Szaloczy v. Elevators

JAMES SZALOCZY and MEGAN SZALOCZY, Plaintiffs, v. KONE ELEVATORS AND ESCALATORS and JOHN DOE DEFENDANTS (1-10), Defendants; andKONE INC. Defendant/Third-Party Plaintiff, v. CENTERRA INTEGRATED SERVICES, LLC, Third-Party Defendant.

Case No. 3:20-cv-03815 (BRM) (LHG)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

June 29, 2021

NOT FOR PUBLICATION

OPINION

MARTINOTTI, DISTRICT JUDGE

Before this Court is a Motion to Dismiss filed by Third-Party Defendant Centerra Integrated Services, LLC ("Centerra") seeking to dismiss Defendant/Third-Party Plaintiff KONE, Inc.'s ("KONE") Third-Party Complaint with prejudice, pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 21.) KONE opposed the motion. (ECF No. 25.) Centerra filed a reply. (ECF No. 29.) KONE filed a sur-reply opposing the motion. (ECF No. 33.) Having reviewed the submissions filed in connection with the motion and having declined to hold oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth below and for good cause appearing, Centerra's Motion to Dismiss is GRANTED in part and DENIED in part.

I. BACKGROUND

For the purposes of this Motion to Dismiss, the Court "accept[s] as true all factual allegations in the [Third-Party Complaint] and draw all inferences from the facts alleged in the light most favorable to" KONE, the Third-Party Plaintiff. Phillips v. Cty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008) (citing Worldcom, Inc. v. Graphnet, Inc., 343 F.3d 651, 653 (3d Cir. 2003)). Furthermore, the Court also considers any "document integral to or explicitly relied upon in the complaint." In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (citing Shaw v. Dig. Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)).

On March 14, 2016, KONE and Centerra entered into the KONE CareTM Premium Agreement for Vertical Transportation (the "Agreement"). (ECF No. 25 at 6.) Pursuant to the Agreement, KONE contracted to provide maintenance services for the elevators on the premises of the Department of Veteran Affairs (the "VA") located at 151 Knollcroft Road, Lyons, New Jersey (the "Premises"). (Id. at 6-7.) The Agreement has an indemnification provision (the "Indemnification Provision") that states:

To the extent permitted by law, Purchaser [i.e., Centerra] will indemnify, defend, and hold KONE harmless from and against any and all claims, demands, action, suits, proceedings, judgments, damages, loss, liabilities, costs, or expenses, including without limitation court costs and reasonable attorney's fees, whether arising from or related to Purchaser's, KONE's, or any third party's negligence, willful misconduct, or act or omissions in performance of the Agreement.

(Id. at 7.) The Agreement further states: "Purchaser [i.e., Centerra] will name KONE as an additional insured on its insurance policy." (Id.) The Agreement also provides: "In the event anypart of the Agreement is determined to be invalid or non-enforceable, the remaining part or provisions will continue in full force and effect." (Id.)

The Agreement remained in effect on March 28, 2018, when James Szaloczy ("Szaloczy"), a VA employee, sustained personal injuries in an elevator on the Premises. (Id. at 6-7.) Szaloczy alleges the elevator abruptly free fell and then suddenly slammed to a stop, causing him to be thrown into the air, ultimately landing on his hands and knees. (ECF No. 1-1 at 6.) On March 9, 2020, Szaloczy and his wife Megan Szaloczy (collectively, "Plaintiffs") filed a Complaint in the Superior Court of New Jersey, Law Division, against KONE (sued as "KONE Elevators and Escalators") and fictitious John Doe defendants (the "Lawsuit"). (ECF No. 25 at 6.) Plaintiffs asserted negligence and res ipsa claims against KONE for its alleged failure to exercise due care over the elevator, which allegedly caused Plaintiffs' injuries. (ECF No. 1-1 at 7-8.)

On April 8, 2020, KONE removed the Lawsuit to this Court. (ECF No. 21-1 at 6.) By a letter dated July 22, 2020, KONE requested Centerra to defend and indemnify KONE from and against all claims and damages in the Lawsuit, as well as secure a policy of insurance naming KONE as an additional insured. (ECF No. 15 at 5.) Centerra did not respond to the letter. (Id.) On August 25, 2020, KONE sent a follow-up letter to Centerra, making the same requests. (Id. at 6.) Centerra did not respond to the follow-up letter. (Id.)

