Agere Systems v. Advanced Environmental Technology

552 F.Supp.2d 515

AGERE SYSTEMS, INC., et al., Plaintiffs, v. ADVANCED ENVIRONMENTAL TECHNOLOGY CORPORATION, et al., Defendants.

Civil Action No. 02-3830.

United States District Court, E.D. Pennsylvania.

May 14, 2008.

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Andrew P. Foster, Drinker Biddle & Reath, LLP, Robert T. Carlton, Jr., White & Williams LLP, Robert M. Morris, Morris & Adelman, P.C., Richard C. Biedrzycki, Jeffrey L. Pettit, Phelan Pettit & Biedrzycki, Yvonne Y. Barnes, Booth & Tucker, LLP, Seth V.D.H. Cooley, Jeffrey S. Pollack, A. Nicole Friant, Duane Morris LLP, Stephen Paul Chawaga, Monteverde, McAlee & Hurd, Christopher R. Booth, Jr., Philadelphia, PA, Diana L. Buongiorno, John A. McKinney, Jr., Laurie J. Sands, Wolff & Samson P.C., West Orange, NJ, "Lynn Wright, Edwards Angell Palmer & Dodge, LLP, Short Hills, NJ, G. Glennon Troublefield, John M. Agnello, Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein, John M. Simon, Thomas Sabino, Wolff & Samson, Melissa E. Flax, Carella Byrne Bain et al., Roseland, NJ, Edward Fackenthal Law Office of Edward Fackenthal Norristown, PA, for Defendants.

MEMORANDUM AND ORDER

LEGROME D. DAVIS, District Judge.

Presently before the Court are defendant Advanced Environmental Technology Corporation's Motion for Summary Judgment (Doc. No. 293), Ashland's Response in Opposition (Doc. No. 296), and Advanced Environmental Technology's Reply (Doc. No. 313). After careful consideration and for the reasons set forth below, it is ORDERED that the motion is GRANTED.

I. Factual and Procedural History

The underlying cause of action in this suit was filed on June 18, 2002, under the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. § 9601, et seq., ("CERCLA") and the Pennsylvania Hazardous Sites Cleanup Act, 35 Pa. Cons.Stat. § 6020.101 et seq., ("HSCA") for the recovery of costs incurred and to be incurred in response to the release or threatened release of hazardous substances at the Boarhead Farms Superfund Site (the "Site"). Nearly six years later, on January 11, 2008, after extensive discovery and litigation, this Court granted plaintiffs leave to file a Fifth Amended Complaint (Doc. No. 279). Defendants answered the complaint on January 31, 2008 (Doc. Nos. 283, 284, 285, 286, and 287).

Defendant Ashland Chemical Company ("Ashland"), in its answer to the Fifth Amended Complaint, asserted ten new cross-claims against defendant Advanced Environmental Technology Corporation ("AETC") (Doc. No. 286). Ashland previously asserted these cross-claims in its Motion for Leave to File an Amended Answer to Plaintiffs' Fourth Amended Complaint (Doc. No. 211). However, Ashland's Motion was based on the possibility that summary judgment might be granted in favor of AETC (See Doc. Nos. 196 and 211). Thus, when AETC's Motion for Summary Judgment was denied (Doc. No. 216), Ashland's Motion for Leave to File an Amended Answer to Plaintiffs' Fourth Amended Complaint was denied as moot (Doc. No. 217).

In light of recent litigation events, Ashland now seeks to reassert its cross-claims against AETC, and AETC moved for summary judgment on all of the cross-claims.

II. Legal Standard

In considering a motion for summary judgment, the court must examine "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits," to determine whether there is any "genuine issue as to any material fact." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists when "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In ruling on the motion, the court must draw all reasonable inferences in the light most favorable to the nonmoving party, and "may not weigh the evidence or make credibility determinations." Boyle v. County of Allegheny, 139 F.3d 386, 393 (3d Cir.1998); Anderson, 477 U.S. at 255, 106 S.Ct. 2505. Therefore, "where the non-moving party's evidence contradicts the movant's, then the nonmovant's must be taken as true." Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir.1992), cert. denied, 507 U.S. 912, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993).

III. Discussion

Contribution and indemnity are each separate and distinct causes of action. The right of contribution arises as between joint tort-feasors where a party has paid more than its fair share of liability to a third party. Swartz v. Sunderland, 403 Pa. 222, 169 A.2d 289, 291 (1961). Indemnity, on the other hand, can arise from express contract, implied contract, or by operation of law. Boswell v. Aetna Life Ins. Co., 31 Pa. D. & C.3d 94, 98 (Pa. Commw.Ct.1984). Indemnity arising by operation of law "is a right which enures to a person who, without active fault on his own part, has been compelled, by reason of some legal obligation, to pay damages occasioned by the initial negligence of another, and for which he himself is only secondarily liable." MIIX Insurance Co. v. Epstein, 937 A.2d 469, 472 (Pa.Super.2007). Absent a contract to the contrary, indemnity is not available to a party who is actively negligent, Consolidated Rail Corp. v. Youngstown Steel Door Co., 695 F.Supp. 1577, 1581 (E.D.Pa.1988) (citing Rabatin v. Columbus Lines, Inc., 790 F.2d 22 (3d Cir.1986); Wingo v. Celotex Corp., 834 F.2d 375 (4th Cir.1987)), and is therefore unavailable among joint tort-feasors. Globe Indem. Co. v. Agway, Inc., 456 F.2d 472, 474-75 (3d Cir.1972); Foulke v. Dugan, 212 F.R.D. 265, 270 (E.D.Pa. 2002). As such, claims for contribution and indemnity should be analyzed separately.

