Kmart Corp v R.K. Hooksett, et a l . CV-09-167-JL 2/19/10 UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Kmart Corporation

v. Civil N o . 09-cv-167-JL Opinion N o .

R.K. Hooksett, LLC, Merchants Plaza, LLC, MRAC, LLC

MEMORANDUM ORDER

Since experiencing a number of instances of flooding at its

store in Hooksett, New Hampshire, Kmart Corporation has sued its

landlord at that location, R.K. Hooksett, LLC, and two owners of

adjacent property, Merchants Plaza, LLC and MRAC, LLC. Kmart

alleges that Merchants Plaza and MRAC made improvements to their

properties that caused surface water to enter its store,

amounting to either trespass or negligence. MRAC has moved to

dismiss those counts for failing to state a claim for relief.

See Fed. R. Civ. P. 12(b)(6). This court has jurisdiction over

this action between Kmart, an Illinois corporation with its

principal place of business in Michigan, and the defendants,

limited liability companies whose members are citizens of neither

of those states, under

(a)(1) (diversity). The

motion is denied.

Kmart, whose store is located at 1267 Hooksett Road, alleges

that MRAC owns property at 1271 Hooksett Road, the site of a car dealership. The complaint states that MRAC paved certain areas

of its property, with the result that stormwater was directed

toward the Kmart, but (a) failed to install sufficient drainage

to prevent that from happening, (b) failed to maintain the

drainage system to prevent water from backing up or otherwise

diverting toward the Kmart, or (c) installed a system that

allowed water to back up toward the Kmart. In fact, Kmart

alleges, these actions directly and proximately caused water to

enter its store on a number of occasions, damaging its

merchandise and trade fixtures and interrupting its business.

Kmart claims that MRAC “knew or should have known, to a

substantial certainty,” that its actions “would interfere with

Kmart’s property interest,” amounting to trespass (count 1 3 ) . In

the alternative, Kmart claims that MRAC’s actions breached its

“duty to maintain and construct” its improvements “in a

reasonable manner so as to avoid damaging property interests in

neighboring property,” amounting to negligence (count 1 4 ) . MRAC,

in moving to dismiss, argues that Kmart has not “plausibly

alleged” those claims because it has failed to describe MRAC’s

actions “with sufficient specificity”--particularly in light of

2 the fact that its property is “located across a major roadway

from Kmart, and downstream.”1

While it is true that “a plaintiff’s obligation to provide

the ‘grounds’ of his ‘entitlement to relief’ requires more than

labels and conclusions, and a formulaic recitation of the

elements of a cause of action will not do,” it is also true that

“a complaint attacked by a Rule 12(b)(6) motion to dismiss does

not need detailed factual allegations.” Bell Atl. Corp. v .

Twombly,

4 4 , 555 (2006) (bracketing omitted). Here,

Kmart alleges that MRAC paved its lot without installing or

maintaining sufficient drainage to prevent stormwater from

flowing toward or backing up into Kmart’s nearby store, resulting

in flooding that damaged its personal property there. That is

hardly the kind of “unadorned, the-defendant-unlawfully-harmed-me

1 The complaint alleges that MRAC’s property is located on the same side of the street as the Kmart (both addresses are identified by odd numbers), and says nothing about which property is downstream from the other. So MRAC, to show that it is in fact located across the street and downstream from the Kmart store, relies on materials outside the pleadings, including an affidavit by one of its members and a series of maps. In considering a motion to dismiss, of course, a “court may properly consider only facts and documents that are part of or incorporated into the complaint.” Trans-Spec Truck Serv., Inc. v . Caterpillar Inc.,

(1st Cir. 2008). But because Kmart acknowledges in its response to the motion to dismiss that its store is indeed located across the street and upstream from MRAC’s land, the court will consider those facts to be undisputed for purposes of the motion.

3 accusation” that fails to state a claim for relief. Iqbal v .

Ashcroft, 129 S . C t . 1937, 1949 (2009).

Contrary to MRAC’s suggestion, then, Kmart need not have

further specified in its complaint how the drainage system was

inadequate or how it caused the flooding to state claims for

trespass or negligence. Compare Miller v . S e . Supply Header,

LLC, N o . 09-0067,

, at *3 (S.D. Ala. Jan. 4 , 2010)

(applying the Twombly/Iqbal standard in denying a motion to

dismiss a negligence claim arising out of flooding on plaintiffs’

property because “the facts have been sufficiently developed

. . . to draw the reasonable inference that the defendant is

liable for the misconduct alleged”) with Vill. of DePue, Ill. v .

