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Riverboat/Casino Cruises, Inc. v. Hnedak Bobo Group

July 25, 2007

RIVERBOAT/CASINO CRUISES, INC., PLAINTIFF,
v.
HNEDAK BOBO GROUP, INC., DEFENDANT.



The opinion of the court was delivered by: Gilbert, District Judge

MEMORANDUM AND ORDER

This matter comes before the Court on a motion for partial summary judgment on the issue of liability for plaintiff's fire watch expenses (Doc. 60) filed by defendant Hnedak Bobo Group, Inc. (HBG). The plaintiff, Southern Illinois Riverboat/Casino Cruises, Inc. (Harrahs), has responded to HBG's motion (Doc. 72) and HBG has replied to the response (Doc. 74). HBG has moved to strike the affidavit of Rick W. Abell (Doc. 75), which Harrahs attached to its response to HBG's motion. Harrahs has responded to HBG's motion to strike (Doc. 78)

I. Standard on Summary Judgment

Summary judgment is appropriate where "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 Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Spath v. Hayes Wheels Int'l-Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000). In determining the existence of a genuine dispute of material fact, the Court construes all facts in the light most favorable to the nonmoving party and draws all reasonable inferences in favor of that party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Spath, 211 F.3d at 396.

If the moving party meets its burden, the nonmoving party has the burden "to go beyond the pleadings and affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact which requires trial." Borello v. Allison, 446 F.3d 742, 748 (7th Cir. 2006) (internal quotation marks and citations omitted); Celotex, 477 U.S. at 322-26; Johnson v. City of Fort Wayne, 91 F.3d 922, 931 (7th Cir. 1996). A genuine issue of material fact is not demonstrated by the existence of "some alleged factual dispute between the parties," Anderson, 477 U.S. at 247, or by "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists only if "a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented." Anderson, 477 U.S. at 252; Insolia v. Phillip Morris Inc., 216 F.3d 596 (7th Cir. 2000).

II. Background

Harrahs and HBG entered into an agreement on June 29, 2000, under which HBG agreed to design the docking facility for a riverboat casino Harrahs planned to build on the Ohio River in Metropolis, Illinois. Harrahs wanted to replace the casino it was operating on the site because it was in very poor condition. The parties' contract (the Agreement) contained several provisions dealing with code compliance. Among other things, HBG agreed to assist Harrahs "in the filing of the required documents for the approval of governmental authorities having jurisdiction over the Project" and to revise "the drawings, if necessary for such approval." (Agrmt. at 7). The Agreement also provides that, "Prior to the commencement of construction, [HBG] shall provide documentation to [Harrahs] that, in the professional judgment of [HBG], all plans specifications and drawings conform to all applicable governmental regulations, statutes and ordinances, and the improvements when built in accordance therewith will conform to applicable regulations." Id.

Pursuant to the Agreement, HBG designed a dock with four ramps providing access to the riverboat. HBG eventually determined, after employing an independent code consultant, that a cheaper, two-ramp design would satisfy the applicable codes and regulations. (Doc. 61 Ex. C & D). Upon review, Harrahs agreed to the two-ramp design. On March 23, 2000, HBG, HBG's code consultant, and Harrahs met with a representative of the State Fire Marshal to review the two-ramp plan. The Fire Marshal's representative orally confirmed that the two-ramp plan complied with applicable fire code. He declined, however, to provide written approval of the design because it was his policy to withhold such approval until he conducted an inspection of a completed facility.

In the spring of 2001, after construction of the dock had begun, another Fire Marshal's representative toured the construction site with James Nolan, the facilities manger for the project. This representative told Nolan the dock did not have sufficient ramps to comply with the fire code. Nolan told his superiors at Harrahs of the problem, but they did not relay this information to HBG.

HBG completed the dock in August 2001. On August 6, 2001, Harrahs moved the old boat to the new dock and continued operating the old boat there until the new boat arrived. The Fire Marshal inspected the old boat/new dock facility on August 24, 2001, and concluded that it failed to meet code because of ingress and egress problems.*fn1 The Fire Marshal refused to certify the structure and told Harrahs it had to maintain a fire watch if it intended to continue its operations. Harrahs chose to keep the facility open and to maintain the fire watch.

Once the new boat arrived on September 10, 2001 and its connection to the new dock was complete, the Fire Marshal inspected the set up and concluded that the facility needed additional ramps to comply with code. He concluded that the casino could not remain open unless Harrahs continued to maintain a fire watch. After an abortive appeal, Harrahs decided to build a third ramp. HBG claims Harrahs asked it and Thompson to submit plans for building the third ramp. HBG claims Harrahs chose to go with Thompson and fired HBG. Harrahs, on the other hand, contends that HBG continued to be involved with the third ramp until its completion.

Harrahs brings the instant action against HBG, alleging that it breached both express and implied warranties by submitting a plan for the dock that did not comply with applicable code.

III. Analysis

HBG raises five, alternative grounds for granting it summary judgment on the issue of damages for fire watch expenses: (1) Harrahs cannot recover pursuant to the rule of Hadley v. Baxendale, 156 Eng. Rep. 145 (Ex. Ct. 1854); (2) Harrahs cannot recover for an illegal act; (3) Illinois' anti-indemnity statute prohibits recovery; (4) Harrahs cannot recover because ...


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