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Lexington Insurance Co. v. Johnson Controls Fire Protection L.P.

United States District Court, D. Massachusetts

November 9, 2018

LEXINGTON INSURANCE COMPANY, STARR SURPLUS LINES INSURANCE COMPNAY, CERTAIN UNDERWRTIERS AT LLOYDS, SUBSCRIBING TO POLICY B080115304U15, ALLIED WORLD ASSURANCE COMPANY, LTD., ZURICH AMERICAN INSURANCE COMPANY, CHUBB INSURANCE COMPANY, CHUBB CUSTOM, GENERAL SECURITY INDEMNITY COMPNAY OF ARIZONA AND CONTINENTAL CASUALTY COMPANY, ALL AS SUBROGEE OF BROOKDALE SENIOR LIVING, INC., and BROOKDALE SENIOR LIVING, INC. Plaintiffs,
v.
JOHNSON CONTROLS FIRE PROTECTION LIMITED PARTNERSHIP formerly known as TYCO SIMPLEXGRINNELL or SIMPLEXGRINNELL LIMITED PARTNERSHIP Defendant. Civil Action No. 18-10516-TSH

          MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO DISMISS (Docket No. 22)

          HILLMAN, D.J.

         Plaintiffs Lexington Insurance Company, Starr Surplus Lines Insurance Company, Certain Underwriters at Lloyds, subscribing to policy B080115304U15, Allied World Assurance Company, Ltd., Zurich American Insurance Company, Chubb Insurance Company, Chubb Custom, General Security Indemnity Company of Arizona, Continental Casualty Company, and Brookdale Senior Living, Inc. (“Brookdale” and collectively with the preceding named-plaintiffs, “Plaintiffs”) brought this action against Johnson Controls Fire Protection Limited Partnership formerly known as Tyco SimplexGrinnell or SimplexGrinnell Limited Partnership (“Defendant”) for breach of contract and negligence. Defendant moves to dismiss for failure to state a claim on which relief can be granted. For the reasons stated below, Defendant's motion (Docket No. 22) is denied.

         Background

         The following facts are taking from Plaintiffs' amended complaint and are assumed true at this stage in the litigation. (Docket No. 18). On November 19, 2015, Plaintiffs' insured, Brookdale, entered into a contract with the Defendant. The contract required Defendant to maintain and regularly inspect the sprinkler systems on Brookdale's property. In addition, the contract provided:

To the fullest extent permitted by law, [SimplexGrinnell] shall defend, indemnify and hold harmless [Brookdale] . . . from and against [] damages, losses and expenses, including, but not limited to, reasonable attorneys' fees, arising out of or resulting from performance of the Work, provided that the claim, damage, loss or expense is attributable to . . . injury to or destruction of tangible property (other than the Work itself) but only to the extent caused by the negligent acts or omissions of [SimplexGrinnell.]

         Upon Plaintiffs' information and belief, prior to February 15, 2016, the sprinkler system required maintenance because a compressor was failing to properly pressurize the attic's dry sprinkler system. Defendant initially replaced the smaller compressor with a larger compressor in an attempt to rectify the problem. This larger compressor, however, also had a problem keeping the system pressurized. Defendant became aware that the compressor was not the cause of the problem and began looking for leaks in the attic's sprinkler system.

         On or about February 15, 2016, one of Defendant's technicians was at Brookdale's property. Upon Plaintiffs' information and belief, the technician was performing repairs related to the pressurization issue in the attic's sprinkler system. While the technician was performing this work, a clapper valve in the dry system opened and released water into the system at a rate of 100 pounds per square inch. The technician subsequently allowed the sprinkler system to run for approximately nine minutes. As a result, a pipe fixture failed, which enabled water to escape into Brookdale's property causing extensive water damage. The fitting that failed evidenced signs of oxidation, caused by condensation which was permitted to accumulate inside the pipe by the dry sprinkler's defective pressurization system.

         Plaintiffs allege that the damage was caused by Defendant's failure to adequately maintain Brookdale's dry sprinkler system from known weather conditions then existing, namely low temperatures.

         Standard of Review

         A defendant may move to dismiss, based solely on the complaint, for a plaintiff's “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To survive a Rule 12(b)(6) motion to dismiss, a complaint must allege “a plausible entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559, 127 S.Ct. 1955 (2007). Although detailed factual allegations are not necessary to survive a motion to dismiss, the standard “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555, 127 S.Ct. 1955. “The relevant inquiry focuses on the reasonableness of the inference of liability that the plaintiff is asking the court to draw from the facts alleged in the complaint.” Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 13 (1st Cir. 2011).

         In evaluating a motion to dismiss, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. American Airlines, Inc., 199 F.3d 68, 68 (1st Cir. 2000). It is a “context-specific task” to determine “whether a complaint states a plausible claim for relief, ” one that “requires the reviewing court to draw on its judicial experience and common sense.” Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937 (2009) (internal citations omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-that the pleader is entitled to relief.” Id. (quoting Fed.R.Civ.P. 8(a)(2)). On the other hand, a court may not disregard properly pled factual allegations, “even if it strikes a savvy judge that actual proof of those facts is improbable.” Twombly, 550 U.S. at 556, 127 S.Ct. 1955.[1]

         Discussion

         1. Contract Claim

         To state a breach of contract claim, “plaintiffs must prove that a valid, binding contract existed, the defendant breached the terms of the contract, and the plaintiffs sustained damages as a result of the breach.” Brooks ...


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