Viacom Int’l, Inc.,

5 4 , 864-65 (applying the

Twombly/Iqbal standard in dismissing a trespass claim that

alleged only the migration of substances from the defendants’

property without alleging any tortious conduct). As Kmart points

out, MRAC’s demands for “specificity” seem to invoke Rule 9(b)’s

heightened pleading standard for claims of fraud and mistake as

opposed to Rule 8's requirement for a “short and plain statement

showing the pleader is entitled to relief”--which, again, “‘does

not require detailed factual allegations.’” Iqbal, 129 S . C t . at

1949 (quoting Twombly, 550 U.S. at 5 5 5 ) .

4 Similarly, while “a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim for relief

that is plausible on in its face,’” this “standard is not akin to

a ‘probability requirement,’ but it asks for more than a sheer

possibility that a defendant has acted unlawfully.” Iqbal, 129

S . C t . at 1949 (quoting Twombly, 550 U.S. at 5 7 0 ) . At best,

MRAC’s point that its land is located across the street and

downstream from the Kmart store tends to make the claim that

activities on MRAC’s property caused flooding at the Kmart less

probable than it might have been if MRAC’s land were situated

next to and upstream from the store. But the actual location of

MRAC’s parcel vis-a-vis the Kmart does not make the claim

“implausible on its face.”

Indeed, the complaint expressly alleges that MRAC’s actions

caused water to “back up” toward Kmart’s store. That scenario is

hardly “implausible” as a matter of the “judicial experience and

common sense” that come into play in applying the plausibility standard.2 Id. at 1949-50.

2 As Kmart points out, there are a number of reported cases considering the merits of trespass claims based on flooding caused by downstream activities. See, e.g., Bethel Inv. C o . v . City of Hampton,

(Va. 2006); Mack v . Edens,

3 1 , 432-33 (S.C. App. C t . 1991); Guenther v . Finley,

1 7 , 718 (Mont. 1989); Dial v . City of O’Fallon,

1 7 , 220-21 (Ill. 1980); see also Restatement (Second) of Torts § 158 cmt. b ill. 5 (1965) (“A erects a dam across a

5 Finally, MRAC’s argument that its alleged conduct “may be

explained as actions that MRAC took to lawfully address the issue

of water flowing onto its property” turns the plausibility

standard on its head.3 Again, under that standard, dismissal for

failure to state a claim is appropriate only if “the well-pleaded

facts do not permit the court to infer more than the mere

possibility of misconduct.” Id. at 1950. It is not appropriate

in the opposite case, i.e., if the complaint simply permits (but

does not compel) the court to infer that the defendant acted

lawfully. C f . Ark. Pub. Employees Ret. Sys. v . GT Solar Int’l,

Inc.,

, 10 & n.7 (“[a]t most . . . if the facts

alleged in a complaint could support either an inference of

wrongdoing or an ‘obvious alternative explanation’ then the

plausibility standard requires the court to choose the ‘obvious

alternative explanation’”) (quoting Twombly, 550 U.S. at 5 6 7 ) .

stream, thereby intentionally causing water to back up and flood the land of B , an upper riparian proprietor. A is a trespasser.”) (emphasis added). So “judicial experience” teaches that such claims are quite plausible (if not always successful, but that is a different question). 3 Under New Hampshire law, “[a] landowner may manage or control diffuse surface water in any manner, provided it is reasonable in light of the interests affected thereby”--a standard that incorporates a number of factors, such as “the extent of the alteration of natural or existing runoff patterns, the importance and nature of the land and its use, and the foreseeability and magnitude of any resulting damage.” Dudley v . Beckey,

6 8 , 570 (1989).

6 Accordingly, MRAC’s motion to dismiss4 is DENIED.

SO ORDERED.

___ Jos^h N. Laplante __ ap __ nte _________ Uni e ed States District Judge

Dated: February 1 9 , 2010

cc: John McCabe, Esq. Nicholas Novak, Esq Jamie N . Hage, Esq. Donna Feeney, Esq. Andrew D. Dunn, Esq. Anthony M . Camp, Esq. Thomas J. Fay, Esq.

4 Document n o . 1 8 .

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