A. Ashland's Claims for Contribution

Pennsylvania adopted the Uniform Contribution Among Tort-feasors Act ("UCATA").¹ 42 Pa. Cons.Stat. §§ 8321 et seq. UCATA establishes a right to contribution among joint tortfeasors. 42 Pa. Cons.Stat § 8324(a). The term "joint tortfeasor" is defined as "two or more persons jointly or severally liable in tort for the same injury to persons or property, whether or not judgment has been recovered against all or some of them." 42 Pa. Cons. Stat § 8322. "In order to be joint tortfeasors, `the parties must either act together in committing the wrong, or their acts, if independent of each other, must unite in causing a single injury.'" Foulke v. Dugan, 212 F.R.D. 265 (E.D.Pa.2002) (quoting Lasprogata v. Qualls, 263 Pa.Super. 174, 397 A.2d 803, 806 n. 4 (Pa.Super.Ct.1979); Black's Law Dictionary, 4th Ed. (1968) at 1661). Contribution "is not a recovery for the tort, but rather it is the enforcement of an equitable duty to share liability for the wrong done by both." Swartz v. Sunderland, 403 Pa. 222, 169 A.2d 289, 290 (Pa.1961) (citing Parker to Use of Bunting v. Rodgers, 125 Pa.Super. 48, 189 A. 693, 695. (Pa.Super.Ct.1937) ("The doctrine of contribution rests on the principle that, when the parties stand in aequali jure, the law requires equality, which is equity, and one of them shall not be obliged to bear a common burden in ease of the rest.")). Contribution is a fault-sharing mechanism between two parties responsible for a harm. Kemper National P & C Companies v. Smith, 419 Pa.Super. 295, 615 A.2d 372, 375 (Pa.Super.Ct.1992).

In Ashland's ten cross-claims it asserts a right to contribution based on: (1) Breach of Written Contract; (2) Breach of Oral Contract; (3) Breach of Implied Contract; (4) Unjust Enrichment; (5) Detrimental Reliance; (6) Fraud in the Inducement; (7) Failure to Exercise Reasonable Care and Control Over Contractor/Agent; (8) Negligent Hiring/Breach of Fiduciary Duty; (9) Negligent Supervision/Breach of Fiduciary Duty; and (10) Negligent Retention/Breach of Fiduciary Duty. Ashland asserts that the ten crossclaims are all claims for contribution and/or indemnity. However, the claims are plead as either contract claims or tort claims with contribution and indemnity asserted as alternative damages. Contribution, however, is a separate cause of action, and is distinct from the underlying tort upon which it is based. Svetz for Svetz v. Land Tool Co., 355 Pa.Super. 230, 513 A.2d 403, 407 (Pa.Super.Ct.1986) (quoting Puller v. Puller, 380 Pa. 219, 110 A.2d 175, 177 (Pa.1955) ("[C]ontribution is not a recovery for the tort [committed against the plaintiff,] but the enforcement of an equitable duty to share liability for the wrong done.")).

In order to be entitled to contribution, Ashland must plead that it and AETC are joint tortfeasors both liable to a third party. All ten of Ashland's cross-claims, however, allege that AETC is liable to Ashland for breaching contractual obligations or duties owed to Ashland, not a third party. This is not the basis for a contribution claim.

The only liability for which Ashland and AETC could potentially be found jointly liable to a third party are plaintiffs' CERCLA and HSCA claims. (See Pls. Fifth Am. Compl.) This Court already deemed defendants' answers to raise all cross-claims and counterclaims for contribution pursuant to CERCLA and HSCA.

For these reasons, AETC's Motion for Summary Judgment as to Ashland's crossclaims for contribution is granted.²

B. Ashland's Claims for Indemnity

1. Applicable Law

A federal court sitting in diversity applies the substantive law of the forum state. First Health Group Corp. v. National Prescription Adm'rs, Inc., 155 F.Supp.2d 194, 215 (M.D.Pa.2001). Therefore, this Court applies Pennsylvania choice of law analysis. Id. Under Pennsylvania law, the first question to resolve is whether there is an actual conflict of law. Ratti v. Wheeling Pittsburgh Steel Corp., 758 A.2d 695, 702 (Pa.Super.Ct.2000). If there is a conflict, the court "must weigh the governmental interests underlying the issue and determine which state has the greater interest in the application of its law." Id.

The Court finds that, for purposes of this motion, there is no conflict between Pennsylvania and New Jersey's law of indemnity. Both...