CYNTHIA REED EDDY, Magistrate Judge.
Presently before the court for disposition are the following:
The motions are fully briefed and ripe for disposition. See ECF Nos. 161, 162, 164, 165, 166, 182, 183. For the reasons that follow, it is respectfully recommended as follows:
Adams Pointe Management's motion to dismiss the Third Party Complaint [ECF No. 138] be GRANTED in part and DENIED in part; and
Adams Pointe Contractors' motion to dismiss the Third Party Complaint [ECF No. 140] be GRANTED in part and DENIED in part.
It is specifically respectfully recommended that the motions be granted with respect to Pro-Flex and Tru-Flex's claim for indemnification and that claim be dismissed with prejudice and that the motions be denied in all other respects.
Because the discussion of the underlying complaint is necessary for resolution of the pending motions to dismiss the Third-Party Complaints, the court will discuss the facts of the original complaint before discussing the allegations set forth in the Third-Party Complaints.
Named Plaintiffs are a group of putative class members who initiated the present products liability suit against Defendants Tru-Flex Metal Hose Corp., Tru-Flex, LLC (collectively referred to as "Tru-Flex") and Pro-Flex, LLC ("Pro-Flex") in connection with the alleged defective design, manufacture and sale of Corrugated Stainless Steel Tubing ("CSST") for use in residences and in other structures owned or otherwise occupied by Named Plaintiffs. The court will only discuss facts of the original complaint which are necessary to decide the pending motions to dismiss the Third Party Complaints.
CSST consists of continuous, 300 series flexible stainless-steel pipe encased in an insulative outer yellow jacket. Am. Compl. [ECF No. 186] at ¶ 1. The yellow jacket material has the thickness of approximately four sheets of paper. Id. CSST is marketed as a superior option for natural gas delivery to residences and more installer-friendly and safer than traditional black iron pipe gas delivery systems. Id. at ¶ 2. According to Named Plaintiffs, there is internal industry recognition that yellow-jacketed CSST products are prone to catastrophic failure when exposed to electrical energy, and despite knowing this, Tru-Flex and Pro-Flex continued to manufacture, market and distribute their yellow-jacketed CSST product, Pro-Flex® CSST and marketed their product through retail stores to "do-it yourself" consumers and untrained workers. Id. at ¶ 3. The thin walls of the yellow-jacketed CSST are penetrable by the heat of an electrical event and causes the piping to melt and the natural gas inside escapes which causes a gas-fueled fire. Id. at ¶ 32. Named Plaintiffs allege that even a nearby lightning strike that does not directly strike a structure can cause the structure to be electrically energized and this power surge can potentially puncture a hole in the CSST and cause a fire. Id. at ¶ 33. Electrical energy will travel through any conductive path, such as gas piping, until it is able to reach the ground. Id. While traditional black iron pipes are able to withstand this energy, Named Plaintiffs claim that yellow-jacketed CSST cannot. Id. Named Plaintiffs allege that if a direct or indirect lightning strike energizes CSST, the insulative materials will not be able to carry the charge, which will look to jump to a less resistant pathway by "arcing." Id. at ¶ 35. CSST has no conductive value, meaning it does not distribute the electric charge. Id. at ¶ 36. Instead, CSST focuses the energy from an arc into the weakest points of the yellow-jacketing which disintegrates those points first and exposes the metal tubing to further energy, causing holes or perforations in the gas lines. Id. CSST is exposed to electric current frequently during electrical storms, lightning strikes and often in ordinary household circumstances where nearby sources of electricity, i.e., electric wiring or appliances, cause a "flashover" or an electric "arc." Id. at ¶ 37.
Previous manufacturers of yellow-jacketed CSST ceased distribution of this product even to qualified plumbing professionals, while Tru-Flex and Pro-Flex increased their sales of these allegedly defective products to consumers. Id. at ¶ 4. Named Plaintiffs allege that Tru-Flex and Pro-Flex possess actual knowledge that the Pro-Flex® CSST does not have sufficient thickness to protect against combustion after a lightning strike or potentially even a household electrical current, but continue to manufacture and distribute their product to "do-it-yourself" installers and professional installers in the Commonwealth of Pennsylvania and nationwide. Id. at ¶ 5.
Pro-Flex® CSST has been installed in real property owned by Named Plaintiffs and is the alleged cause of property-damaging fires, loss of value to the structures, costs for inspection and repair, retrofitting costs, loss of sales through disclosure and/or financing restrictions, and increased insurance coverage costs. Id. at ¶ 6. Named Plaintiffs seek redress for the harm caused by Tru-Flex and Pro-Flex in the design, manufacture and ongoing marketing and sales of the allegedly defective Pro-Flex® CSST. Id.
