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Federated Dep't Stores, Inc. v. M.J. Clark

February 1, 2007

FEDERATED DEPARTMENT STORES, INC. AND BLOOMINGDALE'S, INC., PLAINTIFFS,
v.
M.J. CLARK, INC., JOHNSON CONTROLS WORLD SERVICES, INC., AND GLOBAL FIRE PROTECTION COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Following a flood at the Bloomingdale's store at 900 N. Michigan Avenue in Chicago, plaintiffs Federated Department Stores ("Federated") and Bloomingdale's, Inc. ("Bloomingdale's") filed a five-count amended complaint against defendants M.J. Clark, Inc. ("M.J. Clark"), Johnson Controls World Services, Inc. ("Johnson Controls") and Global Fire Protection Company ("Global Fire"). Plaintiff Bloomingdale's has moved for summary judgment on two of its five counts: Count I against M.J. Clark for breach of contract and Count V against Global Fire for negligence. Defendant M.J. Clark has moved for summary judgment on its breach of contract claim against plaintiffs and on plaintiffs' claims against it. For the reasons set forth below, the Court denies the motions for summary judgment.

I. Background

Unless otherwise noted, the following facts are undisputed.*fn1 In March 2003, a sprinkler leak on the fifth floor of the Bloomingdale's store at 900 N. Michigan Avenue in Chicago damaged the first five floors of the store. Bloomingdale's and its owner, Federated, filed suit against M.J. Clark (the contractor), Global Fire (the subcontractor working on the sprinkler system) and Johnson Controls (the building manager responsible for the shutting down and drainage of the sprinkler system).

Plaintiff Bloomingdale's operates Bloomingdale's Department Stores, including the store at 900 N. Michigan Avenue in Chicago (the "Store"). Bloomingdale's is a wholly-owned subsidiary of Federated. When Federated wanted to remodel the fifth and sixth floors of the Store, it contracted with defendant M.J. Clark. The contract identifies Federated as the Owner and M.J. Clark as the "Contractor." The contract contains, among others, the following provisions:

Article I, Section (a):

Contractor shall furnish all services, materials, labor, tools, equipment, plant facilities and everything necessary to undertake and complete in a thoroughly first-class and workmanlike manner all of the work indicated in the Drawings, Specifications and General and Special Conditions, under the direction and to the satisfaction of Architect and Owner.

General Conditions, Section 13(g): Owner and Contractor each waive any rights each may have against the other on the account of any loss or damages occasioned to Owner or Contractor, their respective property, or to the premises or its contents arising from any liability, loss, damage or injury caused by fire or other peril for which property insurance is carried or required to be carried pursuant to this Agreement. The insurance policies obtained by Owner and Contractor pursuant to this Agreement shall contain endorsements or other provisions, waiving any right of subrogation which the insurer may otherwise have against the other party. The provisions of this Section 13g shall not limit the indemnification for liability pursuant to Section 13c.

General Conditions, Section 14(a): The Owner shall keep the premises including all materials delivered on the jobsite to be incorporated in the Work fully insured against fire and other risks included in standard endorsement, exclusive, however, of Contractors' and Subcontractors' and workers' tools and equipment. The Owner will provide fire, extended coverage and vandalism and malicious mischief insurance on the building where the Work is being done, including coverage for materials, supplies, equipment, machinery, and apparatus all of which are to become a part of the building upon completion of the Work and all of which are located on the jobsite or immediately adjacent thereto.

General Conditions, Section 31(d): The Contractor agrees that he is as fully responsible to the Owner for the acts and omissions of his Subcontractors and of persons either directly or indirectly employed by them, as he is for the acts and omissions of persons directly employed by him.

General Conditions, Section 39(a): If either party to the Contract should suffer damage in any manner because of any wrongful act or neglect of the other party or of anyone employed by him, then he shall be reimbursed by the other party for such damage.

M.J. Clark, in turn, subcontracted with Global Fire to perform work on the sprinkler system.

Global Fire could not do its work on the sprinkler system while the system contained water. While full, the sprinkler systems on the fifth and sixth floors of the Store carried a water pressure of 150 pounds per square inch. Thus, before Global Fire could do its work, it needed the building manager, Johnson Controls, to shut down and drain the system. Each floor had its own shut-off valve and drain.

A number of possible errors may have contributed to the flood. First, Johnson Controls required drain-down requests to be submitted in writing. M.J. Clark did not request the drain-down in writing. Rather, it requested the drain-down orally. The parties dispute whether the M.J. Clark employee (who orally requested the drain-down) requested that Johnson Controls drain down both the fifth and sixth ...


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