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Sears, Roebuck and Co. and Kmart Corporation v. Tyco Fire Products Lp

June 23, 2011

SEARS, ROEBUCK AND CO. AND KMART CORPORATION, PLAINTIFFS,
v.
TYCO FIRE PRODUCTS LP, SIMPLEXGRINNELL LP AND STAR SPRINKLER, INC. DEFENDANTS.



The opinion of the court was delivered by: Judge Ronald A. Guzman

MEMORANDUM OPINION AND ORDER

Plaintiffs Sears, Roebuck and Company and Kmart Corporation (collectively referred to herein as "Sears") filed suit against Tyco Fire Products LP and SimplexGrinnell LP for negligence and strict product liability and SimplexGrinnell LP for breach of contract.*fn1 Defendants have moved for summary judgment. For the reasons provided in this Memorandum and Opinion, the Court grants in part and denies in part the motion.

Facts

This litigation arises out of the inadvertent activation of Model F950 fire sprinkler heads in Sears' stores throughout the country. (Defs.' LR 56.1(a)(3) Stmt. ¶ 9.) Specifically, from May 15, 2007 to October 11, 2008, seven F950 sprinkler heads activated in the absence of fire at Sears' stores in Louisiana, Pennsylvania, Texas, California, Virginia and New Hampshire. (Id. ¶¶ 11-12.) The sprinkler heads were manufactured by Grinnell Corporation and/or its successor Tyco Fire Products LP ("Tyco"). (Id. ¶ 8.) SimplexGrinnell, also owned by Tyco, installs and services sprinkler heads. (Pls.' LR 56(b)(3) Stmt. ¶ 34; Defs.' Ex. Q, Thomas McDonald Aff. 2-3.)

A. Sprinkler Heads

Plaintiffs' product claims are focused on the activation mechanism of the F950 sprinkler head. (Defs.' LR 56.1(a)(3) Stmt. ¶ 26.) The activation mechanism is made up of a dome-shaped heat collector which is soldered to a cup-shaped key. (Id. ¶¶ 19-20.) The soldered junction is coated with wax and a hook is riveted to the key. (Id. ¶ 20.) At the other end of the hook is a strut that runs the length of the sprinkler frame from the deflector to the base. (Id.) At the base end of the frame, the strut presses against a plug that holds back the water present in the sprinkler pipe. (Id.) When the solder melts or is otherwise broken, for example from voids in the solder, the heat collector separates from the key or cup which moves the hook, which in turn moves the strut, which frees the plug and thereby allows water to flow from the sprinkler pipe. (Id.)

Only two activation mechanisms were recovered from the seven activations at issue, one from a Sears' store in Texas and one from a Sears' store in Pennsylvania. (Id. ¶ 26.) Plaintiffs retained two experts, Gerald Uhland and Curt M. Freedman, to evaluate, among other things, the two recovered activation mechanisms. (Id. ¶ 27.) The experts testified that, because of deficiencies in the manufacturing process, the soldered junction (described above) between the heat collector and the key had voids and/or areas of deficient bonding between the heat collector and the key, which caused the inadvertent activation of the sprinkler heads. (Pls.' LR 56(b)(3) Stmt. ¶¶ 6, 9.)*fn2 Specifically, Freedman's analysis included review of other F950 sprinkler heads that had prematurely activated, as well as examination of the fire protections systems, building features and surrounding circumstances of the premature sprinkler activations at the seven stores at issue in this litigation. (Id. ¶ 5.) Based on his analysis, Freedman testified that the F950 sprinklers "were defective due to deficiencies in the manufacturing process and/or deficiencies in quality control." (Id. ¶ 6.) He further testified that there is no data to support that the sprinkler heads activated from overheating, and that all other "causes of failure . . . have been ruled out through investigation." (Id. ¶ 7.)*fn3

Uhland examined the recovered activation mechanisms, which he stated were manufactured between 1978 and 1982. (Id. ¶ 9.) Based upon his analysis of the mechanisms and discussions with Freedman, he opined that the mechanisms were defective due to improper soldering at the time of manufacture. (Id.) Uhland testified that a void space of one to five percent in the soldering was "usual" or "ordinary," and that based on his experience, he had observed premature activations with a void space of twenty to fifty percent. (Id. ¶ 10.) Freedman had found a fifteen percent void space for the sprinkler head examined from the Pennsylvania store. (Id. ¶ 4.) Uhland testified that Freedman's void numbers were conservative, and that he had understated the amount of void space for the two activation mechanisms at issue here, but his methodology and report were otherwise accurate. (Id. ¶ 11.)

