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Maryland Casualty Co. v. Preferred Fire Protection, Inc.

United States District Court, Western District of Pennsylvania

July 17, 2014

MARYLAND CASUALTY CO., a/s/o IMAMIA, INC., Plaintiff,
v.
PREFERRED FIRE PROTECTION, INC., Defendant.

The Honorable David S. Cercone United States District Judge United States Courthouse Steven L. Smith, Esquire on behalf of Plaintiff.

Ashley N. Wiegand, Esquire Joseph L. Orszulak, II, Esquire Mark P. Merlini, Jr., Esquire on behalf of Defendant.

David S. Cercone, District Judge.

REPORT AND RECOMMENDATION

ROBERT C. MITCHELL, United States Magistrate Judge.

I. RECOMMENDATION

On April 22, 2014, Defendant, Preferred Fire Protection Inc. (“Preferred”) filed a partial motion to dismiss. Plaintiff, Maryland Casualty Company (“Maryland”) as subrogee of Imamia, Inc., filed its response on May 13, 2014. Defendant filed a reply on June 5, 2014.

After careful review of Defendant’s partial motion to dismiss, its brief in support, Plaintiff’s response and Defendant’s reply, for the following reasons, it is respectfully recommended that Defendant’s partial motion to dismiss be granted in part and denied in part. It is specifically recommended that Defendant’s motion to dismiss be granted in part as to Plaintiff’s negligence claim and that claim be dismissed with prejudice and that Defendant’s motion to dismiss be denied in all other respects.

II. REPORT

A. Background

Preferred Fire Protection Inc. is engaged in the fire protection business and was hired by Imamia in or about August 2011 to “examine, inspect, text, troubleshoot, maintain, repair, bring up to code, and service the automatic fire sprinkler system” that was already installed on Imamia’s property. Compl. [ECF No. 1] at ¶¶ 2, 7; Service Contract [ECF No. 11-1]. On February 1, 2013, a pipe associated with Imamia’s sprinkler system froze and ruptured causing a flood on its premises. Id. at ¶ 8. Plaintiff claims that the rupture of the pipe and the flood were caused by Preferred’s failure to perform its services associated with the sprinkler system in a “careful, good and workmanlike manner, and to insure that the water-filled pipes in the system were protected and/or prevented from freezing.” Id. at ¶ 9.

Subrogated to the rights of their insured, Maryland filed suit against Preferred on February 24, 2014 for negligence, breach of contract and breach of warranty. Id. at ¶¶ 16-23. Preferred filed a partial motion to dismiss[1] arguing that Maryland has not stated a negligence claim because it is barred by the gist of the action and economic loss doctrines, as it has asserted a claim for breach of contract against Preferred based upon an existing contract between the parties. Def.’s Mot. to Dismiss [ECF No. 6] at ¶ 5. Additionally, Preferred argues that Maryland has not stated a claim for breach of warranty because such a claim is not valid with respect to service contracts. Id. at ¶ 6. The Court will discuss each argument separately.

B. Standard of Review

To determine whether dismissal is proper under Federal Rule of Civil Procedure 12(b)(6) a complaint must include factual allegations that “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 697 (2009). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint and in making this determination, a court must read the complaint in the light most favorable to the plaintiff and all factual allegations must be considered true. Estelle v. Gamble, 429 U.S. 97, 99 (1976). The court must also draw all reasonable inferences from all “well-pleaded” allegations contained in the complaint. Retail Clerks Intern. Ass’n, Local 1625, AFL-CIO v. Schermerhorn, 373 U.S. 746, 753 n. 6 (1963). In determining whether a plaintiff has met this standard, the reviewing court must ignore legal conclusions, “[t]hreadbare recitals of the elements of a cause of action supported by mere conclusory statements[, ]” . . . “labels and conclusions[, ]” and “naked assertions [that are] devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 677 (citations omitted). Thus, “a complaint must do more than allege the plaintiff’s entitlement to relief. A complaint has to ‘show’ such an entitlement with its facts.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).

A court may take into consideration matters of public record, exhibits attached to the plaintiff’s complaint and undisputedly authentic documents attached to a motion to dismiss without converting a motion to dismiss into one for summary judgment. Delaware Nation v. Pennsylvania, 446 F.3d 410, 413 n. 2 (3d Cir. 2006); Sentinel Trust Co. v. Universal Bonding Ins., 316 F.3d 213, 216 (3d Cir. 2003). Preferred attached a work proposal, a service contract and its standard terms and conditions and refers to it as the contract between the parties. Plaintiff disputes the authenticity of these documents. However, this court’s reference to said ...


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