Tru-Flex Metal Hose Corp began manufacturing and distributing a yellow-jacketed CSST product in the 1990's. Id. at ¶ 27. In the early 2000's, Tru-Flex Metal Hose Corp. changed the brand name of its yellow-jacketed CSST product and began to distribute under the branded Pro-Flex® mark, which was owned by Tru-Flex Metal Hose Corp. Id. In 2004, a class action lawsuit was brought against certain manufacturers of yellow-jacketed CSST alleging that these manufacturers possessed knowledge that yellow-jacketed CSST possessed insufficient thickness to protect against combustion, and yet continued to manufacture, market and distribute the same. Id. at ¶ 28 n. 4 (referring to Lovelis, et al. v. Titeflex, et al., Case No. Civ-2004-211, Clark County, Arkansas). The Lovelis class further alleged that the manufacturers failed to warn consumers about the inherent defect of yellow-jacketed CSST that rendered it unreasonably dangerous when used for its designed purpose. Id. The class action ultimately settled and as part of the settlement, the major manufacturers of CSST represented that bonding and grounding the CSST system might mitigate the harm posed by electrical imposition on the jacketing material. Id. "Bonding" attempts to connect or tie all metal points in the gas system together so that they conduct at the same electrical potential level, theoretically preventing an "arc" between areas of different electrical potential. Id. at ¶ 40. "Grounding" attempts to provide stray electrical current with a path to the earth (ground). Id. at ¶ 41. This is accomplished by attaching a larger wire (a ground wire or other ground mechanism) to the tubing to "remove" the electrical charge. Id. The charge transfers to the ground wire or other "ground" to direct the electric charge away from the tubing." Id.
Named Plaintiffs allege that without first validating whether the risk of using yellow-jacketed CSST was sufficiently mitigated by bonding and grounding future installations, and without regard for any prior legacy installation, bonding and grounding guidelines were included in industry-wide revised Design and Installation Manuals provided to certified installers (not the ultimate homeowner) for purposes of new installations of yellow-jacketed CSST. Id. at ¶ 42. Industry regulators allegedly questioned the propriety of the bonding and grounding "safety fix" and noted the absence of sufficient validation of the representations of bonding and grounding as a safety solution. Id. Pro-Flex and Tru-Flex both tout "bonding and grounding" as a mitigation effort for their Pro-Flex® CSST product in installation guides, but do not provide any remedies or relief for legacy installations. Id. at ¶¶ 44-49. Unlike other manufacturers, Tru-Flex and Pro-Flex did not modify the design of its CSST product to one with an arc-resistant jacket and continue to use the insulative yellow-jacket and rely solely on the instruction for future installations to include bonding and grounding. Id. at ¶ 49. According to Named Plaintiffs, "bonding and grounding" fails to remedy the Pro-Flex® CSST in existing structures and is not sufficient to remedy the inherent danger of yellow-jacketed CSST because yellow-jacketed CSST focuses electrical energy onto the surface of the CSST. Id. at ¶¶ 51-52. Further, Named Plaintiffs allege that even if Pro-Flex® CSST is properly bonded, it still poses a risk of a lightning-related fire and risks from ordinary household current, and although Tru-Flex and Pro-Flex are aware of these dangers and the availability of safer alternative designs, they continue to market and distribute the yellow-jacketed CSST. Id. at ¶ 53.
Industry practices require yellow-jacketed CSST to be installed by a qualified plumbing professional and in accordance with the Manufacturer's Design and Installation ("D&I") Guide and all applicable plumbing codes. Id. at ¶ 55. For installations that came after the 2004 class action settlement "bonding and grounding" mitigation, additional bonding of the CSST must be performed by licensed electricians. Id. According to Named Plaintiffs, the Defendants claim that their product is safe enough when installed as directed and take the position that third-parties assume the role of ensuring the safety of the Pro-Flex® CSST product regardless of the industry-wide admission that the yellow-jacketed product is inherently dangerous and Defendants' responsibility ends upon the realized sale because third-party entities have assumed the responsibility to meet industry-accepted guidelines. Id. at ¶ 56. Further, Named Plaintiffs point out that although industry practices require CSST to be installed by a qualified plumbing professional, and bonding to be performed by licensed professionals, the Defendants disregard these regulations by distributing and selling Pro-Flex® CSST to "do-it-yourself" installers at hardware and home supply stores where the only "training" provided is an installation manual that is often sold separately. Id. at ¶ 58. As Named Plaintiffs allege, Defendants maintain that the down-stream seller, including independent hardware stores, large "box store" retailers, third-party catalogue sales and online outlets, assume the responsibility for ensuring the purchaser of the Pro-Flex® CSST product is qualified by appropriate regulations and is further trained in the installation of the Pro-Flex® CSST. Id. at ¶ 59. Named Plaintiffs allege that while Defendants seek to mitigate the dangers of Pro-Flex® CSST by employing third-parties, the responsibility remains with Defendants. Id. at ¶ 60.
The Named Plaintiffs own residences affected by the allegedly defective Pro-Flex® CSST and own multiple condominiums, quad duplexes, carriage homes and townhomes in Pennsylvania for personal possession, leasing and sale. Id. at ¶ 61.
