Hawkins Constr. Co. v. Peterson Contractors, Inc.

970 F.Supp.2d 945

HAWKINS CONSTRUCTION COMPANY, a Nebraska corporation; Plaintiff,

v.PETERSON CONTRACTORS, INC., an Iowa Corporation; Ground Improvement Engineering, L.L.C., an Iowa Limited Liability Company; Geopier Foundation Company, a Georgia corporation; Travelers Casualty and Surety Company of America, a Connecticut corporation; Zurich American Insurance Company, an Illinois corporation; and Axis Surplus Insurance Company, an Illinois corporation; Defendants.

No. 8:13CV46.

United States District Court, D. Nebraska.

Sept. 4, 2013.

Edward H. Tricker, Monica L. Freeman, Woods, Aitken Law Firm, Lincoln, NE, Kari A. F. Scheer, Todd W. Weidemann, Woods, Aitken Law Firm, Omaha, NE, for Plaintiff.

Benton J. Barton, Darin J. Lang, Michael A. Paul, Hall, Evans Law Firm, Denver, CO, Thomas R. Olson, Olson, Welle Law Firm, West St. Paul, MN, Austin L. McKillip, Cline, Williams Law Firm, Randall L. Goyette, Baylor, Evnen Law Firm, Lincoln, NE, Richard P. Jeffries, Cline, Williams Law Firm, Craig F. Martin, Lamson, Dugan Law Firm, Angela Probasco, Kutak, Rock Law Firm, Omaha, NE, David J. Welder, Michael G. Norris, Norris, Keplinger Law Firm, Overland Park, KS, Bradley J. Baumgart, Larry Fields, Kutak, Rock Law Firm, Kansas City, MO, Jason M. Taylor, Mark F. Wolfe, Traub, Lieberman Law Firm, Chicago, IL, for Defendants.

MEMORANDUM AND ORDER

JOSEPH F. BATAILLON, District Judge.

This matter is before the court on Zurich American Insurance Company's (“Zurich”) motion to dismiss for failure to state a claim, Filing No. 45; Axis Surplus Insurance Company's (“Axis”) motion to dismiss for failure to state a claim, Filing No. 47; Ground Improvement Engineering's (“GIE”) motion to dismiss for failure to state a claim, Filing No. 55; Geopier Foundation Company's (“Geopier”) motion to dismiss for failure to state a claim, Filing No. 62; and Hawkins Construction Company's (“Hawkins”) motion to strike the reply brief, Filing No. 72.

BACKGROUND

Hawkins entered into a Prime Contract with the Nebraska Department of Roads (“NDOR”) for construction and reconstruction of United States Highway 75/United States Highway 34. The Prime Contract required Hawkins to build and design an Intermediate Foundation Improvement (“IFI”). Hawkins was required to design and build an IFI to increase the allowable bearing capacity and improve global stability beneath a Mechanically Stabilized Earth wall (“MSE Wall”) to be placed on the Project. Filing No. 1 at ¶ 11. Hawkins entered into a subcontract with Peterson Contractors, Inc. (“PCI”) to build the foundation. PCI signed and agreed to indemnify Hawkins. PCI also entered into a performance bond and a payment bond, with a penal sum of $279,400. PCI obtained the bond from defendant Travelers Casualty and Surety (“Travelers”). Hawkins also required PCI to obtain a commercial general liability policy and an umbrella policy in the amount $3,000,000. PCI then entered into an agreement with Geopier and also GIE, noted as the Sub–Consultant Agreement. Hawkins alleges that PCI, GIE and Geopier breached their duty of care and failed to properly design and perform their work on the project, and in fact NDOR rejected the work done by them. The NDOR demanded removal and replacement of the work. Following PCI's failure to cure, Hawkins' personnel had to remediate the work.

Hawkins sent Travelers a claim for damages. Travelers refused to make payment for the removal and replacement of the deficient and defective work. Likewise, following a request by Hawkins, neither Zurich nor Axis accepted or denied responsibility or agreed to indemnify or pay Hawkins for its damages.

