Opinion
Civil Action No. 97-775, c/w. 97-803, c/w 98-2200 SECTION: "R"(4)
November 2, 2000
ORDER AND REASONS
Before the Court is defendant Grinnell Corporation's motion for summary judgment, or, in the alternative, for partial summary judgment to dismiss plaintiffs' claims. For the following reasons, the Court grants in part and denies in part Grinnell's motion for partial summary judgment.
I. Background
West Coast Liquidators, Inc. entered into a contract with Broadmoor Corporation on December 8, 1988 to design and build its New Orleans distribution center, in which Broadmoor warranted the construction to "be of good quality, free from defects, and in conformance with the Contract Documents." (Pls.' Mot. Supplement Exs., Ex. 1 at 1-2.) During the early design stages, Broadmoor's architect in charge of construction, Dean Duplantier, realized that the size of the building prevented it from conforming to the travel distance restrictions found in the applicable Building Code. Specifically, the longest distance between a point in the warehouse and the nearest exit door was approximately 600 feet. The Building Code, however, allowed only a maximum of 400 feet to permit occupants adequate time to escape in the event of a fire. To solve the problem, WCL could either dig a tunnel under the warehouse or obtain a variance allowing an increase in the permissible travel distance. As a tunnel was expensive and impractical, Duplantier pursued a variance. He hoped to persuade the New Orleans Board of Building Standards and Appeals as well as the State Fire Marshal's Office that in this building design the longer distances were compatible with a safe exit during a fire.
To help substantiate this variance proposal, Duplantier hired Richard Schulte, a professional engineer, to determine whether the empty space in the upper reaches of the warehouse would serve as a sufficient smoke, gas, and heat reservoir to allow occupants to leave the building safely. Schulte generated several computerized fire models in which he used 289 linear feet (the width of the three North-South aisles in the high bay area of the warehouse) to determine the horizontal component of the reservoir. Based on these models, he concluded that 36 feet 4 inches was the lowest level to which smoke from a hypothetical fire would descend and presented these findings to the Board as part of the variance request.
After reviewing the variance application, Schulte's testimony, and his report, the Board approved the variance. In its determination letter, the Board ruled: "The criteria and conditions stated in the consultant's presentation . . . shall be binding as though repeated herein in extenso." (Def.'s Mem. Supp. Mot. Summ. J., Ex. 10 at 2.) The letter also emphasized four stipulations, the third of which provides: "[T]here shall be three main aisles running through the rack structure in the high bay area. The total width of these three aisles shall be a minimum of 289 feet." ( Id., Ex. 10 at 2.) The Board forwarded this determination letter to the Director of Safety and Permits. The Director, in turn, advised Broadmoor by letter that it must verify in writing its acceptance and compliance with the Board's conditions. Duplantier replied in writing, but did not address the third condition.
Subsequently, Broadmoor subcontracted with Grinnell on April 13, 1989 to design and install a sprinkler system. ( Id., Ex. 11 at 1.) In the subcontract, Grinnell agreed "to assume towards [Broadmoor] in connection with the work covered by this subcontract, all of the obligations and responsibilities which [Broadmoor] by those documents assumes towards [WCL] or anyone else." ( Id., Ex. 11 at 1.) As design of the sprinkler system required Grinnell to review detailed warehouse drawings showing the aisles and rack locations, Grinnell was initially provided a conceptual drawing of the warehouse and, later, the architectural drawings, including revisions. (Pls.' Mem. Opp'n Def.'s Mot. Summ. J., Ex. 8.) The architectural drawings showed merchandise stored on the floor of the west high-bay aisle, but they did not contain any information regarding the usage of the other two aisles. ( Id., Ex. 24.) To further assist Grinnell during the design phase, WCL invited Charles Martin, who was charged with the responsibility of designing the sprinkler system, to visit WCL's Rancho Cucamonga distribution center, which used portable racks stacked two high. Based on these drawings and observations at the Rancho Cucamonga facility, Grinnell designed a sprinkler system, which Broadmoor accepted and incorporated into the overall warehouse design. Ultimately, Grinnell also installed the sprinkler system.