B. Contracts

On January 1, 2003, Sears and SimplexGrinnell, LP ("SimplexGrinnell") entered into two contracts, a National Fire Protection Service Agreement ("Protection Agreement") and a National Sprinkler Identification Service Agreement ("Identification Agreement"). (Defs.' LR 56(a)(3) Stmt. ¶ 39.) Both Agreements will be discussed in more detail when the Court address plaintiffs' contract claims.

Discussion

Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The movant bears the burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If the movant meets this burden, the non-movant cannot rest on conclusory pleadings but "must present sufficient evidence to show the existence of each element of its case on which it will bear the burden at trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986). To succeed on a summary judgment motion, the evidence must be such "that [no] reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In considering the motion, the court must view all evidence in the light most favorable to the non-movant. Id. at 255.

In their five count complaint, Plaintiffs allege that SimplexGrinnell is liable for breach of the Protection and Identification Agreements (Counts I & II) and for negligently performing its duties under both Agreements (Count III). They further allege that SimplexGrinnell and Tyco are liable under product liability theories of negligence (Count IV) and strict liability (Count V) for designing, manufacturing, testing, inspecting and distributing the allegedly defective sprinkler heads. Part I of this Opinion will address plaintiffs' tort based claims, while Part II will address plaintiffs' contract claims against SimplexGrinnell.

I. Plaintiffs' Tort Claims

A. Statutes of Repose

Defendants first argue that the statutes of repose in Virginia, New Hampshire and Texas bar plaintiffs' tort claims involving the stores in those states. (Defs.' Mem. Supp. Summ. J. 4-7.)*fn4 Defendants have the burden of establishing this affirmative defense. Baker v. Poolservice Co., 636 S.E.2d 360, 366 (Va. 2006) (explaining that the statute of repose is an affirmative defense and therefore, the movant's burden to prove); Nexen, Inc. v. Gulf Interstate Eng'g Co., 224 S.W.3d 412, 416 (Tex. App. Ct. 2006) (same); see Beane v. Dana S. Beane & Co., 7 A.3d 1284, 1289 (N.H. 2010) (holding that defendant bears the burden of proving affirmative defenses).

Defendants have failed to establish that the Virginia statute of repose bars plaintiffs' claims. The Virginia statute of repose provides that:

No action to recover for any injury to property . . . arising out of the defective and unsafe condition of an improvement to real property . . . shall be brought against any person performing or furnishing the construction of such improvement to real property more than five years after the performance . . . [of] such services and construction.

Va. Code. Ann. § 8.01-250. The statute does not apply to "manufacturer[s] [and] supplier[s] of . . . [the equipment at issue]." Id. The sprinkler heads are "equipment" under the statute of repose. Royal Indem. Co. v. Tyco Fire Prods., LP, 704 S.E.2d 91, 94 (Va. 2011).

The statute of repose does not bar plaintiffs' claims against Tyco because it manufactured the product at issue. § 8.01-250; (Pls.' LR 56(b)(3) Stmt. ¶ 34.) It is unclear, however, whether it applies to the claims against SimplexGrinnell. It is undisputed the SimplexGrinnell did not manufacturer the sprinkler heads, (Defs.' LR 56(b)(3)(B) Stmt. ¶ 22; Pls.' LR 56(b)(3) Stmt. ¶ 34; Defs.' Ex. Q, Thomas McDonald Aff. 2-3), but the record does not establish whether SimplexGrinnell supplied them to Sears. Even assuming the statute did apply to SimplexGrinnell, however, defendants have not established the date the sprinkler heads were installed and therefore, have not proven when the construction (or installation) was performed as required under the statute. Therefore, summary judgment is denied as to this issue.

Defendants have also failed to satisfy their burden with regards to the New Hampshire statute of repose, which provides that claims arising out of improvements to property must be brought within eight years of substantial completion of such improvement. N.H. Rev. Stat. Ann. § 508:4-b.*fn5 Defendants argue that the statute bars plaintiffs' claims because Sears purchased the New Hampshire store in 1977. (Defs.' LR 56(b)(3) Stmt. ¶ 24.) This date alone, however, does not establish when the fire sprinklers were installed as required for the statute to apply. § 508:4-b. Therefore, defendants have failed to establish this affirmative defense.

The situation is different for the claims involving the Texas stores. The Texas statute of repose provides that "a claimant must commence a product liability action against a manufacturer or seller" within fifteen years "after the date of the sale of the product" by the manufacturer or seller, unless the "manufacturer or seller expressly warrants in writing" that the product has a safe "useful life longer than fifteen years," and then, in that case, the claimant must bring suit within the warranted time period. Tex. Civ. Prac. & Rem. Code Ann. § 16.012; see Zaragosa v. Chemetron Invs., Inc.,122 S.W.3d 341, 345-46 (Tex. ...


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