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Mutual Service Casualty Insurance Co. v. Skinner Tank Co.

June 15, 2007

MUTUAL SERVICE CASUALTY INSURANCE COMPANY, AS SUBROGEE OF GROWMARK, INC. PLAINTIFF,
v.
SKINNER TANK COMPANY, DEFENDANT.



The opinion of the court was delivered by: David G. Bernthal U.S. Magistrate Judge

ORDER

In May 2005, Plaintiff Mutual Service Casualty Insurance Company, as subrogee of Growmark, Inc., filed a Complaint (#1) against Defendant Skinner Tank Company, alleging breach of contract, negligence, and breach of warranty. Federal jurisdiction is based on diversity pursuant to 28 U.S.C. § 1332. The parties have consented to jurisdiction by a United States Magistrate Judge.

In March 2007, Defendant filed a Motion for Summary Judgment (#14). After reviewing the parties' pleadings, Defendant's memorandum, and the evidence presented, this Court GRANTS Defendant's Motion for Summary Judgment (#14).

I. Standard

A court will grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In ruling on a motion for summary judgment, the Court must decide, based on admissible evidence, whether any material factual dispute exists that requires a trial. Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994). The party seeking summary judgment bears the initial burden of showing that no such issue of material fact exists. Celotex, 477 U.S. at 323.

The Court must draw all inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, the nonmoving party may not rest upon mere allegations in the pleadings or upon conclusory statements in affidavits; rather, he must go beyond the pleadings and support his contentions with proper documentary evidence. Celotex, 477 U.S. at 322-23. A scintilla of evidence in support of the non-movant's position is not sufficient to oppose successfully a summary judgment motion; "there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The plain language of Rule 56(c) mandates the entry of summary judgment against a party who fails to establish the existence of any element essential to that party's case, and on which that party will bear the burden of proof at trial. Id. "In such a situation there can be 'no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id.

II. Background

In 1996, Growmark contracted with Skinner to construct a secondary containment steel tank within an existing aluminum tank. In May 2001, the aluminum tank failed.

Kurt Goebel, an engineer, works for Growmark. He was personally involved in the design of the secondary containment tank project in 1996 and he discussed the design with Kent Brook, an employee of Skinner Tank. (Goebel affidavit, p. 2.)

Kent Brook's degree is in mechanical design engineering technology. Mr. Brook testified that Skinner builds American Petroleum Institute (hereinafter "API") standard 650 field-erected steel storage tanks. (Brook dep., p. 21.) He is familiar with API 650, which constitutes a set of industry-standard recommendations on how to build welded steel storage tanks to store liquids. He worked with Growmark employees throughout the design phase. He discussed the details of the tank project with Growmark employees and developed Skinner's proposal.

Larry Skinner testified regarding the procedure that Skinner Tank follows when it receives an inquiry from a customer (Skinner dep., p. 28) and what happened in the specific case when Growmark contacted Skinner (Skinner dep., p. 65). When Growmark first contacted Skinner about building the tank, Growmark provided some basic information regarding the tank volume and size so that Skinner could develop a proposal. Growmark also provided some drawings. (Skinner dep., pp. 67-69.) Growmark specified that the interior tank would be steel. (Skinner dep., pp. 69-70.) The final proposal included drawings by Kent Brook. (Skinner dep., pp. 78-80.)

Keith Brandau is Defendant's expert witness. He testified that the tank collapsed because galvanic corrosion reduced the mass of the aluminum columns to the extent that they could no longer carry the loads from the roof. (Brandau dep., p. 74; Brandau report, #16-5, p. 39.) Galvanic corrosion occurs when dissimilar metals come into contact thereby creating a situation where one of the metals gives itself up to the other, resulting in physical loss. (Goebel aff., ¶ 6.)

Plaintiff Mutual Service sent Skinner Tank a letter summarizing its conclusions as follows:

After extensive investigation into the cause of the loss, we have concluded that the collapse resulted from Skinner Tank Company's defective construction of the tank. Our engineering consultants have concluded that the aluminum support beams for the tank structure corroded due to galvanic corrosion . . . . The modifications to the existing tank performed by Skinner resulted in direct contact between the pre-existing aluminum support beams and the ...


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