On October 8, 2020, KONE filed a Third-Party Complaint against Centerra, arguing the Lawsuit triggers the Indemnification Provision, which entitles KONE to a full defense and indemnification from Centerra for all the claims and damages alleged by Plaintiffs. (ECF No. 25 at 7.) KONE asserts Centerra failed to fulfill such an obligation under the Agreement. (Id.) KONE also argues Centerra failed to name KONE as an additional insured on Centerra's insurance policy, in breach of another obligation under the Agreement. (Id. at 8.) The Third-Party Complaintcontains causes of action for breach of contract (Count I), contractual indemnification (Count II), common law indemnification (Count III), and contribution (Count IV). (ECF No. 15 at 6-10.)

On November 24, 2020, Centerra filed a Motion to Dismiss the Third-Party Complaint with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 21.) On December 21, 2020, KONE opposed the motion. (ECF No. 25.) On January 12, 2021, Centerra filed a reply. (ECF No. 29.) On January 29, 2021, KONE filed a sur-reply opposing the motion. (ECF No. 33.)

II. LEGAL STANDARD

"[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). However, the plaintiff's "obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). A court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan, 478 U.S. at 286 (citations omitted). Instead, assuming the factual allegations in the complaint are true, those "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp 235-36 (3d ed. 2004)).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for misconduct alleged." Id. This "plausibility standard" requires the complaint to allege "more than a sheer possibility that a defendant has acted unlawfully," but it "is not akin to a probability requirement." Id. (quoting Twombly, 550 U.S. at 556). "Detailed factual allegations"are not required, but "more than an unadorned, the defendant-harmed-me accusation" must be pled; it must include "further factual enhancement" and not just conclusory statements or a recitation of the elements of a cause of action. Id. (citing Twombly, 550 U.S. at 555, 557).

"Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief.'" Id. (quoting Fed. R. Civ. P. 8(a)(2)). However, courts are "not compelled to accept 'unsupported conclusions and unwarranted inferences,'" Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (quoting Schuylkill Energy Res. Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997)), nor "a legal conclusion couched as a factual allegation." Papasan, 478 U.S. at 286 (citations omitted).

While, as a general rule, the court may not consider anything beyond the four corners of the complaint on a motion to dismiss pursuant to Rule 12(b)(6), the Third Circuit has held that "a court may consider certain narrowly defined types of material without converting the motion to dismiss to a summary judgment motion, including items that are integral to or explicitly relied upon in the complaint." Coulter v. Doerr, 486 F. App'x 227, 228 (3d Cir. 2012) (citing In re Rockefeller Ctr. Props. Sec. Litig., 184 F.3d 280, 287 (3d Cir. 1999)).

III. DECISION

A. Centerra's Motion to Dismiss Is Denied as to Count I and Count II

1. It Is Premature to Decide Whether the Indemnification Provision Is Enforceable

Centerra contends the Indemnification Provision is unenforceable under N.J. Stat. Ann. §2A:40A-1, which provides an indemnitee in a maintenance contract cannot be indemnified if it was solely negligent in causing the plaintiff's injury. (ECF No. 21-1 at 9.) Centerra suggests KONE is solely negligent in causing Plaintiffs' injuries, because Centerra is not alleged to be negligent and the only other defendants are fictitious parties. (Id.) Centerra insists § 2A:40A-1 applies to the Indemnification Provision, because the Agreement is for the repair, maintenance and servicing of an elevator, which is an "appurtenance" to a building under the statute. (ECF No. 29 at 7-8.) KONE counters § 2A:40A-1, pursuant to its legislative intent and history, only applies to construction contracts. (ECF No. 25 at 9.) KONE argues § 2A:40A-1 does not apply to an elevator maintenance agreement, like the Agreement, which is not a construction contract. (Id. at 12-13.) KONE asserts the elevator in question, which is not part of a construction project, is not an "appurtenance" under § 2A:40A-1. (ECF No. 33 at 7.)...