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American Stores Properties, Inc. v. Spotts

August 13, 2009


The opinion of the court was delivered by: Slomsky, J.



The above-captioned matter is a complex construction case arising from the alleged failure to properly construct three retaining walls at Plaintiff American Stores Properties, Inc.'s ("ASPI") food distribution center in Denver, Pennsylvania (the "Distribution Center"). Plaintiff commenced this action on March 29, 2005 and filed its Amended Complaint (Doc. No. 2) on July 22, 2005, naming as defendants twelve parties that were involved in various aspects of the construction of the retaining walls. The named defendants are: (1) Spotts, Stevens & McCoy, Inc.; (2) Clark/Epstein;*fn1 (3) The Clark Construction Group, Inc.; (4) A. Epstein & Sons, International, Inc.; (5) Earth Engineering, Inc.; (6) Handwerk Contractors;*fn2 (7) MacCaferri Gabions, Inc.; (8) Baseline Contracting, Inc.; (9) Haines & Kibbelhouse, Inc.; (10) High Associates, Ltd. ("High"); (11) CBL Service Corporation (f/k/a Lenders Support Group, Inc.) ("CBL/LSG"); and (12) Timothy E. Debes ("Debes").

Currently before the Court is Defendant Debes's Motion to Dismiss all claims against him pursuant to Federal Rule of Civil Procedure 12(b)(6), filed September 16, 2005 (Doc. No. 40). Plaintiff filed its Opposition to Debes' Motion to Dismiss (Doc. No. 74) on October 17, 2005. On October 20, 2005, Debes filed a Reply in support of his Motion to Dismiss (Doc. No. 76).

This action was transferred to the docket of this Court on April 30, 2009.


Plaintiff's claims against Debes stem from his role in the construction of the Distribution Center for ASPI. Due to the uneven geological foundation of the land on which the Distribution Center was to be constructed, gabion retaining walls were required as part of the proper foundation for the building. (Pl. Compl., ¶22.) A gabion retaining wall is composed of gabions, or stone-filled wire baskets, which are stacked together to create an earth retaining wall. (Id., ¶ 28.)

In 1996, ASPI entered into an "Entitlement Services Agreement" with Defendant High to engage in commercial development of the Distribution Center. (Id., ¶17.) High agreed to manage the civil design and procurement of entitlements (i.e. obtaining the necessary permits) for the development on behalf of ASPI. (Id.) These agreements authorized High to select and hire subcontractors to prepare engineering investigations, reports, plans and specifications for the site work required at the Distribution Center. (Id.) Defendant CBL/LSG contracted with High to provide geotechnical engineering services (the "High-CBL/LSG Agreement"). (Id.,¶18.) CBL/LSG performed subsurface explorations of the Distribution Center site and made design recommendations, including those for the retaining walls that were to be built and installed at the site. (Id., ¶19.) On January 13, 1997, Debes, an employee of CBL/LSG, issued a Subsurface Exploration Report of Building No. 264 Project*fn3 (the "Soils Report"), which he signed and professionally sealed as conforming "with the recognized standard geotechnical engineering procedures, while employing good customary and commercial practice." (Id., ¶21; Pl. Ex. A.)

Five gabion retaining walls were designed and constructed at the Distribution Center. (Pl. Compl.,¶ 41.) The walls were identified on the construction plans as Wall Nos. 1, 2, 3, 4 and 5. (Id.) Plaintiff alleges that Wall No. 1 shows signs of distress from excessive movement and will eventually fail in its entirety if it is not repaired or replaced. (Id.) Wall No. 2 also shows signs of distress with a 40 foot section that has completely failed. (Id.) Portions of Wall 4 show signs of distress, as well. (Id.) Plaintiff contends that the failure of Wall No. 2 and the evident distress in the other walls have progressed to the point where they will only become worse unless repaired or replaced. (Id.) The walls were designed to have a "useful life" in excess of 25 years and the distress or signs of movement within the walls are not normal and were not expected. (Id., ¶ ¶ 42, 43.)

Plaintiff has brought two claims against Debes. In Count III of the Amended Complaint, Plaintiff alleges breach of warranty. In Count IV of the Amended Complaint, Plaintiff alleges negligent design. Debes has moved to dismiss both claims.


Debes has moved to dismiss all claims against him for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under a reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (reasoning that this statement of the Rule 12(b)(6) standard remains acceptable following U.S. Supreme Court's decision in Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007) (internal quotations omitted)).

To withstand a motion to dismiss under Rule 12(b)(6), "factual allegations must be enough to raise a right to relief above the speculative level." Phillips, 515 F.3d at 234. When a complaint contains well-pleaded factual allegations, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 129 U.S. 1937, 1950 (2009) (reaffirming rationale set forth in Twombly). However, a court is "not bound to accept as true a legal conclusion couched as a factual ...

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