On June 14, 2015, a nearby lightning activity caused a fire at 220 Adams Pointe Boulevard, Mars, Pennsylvania and caused significant property damage to the properties. Id. at ¶¶ 62, 64. After a fire investigation by third parties, it was determined that the Pro-Flex® CSST installed in the condominium unit failed as a result of electrical insult, releasing natural gas into the unit, which was ignited and caused significant property damage to the contents and structure of the apartment unit with the CSST and neighboring condominium units. Id. Prior to the fire, the structure that had experienced the fire had been inspected by local code officials and was reported to be in compliance with the Construction Code Act and Uniform Construction Code, and building code officials issued the requisite certificate of occupancy for each of the structures owned by Adams Pointe I, II and III. Id. at ¶ 63. Named Plaintiffs allege that this signifies that installation had occurred in accordance with applicable standards and codes. Id. It also was difficult for the owners of Adams Pointe I, II and III structures to sell their interests in the property, as inspectors became aware of the risks of yellow-jacketed CSST and included notes in the home inspections of the material defect and danger posed by the product. Id. at ¶ 65. This impacted the sales and ultimate value of such residences. Id.
Named Plaintiffs filed an Amended Complaint on December 4, 2017 identifying a proposed class of the following:
Id. at ¶ 87. The Amended Complaint includes the following claims against Defendants:
Id. at ¶¶ 115-151. Named Plaintiffs' requested relief includes, inter alia, monetary damages for economic losses and equitable relief as well as prejudgment interest and attorneys' fees and costs.
In response to the Named Plaintiffs' original complaint, Defendants Tru-Flex and Pro-Flex filed Third-Party Complaints for Contribution and/or Indemnification in accordance with Federal Rule of Civil Procedure 14(a) on June 14, 2017 against Adams Pointe Management and Adams Pointe Contractors.
Tru-Flex and Pro-Flex bring a claim for "Equitable Indemnification/Contribution" and allege that Adams Pointe Management "had a duty to exercise reasonable care in maintaining, repairing and inspecting the property, including CSST present thereon, to comply with any and all requirements to notify tenants, lessees, buyers, and inhabitants of any known material defects of the property, and to perform and/or oversee any construction work at Adams Pointe, including the installation of the CSST, in a safe and workmanlike manner, following the Installation Guidelines, industry standards, and local codes in effect at the time of the installation." Third-Party Compl. [ECF No. 90] at ¶ 34. Tru-Flex and Pro-Flex further allege that to the extent that Adams Pointe Plaintiffs suffered any damages and remediation costs from the fire incident and installation/presence of CSST, Adams Pointe Management was negligent, careless and fraudulent by failing to use reasonable care in maintaining, repairing and inspecting the CSST in the common elements of Adams Pointe. Id. at ¶ 35. Further, Defendants allege that the "[c]ontinued action of marketing, leasing, and selling residences at Adams Pointe to the end consumer that are known by Third Party Defendants to have `dangerous' and `defective' CSST, which is an unfair or deceptive act prohibited by the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-2(4)(ii), (iii), (v), (vii), (ix), (xxi)." Id. at ¶ 35(f). Defendants claim that the "duty of the Third Party Defendants to indemnify Defendant[s] is implied in the law to prevent an unjust result[,]" and claims that Defendants are entitled to indemnification from the Third Party Defendants "for any and all sums awarded against it and to the underlying Adams Pointe Plaintiffs. . . because [the Defendants are] without fault to the underlying Adams Pointe Plaintiffs and because the negligence of the Third-Party Defendants was the proximate cause of any damages sustained by the Adams Pointe Plaintiffs. Id. at ¶¶ 36-37.
Similarly, Defendants bring an indemnification/contribution claim against the Adams Pointe Contractors. Defendants claim that the Adams Pointe Contractors were "responsible for performing and/or overseeing the construction work at Adams Pointe, including the installation of the CSST in a safe and workmanlike manner, following the Installation Guidelines, industry standards, and local codes in effect at the time of the installation." Id. at ¶ 44. Defendants claim that to the extent that the Adams Pointe Plaintiffs suffered damages and remediation costs from the fire incident and installation of the CSST, the Adams Pointe Contractors were contributorily negligent and careless by failing to use reasonable care to install, assemble and incorporate the CSST at Adams Pointe, failing to properly select, hire, supervise and instruct subcontractors performing installation of CSST at Adams Pointe, failing to ensure compliance with plans and specifications, failing to properly inspect the CSST at Adams Pointe to ensure proper installation and failing to comply with Installation Guides, industry standards and local codes in effect at the time of the installation, including the requirement to properly bond the CSST system to the structure's electrical ground system. Id. at ¶ 44. Defendants allege that this duty to indemnify "is implied in the law to prevent an unjust result[,]" and Defendants are entitled to be indemnified for any and all sums awarded against them because the negligence of the Adams Pointe Contractors was the proximate cause of any damages sustained by the Named Plaintiffs. Id. at ¶¶ 45, 46.