Grinnell now argues that the WCL used portable racks in the open aisleways (where the initial fire began) in contravention of its understanding of the intended warehouse operations. Moreover, Grinnell argues, the placement of portable racks in these aisleways without in-rack sprinklers violated not only an express condition of the variance, but also National Fire Protection Association ("NFPA") standard 231C. Those violations, Grinnell asserts, constitute a superseding intervening cause of plaintiffs' losses and preclude any liability by Grinnell.
Grinnell further contends that the Louisiana Product Liability Act governs its liability for failure to warn. It argues that under the LPLA, WCL's use of portable racks was not a reasonably anticipated use of the sprinkler system, which was designed only to protect the structure of the warehouse. Accordingly, Grinnell argues it cannot be held liable for failure to warn. Furthermore, Grinnell claims that the Court must dismiss plaintiffs' claims for breach of contract, negligence, strict liability, and breach of warranty because the LPLA provides plaintiffs' exclusive grounds of relief. Grinnell also urges a number of alternative reasons why it is not liable, in the event the LPLA is not applicable.
II. Discussion
A. Summary Judgment Standard
Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552 (1986). Accordingly, a court must be satisfied that no reasonable trier of fact could find for the nonmoving party. In other words, "if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the nonmoving party to carry its burden." Beck v. Texas State Bd. of Dental Exam'rs, 204 F.3d 629, 633 (5th Cir. 2000).
Initially, the moving party bears the burden of establishing that there are no genuine issues of material fact. If the dispositive issue is one for which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. at 2554; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. Summary judgment is mandated if the nonmovant fails to make a showing sufficient to establish the existence of an element essential on which it bears the burden of proof at trial. See Id. at 322, 106 S.Ct. at 2552. The nonmovant may not rest upon the pleadings but must identify specific facts that establish a genuine issue exists for trial. See Id. at 325, 106 S.Ct. at 2553-54; Rushing v. Kansas City S. Ry. Co., 185 F.3d 496, 505 (5th Cir. 1999).
B. Superseding Intervening Cause
Grinnell first argues that WCL's placement of portable racks in the east aisleway of the warehouse violated not only an express condition of the variance, but also NFPA standard 231C. These violations, Grinnell asserts, are the superseding intervening cause of plaintiffs' losses and preclude ascribing any liability to Grinnell. In response, plaintiffs argue that, in Younger v. Marshall Industries, Inc., the Louisiana Supreme Court "unambiguously" rejected the traditional proximate cause and intervening act analysis in favor of a duty-risk analysis. (Pls.' Mem. Opp'n Mot. Summ. J. at 11.) See also Younger v. Marshall Indus., Inc., 618 So.2d 866, 872-73 (La. 1993). Although plaintiffs acknowledge that a line of Fifth Circuit cases, several of which postdate Younger, employ the traditional proximate cause language, they assert: "Those cases[,] whatever their vintage [,] do not express the law of Louisiana on proximate causation and intervening or superseding acts." (Pls.' Mem. Opp'n Mot. Summ. J. at 11.) See, e.g., Pickett v. RTS Helicopter, 128 F.3d 925, 929 (5th Cir. 1997) (defining proximate cause under Louisiana law, applying it to the LPLA, and noting that "the presence of the intervening cause prevents a finding of liability on the one responsible for the more remote cause" (quoting Graham v. Amoco Oil Co., 21 F.3d 643, 648-49 (5th Cir. 1994))).
