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Cat Iron, Inc v. Bodine Environmental Services

June 15, 2011


The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge


Wednesday, 15 June, 2011 02:28:34 PM

Clerk, U.S. District Court, ILCD


Defendant, Bodine Environmental Services, Inc., filed this Amended Motion for Summary Judgment (#23) on February 24, 2011. Plaintiff, Cat Iron, Inc., filed their Response (#25) on March 31, 2011, and Defendant filed its Reply (#26) on April 14, 2011. The motion is now fully briefed and ready for judgment. For the following reasons, Defendant's Amended Motion for Summary Judgment (#23) is DENIED in part, with ruling reserved on another part.


Plaintiff filed its Amended Complaint (#11) on August 4, 2010. In the Amended Complaint, Plaintiff alleged the following:

Plaintiff and Defendant entered into a contract whereby Defendant would inspect one of Plaintiff's facilities for asbestos and issue a written report to Plaintiff. Defendant, an Illinois corporation, submitted a proposal for a complete National Emission Standards for Hazardous Air Pollutants (NESHAPS) asbestos inspection and comprehensive report of the findings of the inspection of the Intermet Facility in Decatur, Illinois, with the cost not to exceed $6,100.00. On May 30, 2008, Robb Davis, Plaintiff's co-owner, on behalf of Plaintiff, a Pennsylvania corporation, accepted and signed the proposal. On July 7, 2008, Defendant sent its asbestos inspection report to Plaintiff and billed Plaintiff for the asbestos inspection, sampling, and written report. Plaintiff alleges that Defendant failed to identify several asbestos containing materials at the Decatur facility. Plaintiff alleges Defendant failed to fully perform its part of the contract made on May 30, 2008, with Plaintiff. Plaintiff alleges damages in excess of $75,000 on each of the four counts contained in its First Amended Complaint: (1) breach of contract; (2) breach of express warranty; (3) negligence (and in the alternative Plaintiff plead that Defendant was guilty of willful and wanton acts or omissions, such as intentionally or with conscious disregard failing to identify several asbestos containing materials); and (4) negligent misrepresentation.

Defendant filed its Answer, Affirmative Defenses, and Counterclaim to Plaintiff's First Amended Complaint (#15) on August 18, 2010. Defendant plead three affirmative defenses: (1) any damages Plaintiff can recover are limited by the limitation of liability clause set forth in the parties' contract attached to the Amended Complaint; (2) under the parties' contract, the Plaintiff discharged and released Defendant from any damage in excess of Defendant's compensation for the work ($6,100 under the contract, although Defendant was only paid $6,080 by Plaintiff); and (3) the district court lacks subject matter jurisdiction because the parties' contract limits the Plaintiff's damages to an amount below the amount in controversy requirement for diversity jurisdiction.

Item 5 of the Standard Terms and Conditions in the parties' contract states:

"Item 5. Limitations of Liability. The CLIENT [Plaintiff Cat Iron, Inc.] agrees to limit Bodine's liability to the CLIENT and all parties claiming through the client or otherwise claiming reliance on Bodine's services, allegedly arising from Bodine's professional acts or errors or omissions, to a sum not to exceed Bodine's fees for the services performed on the project, provided that such claims are not attributable to Bodine's gross negligence or intentional misconduct. In this latter event, the limit of liability will be increased to $25,000 less any applicable insurance amount covering alleged damages or claims. In no event shall Bodine or any other party to this agreement, including parties which may have claim to have a direct or indirect reliance on Bodine's services, be liable to the other parties for incidental, indirect or consequential damages arising from any cause."

On October 5, 2010, during discovery in this case, Defendant served upon Plaintiff a Federal Rule of Civil Procedure 30(b)(6) Notice of Deposition (attached as Exhibit D to Defendant's Amended Motion for Summary Judgment (#23)), requesting that Plaintiff:

"designate and produce one or more officers, directors, managing agents, or other persons knowledgeable to testify in detail with respect to the following matters:

1. All facts upon which Cat Iron bases its allegation that Bodine Environmental Services, Inc., engaged in willful and wanton misconduct in allegedly failing to identify or report certain-asbestos-containing materials as alleged in Count III of the First Amended Complaint.

2. The nature, duration, and scope of Cat Iron's investigation in obtaining the facts to support its allegation that Bodine Environmental engaged in any willful and wanton misconduct while working on the Intermet project, which is the subject matter of the First Amended Complaint."

Plaintiff's co-owner Robb Davis was produced pursuant to the Rule 30(b)(6) Notice by Plaintiff. No other person was produced by Plaintiff pursuant to the Rule 30(b)(6) Notice. Davis's deposition was taken on January 18, 2011. During the deposition, Defendant's counsel repeatedly asked Davis what facts Plaintiff had to support its allegations that Defendant engaged in willful and wanton misconduct. Each time Plaintiff's counsel objected during the deposition. The answers provided by Davis, subject to Plaintiff's counsel's objections, time and again, stated that Davis was not aware of any facts that supported Plaintiff's claim that Defendant's actions were willful and wanton. Davis said he did not have any facts that Defendant acted with conscious disregard for Plaintiff's business plans with regard to the Decatur facility. Davis also stated that Plaintiff does not know what Defendant's motives "were or were not" in doing the inspection. Further, Davis and Plaintiff did not have any facts in its possession to show that Defendant acted intentionally or with reckless disregard in failing to allegedly identify all of the asbestos containing material at the Decatur building.

When he was examined by Plaintiff's counsel, Davis testified that he had no legal training, could not give a definition of "willful and wanton misconduct," and could not identify "what fact may or may not tend to prove or disprove somebody's willful and wanton misconduct." Davis stated that he became aware asbestos was still in the building after Defendant had performed its inspection and removal when David Stowers of Parkland ...

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