Each Third-Party Defendant filed a separate motion to dismiss the Third-Party Complaints. See Adams Pointe Mgmt. Mot. to Dismiss [ECF No. 138]; Adams Pointe Contractors Mot. to Dismiss [ECF No. 140]. Generally, the Adams Pointe entities argue that the Third-Party Complaints should be dismissed and/or stricken for the following reasons: (1) Tru-Flex and Pro-Flex belatedly filed waivers of service; (2) the Third-Party Complaints are improper under Federal Rule of Civil Procedure 14(a); (3) the Third-Party Complaints do not comply with Federal Rule of Civil Procedure 8; (4) the Third-Party Complaints do not state a claim for joint and several liability; (5) the Third-Party Complaints fail to state a claim for indemnity under Pennsylvania law; and (6) the Third-Party Complaints fail to state a claim for contribution under Pennsylvania law. Many of the arguments contained in the motions to dismiss overlap and, to the extent feasible, will be addressed concurrently.
Adams Pointe Management and Adams Pointe Contractors first argue Tru-Flex's Third Party Complaint should be stricken because Tru-Flex has not filed any of the waivers of service signed by Adams Pointe Management and this violates due process. See Adams Pointe Mgmt. Mot. to Dismiss [ECF No. 138]; Adams Pointe Contractors Mot. to Dismiss [ECF No. 140] ¶ 1. Tru-Flex responds that the Adams Pointe entities' arguments are moot, because it filed the waivers of service at issue on August 2, 2017. Tru-Flex's Op. Br. [ECF No. 165] at 6.
Federal Rule of Civil Procedure 4(d) permits a plaintiff to notify a defendant that an action has been commenced and request that a defendant waive service of summons. See Fed. R. Civ. P. 4(d). "If the defendant waives service, the plaintiff is to then file the waiver, and service is deemed complete as of the time of the filing of the waiver." Fife v. Bailey, CV 3:14-1716, 2016 WL 2625014, at *2 (M.D.Pa. May 9, 2016). A certificate of service "must be filed within a reasonable time after service." Fed. R. Civ. P. 5(d)(1).
The Adams Pointe entities are incorrect in their assertion that Tru-Flex failed to file any waivers of service as to the Adams Pointe Management Third Party Defendants. A simple review of the docket reveals that waivers of service were filed on the docket on August 2, 2017 as to all of the entities that comprise Adams Pointe Management and Adams Pointe Contractors. See Waiver of Service [ECF No. 109] (Ridge Management & Development Corp.); Wavier of Service [ECF No. 111] (Adams Pointe Construction Corp.); Waiver of Service [ECF No. 112] (Ridge Development Corp.); Waiver of Service [ECF No. 113] (Adams Pointe South Village Owners Association, L.P.); Waiver of Service [ECF No. 114] (Adams Pointe Condominium Association). Accordingly, this argument is rejected. Insofar as the Adams Pointe entities argue that Tru-Flex has violated due process by belatedly filing the waivers of service, this argument is summarily rejected, as the Adams Pointe entities provide no citation to any applicable legal principal, and further have not shown that it was unreasonable for Tru-Flex to file the waivers of service approximately fifty days after the Third Party Complaint was filed. Likewise, the Adams Pointe entities have not shown that they suffered any prejudice by this delay, as they had notice of the Third Party Complaint and timely filed their pending motion to dismiss.
Further, Adams Pointe Management and Adams Pointe Contractors call attention to the fact that Pro-Flex violated due process by filing waivers of service completed by Adams Pointe Management and Adams Pointe Contractors one month after receiving the waivers of service. If Adams Pointe is attempting to argue that Pro-Flex violated due process by filing a waiver of service approximately a month after receiving it, this argument is unconvincing. The Adams Pointe entities have not shown that this delay is unreasonable or how they were prejudiced by this delay, as they had notice of the Third Party Complaint and timely filed their pending motion to dismiss.
Accordingly, it is respectfully recommended that Adams Pointe Management and Adams Pointe Contractors motions that the Third-Party Complaints be stricken for violating due process be denied.
The Adams Pointe entities next argue that the Third-Party Complaints are improper under Federal Rule of Civil Procedure 14(a), because under Rule 14, joinder is not appropriate when a defendant/third party plaintiff seeks to join a third party who is or may be liable only to the plaintiff, and reading the allegations set forth in the Third Party Complaints, there is no basis to find that the Adams Pointe entities are directly liable to Pro-Flex or Tru-Flex. The Adams Pointe entities argue that the Third Party Complaints' allegations are conclusory because they only allege that Pro-Flex and Tru-Flex are "without fault to the underlying [Named] Plaintiffs" and "the negligence of the Third Party Defendants was the proximate cause of any damages sustained by the Adams Pointe Plaintiffs." Adams Pointe Mgmt. Br. [ECF No. 139] at 7.
Rule 14(a) allows a defendant to file a third party complaint against a non-party "who is or may be liable to him for all or part of the plaintiff's claim against him." Fed. R. Civ. P. 14(a). The purpose of Rule 14(a) is "to permit additional parties whose rights may be affected by the decision in the original action to be joined and brought in so as to expedite the final determination of the rights and liabilities of all of the interested persons in one suit." Glens Falls Indem. Co. v. Atl. Bldg. Corp., 199 F.2d 60, 63 (4th Cir.1952).
