The Charter Oak Fire Ins. Co. v. Yeadon Fabric Domes, LLC

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THE CHARTER OAK FIRE INSURANCE COMPANY a/s/o UTICA COLLEGE, Plaintiff, v. YEADON FABRIC DOMES, LLC, YEADON FABRIC STRUCTURES, LTD and YEADON FABRIC DOMES, INC., Defendants.

YEADON FABRIC DOMES, LLC, and YEADON FABRIC STRUCTURES, LTD, Third-Party Plaintiffs, v. TEMCO SERVICE INDUSTRIES, INC., Third-Party Defendant.

No. 6:20-cv-00496 (AMN/MJK)

United States District Court, N.D. New York

March 12, 2024

APPEARANCES: SHEPS LAW GROUP, P.C. Attorneys for Plaintiff AHMUTY, DEMERS & MCMANUS, ESQS. Attorneys for Defendants/Third-Party Plaintiffs LESTER SCHWAB KATZ &amp DWYER, LLP Attorneys for Third-Party Defendant

OF COUNSEL: ROBERT C. SHEPS, ESQ. GREGG E. OPELL, ESQ. PATRICK J. PICKETT, ESQ. DAVID H. MOTOLA, ESQ. THOMAS B. COPPOLA ESQ.

MEMORANDUM-DECISION AND ORDER

Hon Anne M. Nardacci, United States District Judge

I. INTRODUCTION

On March 12, 2020, The Charter Oak Fire Insurance Company ao Utica College (“Plaintiff” or “Utica College”) commenced this action in New York State Supreme Court, Oneida County, against Yeadon Fabric Domes, LLC, Yeadon Fabric Structures, LTD, and Yeadon Fabric Domes, Inc. (collectively “Defendants/Third-Party Plaintiffs” or “Yeadon”), seeking recovery for damages sustained on March 14, 2017 during a large snow event, from the collapse of a recreational air-supported sports dome (the “Dome” or “the Utica Dome”), owned by Utica College and manufactured and designed by Yeadon. Dkt. No. 2 (“Complaint”). Utica College asserts four causes of action against Yeadon: (1) negligence; (2) strict products liability; (3) breach of warranty; and (4) breach of contract. See generally id. Utica College is seeking monetary compensation totaling $3,434,276.34 for damages incurred from the collapse of the Dome, including the cost of replacing the Dome. Id. at ¶¶ 2-3.

On May 1, 2020, Yeadon filed a Petition for Removal to the Northern District of New York. Dkt. No. 1. On May 21, 2021, Yeadon filed a third-party complaint against Temco Service Industries, Inc. (“Third-Party Defendant” or “Temco”), seeking common law indemnification and contribution as to the causes of action in the Complaint for negligence, strict products liability, and breach of warranty. Dkt. No. 35 (“Third-Party Complaint”). In its Third-Party Complaint, Yeadon alleges that Temco was negligent in its maintenance, control, and monitoring of the Utica Dome both prior to the snowstorm and on the day of the Dome's collapse. See generally id. In its answer to the Third-Party Complaint, Temco asserts counterclaims against Yeadon for common law indemnification and contribution for any judgment against it. Dkt. No. 43.

Presently before the Court is Yeadon's Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure (“Rule 56”), seeking dismissal of Plaintiff's Complaint and Temco's Third-Party Counterclaims. Dkt. No. 60 (“Yeadon's Motion”). Utica College submitted an Opposition to Yeadon's Motion, Dkt. No. 68 (“Opposition”), and Yeadon Replied, Dkt. No. 71. Also before the Court is Temco's Motion for Summary Judgment pursuant to Rule 56 seeking dismissal of the Third-Party Complaint. Dkt. No. 59 (“Temco's Motion”). Yeadon submitted an Opposition to Temco's Motion, Dkt. No. 67, and Temco Replied, Dkt. No. 74.^[1]

For the reasons set forth below, Yeadon's Motion is granted in part and denied in part, and Temco's Motion is granted in its entirety.

II. BACKGROUND^[2]

A. Contract between Yeadon and Utica College

On March 5, 2015, Yeadon entered into a contract with Utica College (“Yeadon Contract”) to provide “a new multi-sport air-supported structure, measuring 270 feet wide by 500 feet long by 81 feet high.” Dkt. No. 60-3 at ¶¶ 1-2.^[3] The Dome's membrane was “made up of two layers of Teflon-coated polyester fabric separated by a layer of insulation. The membrane [was] supported by air pressure that [was] regulated by a mechanical inflation system that circulate[d] air in and out of the Dome. The membrane [was] held down by reinforcing cables anchored to a concrete grade beam along the perimeter of the Dome.” Dkt. No. 59-17 at 3. There was a one-story brick building near the southwest corner of the Dome. Id. at 5.

The Yeadon Contract included two inflation units with furnaces, a remote access thermostat,^[4] a built-in standby inflation package,^[5] and an Automation Package.^[6] Dkt. No. 60-3 at ¶¶ 3-5. Utica College also purchased from Yeadon certain add-on features, including a snow sensor,^[7] remote monitoring tools,^[8] and wind temperature controls. Id. at ¶¶ 45, 110; Dkt. No. 685 at ¶ 131.

