Brethren Mut. Ins. Co. v. Sears, Roebuck & Co.

BRETHREN MUTUAL INSURANCE COMPANY, Plaintiff, v. SEARS, ROEBUCK AND COMPANY, et al., Defendants.

CIVIL NO.: WDQ-12-0753

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND, NORTHERN DIVISION

Dated: July 10, 2014

MEMORANDUM OPINION

Brethren Mutual Insurance Company ("Brethren") sued Sears, Roebuck and Company ("Sears") and Liberty Transportation, Inc. ("Liberty") (together, the "defendants") for negligence. ECF No. 2. Sears removed to this Court. ECF No. 1. Pending are the defendants' motion for sanctions or to reopen discovery and file a third-party complaint, ECF No. 45, and motion to dismiss or for summary judgment, ECF No. 47. No hearing is necessary. Local Rule 105.6 (D. Md. 2011). For the following reasons, discovery will be reopened, the motion for sanctions and to file a third-party complaint will be denied without prejudice, and summary judgment will be denied.

I. Background¹

At all relevant times. Brethren insured the home of Terry Stancill ("Mr. Stancill") and his wife Regina Stancill ("Mrs. Stancill"), (together, the "Stancills"). See ECF No. 48-1. On May 10, 2009, the Stancills bought a Kenmore refrigerator with a built-in icemaker from a Sears store in Bel Air, Maryland. See ECF Nos. 48-2, 49-3 at 11, 49-4 at 6. They paid an additional fee for Sears to deliver and install the new refrigerator. See id. The refrigerator had a one-year limited warranty, which included repair services for all defects "in material or workmanship."² ECF No. 47-6 at 3.

On May 11, 2009, pursuant to a Home Delivery and Shuttle Carrier Agreement (the "Agreement") with Sears Logistics Services ("SLS"),³ Liberty delivered and installed the refrigerator. See ECF Nos. 48-3 at 1, 48-4, 48-5. To connect the icemaker to the water line, the refrigerator manual requiresthe use of ¼ inch outside diameter copper tubing.⁴ ECF No. 47-6 at 6. When Liberty installed the refrigerator, it connected the icemaker to a plastic water line.⁵ ECF No. 47-3 at 1.

Under the Agreement, dated December 7, 2008, Liberty agreed to perform its services "in a prompt, safe and workmanlike manner, with due care, and in accordance with the standard of performance exhibited by highly-skilled transportation professionals operating on a nation-wide basis." ECF No. 48-3 at 1. It also agreed to "hook up all appliances according to manufacturers' instructions." Id. In the event of any conflict between the manufacturers' instructions and the provisions of the Agreement or the instructions of SLS, SLS clients, or retail customers, the manufacturers' instructions controlled. See id.

Incorporated in the Agreement is Exhibit A, which outlines the respective "Operations and Responsibilities" of SLS and Liberty. See ECF No. 48-3 at 12. With respect to the installation of refrigerators and freezers, Exhibit A instructs Liberty to "re-connect icemaker to existing water line, provided that water line meets manufacturer and local buildingrequirements. Note: icemaker connection may require connectors and additional tubing." See id. at 19.

When asked if Liberty installed the refrigerator with a plastic water line, a representative of Liberty testified that she "assum[ed Liberty] did, but [she was] not absolutely certain," because the installer did not note what line was used but "a plastic water line normally come[s] with that piece."⁶ ECF No. 48-8 at 4. She also confirmed that "generally a water line comes with a refrigerator with an ice maker." Id. Finally, she confirmed that a "Best Practices Guide" developed by Sears for refrigerator installation, and used in training Liberty installers, directs that installers should "review the electrical, water, and gas hook-ups in the home as required." Id. at 5; see also ECF No. 48-9 at 14 (Guide).

In August 2009, the Stancills requested that Sears fix problems with the icemaker. See ECF No. 48-10. On August 14, 2009, a Sears technician wrapped insulation around therefrigerator's suction line to stop leaking,⁷ ECF Nos. 48-10 at 5, 48-11 at 6, and on August 28, 2009, a Sears technician replaced a cracked drip pan, ECF No. 48-10 at 10. Both repair jobs required the technicians to move the refrigerator. See ECF Nos. 48-11 at 6, 8, 48-12 at 4.