"A third-party complaint must attempt `to transfer to the third-party defendant the liability asserted against him by the original plaintiff.'" Monarch Life Ins. Co. v. Donahue, 702 F.Supp. 1195, 1197 (E.D. Pa. 1989) (citing Baltimore & Ohio R. Co. v. Central Ry. Serv., Inc., 636 F.Supp. 782, 786 (E.D.Pa.1986)). A defendant/third-party plaintiff may use Rule 14(a) to implead a third-party defendant "only if the proposed third-party defendant may be liable to the third-party plaintiff derivatively or secondarily." Jabara v. Lang, 1:12-CV-1833, 2014 WL 47767, at *2 (M.D.Pa. Jan. 6, 2014) (citing Naramanian v. Greyhound Lines, Inc., 07-CV-4757, 2010 WL 4628096, at *2 (E.D. Pa. Nov. 15, 2010)). Joinder is not available "when a defendant seeks to join a third party who may only be liable to the plaintiff." Id.
Because Rule 14(a) is procedural in nature, a third party complaint must have "some substantive basis in the law for the third-party plaintiff to hold the proposed third-party defendant liable." Naramanian, 2010 WL 4628096, at *3 (citations omitted). In the instant matter, if state substantive law recognizes a right of contribution and/or indemnity, Rule 14 impleader is proper to assert such claims. See In re One Meridian Plaza Fire Litig., 820 F.Supp. 1492, 1496 (E.D. Pa. 1993).
A court must determine whether the third party complaint alleges a recognized cause of action under the law in analyzing whether the third party complaint is proper under Rule 14(a). See e.g., Meyers v. Heffernan, 12-CV-2434, 2014 WL 3343803, at *9 (D.N.J. July 8, 2014) (parties "vehemently disputed" whether the third-party complaint was proper under Rule 14(a) and the court decided to first analyze the substance of the third-party plaintiffs' contribution and indemnification claims to ascertain whether those claims sufficiently alleged secondary liability such that they were properly brought in accordance with Rule 14(a)). While the parties take great issue with whether the Third-Party Complaints are proper under Rule 14, the court will first determine whether the Third-Party Complaints state a claim against the Adams Pointe entities for indemnification and contribution under Pennsylvania law.
A third-party defendant "must assert any defense against the third-party plaintiff's claim under Rule 12" and "may assert against the plaintiff any defense that the third-party plaintiff has to the plaintiff's claim." Fed. R. Civ. P. 14(a)(2)(A); (a)(2)(C). Motions to dismiss a third-party complaint is generally analyzed under Federal Rule of Civil Procedure 12(b)(6). Turning to the substance of the pending motions to dismiss, the applicable inquiry under Federal Rule of Civil Procedure 12(b)(6) is well-settled. Under Federal Rule of Civil Procedure 8, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Rule 12(b)(6) provides that a complaint may be dismissed for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint that merely alleges entitlement to relief, without alleging facts that show entitlement, must be dismissed. See Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009). This "`does not impose a probability requirement at the pleading stage,' but instead `simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of' the necessary elements." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). Nevertheless, the court need not accept as true "unsupported conclusions and unwarranted inferences," Doug Grant, Inc. v. Great Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000), or the plaintiff's "bald assertions" or "legal conclusions." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997).
Although a complaint does not need detailed factual allegations to survive a Rule 12(b)(6) motion, a complaint must provide more than labels and conclusions. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A "formulaic recitation of the elements of a cause of action will not do." Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Factual allegations must be enough to raise a right to relief above the speculative level" and "sufficient to state a claim for relief that is plausible on its face." Twombly, 550 U.S. at 555. Facial plausibility exists "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
Id. (quoting Twombly, 550 U.S. at 556) (internal citations omitted).
When considering a Rule 12(b)(6) motion, the court's role is limited to determining whether a plaintiff is entitled to offer evidence in support of his claims. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The court does not consider whether a plaintiff will ultimately prevail. Id. A defendant bears the burden of establishing that a plaintiff's complaint fails to state a claim. Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir. 2000).
Courts generally consider the allegations of the complaint, attached exhibits, and matters of public record in deciding motions to dismiss. Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). Factual allegations within documents described or identified in the complaint also may be considered if the plaintiff's claims are based upon those documents. Id. (citations omitted). In addition, a district court may consider indisputably authentic documents without converting a motion to dismiss into a motion for summary judgment. Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir. 2004); Lum v. Bank of America, 361 F.3d 217, 222 (3d Cir. 2004) (in resolving a motion to dismiss pursuant to Rule 12(b)(6), a court generally can consider "the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim"). It is proper for the court to consider charges of discrimination filed with administrative agencies "either as undisputed documents referenced in the complaint, or as information which is a matter of public record, without converting [a motion to dismiss] into one of summary judgment." Rogan v. Giant Eagle, Inc., 113 F.Supp.2d 777, 782 (W.D. Pa. 2000), aff'd, 276 F.3d 579 (3d Cir. 2001).
