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Allstate Insurance Co. v. Structures Design/Build, LLC

United States District Court, W.D. Virginia, Roanoke Division

March 17, 2016

ALLSTATE INSURANCE COMPANY, as subrogee of Hillel at Virginia Tech, Inc., Plaintiff,
v.
STRUCTURES DESIGN/BUILD, LLC, Defendant/Cross-Claimant,
v.
PJ LITTLE PLUMBING, INC., Defendant/Cross-Claim Defendant/ Third-Party Plaintiff,
v.
CMC SUPPLY, INC., Third-Party Defendant/Fourth-Party Plaintiff,
v.
HARRY S. EKLOF, JR. & ASSOCIATES, INC., Fourth-Party Defendant.

MEMORANDUM OPINION

Hon. Glen E. Conrad Chief United States District Judge

Plaintiff Allstate Insurance Company ("Allstate"), as subrogee of Hillel at Virginia Tech, Inc. ("Hillel"), brings this diversity action against defendants Structures Design/Build, LLC ("Structures") and PJ Little Plumbing, Inc. ("PJ Little"), alleging breach of warranty, negligence, and contractual indemnity. The case is presently before the court on PJ Little's motion to dismiss the complaint and third-party defendant CMC Supply, Inc.'s ("CMC Supply") motion to dismiss PJ Little's third-party complaint. For the reasons set forth below, PJ Little's motion will be granted in part and denied in part, and CMC Supply's motion will be granted.

Background

The following facts, taken from Allstate's complaint and PJ Little's third-party complaint, are accepted as true for purposes of the motions to dismiss. See Erickson v. Pardus, 551 U.S. 89, 94(2007).

Allstate is an Illinois corporation and subrogee of Hillel. Structures is a Virginia limited liability company engaged in the business of designing and constructing buildings. PJ Little is a Virginia corporation engaged in the business of plumbing.

At all times material herein, Hillel owned and operated the Rosenberg Hillel Center for Jewish Life at 710 Toms Creek Road in Blacksburg, Virginia (the "Property"). Allstate provided insurance coverage to Hillel for the Property. On or about March 22, 2011, Hillel contracted with Structures for the design and construction of the Property. Structures then subcontracted with PJ Little for plumbing and "mechanical installation work" on the Property. Compl. ¶ 9. This work included the installation of a "CVPC to brass connector" that attached to the piping of a hot water storage tank. Id ¶ 10.

A certificate of occupancy was issued for the Property on January 23, 2013. On or about June 17, 2013, the connector failed, resulting in significant water damage to the Property itself and to the insured personal property stored inside the Property. According to the complaint, the connector used in the installation was improper because the plumbing system produced temperatures in excess of what the connector was able to handle. Pursuant to the insurance policy on the Property, Allstate made payments to Hillel in the amount of $183, 261.97.

On June 26, 2015, Allstate, as subrogee of Hillel, filed a complaint against Structures and PJ Little, alleging various state law claims. In Count I, Allstate alleges that Structures breached its express warranty that the building would be "free from defects for a period of one year from substantial completion." Id. ¶ 17. In Count II, Allstate contends that Structures was negligent in, inter alia, designing the hot water system and instructing PJ Little as to the installation of the connector. In Count III, Allstate seeks contractual indemnification from Structures, pursuant to § 8.5 of the contract between Hillel and Structures that specifies that Structures will indemnify Hillel for any negligence or omissions by any of its subcontractors. In Count IV, Allstate alleges that PJ Little was negligent in failing to properly install the hot water system. In Count V, Allstate alleges that PJ Little breached its implied warranty to perform its services in a good, safe, and workmanlike manner, free of defects. Allstate seeks damages in the amount of $183, 261.97.

On August 13, 2015, Structures filed cross-claims against PJ Little for breach of warranty, contractual indemnification, and equitable indemnification. Structures argues that PJ Little was solely responsible for selecting the materials used in the installation of the hot water system and for installing the connector. In the event that Allstate is entitled to relief from Structures, Structures believes that it is entitled to indemnification from PJ Little.

On September 15, 2015, PJ Little filed a third-party complaint against CMC Supply. CMC Supply is a Virginia corporation engaged in the business of selling plumbing, electrical, and building supplies. On August 21, 2012, CMC Supply sold to PJ Little, inter alia, the connector that PJ Little then installed into the hot water system. According to the third-party complaint, the connector was defective, and that defect caused the connector to fail and damage the Property. PJ Little asserts that a conforming connector would not have failed under the same circumstances. As such, PJ Little asserts a claim of breach of implied warranty of merchantability against CMC Supply and seeks direct, incidental, and consequential damages, as well as any other appropriate relief.

On November 18, 2015, PJ Little moved to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules for Civil Procedure. On December 7, 2015, CMC Supply moved to dismiss PJ Little's third-party complaint pursuant to Rule 12(b)(6). The court held a hearing on both motions on March 2, 2016. The motions have been fully briefed and are ripe for disposition.

Standards of Review

Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move for dismissal of an action for failure to state a claim upon which relief can be granted. To survive such a motion, a plaintiff must establish "facial plausibility" by pleading "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal556 U.S. 662, 678 (2009). All well-pleaded allegations in the complaint are taken as true and all reasonable factual inferences are drawn in the plaintiffs favor. Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). However, "[a]t bottom, a plaintiff must 'nudge [her] claims across the line from conceivable to plausible' to resist dismissal." Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 364-65 (4th Cir. 2012) (quoting Bell Atl. Corp. v. Twomblv, 550 U.S. 544, 570 (2007)). Moreover, the complaint must contain sufficient facts "to raise a right to relief above the speculative level" and "state a claim to relief that is plausible on its face." Twomblv, 550 U.S. at 555, 570. Although a complaint need not contain detailed factual allegations, it must contain more than ...


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