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Continental Casualty Co. v. Equity Industrial Maple Heights, LLC

United States District Court, N.D. Ohio, Eastern Division

April 10, 2017

Continental Casualty Co., Plaintiff,
v.
Equity Industrial Maple Heights, LLC, Defendant.

          MEMORANDUM OF OPINION AND ORDER

          PATRICIA A. GAUGHAN United States District Judge.

         INTRODUCTION

         This matter is before the Court upon Fannie May Confections, Inc.'s Motion to Dismiss Defendant Equity Industrial Maple Heights, LLC's Third Party Complaint against Third Party Defendant Fannie May Confections, Inc., a/k/a Fannie May Confections Brands, Inc. (Doc. 47). Also pending are the Third-Party Defendant Fannie May Confections, Inc. a/k/a Fannie May Confections Brands, Inc.'s Motion to Dismiss “Cross-Claim” of Defendant Tempest, Inc. (Doc. 58) and Motion to Dismiss of Third Party Defendant Fannie May Confections, Inc. a/k/a Fannie May Confections Brands, Inc. the Cross-Claim of Fire Protection, Inc. (Doc. 74). This is an insurance case arising out of a warehouse fire. For the reasons that follow, the motions are GRANTED.

         FACTS

         For purposes of ruling on the pending motions, the facts asserted in the relevant complaints are presumed true.

         Plaintiff, Continental Casualty Company (“Continental Casualty”), filed this action as subrogee to its insured, Fannie May Confections, Inc. a/k/a Fannie May Confections Brands, Inc. (“Fannie May”), seeking recovery for amounts it paid to Fannie May for losses sustained as the result of a warehouse fire. The initial complaint is filed against defendant, Equity Industrial Maple Heights, LLC (“Equity”).

         According to the complaint, Equity owns a large warehouse in Maple Heights, Ohio. Fannie May entered into a lease agreement with Equity. During the lease term, a large fire broke out at the warehouse causing extensive damage. Continental Casualty alleges that the compressed air component of the fire suppression system was disabled. In addition, the fire suppression system lacked an adequate water supply and thus was unable to control the fire until the fire department arrived. Ultimately, it appears that plaintiff paid Fannie May $55 million for the damage to property stored at the warehouse. As a result of the payment, plaintiff became subrogated to the rights of Fannie May.

         Continental Casualty then filed an amended complaint adding new party defendants, Commercial Property Maintenance, LLC (“Commercial Maintenance”), Fire Protection, Inc. (“Fire Protection”), and Tempest, Inc. (“Tempest”). Continental Casualty alleges that Commercial Maintenance was responsible for maintaining, servicing and inspecting the property, including the inspection of the fire suppression system and the water supply connected thereto. Fire Protection is also alleged to have serviced and maintained the fire suppression system.

         Tempest was retained by Fannie May to service and maintain the ammonia refrigeration system used by Fannie May for the operation of freezers and cooler units used for the storage of food and perishable items. According to the amended complaint, Tempest employees came to the property in response to an after-hours alarm. Continental Casualty alleges that the actions or inaction of Tempest employees caused an explosion due to the ammonia levels at the property, which resulted in the fire at issue.

         Continental Casualty asserts negligence claims against all defendants and further asserts breach of contract claims against Equity and Tempest. Equity, in turn, filed a third-party complaint against a number of entities, including Fannie May. Equity alleges that Fannie May was contractually responsible for maintaining the sprinkler system. In addition, Equity claims that a provision the parties' lease agreement provides that Fannie May will indemnify Equity for any damages incurred as a result of Fannie May's improper conduct. Specifically, Equity asserts claims for breach of contract, contribution pursuant to R.C. § 2307.25, contractual and common law indemnification, and “res ipsa loquitur” against Fannie May. In their answers to the amended complaint, both Tempest and Prevention Fire filed cross-claims for contribution against Fannie May on that grounds that, to the extent Tempest or Prevention Fire is found liable to Continental Casualty, Fannie May is liable for all or a portion of the damages as a result of Fannie May's own conduct.

         Fannie May now moves to dismiss the claims asserted by Equity in the third-party complaint. Fannie May also moves to dismiss the claims asserted as cross-claims by Tempest and Fire Protection. Equity and Tempest opposed the motions, but Fire Prevention did not.

         STANDARD OF REVIEW

         When considering a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the allegations of the complaint must be taken as true and construed liberally in favor of the plaintiff. Lawrence v. Chancery Court of Tenn., 188 F.3d 687, 691 (6th Cir. 1999). Notice pleading requires only that the defendant be given “fair notice of what the plaintiff's claim is and the grounds upon which it rests.” Conley, 355 U.S. at 47. However, the complaint must set forth “more than the bare assertion of legal conclusions.” Allard v. Weitzman (In Re DeLorean Motor Co.), 991 F.2d 1236, 1240 (6th Cir. 1993). Legal conclusions and unwarranted factual inferences are not accepted as true, nor are mere conclusions afforded liberal Rule 12(b)(6) review. Fingers v. Jackson-Madison County General Hospital District, 101 F.3d 702 (6th Cir. Nov. 21, 1996), unpublished. Dismissal is proper if the complaint lacks an allegation regarding a required element necessary to obtain relief. Craighead v. E.F. Hutton & Co., 899 F.2d 485, 489-490 (6th Cir. 1990).

         In addition, a claimant must provide “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569 (2007). A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1955 (2009). Nor does a complaint ...


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