The Adams Pointe entities argue that Pro-Flex and Tru-Flex have violated Federal Rule of Civil Procedure 8 by failing to include sufficient allegations explaining "how or why the installation failed to comply with the applicable codes and standards at the time same occurred, which entity, if any, was responsible, how same is connected to the fire event, and . . . why any of the [Adams Pointe Management] entities are accountable for manufacture, design, distribution, or marketing of the Pro-Flex[®] CSST product." Adams Point Mgmt. Br. [ECF No. 139] at 9.
Pro-Flex and Tru-Flex respond that a right to common law indemnity does not require that the defendants/third party plaintiffs sue the third party defendants on a theory similar to that on which the plaintiff sued the defendant/third party plaintiff, and Pro-Flex and Tru-Flex are under no obligation to sue the Adams Pointe Contractors or Management on a theory similar to those on which the named Plaintiffs sued Pro-Flex and Tru-Flex. Pro-Flex Op. Br. [ECF No. 161] at 8-9. Pro-Flex and Tru-Flex maintain that the alleged lack of detailed factual allegations regarding the installation of the CSST is due to the fact that the present discovery schedule is limited to class discovery. Pro-Flex and Tru-Flex maintain that the Third Party Complaints allege a sufficient factual basis under Rule 8.
The court agrees with Pro-Flex and Tru-Flex. As for the Adams Pointe entities argument that the Third Party Complaints fail to show how the Adams Pointe entities are accountable for the allegedly defective CSST, "[a] right to common law indemnity does not require that the defendant sue the third-party defendant on a theory similar to that on which the plaintiff has sued the defendant." Trustees of Intern. Broth. of Elec. Workers Loc. 98 Pension Plan v. Aetna Cas. & Sur, Co., 97-CV-7407, 1998 WL 614769, at *2 (E.D. Pa. Sept. 14, 1998) (applying Pennsylvania law and collecting cases).
Turning to the Adams Pointe entities' argument that the Third Party Complaints violates Rule 8, the court finds that the Third Party Complaints provide enough notice of the claims they allege against Adams Pointe Contractors and Management. The Third Party Complaints allege that the Adams Pointe Contractors were under a duty to properly install the CSST and were negligent due to their "[f]ailure to properly supervise subcontractors performing the installation . . .;" "[f]ailure to ensure compliance with plans and specifications;" and "failure to properly and adequately inspect the CSST . . . to ensure proper installation." Third-Party Compl. [ECF No. 92] at ¶¶ 17, 35, 44. These allegations are enough to raise a reasonable expectation that discovery could reveal evidence that the Adams Pointe Contractors negligently installed the CSST. To require Pro-Flex and Tru-Flex to include detailed allegations regarding the allegedly applicable codes and standards and what entity was responsible and how the negligent installation was connected to the fire event would require Pro-Flex and Tru-Flex to aver "detailed factual allegations" which is not required by Rule 8. See Phillips, 515 F.3d at 231. The allegations of the Third Party Complaints, which incorporate the original complaint, are sufficient to put the Adams Pointe Contractors on notice of the claims against it, which is all Rule 8 requires. Accordingly, it is respectfully recommended that Adams Pointe Contractor's motion to dismiss be denied as to this point.
As for Pro-Flex and Tru-Flex's responses as to Adams Pointe Management's arguments that the Third Party Complaint fails to allege sufficient information, Pro-Flex and Tru-Flex maintains that the Third Party Complaint includes sufficient factual information regarding Adams Pointe Management's alleged negligence including: Adams Pointe Management's duty to maintain, repair and inspect the properties at issue, including the existence of CSST and their duty to notify tenants, lessees, buyers and inhabitants of any known material defects of the property and to perform and/or oversee any construction work at Adams Pointe and failed to do so. Tru-Flex Op. Br. [ECF No. 165] at 7-8; Pro-Flex Op. Br. [ECF No. 166] at 10-11. The Third Party Complaints provide enough notice of the claims alleged against Adams Pointe Management. For example, the Third Party Complaints allege that the Adams Pointe Management were under a duty to maintain, repair and inspect the properties and notify the residents of any material defects of the property, and oversee any of the construction work at Adams Pointe, including the installation of CSST at the properties. These facts are sufficient to put Adams Pointe Management on notice of the claims against it, which is all Rule 8 requires. Accordingly, it is respectfully recommended that Adams Pointe Management's motion to dismiss be denied as to this point.
Moving to the Adams Pointe entities' next argument, they argue that the Third Party Complaints fail to state a claim for "joint and several liability." Adams Point Mgmt. Br. [ECF No. 139] at 14-16. First, to the extent that the Adams Pointe entities read the Third Party Complaints as setting forth a separate cause of action for "joint and several liability," the Adams Pointe entities misread the Third Party Complaint, as it merely sets forth claims for equitable indemnity and contribution. To the extent that the Third-Party Complaints include this phrasing, the complaints only do so to state an element of their claims for contribution. See Sisco v. Cleveland Const., 07-CV-0347, 2008 WL 648916, at *4 (M.D. Pa. Mar. 10, 2008) ("Pursuant to Pennsylvania law, a right to contribution arises only among joint tortfeasors (i.e., `two or more persons jointly or severally liable in tort for the same injury to persons or property, whether or not judgment has been recovered against all or some of them.'") (citing 42 PA. CONS. STAT. ANN. § 8322). Further, Pro-Flex indicates that it has not attempted to set forth a claim for "joint and several liability." See Pro-Flex Op. Br. [ECF No. 161] at 15. Accordingly, as the Adams Pointe entities' argument is misplaced, it is respectfully recommended that the court deny the motions to dismiss on this point.
