United States District Court, W.D. Kentucky, Louisville Division
FACTORY MUTUAL INSURANCE COMPANY, as subrogee of General Electric Company, PLAINTIFF
DERBY INDUSTRIES, LLC DEFENDANT
MEMORANDUM OPINION AND ORDER
H. McKinley, Jr., Chief Judge.
matter is before the court on a motion for partial dismissal
by defendant Derby Industries, LLC (“Derby”). (DN
19.) Also before the Court are motions by plaintiff Factory
Mutual Insurance Company (“Factory Mutual”) to
exclude all documents outside the pleadings (DN 28) and to
set an initial case management conference. (DN 37.) Fully
briefed, these matters are ripe for decision.
present dispute stems from a large fire that occurred at
General Electric Company's (“GE”) Appliance
Park, a 1, 000 acre industrial manufacturing campus in
Louisville, Kentucky. (Pl.'s Compl. [DN 1] ¶ 7.)
Appliance Park had six main buildings at the time of the
fire, one of which was known as “AP6.” On April
3, 2015, a fire originated in AP6 and quickly spread,
completely destroying the 650, 000 square foot warehouse
section of AP6 and its contents. (Id. ¶ 17.)
The fire also significantly damaged the 100, 000 square foot
office section of AP6 and its contents, and smoke caused
extensive soot damage to the adjacent building and its
contents. (Id. ¶¶ 17-18.) Additionally, GE
claims that the fire damage disrupted manufacturing and
business operations throughout Appliance Park and the United
States. (Id. ¶ 19.)
time of the fire, GE was leasing approximately 450, 000
square feet of floor space in AP6 to Derby pursuant to a
written lease agreement (“Lease Agreement”). GE
exclusively used and occupied the 100, 000 square feet of
office space in AP6, while the remaining floor space was used
and occupied in various ways by GE and its
subcontractors/tenants. GE and Derby were also parties to a
Supplier Distribution Center Agreement (“SDC
Agreement”). Pursuant to this agreement, Derby used its
leased floor space in AP6 as a supplier distribution center
for palletized bulk and high rack storage. (Id.
¶ 12.) The complaint alleges that the majority of the
palletized bulk stored by Derby was comprised of flammable,
plastic parts stacked up to twenty-six feet in the air.
(Id. ¶ 17.) The complaint also claims that the
rapid spread of fire across AP6 was the direct and proximate
result of the “enormous fuel load” created by
Derby's bulk storage and high rack storage practices.
(Id.) Factory Mutual, which at all relevant times
provided property and business interruption insurance to GE,
alleges that damages from the fire total approximately $140
million. (Id. ¶¶ 8, 20.) Factory Mutual
reimbursed GE for damages in the amount of $134 million, as
the policy imposed a $6 million deductible on GE.
(Id. ¶ 28.)
Mutual, as subrogee of GE, filed this complaint against Derby
on April 3, 2017, alleging negligence/negligence per se,
breach of contract, and contractual indemnification and
seeking $140 million in damages. (DN 1.) Derby has filed a
motion to partially dismiss the complaint pursuant to
Fed.R.Civ.P. 12(b)(6), as Factory Mutual has failed to state
a claim for the $6 million deductible paid by GE and the
$68.5 million cost associated with rebuilding AP6. (DN 19.)
Factory Mutual has responded by seeking to exclude the
documents Derby cites to in support of their motion, as they
are matters outside the pleadings. (DN 28.) Alternatively,
Factory Mutual argues that the motion should be converted
into one for summary judgment, and that under either
standard, Derby's motion should be denied. (Id.)
Finally, Factory Mutual has also filed a motion to set an
initial case management conference. (DN 37.)
Standard of Review
first issue before the court is the proper standard to apply
to Derby's motion for partial dismissal. Generally, under
Rule 12(b)(6), the court must assess the facial sufficiency
of the complaint without resorting to matters outside the
pleadings. See Wysocki v. Int'l Bus. Mack Corp.,
607 F.3d 1102, 1004 (6th Cir. 2010). If “matters
outside the pleadings are presented to and not excluded by
the court” when deciding a Rule 12(b)(6) motion,
“the motion must be treated as one for summary judgment
under Rule 56.” Fed.R.Civ.P. 12(d).
support of its motion, Derby attached a document called
“Agreement Relating to AP6 Lease and SDC”
(“Termination Agreement”) not contained in the
pleadings. (DN 19-1, at 15.) Derby's motion also
references the contents of a “Confidential Settlement
Agreement” (“CSA”) which was not attached
to the pleadings or the present motion but has since been
filed under seal with the Court. (DN 43.) Factory Mutual
urges the court to strike and exclude the attached document
and reference to the CSA as unauthenticated documents outside
the pleadings and consider the motion under Rule 12(b)(6).
Alternatively, Factory Mutual argues that the motion should
be converted to a motion for summary judgment under Rule 56.
Court will convert Derby's motion into one for summary
judgment. Factory Mutual's contention that the
Termination Agreement and CSA are unauthenticated and
therefore should be stricken is rendered moot by Factory
Mutual's filing of the same documents, along with
affidavits for authentication purposes, as exhibits to its
response to Derby's motion. (DN 28-1, 28-2.) Further,
Factory Mutual has also attached and relied upon a document
entitled “Assignment of Claims Agreement”
(“Assignment Agreement”) in its response to
Derby's motion. This Assignment Agreement is not
contained in the pleadings, and thus the court must convert
Derby's motion to one for summary judgment in order to
consider this document in Factory Mutual's response. As
both parties have attached and relied upon documents not
contained in the pleadings and had an opportunity to respond
to the documents submitted by the opposing parties, the court
finds it appropriate to convert Derby's motion into a
motion for summary judgment. Therefore, Factory Mutual's
motion to exclude those documents included by Derby in its
motion (DN 28) is DENIED.
moving for summary judgment must show that “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The moving party bears the burden of demonstrating the
absence of a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Additionally, the Court must draw all factual inferences in
favor of the nonmoving party. Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). A genuine issue for trial exists when “there is
sufficient evidence favoring the nonmoving party for a jury
to return a verdict for that party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
motion argues that Factory Mutual may not recover (1) the $6
million paid by GE as a deductible and (2) damages for the
rebuild value of AP6, estimated by Factory Mutual to ...