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Pennsylvania Lumbermens Mutual Insurance Co. v. Rstart LLC

United States District Court, D. Colorado

September 27, 2018

PENNSYLVANIA LUMBERMENS MUTUAL INSURANCE COMPANY, and SENECA INSURANCE COMPANY, INC., Plaintiffs,
v.
RSTART, LLC, d/b/a Planet Roofing & Solar, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS PENNSYLVANIA LUMBERMENS MUTUAL INSURANCE COMPANY'S COMPLAINT; AND DENYING DEFENDANT'S MOTION TO DISMISS SENECA'S COMPLAINT

          CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.

         The matters before the Court are Defendant RStart LLC d/b/a Planet Roofing & Solar's (“Planet Roofing”):

1. Motion to Dismiss Plaintiff Pennsylvania Lumbermens Mutual Insurance Company's (“PLM”) Complaint (18-cv-00478, Doc. # 11); and
2. Motion to Dismiss Plaintiff Seneca Insurance Company, Inc.'s (“Seneca”) Complaint. (18-cv-00564; Doc. # 16.)

         For the following reasons, the Court grants in part and denies in part Planet Roofing's Motion to Dismiss PLM's Complaint and denies Planet Roofing's Motion to Dismiss Seneca's Complaint.

         I. BACKGROUND

         The following facts are taken from PLM's and Seneca's Complaints, which are accepted as true for purposes of the underlying motions. See Williams v. Meese, 926 F.2d 994, 997 (10th Cir. 1991).

         This consolidated action[1] arises out of the collapse of two roofs at the Maplewood Village Apartments, LLC apartment complex (“Maplewood Village”). (Doc. # 1 at ¶ 10.) Maplewood Village entered into a general contract with Planet Roofing for re-roofing services. (18-cv-00564; Doc. # 1 at ¶ 8.) Planet Roofing, in turn, purchased roofing and construction materials from Gulfeagle.[2] (Doc. # 1 at ¶ 6.) As part of the purchase, Planet Roofing and Gulfeagle also entered into a contract, wherein, as pertinent here, Planet Roofing agreed to indemnify Gulfeagle for “any and all loss or expense . . . by reason of liability imposed upon [Gulfeagle] for damages . . . whether caused or contributed by [Gulfeagle] . . . arising from the delivery and placement of materials being delivered.” (Doc. # 1-1 at 2.)

         On June 16, 2017, Gulfeagle delivered the roofing materials to Maplewood Village and stacked them on the roof at Planet Roofing's direction. (Id. at ¶ 9.) Three days later, the roofs collapsed. (Id. at ¶ 10.) Maplewood Village then submitted an insurance claim for the damaged roofs to its insurer, Seneca. (18-cv-00564; Doc. # 1 at ¶ 12.) Seneca made, and is continuing to make, payments to Maplewood Village for repair of the roofs. (Id.) To date, Seneca has paid $882, 128.90 to or on behalf of Maplewood Village for repairs. (Id.) Seneca was therefore “subrogated” to seek payment from Gulfeagle and Planet Roofing for damage caused to the roofs. Gulfeagle, through its insurer PLM, settled Seneca's subrogation claim. PLM agreed to pay Seneca $508, 000 on Gulfeagle's behalf, and in exchange, Seneca signed a “Release, ” wherein it relinquished its right to sue PLM, Gulfeagle, and all related subsidiaries for any damages relating to the collapsed roofs. (Doc. # 11-1.)

         Planet Roofing was not a party to the Settlement. Planet Roofing was, however, notified of the damage to Maplewood Village as well as Seneca's subrogation claim. Planet Roofing denied any responsibility for the collapsed roofs and refused to pay Seneca any funds related to the damages. (Doc. # 1 at ¶ 10.) Planet Roofing has also refused to indemnify Gulfeagle for the settlement amounts it paid to Seneca for damages to the roofs. (Id.)

         In February 2018, PLM commenced the instant lawsuit against Planet Roofing, alleging breach of contractual indemnity and contribution-ultimately seeking to recover the funds it paid to Seneca on behalf of Gulfeagle. (Doc. # 1.)

         In March 2018, Seneca likewise commenced a lawsuit against Planet Roofing, alleging causes of action for negligence, breach of implied warranty, and breach of contract-all related to Planet Roofing's alleged failure to exercise reasonable care and skill when in performance of its roofing services. (18-cv-00564, Doc. # 1.)

         Planet Roofing now moves to dismiss both complaints. With respect to PLM's complaint, Planet Roofing argues that the indemnification clause at issue is void under Colorado law and, therefore, Planet Roofing did not breach the contract by refusing to adhere to it. (Doc. # 11.) With respect to both complaints, Planet Roofing asks this Court to determine the scope and applicability of the Release in the Settlement between PLM and Gulfeagle-specifically to determine whether it bars PLM's contribution claim against Planet Roofing or Seneca's causes of action against Planet Roofing. (Doc. # 11; 18-cv-00564, Doc. # 16.) The Court addresses each contention below.

         II. LAW

         The purpose of a motion to dismiss under Rule 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). A complaint will survive such a motion only if it contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The question is whether, if the allegations are true, it is plausible and not merely possible that the plaintiff is entitled to relief under the relevant law.” Christy Sports, LLC v. Deer Valley Resort Co., Ltd., 555 F.3d 1188, 1192 (10th Cir. 2009).

         In reviewing a Rule 12(b)(6) motion, a court must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff. Williams v. Meese, 926 F.2d 994, 997 (10th Cir. 1991). Nevertheless, a complaint does not “suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).

         When interpreting a contract on a Rule 12(b)(6) motion, the Court adheres to general principles of contract interpretation, reading the plain language of a contract to ascertain the parties' intent and the contract's meaning. See Albright v. McDermond, 14 P.3d 318, 322 (Colo. 2000). Contract terms will be deemed ambiguous when they can be read to have more than one reasonable interpretation. Hecla Min. Co. v. New Hampshire Ins. Co., 811 P.2d 1083, 1090 (Colo. 1991); see also Harwood v. Senate Majority Fund, LLC, 141 P.3d 962, 964 (Colo.App. 2006) (“Any interpretation that creates an unreasonable or absurd result should be avoided.”). The mere fact that the parties disagree about the meaning of a provision does not in itself render it ambiguous. Snipes v. Am. Fam. Mut. Ins. Co., 134 P.3d 556, 558 (Colo.App. 2006).

         III. ANALYSIS

         A. BREACH OF CONTRACT - ...


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