Pro-Flex and Tru-Flex levy a claim for equitable indemnification against Adams Pointe Management and Adams Pointe Contractors for their alleged negligent installation and maintenance of the CSST system. The Adams Pointe entities argue that this claim should be dismissed because there is no legal relationship between themselves and Pro-Flex and/or Tru-Flex that could trigger liability to state a claim for equitable indemnification.
Pro-Flex and Tru-Flex respond that Pennsylvania law does not limit indemnity to cases where a legal relationship exists between the party primarily liable and secondarily liable, and the absence of allegations concerning a legal relationship between Pro-Flex and Tru-Flex and the Adams Pointe entities does not render indemnity unavailable to Pro-Flex and Tru-Flex. Pro-Flex Op. Br. [ECF No. 161] at 17; Pro-Flex Op. Br. [ECF No. 166] at 14-15; Tru-Flex's Op. Br. [ECF No. 165] at 11.
Pro-Flex further argues that "[t]he fact finder could determine that Adams Pointe Contractors improperly installed the CSST system, and that the improper installation was the sole proximate cause of the damages alleged by the Named Plaintiffs[, and] because the Named Plaintiffs elected to sue Pro-Flex and not Adams Pointe Contractors, Pro-Flex could be compelled to pay a judgment to the Named Plaintiffs" due to Adams Pointe Contractor's improper installation of CSST. Pro-Flex Op. Br. [ECF No. 161] at 18. Likewise, Pro-Flex argues that because the fact finder could determine that Adams Pointe Management's failure to maintain, repair and/or inspect the CSST system was the sole proximate cause of Named Plaintiffs' damages, Pro-Flex could be compelled to pay a judgment based on Adams Pointe Management's conduct. Pro-Flex Op. Br. [ECF No. 166] at 16.
Tru-Flex further responds that this issue is not suitable to determine at the motion to dismiss stage and discovery may reveal that primary liability falls on the Adams Pointe entities tasked with the maintenance and installation of the CSST system and secondary liability may fall with the manufacturer of Pro-Flex® CSST. Tru-Flex's Op. Br. [ECF No. 165] at 11.
The Adams Pointe entities reply that equitable indemnification only applies if a third party plaintiff "without active fault of their own" is compelled to pay damages caused solely by the wrongful conduct of the Adams Pointe entities, and seemingly argues that Pro-Flex andTru-Flex are at fault to the Named Plaintiffs. Adams Pointe Contractors Reply [ECF No. 182] at 4; Adams Pointe Mgmt. Reply [ECF No. 183] at 4-5.
Under Pennsylvania law, common law or equitable indemnification is available "(1) where there is an express contract to indemnify, or (2) where the party seeking indemnity is vicariously or secondarily liable for the indemnitor's acts." Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 448 (3d Cir. 2000) (citation and internal quotation marks omitted). In the present matter, it is undisputed that no contract exists between the Adams Pointe entities and Pro-Flex and/or Tru-Flex. Instead, Pro-Flex and Tru-Flex maintain that any liability they purportedly owe to the Named Plaintiffs is secondary to the Adams Pointe entities liability to the Named Plaintiffs and Pro-Flex and Tru-Flex should be indemnified.
The Pennsylvania Supreme Court has explained secondary liability as follows:
Builders Supply Co. v. McCabe, 77 A.2d 368, 370, 371 (Pa. 1951) (emphasis omitted). Equitable indemnity "is not a fault sharing mechanism between one who was predominately responsible for [damages sustained] and one whose negligence was relatively minor." Sirianni v. Nugent Bros., Inc., 506 A.2d 868, 871 (Pa. 1986). Rather, indemnity is a "fault shifting mechanism, operable only when a defendant who has been held liable to a plaintiff solely by operation of law, seeks to recover his loss from a defendant who was actually responsible for the [incident] which occasioned the loss." Id. Thus, indemnity "shifts the entire responsibility for damages from a party who, without any fault, has been required to pay because of a legal relationship to the party at fault." City of Wilkes-Barre v. Kaminski Bros., Inc., 804 A.2d 89, 92 (Pa. Cmmw. 2002).
In determining whether a party can be indemnified, "a court must look to whether the party seeking indemnity had any part in causing the injury." Sirianni, 506 A.2d at 871 (emphasis in original). As applicable here, "[i]n the case of concurrent or joint tortfeasors, having no legal relation to one another, each of them owing the same duty to the injured party, and involved in an [incident] in which the injury occurs, there is complete unamimity among the authorities everywhere that no right of indemnity exists on behalf of either against the other; in such a case, there is only a common liability and not a primary or secondary one, even though one may have been very much more negligent that the other." Builders Supply, 77 A.2d at 371 (emphasis in original).