Hawkins sues on the following claims for relief: First Claim, breach of contract against PCI; Second Claim, negligence against PCI; Third Claim, breach of implied warranties against PCI; Fourth Claim, contractual indemnity against PCI; Fifth Claim, negligence against Geopier; Sixth Claim, breach of implied warrants against both Geopier and GIE; Seventh Claim, equitable indemnity against both Geopier and GIE; Eighth Claim, negligence against GIE; Ninth Claim, contribution against Geopier and GIE; Tenth Claim, equitable subrogation against Geopier and GIE; Eleventh Claim, misrepresentation against GIE and Geopier; Twelfth Claim, performance bond claim against Travelers; Thirteenth Claim, payment bond claim against Travelers; Fourteenth Claim, breach of insurance agreement against Zurich; and Fifteenth Claim, breach of insurance agreement against Axis. Filing No. 1.

STANDARD OF REVIEW

Under the Federal Rules, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The rules require a “ ‘showing,’ rather than a blanket assertion, of entitlement to relief.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Fed.R.Civ.P. 8(a)(2)). “Specific facts are not necessary; the statement need only ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ ” Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). In order to survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the plaintiff's obligation to provide the grounds for his entitlement to relief necessitates that the complaint contain “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

The factual allegations of a complaint are assumed true and construed in favor of the plaintiff, “even if it strikes a savvy judge that actual proof of those facts is improbable and ‘that a recovery is very remote and unlikely.’ ” Id. (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)). “On the assumption that all the allegations in the complaint are true (even if doubtful in fact),” the allegations in the complaint must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555–56, 127 S.Ct. 1955. In other words, the complaint must plead “enough facts to state a claim for relief that is plausible on its face.” Id. at 547, 127 S.Ct. 1955. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (stating that the plausibility standard does not require a probability, but asks for more than a sheer possibility that a defendant has acted unlawfully.).

Twombly is based on the principles that (1) the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions and (2) only a complaint that states a plausible claim for relief survives a motion to dismiss. Id. at 678–79, 129 S.Ct. 1937. Determining whether a complaint states a plausible claim for relief is “a context-specific task” that requires the court “to draw on its judicial experience and common sense.” Id. at 679, 129 S.Ct. 1937. Accordingly, under Twombly, a court considering a motion to dismiss may begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. Id. Although legal conclusions “can provide the framework of a complaint, they must be supported by factual allegations.” Id. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id.

Thus, the court must find “enough factual matter (taken as true) to suggest” that “discovery will reveal evidence” of the elements of the claim. Twombly, 550 U.S. at 558, 556, 127 S.Ct. 1955;Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 347, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) (explaining that something beyond a faint hope that the discovery process might lead eventually to some plausible cause of action must be alleged). When the allegations in a complaint, however true, could not raise a claim of entitlement to relief, the complaint should be dismissed for failure to set a claim under Fed.R.Civ.P. 12(b)(6). Twombly, 550 U.S. at 558, 127 S.Ct. 1955;Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.

DISCUSSION

A. Filing No. 45, Motion to Dismiss by Zurich; Filing No. 47, Motion to Dismiss by Axis

Zurich contends that Hawkins' breach of contract claim against it alleging failure or refusal to indemnify with respect to remediation should be dismissed.¹ First, argues Zurich, Hawkins has failed to set forth any facts showing it is an additional insured under the Zurich policy issued to PCI. Second, even if Hawkins were an additional insured, Zurich contends that Hawkins' voluntary remediation does not constitute “property damage” caused by an “occurrence” under the commercial general liability policy. In particular, these two defendants argue that there are no facts in the complaint that, if true, would show Hawkins is an additional insured under the policies. Further, these two defendants contend that Hawkins fails to cite to specific parts of the contract showing it is an additional insured.

Hawkins disagrees and contends it clearly alleges in the complaint that it is an additional insured under the policies, pointing to ¶ 18, stating “PCI obtained the Policies from Zurich and Axis which Policies named Hawkins as an additional insured.” Filing No. 1, Complaint, ¶ 18. Further, Hawkins also attached a Certificate of Liability Insurance as Exhibit 4 to the Complaint, which lists both Zurich and Axis as insurers and states, “For the project described as US–75/US–34—Platteview Intersection NH–34–7(124), Hawkins Construction and NDOR are named as additional insured on a primary, noncontributory basis including completed operations on the GL.” (See Complaint Exhibit 4). Filing No. 1, Complaint, Ex. 4....