By Leah S. Poniatowski, J.D.
None of the subcontractor and supplier’s several arguments were able to defeat the general contractor’s lawsuit.
Neither the manufacturer of windows for residential homes nor the windows’ seller on two home building projects presented any valid arguments that they should be dismissed from a third-party lawsuit filed by the general contractor that had been named as the primary defendant in lawsuits for negligent construction by two home owners, a federal district court in Pennsylvania ruled (Milo, LLC v. Procaccino, April 13, 2020, Surrick, R.).
Jeld-Wen, Inc. and Tague Lumber (collectively, Jeld-Wen and Tague) were subcontractors and product suppliers on two residential home projects in Philadelphia, Pennsylvania. The home owners filed lawsuits against the general contractors for alleged negligent building, prompting the contractors to file a joinder complaint against Jeld-Wen, Tague, and six other entities. The joinder complaint asserted claims for indemnification, contribution, negligence, strict products liability, and breach of implied warranty.
Homeowner lawsuits. In November 2016, the home owners of 501A South 12th Street filed a complaint against the contractors (the Milo action) and, in September 2017, the home owners of 507 South 12th Street filed a complaint against the contractors and the Harman Deutsch Corporation (the Klehr action). In both actions, the contractors alleged that Jeld-Wen, Inc. manufactured defective windows, which were sold to Tague Lumber.
The Klehr action was filed in state court and, after several procedural rulings, the court dismissed the claims against Jeld-Wen and Tague with prejudice but did not provide an opinion or memoranda with the orders. The instant Milo action was filed in a federal district court. The subcontractors filed a motion to dismiss, contending that the general contractors failed to state a valid claim upon which relief could be granted.
Claim preclusion. The court was not persuaded that the dismissal of the homeowner’s other lawsuit had the effect of claim preclusion on the case at bar. The court explained that under Pennsylvania law, the two causes of action needed to share four common elements, which was not true here because the case involved different homes and different home owners. Additionally, the contractors could not have been expected to raise issues vis-a-vis the Milo home in the Klehr case because the Milo case already had been filed. Accordingly, the negligence, implied warranty, and strict products liability claims were not precluded.
Issue preclusion. Similar to the claim-preclusion analysis, the court stated that the issues also were not the same in both cases because the homes and home owners were not the same. Moreover, because the state court’s order lacked any explanation, it could not be said that the issues in the Klehr action had been resolved on the merits. Thus, the doctrine of issue preclusion could not apply in the instant case.
Economic loss doctrine. The court determined that the economic loss doctrine did not apply in the instant case because Jeld-Wen and Tague may have caused personal injury and additional property damage for which the contractors might be responsible. The court relied on precedent predicting that the Pennsylvania Supreme Court would hold that this doctrine does not bar a tort claim because personalty within a prefabricated building is not part of the building for the purpose of bringing a tort claim against the builder or manufacturer of a component of the building. Thus, because the home owners in the Milo action alleged mold damage and personal injuries therefrom, the economic loss doctrine did not bar the contractors from filing tort claims against the subcontractor and supplier.
Gist of the action doctrine. Additionally, the gist of the action doctrine did not bar the contractors’ claims against Jeld-Wen and Tague, the court held, explaining that the duties affiliated with the negligence and strict products liability claims are imposed by law and not contract—even if there was a contract among the parties—because the claims arose from a separate duties.
Contribution. The court determined that Jeld-Wen and Tague could be found as joint tortfeasors with the contractors if the contractors are found liable for negligently constructing the home in consideration of the homeowner’s complaint. The negligence claim alleged that the contractors failed to "ensure that the construction of the [h]ome was completed in such a way that conformed to applicable building codes and did not present a danger to the [family]." The contractors alleged that "all construction materials were supplied by the Joinder Defendants [including Movants]," and specified that Jeld-Wen manufactured the windows and sold them to Tague, which sold allegedly defective windows and building materials.
Under the plain language of the Uniform Contribution Among Tortfeasors Act, the injury to the plaintiff and the tortfeasors’ relationship that makes defendants joint tortfeasors—not the claim brought against them. In the case at bar, the injury to the home owners arose from the home’s health and safety hazards, which were adequately addressed in the contractors’ claims against Jeld-Wen and Tague.
Indemnification. The court explained that at the present stage of litigation, it was plausible for the contractors to claim indemnification from Jeld-Wen and Tague. First, the contractors’ complaint alleged sufficient facts the support the inference that the subcontractor and supplier were primarily liable for the home owners’ injuries. Second, the contractors established that there was a relationship between them and Jeld-Wen and Tague that would give rise to a duty to indemnify.
Remaining issues. The court was satisfied with the contractors’ complaint as providing sufficient notice to Jeld-Wen and Tague and the grounds upon which the claims were based. Additionally, the contractors’ complaint explicitly alleged that the subcontractor and supplier were liable for the home owners’ injuries and how they were liable, thus not improperly shifting the burden of proof. Therefore, the subcontractor and supplier’s motion to dismiss was denied.
The case is No. 16-5759.
Attorneys: George Bochetto (Bochetto & Lentz PC) for Milo, LLC. Malik Pickett (Wade Clark Mulcahy LLP) for Virgil Procaccino. Angelo L. Scaricamazza, Jr. (Naulty Scaricamazza & McDevitt LLC) for AB Construction LLC.
Companies: Milo, LLC; AB Construction LLC; Jeld-Wen, Inc.; Tague Lumber
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