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Sears, Roebuck and Co. v. Tyco Fire Products LP

August 17, 2010

SEARS, ROEBUCK AND CO., PLAINTIFF,
v.
TYCO FIRE PRODUCTS LP; SIMPLEXGRINNELL LP; STAR SPRINKLER, INC., DEFENDANTS.



The opinion of the court was delivered by: Susan E. Cox, Magistrate Judge

Judge Ronald A. Guzman

Magistrate Judge Susan E. Cox

MEMORANDUM OPINION AND ORDER

Sears, Roebuck and Co. ("Sears") filed breach of contract and product liability claims against Simplex Grinnell, LP ("Simplex") and Tyco Fire Products LP ("Tyco") for sprinklers that prematurely activated in seven Sears stores located in six states throughout the United States. Tyco and Simplex have filed a motion for summary judgment, and within that motion they have requested that the Court sever the seven claims into separate trials. Defendants both argue that a jury would get confused in applying the different laws of six states in one trial. Sears contends that severing the claims would result in duplicate trials of the same legal issue and unnecessarily waste judicial resources. The district court has referred this specific question, of whether to sever the claims for separate trials, to us for consideration. For the reasons discussed herein, the request to sever the claims for trial is denied [dkt. 110, exh. 1].

II. BACKGROUND FACTS

Tyco, a manufacturing company, manufactured F950 "Duraspeed" sprinklers in the mid- 1970s and early 1980s.*fn1 Sears, a nationwide retail store, had these F950 sprinklers installed in their stores across the country.*fn2 On January 1, 2003 Simplex, an inspection company, and Sears entered into two contracts: (1) the National Fire Protection Service Agreement ("Protection Agreement") and (2) the National Sprinkler Identification Service Agreement ("Identification Agreement").*fn3 Under the Protection Agreement, Simplex was to provide fire protection services to all Sears stores nationwide,*fn4 including inspecting the stores' sprinkler systems,*fn5 determining if those sprinkler systems were in satisfactory condition,*fn6 and recommending how to correct any deficiencies.*fn7 The Protection Agreement's term lasted through September 30, 2007.*fn8 Under the Identification Agreement, Simplex was to provide sprinkler identification services to all Sears stores nationwide,*fn9 including verifying the existence or non-existence of sprinkler heads covered under the Central Sprinkler Company Voluntary Replacement Program, presenting a Proof of Claim Form for any sprinklers covered in the program, or presenting a letter to Sears when no sprinklers covered in the program were found.*fn10 The Identification Agreement's term lasted through December 31, 2005.*fn11 Both the Protection and Identification Agreements contain the same choice of law provision which states "[t]his Agreement shall be deemed to be entered into and shall be interpreted and construed in accordance with the laws of the State of Illinois without reference to rules governing choice of law."*fn12

In 2007 and 2008, F950 sprinklers prematurely activated in various Sears stores throughout the United States, causing water damage to Sears' property.*fn13 The F950 sprinklers each have the same type of soldering material holding together the triggering mechanism which prematurely activated.*fn14 The Sears stores were air conditioned*fn15 and the F950 sprinklers were kept at normal and consistent temperatures and endured a normal level of mechanical stress.*fn16 No fire, smoke, or any similar event was occurring within the stores when the sprinklers activated.*fn17 Sears claims that it incurred over $300,000 in expenses relating to water damage, lost profits, and repair of its sprinkler systems.*fn18 There are seven separate incidents at issue that occurred in the following Sears locations:

(1) West Mifflin, Pennsylvania; (2) Baton Rouge, Louisiana; (3) Charlottesville, Virginia; (4) Curpertino, California; (5) Houston, Texas; (6) Midland, Texas; and (7) Manchester, New Hampshire.

Sears filed five counts in its complaint against Simplex and Tyco to recoup its lost expenses. Counts I and II are breach of contract claims against Simplex.*fn19 Count III is a negligence claim against Simplex.*fn20 Counts IV and V are negligence and strict liability claims, respectively, against both Simplex and Tyco.*fn21

III. DISCUSSION

We will address separately whether Sears' claims against Simplex or Tyco should be severed for trial. Federal Rule of Civil Procedure 42(a)(2) states that "[i]f actions before the court involve a common question of law or fact, the court may consolidate the actions."*fn22 Rule 42(b) further states that "[f]or convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate . . . claims . . . ."*fn23 But before we address whether the claims should be severed, we must first determine what law governs Sears' claims against Simplex and Tyco.

A. Sears' Breach of Contract Claims Against Simplex

Sears claims Simplex violated the Protection Agreement, which mandates that Illinois law govern disputes arising from the contract. The Protection Agreement states "[t]his Agreement shall be deemed to be entered into and shall be interpreted and construed in accordance with the laws of the State of Illinois without reference to rules governing choice of law."*fn24 Simplex argues that the Protection Agreement does not apply to Sears' lawsuit because the Protection Agreement began in 2003, about twenty years after the F950 sprinklers were manufactured and first used at Sears stores (between 1978 and 1982). Simplex further argues that because the Protection Agreement never specifically mentions F950 sprinklers and does not concern F950 sprinklers, Sears is inappropriately "piggybacking" an unsupported breach of contract claim onto what is solely a products liability lawsuit.

Simplex's unsupported arguments demonstrate a lack of understanding of the Protection Agreement. Under the Protection Agreement, Simplex was obligated to "inspect and determine if the fire sprinkler system is in service and in satisfactory condition"*fn25 and to "[c]ompile a complete report of inspection, ...


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