MRL Dev. I, LLC v. Whitecap Inv. Corp.

MRL Development I, LLC and MICHAEL R. LUCHT, Plaintiffs, v. WHITECAP INVESTMENT CORP., d/b/a PARADISE LUMBER;

PUTNAM LUMBER & EXPORT CO.; PUTNAM FAMILY PROPERTIES, INC.;

and GREAT SOUTHERN WOOD PRESERVING, INC., Defendants.

WHITECAP INVESTMENT CORP., d/b/a PARADISE LUMBER, Cross-claimant, v. PUTNAM LUMBER & EXPORT CO.; PUTNAM FAMILY PROPERTIES, INC.;and GREAT SOUTHERN WOOD PRESERVING, INC., Cross-claim defendant.

PUTNAM FAMILY PROPERTIES, INC., Cross-claimant, v. WHITECAP INVESTMENT CORP., d/b/a PARADISE LUMBER;and GREAT SOUTHERN WOOD PRESERVING, INC., Cross-claim defendants.

PUTNAM LUMBER & EXPORT COMPANY, Cross-claimant, v. WHITECAP INVESTMENT CORP., d/b/a PARADISE LUMBER;and GREAT SOUTHERN WOOD PRESERVING, INC., Cross-claim defendant.

Civil No. 2013-48

DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN

November 18, 2014

ATTORNEYS:

David A. Bornn, Esq.

The Bornn Firm, PLLC

St. Thomas, VI

Paul Martin Platte, Esq.

Columbia, SC

For the Plaintiffs ,

Chad C. Messier, Esq.

Alex Moskowitz, Esq.

Dudley, Topper & Feuerzeig

St. Thomas, VI

For the defendant/cross-claimant Whitecap Investment Corp. d/b/a Paradise Lumber,

Lisa M. Komives, Esq.

Bolt Nagi PC

St. Thomas, VI

Robert A. Carlson, Esq.

Lee, Hernandez, Landrum, Garofalo and Blake APC

Miami, FL

For the defendants/cross-claimaints Putnam Lumber & Export Co. and Putnam Family Properties, Inc,

Daryl C. Barnes, Esq.

Bryant, Barnes, Moss & Beckstedt

St. Croix, VI

Stewart Andrew Kelly, Esq.

Lightfoot, Franklin & White, LLC

Birmingham, AL

For the defendant/cross-claim defendant Great Southern Wood Preserving, Inc.

MEMORANDUM OPINION

GÓMEZ, J.

Before the Court are the several motions of the defendants/cross-claim defendants in this matter for total or partial summary judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

Great Southern Wood Preserving, Inc. ("GSWP") is an Alabama lumber wholesaler. In addition to selling wood, it also provides chemical and pressure treatments to prevent lumber from decaying. The ostensible purpose of such treatments is to render the lumber safe for use in buildings.

From in or about 2003 until in or about 2009, GSWP regularly sold treated lumber and provided lumber-treatment services to the defendant/cross-claimant Putnam Family Properties, then doing business as Putnam Lumber and Export Company ("Putnam Family"). Putnam Family later sold its wood export business and name to defendant/cross-claimant Putnam Lumber and Export Co. ("Putnam Lumber")(Putnam Family and Putnam Lumber are collectively referred to herein as the "Putnam Defendants"). Putnam Family, a Florida corporation, was itself alumber retailer. Putnam Family regularly sold lumber to, among others, the defendant/cross-claimant Whitecap Investment Corporation, doing business as Paradise Lumber ("Paradise Lumber").

Paradise Lumber is a lumber retailer operating in St. John, United States Virgin Islands. It sold lumber that it had purchased from Putnam Family, and which had been treated by GSWP, to various consumers in St. John. These consumers used the lumber in their sundry buildings. Two of these consumers are the plaintiffs in the instant case, MRL Development I, LLC ("MRL Dev.") and Michael R. Lucht ("Lucht") (collectively "MRL").

MRL claims that the GSWP-treated lumber, sold by the Putnam Defendants, prematurely decayed, causing damage to its house, into which the lumber had been incorporated.

MRL initiated this matter on February 15, 2013, in the Superior Court of the Virgin Islands. The amended complaint (the "Complaint") named GSWP, Paradise Lumber, and the Putnam Defendants as defendants. The Complaint included six counts: (1) breach of contract against Paradise Lumber; (2) breach of contract against the Putnam Defendants; (3) breach of warranty against all defendants; (4) negligence against all defendants; (5) strict liability against all defendants; and (6) deceptive trade practices against all defendants.

Thereafter, on April 15, 2013, Paradise Lumber filed its answer to MRL's complaint. Paradise Lumber also filed cross-claims against GSWP and the Putnam Defendants. Paradise Lumber's cross-claims seek indemnity and contribution from GSWP and the Putnam Defendants.