While Younger did reject the intervening act terminology, it did not reject the analytical value of considering intervening acts. Younger, 618 So.2d at 872-73. Indeed, Louisiana courts continue to consider intervening acts in their causation analysis. See, e.g., Shows v. Shoney's, Inc., 738 So.2d 724, 732 (La.App. 1st Cir. 1999) ("not liable for damages caused by separate, independent or intervening causes"); Guillie v. Comprehensive Addiction Programs, Inc., 735 So.2d 775, 778 (La.App. 4th Cir. 1999) ("[I]f it is determined that the intervening cause is a superseding intervening cause, the defendant is exonerated."); Griffin v. International Ins. Co., 727 So.2d 485, 491 (La.App. 3d Cir. 1998), writ denied, 741 So.2d 656 (La. 1999) ("An initial tortfeasor will not be relieved of the consequences of his negligence unless the intervening cause superseded the original negligence and alone produced the injury." (quoting Domingue v. State Dept. of Pub. Safety, 490 So.2d 772, 775 (La.App. 3d Cir. 1986))). For under the duty-risk analytical framework, the first factor is causation-in-fact and the fourth factor considers whether the risk of harm was within the scope of protection afforded by the duty breached. See, e.g., Oubre v. Union Carbide Corp., 747 So.2d 212, 225-26 (La.App. 5th Cir. 1999). The fourth factor in essence asks whether, even if defendant's conduct is a cause in fact of the damage, should it be relieved of liability because plaintiffs' injury is not the kind one would expect to result from the defendant's breach of duty. See Hill v. Lundin Assocs., Inc., 256 So.2d 620 (La. 1972). It is in this context that the duty-risk analysis considers the effect of intervening acts of others. See, e.g., Goodrich v. Caterpillar, Inc., 717 So.2d 1235 (La.App. 2d Cir. 1998). Therefore, the Court rejects plaintiffs' contention that Younger precludes any analysis of intervening acts in determining "proximate" causation under the LPLA. See LA. REV. STAT. § 9:2800.54 (A) (employing term "proximately caused").
The Court further finds that whether WCL's placement of the portable racks violated a condition of the variance or NFPA standard 231C is not determinative in the causation analysis. This follows because even if these factors contributed to the fire, Grinnell's conduct could also be a substantial causative factor if Grinnell knew or should have known when it designed the sprinkler system that WCL intended to store merchandise requiring fire protection in the aisleways. Grinnell argues that it always understood the aisleways were to remain clear. To substantiate its understanding, Grinnell posits the absence of any indications in the architectural drawings that WCL would store merchandise in the east high bay aisleway and points to Winthrop Davenport, Jr.'s deposition testimony that WCL did not know how or when it was going to use the east aisleway. (Def.'s Reply Mem. Supp. Mot. Summ. J., Ex. C at 98-103, 111-17.) Plaintiffs counter, arguing Grinnell knew, or should have known, that the aisles were never intended to be clear and open spaces. In support of their contention, they cite (1) a Broadmoor drawing that shows merchandise would be placed in the west high bay aisle, (2) Davenport's deposition testimony that the west high bay aisle was intended for temporary storage, (3) the presence of a maintenance shop in the west high bay area, (4) the massive area of the aisleways (approximately four acres), (5) Martin's tour of WCL's Ranch Cucamonga distribution center (at which portable racks were stacked two high), and (6) Duplantier's deposition testimony that Broadmoor always understood that merchandise could be placed on the floor of the east high bay aisle. (Pls.' Mem. Opp'n Def.'s Mot. Summ. J., Exs. 12, 24, 34.) Whether Grinnell knew or should' have known that WCL intended to store merchandise in the warehouse aisles is a question of material fact. The parties have presented contradictory evidence, which a jury must assess. Accordingly, the Court denies Grinnell's motion for summary judgment that WCL's placement of portable racks in the east aisleway was a superseding intervening cause of plaintiffs' damages.
