Lang Lasalle Americas, Inc. and SimplexGrinnell, L.P.' " Id. ¶ 18. Finally, Plaintiffs contend that the contract, by its own terms "was valid from November 1, 2015 up to and until September 30, 2018, and it included the Property." Id. ¶ 19.
Defendant argues that a plaintiff seeking to recover for breach of contract must allege that "he himself adequately performed under the contract." Debnam v. FedEx Home Delivery ,
Thus, I find that Plaintiffs have pled with plausibility the existence of a valid and binding contract.
b. Defendant Breached the Contract
Plaintiffs allege that that the contract required Defendant "to provide maintenance to, and regular inspections of, its sprinkler systems located on the Property." (Docket No. 18 ¶ 17). Further, the contract provided:
To the fullest extent permitted by law, [SimplexGrinnell] shall defend, indemnify and hold harmless [Brookdale] ... from and against [ ] damages, losses and expenses, including, but not limited to, reasonable attorneys' fees, arising out of or resulting from performance of the Work, provided that the claim, damage, loss or expense is attributable to ... injury to or destruction of tangible property (other than the Work itself) but only to the extent caused by the negligent acts or omissions of [SimplexGrinnell.]
Id. ¶ 49.
Plaintiffs contend that Defendant was on notice of a problem with the sprinkler systems and it had previously failed to rectify them. Further, Plaintiffs note that on February 15, 2016, a technician was on Brookdale's property to perform repairs related to the pressurization issue in the attic's dry sprinkler system. Thereafter, catastrophic water loss occurred which caused extensive damage. Assuming Plaintiffs' allegations are true, Defendant failed to adequately perform its contractual duty to inspect and maintain the sprinkler systems. Consequently, there was clearly "injury to or destruction of tangible property" that was "caused by the negligent acts or *66omissions" of Defendant. Therefore, Defendant had a contractual obligation to indemnify Brookdale for the damage, which it did not.
Defendant points to Doyle v. Hasbro, Inc. for the proposition that a plaintiff must state the nature of an alleged contract with specificity in a breach claim.
Although Plaintiffs did not attach the entire contract to their Amended Complaint, they have made a presentation of the relevant terms, its duration, and when it was formed. Further, Plaintiffs have explained some of the obligations imposed on Defendant by the contract. This is a far cry from the insufficient pleadings in Doyle that failed to state a claim. Thus, I find that Plaintiffs have also plausibly pled that Defendant breached the contract.
c. Damages
Finally, Plaintiffs allege that as a result of Defendant's breach of contract and/or negligence, Brookdale's property incurred extensive water damage. The Plaintiff-insurers thereafter provided coverage to Brookdale for the loss.
I find that Plaintiffs have plausibly pled that Defendant's breach caused Plaintiffs to incur damages. Therefore, Plaintiffs have sufficiently pled all of the elements of their breach of contract claim.
2. Negligence
"A party may set out 2 or more statements of a claim or defense alternatively or hypothetically, either in a single count or defense or in separate ones. If a party makes alternative statements, the pleading is sufficient if any one of them is sufficient." Fed. R. Civ. P. 8(d)(2). Here, Plaintiffs have pled both negligence and breach of contract claims arising out of the same general factual background.
Defendant contends that its relationship with Plaintiffs was solely contractual and the alleged violation was of the contract, not of any common law duties. Defendant notes that Massachusetts courts have held that the breach of a contract, standing alone, does not support an independent tort cause of action. See, e.g. , Anderson v. Fox Hill Vill. Homeowners Corp. ,
Massachusetts law, however, "both civil and criminal, imposes on people a duty to act reasonably." Commonwealth v. Levesque ,
Therefore, in addition to its contractual obligations to maintain and inspect the sprinkler system, Defendant had a duty to act in a reasonable and in a workmanlike manner while performing these contractual obligations. Plaintiffs have alleged that Defendant failed to perform its contractual duties reasonably and provided a sufficient factual basis in its Amended Complaint to make this allegation plausible.
Conclusion
For the reasons stated above, Plaintiffs have plausibly demonstrated that they are entitled to relief under both breach of contract and negligence theories. Therefore, Defendant's motion to dismiss (Docket No. 22) is denied .
SO ORDERED
Defendant contends that "because Plaintiffs' allegations regarding SimplexGrinnell's alleged conduct before, and on the day of the loss are alleged upon Plaintiffs' information and belief, the Court is not required to accept them as true." (Docket No. 23 at 6). The Second Circuit, however, has established what seems to be the emerging consensus: "The Twombly plausibility standard ... does not prevent a plaintiff from pleading facts alleged 'upon information and belief' (1) where the facts are peculiarly within the possession and control of the defendant, or (2) where the belief is based on factual information that makes the inference of culpability plausible." Arista Records, LLC v. Doe 3 ,
Reference
- Full Case Name
- LEXINGTON INSURANCE COMPANY, Starr Surplus Lines Insurance Company, Certain Underwriters at Lloyds, Subscribing to Policy B0801 15304U15, Allied World Assurance Company, Ltd., Zurich American Insurance Company, Chubb Insurance Company, Chubb Custom, General Security Indemnity Company of Arizona and Continental Casualty Company, All as Subrogee of Brookdale Senior Living, Inc., and Brookdale Senior Living, Inc. v. JOHNSON CONTROLS FIRE PROTECTION LIMITED PARTNERSHIP Formerly Known as Tyco SimplexGrinnell or SimplexGrinnell Limited Partnership
- Cited By
- 8 cases
- Status
- Published