The Yeadon Contract warrantied the outer fabric of the Dome, which was manufactured by Seaman Corporation (“Seaman”). Dkt. No. 60-3 at ¶¶ 6, 50. The Yeadon Contract also contained a warranty which excluded “the fabric, motors, blowers, emergency generators, heating and air conditioning units, controls, thermostats, lighting fixtures, structural cables and protective screens, netting or any other items or equipment used or supplied for the air-supported structure,” and which was “limited to the warranty provided by the manufacturer of the aforementioned fabric and equipment, in lieu of any other warranty, express or implied.” Id. at ¶ 9.^[9] The Yeadon Contract excluded other warranties in a clause stating:

EXCLUSION OF OTHER WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTY HEREIN, THERE ARE NO OTHER WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PURPOSE, APPLICABLE TO THE AIR-SUPPORTED STRUCTURE .... NO WARRANTIES OR REPRESENTATIONS AT ANY TIME MADE BY ANY SALES REPRESENTATIVE, DEALER, AGENT OR ANY PERSON SHALL BE EFFECTIVE TO VARY OR EXPAND THE ABOVE EXPRESS WARRANTY OR ANY OTHER TERM HEREOF.

Id. at ¶¶ 11-12. The Yeadon Contract further contained a “limited liability provision”:

LIABILITY LIMITATION. Yeadon shall not be liable in contract or in tort (including negligence) for loss of profits or revenue, loss of use of equipment or facilities, cost of capital, or for any special, indirect, incidental or consequential damages of any nature resulting from or in any manner relating to the air-supported structure covered hereby, its design, use, any inability to use the same or any delay in delivery of the same.

Dkt. No. 60-20 at 7.

Additionally, Yeadon agreed in the Contract to provide “necessary calculations and construction related drawings” for the Utica Dome design. Dkt. No. 60-20 at ¶ 22.^[10] On October 1, 2015, Utica College received a “Handover Certificate” from Yeadon which provided that Utica College “accepts the air-supported structure,” and that its acceptance “notes that the work is substantially complete.” Dkt. No. 60-3 at ¶ 93; Dkt. No. 60-22 at 1. On November 16, 2015, a Certificate of Occupancy was issued to Utica College noting that there were “no visible defects at [t]ime of [i]nspection.” Dkt. No. 60-3 at ¶ 94; Dkt. No. 60-25 at 1.^[11]

B. Temco's Responsibilities to Utica College

From October 2015 until March 2017, the Dome “was operated, maintained, and controlled by Utica College and/or its contractor, Temco.” Dkt. No. 60-3 at ¶ 95. Temco provided custodial and ground-level snow removal services to the College. Dkt. No. 59-20 at ¶ 22.

An unsigned contract between Utica College and Temco (“Temco Contract”), dated June 1, 2008, specified the following responsibilities for Temco and Utica College:

(a) Temco accepts the responsibility for the supervision, cleaning/housekeeping at Utica College (b) Temco will make all salary payments and provide the fringe benefit program for all custodians, housekeepers, building maintenance and grounds maintenance Personnel [and] (c) The College will supervise, direct and be responsible for all building maintenance and grounds care involved in this phase of the physical plant operation.

Dkt. No. 59-10 at 2.^[12]

Utica College relied on Temco to “monitor, maintain and control” the Utica Dome. Dkt. No. 60-3 at ¶ 96. Temco was able to both monitor the Dome's automated controls and manually operate the Dome. Id. at ¶ 97. Michael Durant, Temco's heating, ventilation, and air conditioning (“HVAC”) technician, testified that when there is snow, a grounds crew employed by Temco “was tasked with . . . removing the snow around the base of the [D]ome,” but he had never observed any member of the grounds crew manually removing snow off the Dome. Dkt. No. 60-15 at 26:1527:22. Additionally, Daniel Bollana, Utica College's Director of Facilities, testified that Temco's duties included “snow removal around the [D]ome and [] maintaining the area around the [D]ome to make sure that the area was kept free of debris, and . . . mak[ing] sure that all of the operational parts of the [D]ome were functioning.” Dkt. No. 60-21 at 37:8-17.

C. Materials and Training Provided by Yeadon

1. Owner's Manual and Drawings

After the Dome was completed, Yeadon provided Utica College with a set of drawings and maintenance manuals, including Yeadon's Operating and Maintenance Manual, (the “Owner's Manual”), which explained how to operate the Utica Dome. Dkt. No. 60-3 at ¶¶ 29-32, 109; Dkt. No. 60-18. The Owner's Manual provided guidance with respect to heavy snow accumulation. Dkt. No. 60-3 at ¶¶ 33-36. For example, under the section “Snow Accumulation,” the Owner's Manual states:

Air Supported Structures are designed to shed snow through a combination of pressure, curvature and some heat transfer. While effective, it is possible, under some scenarios, for snow to accumulate on the top, along the perimeter base or on the door attachment curtains. If this condition occurs, the owner must take steps to manually remove the snow immediately. This means that snow must NOT be allowed to accumulate on the top of the bubble, around the dome base or on connecting curtains ....If

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