C. Louisiana Products Liability Act
Grinnell also contends that the LPLA governs the scope of its liability because, under the terms of the Act, Grinnell is a manufacturer, and the sprinkler system is a product. See LA. REV. STAT. § 9:2800.53 (defining "manufacturer" and "product"); LA. CIVIL CODE art. 466 (addressing component parts of buildings or other constructions). Plaintiffs challenge this contention, arguing there is a material question of fact whether Grinnell qualifies as a "manufacturer" and proffer vague references to Grinnell testimony allegedly disavowing any responsibility for designing, manufacturing, or installing the sprinkler system.
The LPLA defines "manufacturer" as:
a person or entity who is in the business of manufacturing a product for placement into trade or commerce. "Manufacturing a product" means producing, making, fabricating, constructing, designing, remanufacturing, reconditioning or refurbishing a product. "Manufacturer" also means:
(a) A person or entity who labels a product as his own or who otherwise holds himself out to be the manufacturer of the product.
(b) A seller of a product who exercises control over or influences a characteristic of the design, construction or quality of the product that causes damage.
(c) A manufacturer of a product who incorporates into the product a component or part manufactured by another manufacturer.
LA. REV. STAT. § 9:2800.53(1). The LPLA defines "product" as "a corporeal movable that is manufactured for placement into trade or commerce, including a product that forms a component part of or that is subsequently incorporated into another product or an immovable." Id. § 9:2800.53(3). Here, Grinnell designed the layout of the sprinkler system, manufactured approximately 68,000 sprinkler heads, fabricated or purchased the piping system and exterior tank, and installed the system. These actions are consistent with the definition of a manufacturer under the LPLA. See, e.g., Chappuis V. Sears Roebuck Co., 358 So.2d 926, 930 (LA. 1978) (manufacturer includes one who "held the product out to the public as its own"); Caulon v. Wal-Mart Stores, Inc., 734 So.2d 916, 919 (LA. App. 1st Cir. 1999) (manufacturer includes one "who assembles a product for sale"). As plaintiffs fail to present any evidence supporting their contention to the contrary, the Court finds that Grinnell is a manufacturer and that the LPLA governs the scope of Grinnell's liability for its sprinkler system.
Under the LPLA, a manufacturer of a product is liable to a claimant for damage "proximately caused" by a characteristic of the product that rendered it "unreasonably dangerous" when the damage arose from a reasonably anticipated use of the product by the claimant. Id. § 9:2800.54(A). A claimant must prove that the product was "unreasonably dangerous" in one of the following four ways: (1) in construction or composition; (2) in design; (3) because of inadequate warning; or (4) because of nonconformity to an express warranty. Id. § 9:2800.54 (B). These are the "exclusive theories of liability for manufacturers for damage caused by their products" under Louisiana law. Id. § 9:2800.52. See also Brown v. R.J. Reynolds Tobacco Co., 52 F.3d 524, 526 (5th Cir. 1995); Lewis v. Intermedics Intraocular, Inc., 56 F.3d 703, 706 (5th Cir. 1995). Here, plaintiffs assert in their complaint that Grinnell failed to provide adequate warnings about the limitations of the sprinkler system design.
Grinnell argues that plaintiffs' desired warnings presume it knew WCL intended to place merchandise in the aisles. It reiterates that it understood the aisles would remain clear, designed the sprinkler system accordingly, and could not reasonably have foreseen that WCL would store merchandise in the aisles. Grinnell also asserts that it cannot be held liable for failure to warn when WCL knew, or should have known, of the fire hazards associated with the portable racks. Citing Jerry Jones' and Samuel Vanover's deposition testimony, it argues that if WCL had conducted proper annual inspections it would have discovered that sprinkler heads seventy feet above the floor could not adequately protect merchandise stored below. (Def.'s Mem. Supp. Mot. Summ. J., Ex. 20 at 140-41, 23 at 28-29.) Plaintiffs counter, arguing it would be reasonable to expect a sprinkler system to extinguish a fire in the warehouse and reiterating that it was obvious that WCL would store merchandise in the broad aisleways. plaintiffs further argue that Grinnell's unanticipated use analysis is inapposite because the LPLA addresses the use of the sprinkler system, not the storage configuration of the warehouse.
