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Liberty Mutual Fire Insurance Co. v. Fowlkes Plumbing, LLC

United States District Court, N.D. Mississippi, Aberdeen Division

February 12, 2018

LIBERTY MUTUAL FIRE INSURANCE COMPANY PLAINTIFF
v.
FOWLKES PLUMBING, LLC, QUALITY HEAT & AIR, INC., and SULLIVAN ENTERPRISES, INC. DEFENDANTS

          MEMORANDUM OPINION GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

         The Court has before it Defendants Fowlkes Plumbing, LLC, Sullivan Enterprises, Inc., and Quality Hath & Air, Inc.'s motion for summary judgment [Doc. No. 102]. Having considered the matter, the Court finds that the motion should be granted in part and denied in part.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         In May 2015, the nonparty Chickasaw County School District entered into a contractual agreement ("Agreement" or "the Agreement") with Defendant Sullivan Enterprises to perform window restoration work on the Houlka Attendance Center. See Affidavit of Dr. Betsy Collums [Doc. No. 107-1] at ¶ 7 & Document Al01-2007, Agreement between Chickasaw County School District and Sullivan Enterprises, Inc. [Doc. No. 107-2, Exhibit A] (hereinafter "Agreement"). On July 30, 2015, while construction work was being done, a fire began that consumed the entire Houlka Attendance Center Building. Doc. No. 107-1 at ¶ 11.

         As a result of this fire, Plaintiff Liberty Mutual, the school district's property insurer, paid the school district $4.3 million for the damages caused to the building. Affidavit of Jay Goldstein [Doc. No. 107-4] at ¶ 13. Liberty Mutual then brought this subrogation action against the Defendants, alleging their negligence had started the fire.

         On July 26, 2017, the Magistrate Judge permitted the parties to conduct limited discovery on the Defendants' motion for summary judgment as to their defenses of waiver of subrogation. [Doc No. 67].[1]The parties have conducted that discovery, filed their motions and supporting briefs, and the matter is now ripe for review.

         II. SUMMARY JUDGMENT STANDARD

         Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See Fed. R. Civ. P. 56(a); Johnston & Johnston v. Conseco Life Ins. Co., 732 F.3d 555, 561 (5th Cir. 2013). The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548.

         The party moving for summary judgment bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record it believes demonstrate the absence of a genuine dispute of material fact. See Id. at 323, 106 S.Ct. 2548. "An issue of fact is material only if its resolution could affect the outcome of the action." DeBlanc v. St. Tammany Par. Sch. Bd, 640 Fed.App'x 308, 312 (5th Cir. 2016) (per curiam) (quoting Manning v. Chevron Chem. Co., LLC, 332 F.3d 874, 877 (5th Cir. 2003) (quoting Wyatt v. Hunt Plywood Co., 297 F.3d 405, 408 (5th Cir. 2002) (internal quotation marks omitted))).

         Under Rule 56(a), the burden then shifts to the nonmovant to "go beyond the pleadings and by ... affidavits, or by the 'depositions, answers to interrogatories, and admissions on file, ' designate 'specific facts showing that there is a genuine issue for trial.' " Id. at 324, 106 S.Ct. 2548; Littlefield v. Forney Indep. Sch Dist, 268 F.3d 275, 282 (5th Cir. 2001); Willis v. Roche Biomedical Labs., Inc., 61 F.3d 313, 315 (5th Cir. 1995). The Court " 'resolve[s] factual controversies in favor of the nonmoving party, but only where there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts.' " Thomas v. Baldwin, 595 Fed, Appx. 378, 378 (5th Cir. 2014) (per curiam) (quoting Antoine v. First Student, Inc., 713 F.3d 824, 830 (5th Cir. 2013) (internal quotation marks and citation omitted)). "[T]he nonmoving party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence.' " Id. at 380 (quoting Hathaway v. Bazany, 507 F.3d 312, 319 (5th Cir. 2007)).

         III. ANALYSIS

         Defendants contend that Liberty Mutual is barred from recovering damages against them because the Agreement between the school district and Sullivan Enterprises waived subrogation rights for damages caused by the fire. They argue that AIA Document A201-2007, General Conditions of the Construction Contract, which contains a waiver of subrogation provision, is incorporated by reference into the parties' Agreement. Liberty Mutual argues that Document A201-2007 is not a part of the Agreement. Further, it argues that even if Document A201-2007 is a part of the Agreement, it does not apply to all the damages for which it claims recovery.

         A. Is AIA Document A201-2007 a part of the Agreement between the School District and Sullivan Enterprises?

         In opposing summary judgment, Liberty Mutual argues that the School Board was never aware of Document A201-2007, nor was it physically attached to the Agreement. Therefore, argues Liberty Mutual, the document cannot be a part of the Agreement because it was never approved by the School Board as required by Mississippi law, nor was it incorporated into the contract.

         Defendants make two arguments in opposition to Liberty Mutual's stance: first, that the School Board possessed a duty to attach Document A201-2007 to the Agreement, and thus Liberty Mutual may not argue the lack of attachment prevents Document A201-2007 from being a part of the Agreement. Second, that Document A201-2007 was in any event incorporated by reference into the Agreement. The Court considers these arguments in turn.

         Neither party disputes that the School Board and Defendant Sullivan Enterprises entered into the Agreement [Doc. No. 107-2, Exhibit A]. It stands to reason, then, that if Document A201-2007 is part of the Agreement, the school board approved Document A201-2007 when it approved the Agreement. And if the Document A201-2007 was not a part of the Agreement, it has no bearing on this case. Thus, the question the Court must first decide is whether Document A201-2007 was a part of the Agreement.

         Contract interpretation under Mississippi law is a "three-tiered" process. Gatlin v. Sanderson Farms, Inc.2007 So.2d 220, 222 (Miss. 2007)(citing Pursue Energy Corp. v. Perkins,558 So.2d 349, 351-53 (Miss. 1990)). The court must first look to the "four corners of the contract and at the language the parties used in expressing their agreement." Id. "When an instrument's substance is determined to be clear or unambiguous, the parties' intent must be effectuated." Id. (internal quotations omitted). A court may apply the canons of contract construction, however, where the intent of the parties is ...


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