The present case does not present a typical claim for indemnity; Pro-Flex and Tru-Flex allege they are entitled to indemnity from the Adams Pointe entities for any judgment rendered against them for the Adams Pointe entities' alleged negligence in installing and maintaining the CSST system. However, the liability that Pro-Flex and Tru-Flex identifies as owing to the Named Plaintiffs is a common liability and not a primary or secondary one. Specifically, the common theories of liability are that the Named Plaintiffs' damages occurred due to the Adams Pointe entities' alleged negligence in installing and/or maintaining the CSST system, due to Pro-Flex and Tru-Flex's alleged defective product or bonding and grounding remedy, or due to some combination of the two. These theories of liability are not primary or secondary to each other, but are common, "even though one may have been very much more negligent than the other." Builders Supply, 77 A.2d at 371. This case involves potential joint tortfeasors, who have no legal relationship to one another, and owe the same duty to the Named Plaintiffs. Pennsylvania law makes it obvious that "no right of indemnity exists on behalf of either against the other." Id. Accordingly, because the theories of liability posited by the parties are not primary or secondary to each other, it is respectfully recommended that the Adams Pointe entities' motions to dismiss be granted and Pro-Flex and Tru-Flex's claim for indemnity against these entities be dismissed with prejudice, as amendment would be futile. Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002).
The Adams Pointe entities argue that Pro-Flex and Tru-Flex have not stated a claim for contribution under Pennsylvania law. Adams Point Mgmt. Br. [ECF No. 139] at 19; Adams Pointe Contractor Br. [ECF No. 141] at 17. They argue that the Third-Party Complaints do not allege that the Adams Pointe entities and Pro-Flex and Tru-Flex are joint tortfeasors, which is required for a contribution claim under Pennsylvania law. Ibid.
Pro-Flex and Tru-Flex respond that they have adequately stated a claim for contribution because they have alleged numerous instances of wrongful conduct by the Adams Pointe entities concerning the installation and maintenance of the CSST system. Pro-Flex Op. Br. [ECF No. 161] at 19; Pro-Flex Op. Br. [ECF No. 166] at 18; Tru-Flex's Op. Br. [ECF No. 165] at 14.
Pro-Flex and Tru-Flex assert its contribution claim under the Pennsylvania Uniform Contribution Among Tortfeasors Act ("UCATA") which establishes that "[t]he right of contribution exists among joint tort-feasors." 42 PA CONST. STAT. § 8324(a). Under Pennsylvania law, "joint tortfeasors" are defined as "two or more persons jointly or severally liable in tort for the same injury to persons or property, whether or not judgment has been recovered against all or some of them." 42 PA CONST. STAT. § 8322. The UCATA "does not directly litigate liability for tort between the injured party and the tortfeasor. Instead, it gives the joint tortfeasors the independent right to recovery where there is a tort in the background." U.S. v. Sunoco, Inc., 501 F.Supp.2d 641, 651 (E.D. Pa. 2007). See e.g., Puller v. Puller, 110 A.2d 175, 177 (Pa. 1955) ("contribution is not a recovery for the tort but the enforcement of an equitable duty to share liability for the wrong done."). One tortfeasor's "right to receive contribution from a joint tortfeasor derives not from his liability to the claimant but rather from the equitable principle that once the joint liability of several tortfeasors has been determined, it would be unfair to impose the financial burden of the plaintiff's loss on one tortfeasor to the exclusion of the other." Svetz for Svetz v. Land Tool Co., 513 A.2d 403, 407 (Pa. Super. 1986)
Pro-Flex and Tru-Flex have adequately stated a claim for contribution against the Adams Pointe entities. They claim in their respective Third-Party Complaints that the Adams Pointe entities are responsible for the injuries alleged by the Named Plaintiffs for negligently installing and inadequately maintaining the CSST system.
Discovery may reveal that the injuries suffered by the Named Plaintiffs were caused by the Adams Pointe entities' alleged negligence in installing and/or maintaining the CSST system, by Pro-Flex and Tru-Flex's alleged defective product and/or defective mitigation efforts, or by some combination of the parties' conduct. Thus, Pro-Flex and Tru-Flex have adequately alleged that the parties are joint-tortfeasors and have the potential of being liable to the Named Plaintiffs whether or not judgment can be "recovered against all or some of them." 42 PA CONST. STAT. § 8322. Accordingly, it would be inappropriate to dismiss Pro-Flex and Tru-Flex's claim for contribution and it is respectfully recommended that the Adams Pointe's motion to dismiss be denied in this respect.
Based on the foregoing, it is respectfully recommended that the Adams Pointe Management's motion to dismiss [ECF No. 138] and Adams Pointe Contractor's motion to dismiss [ECF No. 140] be GRANTED in part and DENIED in part. It is specifically respectfully recommended that the motions be granted with respect to Pro-Flex and Tru-Flex's claim for indemnification and that claim be dismissed with prejudice and that the motions be denied in all other respects.
Therefore, pursuant to 28 U.S.C. § 636(b)(1)(B) and (C), Federal Rule of Civil Procedure 72, and the Local Rules for Magistrates, the parties have until