On May 14, 2013, GSWP removed the action to this Court. Following discovery, and approximately one month before trial, the defendants filed several motions for total or partial summary judgment. On August 29, 2014, GSWP filed a motion for summary judgment on the cross-claims brought against it by Paradise Lumber. Thereafter, on September 2, 2014, Paradise Lumber moved for partial summary judgment against MRL. Paradise Lumber seeks judgment in its favor as to Count Six, deceptive trade practices. Also, on September 2, 2014, the Putnam Defendants filed a motion seeking judgment on all claims alleged against them in MRL's Complaint. Paradise Lumber joined that motion. Finally, also on September 2, 2014, GSWP filed a motion for summary judgment as to all claims alleged against it in MRL's Complaint. Paradise Lumber joined GSWP's motion in total, and the Putnam Defendants joined it in part. MRL opposes all of the summary judgment motions. Each of the motions for summary judgment shall be addressed herein.

II. DISCUSSION

Summary judgment is appropriate if "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Hersh v. Allen Products Co., 789 F.2d 230, 232 (3d Cir. 1986).

The movant has the initial burden of showing there is no genuine issue of material fact, but once this burden is met it shifts to the non-moving party to establish specific facts showing there is a genuine issue for trial. Gans v. Mundy, 762 F.2d 338, 342 (3d Cir. 1985). The non-moving party "may not rest upon mere allegations, general denials, or . . . vague statements . . . ." Quiroga v. Hasbro, Inc., 934 F.2d 497, 500 (3d Cir. 1991). "[T]here is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

"[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. In making this determination, this Court draws all reasonable inferences in favor of the non-moving party. See Bd.of Educ. v. Earls, 536 U.S. 822, 850 (2002); see also Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994).

III. ANALYSIS

A. Claims Alleged in the Complaint

GSWP seeks judgment in its favor as to all claims alleged against it in MRL's Complaint. GSWP argues that MRL's claims are time-barred by the statute of limitations. Both the Putnam Defendants and Paradise Lumber join GSWP's argument on that issue.

Federal courts sitting in diversity apply the statute of limitations of the Court's forum state. See Lafferty v. St. Riel, 495 F.3d 72, 76 (3d Cir. 2007). The Virgin Islands Code provides, in pertinent part:

Civil actions shall only be commenced within the periods prescribed below after the cause of action shall have accrued, except when, in special cases, a different limitation is prescribed by statute:

* * *

(3) Six years --

(A) An action upon a contract or liability, express or implied, excepting those mentioned in paragraph (1)(C) of this section.

(B) An action upon a liability created by statute, other than a penalty or forfeiture.

(C) An action for waste or trespass upon real property.

(D) An action for taking, detaining, or injuring personal property, including an action for the specific recovery thereof.

* * *

(5) Two years--

(A) An action for libel, slander, assault, battery, seduction, false imprisonment, or for any injury to the person or rights of another not arising on contract and not herein especially enumerated, or to set aside a sale of real property for non-payment of real property taxes pursuant to Title 33, chapter 89, subchapter III of this Code.

V.I. CODE ANN. tit. 5, § 31.

MRL has asserted at least two different categories of claims, those based in contract and those based in tort. Each of these claims carries its own statute of limitations. As such, each category of claim will be considered separately.

1. Counts One through Three: Breach of Contract and Breach of Warranty

There are two different types of contract claims, those based in the general common law of contracts and those based on the Uniform Commercial Code, which governs contracts for the sale of goods. A warranty is an express or implied agreement, promising that something in furtherance of the underlying contract is guaranteed by one of the contracting parties. Warranty, Black's Law Dictionary (9th ed. 2009). Warrantyclaims, like contract claims, fall into two categories: common law warranty claims, where the underlying contract is not subject to the UCC, see, e.g., Paramount Aviation Corp. v. Agusta, 288 F.3d 67, 73 (3d Cir. 2002)(applying the New Jersey common law of warranties to a service contract); and UCC warranty claims, where the underlying contract is for the sale of goods, see V.I. CODE ANN. tit. 11A, §§ 2-313, 2-314, 2-315.

A common law contract or warranty claim is subject to a six year statute of limitations. See V.I. CODE ANN. tit. 5, § 31. In such contract cases, the cause of action accrues when there is an existing right to sue based on breach of contract. Cooper v. Sirota, 37 F. App'x 46, 48 (3d Cir. 2002); see also White v. S&E Bakery, Inc., 26 V.I. 87, 90 (Terr. Ct. 1991). That is, a claim accrues at the time that an injured party should be reasonably aware that another party to the contract failed to perform. See Cooper, 37 F. App'x at 48.

Because a claim accrues at the time the injured party should reasonably be aware of the injury, the time before the injury is discovered may toll the running of the statute of limitations. See id. That...