Dan Smalt, a Sears employee who trains repair technicians, testified that Sears technicians are required to inspect the entire appliance when doing a service call on a refrigerator. See ECF No. 48-14 at 5. If the technician discovered that the appliance had not been properly installed, he was responsible for notifying Sears's installation department and fixing the problem if he could. Id. Smalt also stated that neither of the technicians who repaired the Stancills' refrigerator noted that the refrigerator used a plastic water line, even though such lines "are known to deteriorate over a period of time." Id. at 7. It was his "understanding that when a refrigerator is installed, the customer is advised by the installation group they should have a copper water line installed. There's also instructions in the . . . owner's manual that [customers] should have a copper water line . . . . [Sears] technicians also are required to inform customers that have plastic water lines thatthey should have a copper water line installed by a plumber."⁸ Id. Finally, he stated that "there [are no] instances in which a person may prefer or may need a plastic water line over a copper water line," because "plastic water lines are known to deteriorate and . . . leak." Id. However, if the customer did not purchase a separate installation kit, in his "experience . . . the installation crew will hook up an appliance to an existing water line."⁹ Id.

Between September 23 and October 3, 2010, while the Stancills were away on a two-week vacation in Maine, the water line to the icemaker failed. See ECF Nos. 47-7 at 4, 48-12 at 3. The resulting leak caused extensive damage to their kitchen. See, e.g., ECF Nos. 47-9 at 2-3, 48-17. The Kenmore refrigerator's owner's manual states to "[s]hut off water supply to the icemaker" while on vacation, ECF No. 47-6 at 14, but the Stancills had not turned off the water supply before they left,¹⁰ ECF No. 48-7 at 7. Brethren Mutual paid the Stancills'$84,654.42 insurance claim to repair the damage to their kitchen. ECF No. 48-17 at 1.

On February 22, 2012, Brethren filed a subrogation action¹¹ against Sears for negligence in the Circuit Court for Harford County, Maryland. ECF No. 2. On March 27, 2012, Sears removed to this Court. ECF No. 1. On March 29, 2012, Sears answered. ECF No. 8.

On July 30, 2012, Dominic Catanzaro, PE, issued a report about the damage to the Stancill residence and his examination and testing of the plastic water line.¹² ECF No. 47-3 at 1-2. The report stated that "[o]n close inspection" of the water line tubing, he "observed that it was cracked through the wallthickness permitting for the seepage of water." Id. The cracking was "consistent with damage caused by crushing." Id. Because of the location of the cracked portion of the tube, Catanzaro stated that the crushing "could not have occurred in the Stancill house . . . as it simply was not in a position to be crushed or squeezed between any two surfaces." Id.

The report also stated that "[t]he tubing's yellowed color and soiled exterior suggested that it was not brand new tubing first used at the time the Stancill[s'] refrigerator was installed but rather, this tubing was salvaged from another installation and used in the Stancill[s'] home."¹³ Id. at 2. The report noted that using "previously used construction materials, particularly plastic water pipe is not accepted practice" and that "the Kenmore Elite Use and Care Guide specifically calls for ¼ inch O.D. copper tubing, not plastic tubing."¹⁴ Id. at 2.

The report concluded that the water damage was caused by seepage from the cracked plastic water line tube, and that"using this plastic tubing is not in accordance with Kenmore's installation instructions." Id. at 3.

Catanzaro later testified that, in his opinion, there was sufficient slack in the water line, so that if the refrigerator was pulled out for repair or cleaning,¹⁵ no stress or kinks would be put on the water line. ECF No. 48-7 at 4. He also stated that, based on the way the water line was affixed to the back of the refrigerator, there was no way for the line to be crushed by the bottom or back of the refrigerator if it was moved. Id. at 6. He also noted that, in the area where the pipe was cracked and leaking, it was "impossible to [him] that it could have been crushed or pinched or impinged upon or damaged in any way . . . once it's in service." Id. Finally, Catanzaro confirmed, however, that if the Stancills had turned off the water to the icemaker as instructed in the refrigerator's manual, the damage to the kitchen would not have occurred. Id. at 4.

On September 25, 2012, the Court granted Sears's consent motion for leave to file a third-party complaint against Liberty, based on Catanzaro's findings, seeking contractual indemnification and common law indemnification andcontribution.¹⁶ ECF No. 14. On October 22, 2012, Brethren moved to amend the complaint to assert a negligence claim against Liberty, based on Catanzaro's report. ECF No. 25. On April 30, 2013, the Court granted Brethren's motion to amend. ECF No. 30.

On October 30, 2013, the parties deposed the Stancills. ECF No. 45 at 6. During her deposition, Brethren's counsel asked Mrs. Stancill if, while she was on vacation, she had "worried about anything bad happening to [her] home." Id.; ECF No. 45-10 at 1. Mrs. Stancill responded that she was not worried, because the Stancills "had a man who was working for [them] come twice a day to [feed and] let the dog in and out of the house . . . . He kind of kept an eye on what was going on." Id. The defendants' counsel then questioned Mrs. Stancill about the man, whom the defendants had not known about.¹⁷ ECF Nos. 46-1 at 4. Mrs. Stancill told the defendants' counsel that his name was David Jones,¹⁸...