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Chemicals LLC v. Dutchland

January 26, 2011

CHEMICALS LLC PLAINTIFF
v.
DUTCHLAND, INC., ET AL. DEFENDANTS THIRD-PARTY PLAINTIFFS
v.
HALL BLAKE & ASSOCIATES, INC. THIRD-PARTY DEFENDANTS



MEMORANDUM OPINION

This matter is before the Court upon Third-Party Defendant Hall Blake & Associates, Inc.'s Motion for Summary Judgment (Docket #95). Defendants/Third-Party Plaintiffs Dutchland, Inc., Paul Stoltzfus, and Erik Lederman have responded (Docket #98). Third-Party Defendant has replied (Docket #103). This matter is now ripe for adjudication. For the following reasons, Third-Party Defendant's Motion for Summary Judgment is GRANTED.

BACKGROUND

Plaintiff ISP Chemicals, LLC ("ISP"), is a limited liability company headquartered in Calvert City, Kentucky. ISP is a supplier of specialty chemicals and products. Defendant Dutchland, Inc. ("Dutchland") is a corporation headquartered in Gap, Pennsylvania. Dutchland's primary business is the design, manufacture, and construction of concrete structures such as those used for waste water treatment tanks. Defendants Paul Stoltzfus and Erik Lederman were Dutchland employees until 2006 and 2007, respectively.*fn1

On or about October 12, 2005, ISP entered into a contract with Dutchland. In exchange for approximately $2.5 million, Dutchland agreed to design, construct, and install an above ground, pre-cast waste water treatment tank at ISP's Calvert City facility. The contract contained a ten year warranty by Dutchland to remedy any structural or non-conforming defects.

ISP was responsible for the preparation of the surrounding soil, and hired Third-Party Defendant Hall Blake & Associates, Inc. ("Hall Blake") to investigate the soil and subgrade preparations necessary to support the waste water treatment tank. Dutchland was to provide the "acceptable limits of differential settlement across the tank base" to ISP to aid in its preparation of the soil. Dutchland provided these figures, and according to ISP, Hall Blake prepared the soil in accordance with Dutchland's specifications. Dutchland began working on the tank in August of 2006. Construction of the tank was completed in June of 2007.

On August 24, 2007, ISP began testing the tank by filling it with water. The test revealed leakage around the perimeter of the tank. ISP informed Dutchland of the problem on August 27, 2007. Dutchland visited the tank site and told ISP that the leakage was caused by a grout problem. Cracks in the tank were also discovered sometime in September of 2007. In October, ISP hired a forensic engineering firm, CTL Group ("CTL"), to investigate the cause of the cracks and leakage. ISP provided Dutchland with a copy of CTL's report on December 21, 2007. ISP also demanded that Dutchland submit a plan for correcting the tank's defects as laid out in CTL's report. The CTL report indicated defective grout, cracks in the base slab, and errors in the design calculations. Dutchland and ISP thereafter worked together to develop a repair plan. On May 5, 2008, ISP sent Dutchland a proposed design prepared by CTL. Dutchland responded to ISP on May 21, 2008, advising ISP that "Dutchland will not undertake to perform the work on the tank and that ISP should utilize its own contractors to perform the work."

ISP filed this action on September 22, 2008. ISP's Amended Complaint asserts eight counts for relief: (I) Breach of Contract (as to Dutchland); (II) Negligence (as to all Defendants);

(III) Professional Negligence (as to all Defendants); (IV) Negligent Misrepresentation (as to all Defendants); (V) Contractual Indemnity (as to Dutchland); (VI) Specific Performance (as to Dutchland); (VII) Violation of Kentucky Building Code (as to all Defendants); and (VIII) Negligence Per Se (as to all Defendants). On November 10, 2008, Dutchland filed its Answer and Counterclaim against ISP. Dutchland filed a Third-Party Complaint against Hall Blake on August 7, 2009, which contains three counts: (I) Indemnity; (II) Negligent Misrepresentation and/or Non-Disclosure; and (III) Apportionment. Hall Blake filed its answer on October 21, 2009.

On March 5, 2010, Dutchland moved for summary judgment as to all claims, asserting a one year statute of limitations period for any claims of professional malpractice bars ISP from bringing the present lawsuit. The Court denied the motion on August 6, 2010, finding that the one year statute of limitations period in Kentucky Revised Statutes section 413.245 does not apply to out-of-state licensed engineers performing work within Kentucky. Dutchland then asked the Court to reconsider its denial of the motion for summary judgment. The Court granted this motion, reversing its prior opinion and finding that the one year statute of limitations period of section 413.245 applies to all engineers, not just those licensed by the Commonwealth of Kentucky. The Court also denied summary judgment as to Paul Stoltzfus and Dutchland in regard to the statute of limitations issue.

On September 2, 2010, Third-Party Defendants Hall Blake filed a motion for summary judgment as to Dutchland's Third-Party Complaint. The Court now considers this motion.

STANDARD

Summary judgment is appropriate where "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). In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

"[N]ot every issue of fact or conflicting inference presents a genuine issue of material fact." Street v. J. C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989). The test is whether the party bearing the burden of proof has presented a jury question as to each element in the case. Hartsel v. Keys, 87 F.3d 795, 799 (6th Cir. 1996). The plaintiff must present more than a mere scintilla of evidence in support of his position; the plaintiff must present evidence on which the trier of fact could reasonably find for the plaintiff. See id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)). Mere speculation will not suffice to defeat a motion for summary judgment: "the mere existence of a colorable factual dispute will not defeat a properly supported motion for summary ...


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