To the extent Grinnell's argument focuses on the alleged change in the use of the warehouse, the Court agrees with plaintiffs that the appropriate focus under the LPLA is the use of the sprinkler system. Nevertheless, factual questions remain whether (1) Grinnell was aware, or should have been aware, that WCL intended to store merchandise in the aisleways and (2) WCL was or should have been aware of the fire hazards associated with the portable racks. As these factual issues are material, the Court denies Grinnell's motion for summary judgment on the warnings issue. The Court further finds that the LPLA provides the exclusive theories of Grinnell's liability for any damage caused by its sprinkler system. Therefore, the Court dismisses plaintiffs' claims for negligence and strict liability.
D. Breach of Contract and Breach of Warranty
Although the LPLA defines the scope of Grinnell's tortious liability, it does not foreclose Grinnell's accountability for its contractual obligations. See LA. REV. STAT. § 9:2800.52 (noting that "`fault' within the meaning of Civil Code Article 2315" triggers LPLA liability). Plaintiffs asserts contract and warranty claims based on Grinnell's subcontract with WCL's general contractor, Broadmoor. (Def.'s Mem. Supp. Mot. Summ. J., Ex. 13 at 5-7.) Grinnell argues, however, that it only entered into a contract with Broadmoor, not plaintiffs or their insured. Accordingly, in the absence of any privity of contract, plaintiffs have no cause of action for breach of contract or breach of warranty.
Despite Grinnell's assertion that it has no contractual privity with plaintiffs or their insured, the second paragraph of its subcontract with Broadmoor provides:
[Grinnell] has read and is thoroughly familiar with said Contract Documents C, which include the contract between WCL and Broadmoor,] and agrees to be bound to [Broadmoor] by the terms of said Contract Documents insofar as they relate in any part or in any way to the work undertaken herein, and to assume towards [Broadmoor], in connection with the work covered by this subcontract, all the obligations and responsibilities which [Broadmoor] by those documents assumes towards [WCL] or anyone else.
(Grinnell's Mem. Supp. Mot. Summ. J., Ex. 11 at 1.) By these terms, Grinnell assumed towards Broadmoor all of the obligations and responsibilities that Broadmoor had assumed towards WCL, which included a warranty that the construction "be of good quality" and "free from defects." (Pls.' Mot. Supplemental Exs., Ex. 1 at 1-2.) While this subcontract does not directly obligate Grinnell to WCL, the Court finds that Grinnell explicitly assumed certain obligations and responsibilities for the benefit of WCL as a third-party beneficiary. See, e.g., Paul v. Louisiana State Employees' Group Benefit Program, 762 So.2d 136, 140 (La.App. 1st Cir. 2000) ("[T]he intent of the contracting parties to stipulate a benefit in favor of a third party must be made manifestly clear" before its is enforceable.); Bulot v. Intracoastal Tubular Servs., 730 So.2d 1012, 1020 (La.App. 4th Cir. 1999) (same). Grinnell, however, only "guaranteed" its fire sprinkler work "against all defects of materials or workmanship, as required under the Contract Documents." (Pls.' Mot. Supplemental Exs., Ex. 11 at 4.) And, as plaintiffs do not dispute, the subcontract only addresses "Fire Sprinkler Work," it does not obligate Grinnell to identify the need for or recommend the use of draft curtains, smoke and heat ventilators, smoke removal devices, or fire walls. (Id., Ex. 11 at 1.) Therefore, the Court grants Grinnell's motion to dismiss plaintiffs' contractual claims regarding Grinnell's failure to recommend other fire protection measures and denies Grinnell's motion to dismiss plaintiffs' remaining claims for breach of contract and breach of warranty.
III. Conclusion
For the foregoing reasons the Court grants in part and denies in part defendant Grinnell's motion for partial summary judgment.