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Macy's Inc. v. Johnson Controls World Services

June 8, 2009


The opinion of the court was delivered by: Judge Joan B. Gottschall


This matter involves a flood that occurred on March 11, 2003, at Plaintiff Bloomingdale's department store ("the store") located at 900 North Michigan Avenue in Chicago, which occurred while the store was undergoing remodeling. Defendants in this action were originally M.J. Clark, Inc., Global Fire Protection Company ("Global Fire"), and Johnson Controls World Services, Inc. ("Johnson Controls"). A bench trial was held on May 5, 6, 8, and 9, 2008, and concluded on October 28, 2008. Prior to the bench trial, M.J. Clark settled with Bloomingdale's. After the first four days of the bench trial, Global Fire settled with Bloomingdale's.

Bloomingdale's and the remaining defendant, Johnson Controls, have asked this court to proceed in a one- or two-step process. The court is to first determine whether Johnson Controls is liable to Bloomingdale's. If so, the court will then determine the amount of damages owed by Johnson Controls to Bloomingdale's. The following opinion represents the court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure as to liability.*fn1


A. Background Facts

The Bloomingdale's*fn2 store occupies parts of the first six floors of a building located at 900 North Michigan Avenue ("the building"), which is a sixty-seven story building, the first six of which are dedicated to retail purposes. Johnson Controls was under contract with the owners of the building to provide certain engineering and maintenance services for the building. This included, inter alia, performing "drain downs" of sprinkler systems when such drain downs were properly requested by the building tenants, or by the building tenants' agents.

Starting in 2003, Bloomingdale's entered into a contract with M.J. Clark to have remodeling performed on the store's fifth and sixth floors. M.J. Clark then entered into an agreement with Global Fire, whereby Global Fire would perform certain sprinkler fitting work related to the remodeling. Chris O'Brien was M.J. Clark's site superintendent at the store in March, 2003, and M.J. Clark is owned and managed by Michael J. Clark, who was also present at the store. During this same period, Global Fire employed Roman Nowak and Michael Peck as sprinkler fitters.

To be effective, sprinkler systems are generally filled with water, under pressure, so that if the system is opened the water will come out quickly. Such systems are generally connected to a pump that will continue providing water in the case that a sprinkler system is activated. Generally, a multi-story building like the building at issue has many independent sprinkler systems throughout the building; in the store the fifth floor had one sprinkler system, and the sixth floor had multiple sprinkler systems.

A "drain down" is a process by which the water from a sprinkler system is drained, so that a sprinkler system can be modified without resulting in a discharge of water. Drain downs are not complicated. To achieve a drain down, two valves must be turned. The first valve disconnects the sprinkler system from the source of the water and the pump, so that no new water can enter the system. The second valve leads to a drain, so that the water that is in the system can exit through the drain. To achieve a drain down, the first valve must be closed, and the second valve must be opened.

Johnson Controls is the only entity that is authorized to perform drain downs in the building. Johnson Controls has procedures it is to follow regarding drain down requests. These procedures include, inter alia, (1) that the request be made in writing; (2) that a fee be collected from the requestor at the time of service; (3) that the requestor be notified when the drain down is complete; and (4) that the requestor be given a radio that can be used to communicate with Johnson Controls. These procedures have not always been followed when tenants request drain downs.

The remodeling work required sprinkler systems on the fifth and sixth floors to be drained down at various times, either because the sprinkler systems were being changed, or as a preventative measure to ensure that other construction occurring on the floors would not result in an accident that would open a charged sprinkler system.

Prior to Friday, March 7, 2003, M.J. Clark submitted a written drain down request to Johnson Controls, requesting that the sixth floor be drained down. Clark understood that the sixth floor system would remain drained down for approximately two months until the remodeling was complete, but later that day Johnson Controls informed M.J. Clark that the sixth floor could remain drained down over weekends only if M.J. Clark provided "fire watchers"-people to monitor for fires. M.J. Clark was not prepared to do this, so the sixth floor system was recharged on March 7, 2003.

On Monday, March 10, 2003, M.J. Clark held a planning meeting to coordinate upcoming work. Michael Clark, O'Brien, and Brian Windt, a representative from Global Fire, attended. No one from Johnson Controls was present, nor invited. It was agreed that on March 11, Global Fire would work on the fifth floor sprinkler system, dismantling part of the system, and "capping off" part of the system, that is, inserting a block so that the section before that blockage point could remain charged and active, while the section after the blockage point could be dismantled and reconfigured. After this meeting, O'Brien and Windt went to Johnson Controls' office to request a drain down, but were unable to do so because the person with whom they intended to speak was not present. O'Brien returned to Johnson Controls' office later to request a drain down, but did so without Windt. O'Brien met with Joseph Guido and Greg Drantz, representatives of Johnson Controls. What was said during that meeting has become the central dispute in this case, and is described in greater detail below. For now, it is sufficient to state that O'Brien testified that he asked for the fifth and sixth floors to be drained down, but Guido and Drantz testify that O'Brien requested only the sixth floor to be drained down.

The request made by O'Brien was to have the drain down completed by or around 7:00 a.m. Guido and Drantz do not work during the night, and did not perform the drain down. Instead, they communicated the drain down request to a night-shift engineer, Jim Fergus. Fergus drained down the sixth floor at around 5:41 a.m. on March 11. The drain down required twenty to thirty minutes to complete. Fergus did not drain down the fifth floor.

On March 11, 2003, at around 6:00 a.m., Nowak and Peck arrived at Bloomingdale's to perform work on the sprinkler system on the fifth floor. Peck, the more experienced of the two, left the area before Nowak began his work. Peck and Nowak briefly met O'Brien outside of the store, and they then walked through the fifth floor work area, and discussed the work that would occur. Prior to Nowak beginning his work, he went to O'Brien's office, and O'Brien called Johnson Controls to confirm that a drain down had occurred. O'Brien does not know with whom he spoke. The Johnson Controls agent confirmed that a drain down had occurred, but neither O'Brien nor the Johnson Controls agent discussed the specific system or systems that were drained down.

Nowak returned to the work area and began to work on the sprinkler system without personally verifying that the system had been drained. Edward Badgley, a sprinkler fitter and inspector since 1965, testified that Nowak "completely breached the standard of care of a sprinkler fitter" by failing to check if the system was pressurized by, for example, tapping on the pipe, or checking an auxiliary valve that was a few feet away from where Nowak was working. (Tr. 226:6--7, 13--19). The system was still filled with pressurized water, and when Nowak began to disassemble the system, pressurized water began spraying out, and the force was such that Nowak could not re-close the system. The system emitted water, under pressure, for about ten minutes before a Bloomingdale's employee closed the valve to the fifth floor's sprinkler system and opened the drain valve. It is unknown precisely how much water was emitted from the system, but the volume of water was significant, and substantial damage to Bloomingdale's property resulted.

B. Testimony at Trial

1. O'Brien

O'Brien testified as follows. During the March 10 meeting, between Clark and Global Fire, it was clear that Global Fire would work on the fifth floor, and only on the fifth floor. He understood that a drain down would be required, and he went to the Johnson Controls office to ask for this. He testifies ...

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