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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 stemming from the alleged failure to properly construct three retaining walls at Plaintiff American Stores Properties, Inc.'s ("ASPI") food distribution center located in Denver, Pennsylvania. 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 alleged to have been involved in various aspects of the construction of the retaining walls. This action was transferred to the docket of this Court on April 30, 2009. The named defendants are: (1) Spotts, Stevens, & McCoy, Inc. ("SSM"); (2) Clark/Epstein;*fn1 (3) The Clark Construction Group, Inc.; (4) A. Epstein & Sons, International, Inc.; (5) Earth Engineering, Inc. ("EEI"); (6) Handwerk Contractors ("Handwerk");*fn2 (7) MacCaferri Gabions, Inc. ("MGI"); (8) Baseline Contracting, Inc. ("BCI"); (9) Haines & Kibbelhouse, Inc. ("Haines"); (10) High Associates, Ltd. ("High"); (11) CBL Service Corporation (f/k/a Lenders Support Group, Inc.) ("CBL"); and (12) Timothy E. Debes ("Debes").

Five Motions to Dismiss are currently before the Court. In the Motions, Defendants seek dismissal of Counts which contain allegations of negligent or tortious conduct in regard to their participation in building the distribution center. The Motions were filed by Haines, BCI, Handwerk, EEI and MGI ("Moving Defendants"). Defendant Haines filed its Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) on August 12, 2005 (Doc. No. 3). Plaintiff filed a Response in Opposition to Haines' Motion to Dismiss on August 29, 2005 (Doc. No. 27). Defendants BCI and Handwerk each filed Motions entitled: "Response to and Joinder in Defendant Haines & Kibbelhouse, Inc.'s Motion Pursuant to Rule 12(b)" on August 26, 2005 and August 31, 2005, respectively (Doc. Nos. 26 and 31).*fn3 Plaintiff subsequently filed Responses in Opposition to BCI and Handwerks' Motions to Dismiss on September 7, 2005 and September 9, 2005, respectively (Doc. Nos. 32 and 35).*fn4

Defendant EEI filed a Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) on September 13, 2005 (Doc. No. 36). Plaintiff filed a Response in Opposition to EEI's Motion to Dismiss on October 13, 2005 (Doc. No. 69). Defendant MGI filed a Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) on October 20, 2005 (Doc. No. 78). Plaintiff filed a Response in Opposition to MGI's Motion to Dismiss on November 7, 2005 (Doc. No. 88).

For the reasons that follow, Moving Defendants' Motions to Dismiss will be granted.*fn5


This litigation stems from the construction of a food and warehouse distribution center ("the Distribution Center" or "Building No. 264")*fn6 owned by Plaintiff ASPI, located in Denver, Pennsylvania. (Pl. Am. Comp. ¶ 15.) 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 foundation for the building. (Id. ¶ 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.) Plaintiff alleges that each of the named Defendants had roles in the design and/or construction of the site's gabion retaining walls.

Five gabion retaining walls were designed and constructed at the Distribution Center. (Pl. Am. Comp. ¶ 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. A 40-foot section of Wall No. 2 has already failed. (Id.) Portions of Wall No. 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 and signs of movement within the walls are not normal and were not expected. (Id. ¶ ¶ 42, 43.)

The genesis of this conflict began in 1996, when Plaintiff entered into an "Entitlement Services Agreement" with Defendant High ("High Agreement") to engage in the commercial development of the Distribution Center. (Id. ¶ 17.) Under this Agreement, Defendant High had the responsibility to manage the civil design and procurement of entitlements (i.e. obtaining the necessary permits) on behalf of ASPI. (Id. ¶ 17.) The High Agreement authorized High to engage subcontractors for the preparation of engineering investigations, reports, plans and specifications for the Distribution Center site work. (Id.) On or about September 10, 1998, Plaintiff ASPI entered into an "Abbreviated Standard Form of Agreement Between Owner and Architect" with SSM ("SSM Agreement"), under which SSM agreed to provide civil engineering plans and specifications for all site improvements at the Distribution Center, as well as construction, observation, and inspection of the site retaining walls. (Id. ¶ 26.) The SSM Agreement, in part, gave rise to the allegations against Defendant MGI, which are discussed below.

On or about June 29, 1998, after the design of the Distribution Center was complete, Plaintiff ASPI entered into an agreement with Clark/Epstein entitled: "Agreement Between Owner and Contractor for the Building 264 Project - Cost of the Work Plus a Fee With a Guaranteed Maximum Price." ("Clark/Epstein Agreement") (Id. ¶ 29; Pl. Ex. D.) Pursuant to the Clark/Epstein Agreement, Clark/Epstein agreed to construct the Distribution Center and its associated site work in accordance with the construction plans and specifications previously prepared under the High and SSM Agreements. (Id. ¶ 29.) Clark/Epstein also agreed to provide all labor and materials for the construction of the gabion retaining walls. (Id.) The Clark/Epstein Agreement gave rise to the allegations against Defendants EEI, Handwerk, BCI and Haines, which are discussed below.

Due to the complex nature of this action, the Court will describe the allegations against Moving Defendants individually.

A. Defendant MGI: Negligent Design and Inspection

ASPI alleges one count of Negligent Design and Inspection against Defendant MGI (Count X). (Pl. Am. Comp. ¶ ¶ 96-99.) MGI is alleged to be in the business of designing and manufacturing gabion retaining wall systems and component materials.*fn7 (Id. ¶ 38.) SSM allegedly designed the site retaining walls using software provided by MGI, which included methodologies and minimum factors of safety.*fn8 (Id. ¶ ¶ 28, 38.) MGI is also alleged to have reviewed SSM's retaining wall plans and subsequently approved those plans in a letter dated February 13, 1998. (Id.; Pl. Ex. F.) In addition, MGI sold gabions that were used in the construction of the site retaining walls to subcontractor BCI.*fn9 (Pl. Am. Comp. ¶ 38.)

Plaintiff alleges that MGI owed a duty to provide advice or recommendations for the design and/or installation of the gabion retaining walls in accordance with the construction plans, specifications and industry standards. (Pl. Am. Comp. ¶ 97.) ASPI claims that MGI breached that duty when it approved SSM's design which was allegedly made in accordance with MGI's design specification computer software. (Id.) Plaintiff alleges that the software used improper design criteria for the backfill and retained soils, and that the walls were not designed in accordance with the known safety factors in the industry to prevent excessive movement. (Id.) Plaintiff contends that MGI was negligent in its observation and inspection of the retaining walls during construction. (Id. ¶ 98.) ASPI alleges damages in excess of $3,000,000 as a result of MGI's negligence and breach of its duty. (Id. ¶ 99.)

B. Defendant EEI: Negligent Inspection and Testing

ASPI alleges one count of Negligent Inspection and Testing against Defendant EEI (Count IX). (Pl. Am. Comp. ¶ ¶ 93-95.) EEI entered into a subcontract agreement with Clark/Epstein to provide consulting services, which included the testing and inspection of materials related to the earthwork at the Distribution Center. (Id. ¶ 36.) During the construction of ...

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