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Fidelity and Guaranty Ins. Underwriters, Inc. v. Omega Flex, Inc.

United States District Court, D. New Jersey

March 26, 2013

FIDELITY AND GUARANTY INSURANCE UNDERWRITERS, INC., as subrogee of Ralph Santaniello, Plaintiff,
v.
OMEGA FLEX, INC., et al., Defendants

Page 442

Jared Laurence Elster, Esquire, Thomas Paolini, Esquire, Law Offices of Robert A. Stutman, P.C., Berlin, New Jersey, Attorneys for Plaintiff Fidelity and Guaranty Insurance Underwriters, Inc. as subrogee of Ralph Santaniello.

Angela Marie Catanach, Esquire, Campbell Campbell Edwards & Conroy, P.C., Berwyn, Pennsylvania, Attorney for Defendant Omega Flex, Inc.

William D. Pastorick, Esquire, Jeannie Park, Esquire, Nelson Levine Deluca & Hamilton, LLC, Cherry Hill, New Jersey, Attorneys for Defendant Drexel HVAC, Inc.

OPINION

Page 443

NOEL L. HILLMAN, United States District Judge.

This matter comes before the Court by way of Defendant Drexel HVAC, Inc.'s motion [Doc. No. 12] seeking to dismiss Counts IV, V, and VI of Plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court has considered the parties' submissions and decides this matter pursuant to Federal Rule of Civil Procedure 78.

For the reasons expressed below, Defendant's motion is granted in part and denied in part.

I. JURISDICTION

The Court exercises jurisdiction over this matter pursuant to 28 U.S.C. § 1332 based on diversity of citizenship between

Page 444

the parties and an amount in controversy in excess of $75,000. Plaintiff Fidelity and Guaranty Insurance Underwriters, Inc. (" Fidelity" or " Plaintiff" ) brings this action as subrogee of its insured, Ralph Santaniello.[1] Fidelity is a citizen of the state of Minnesota because it is a corporation organized and existing under the laws of Minnesota with its principal place of business there. (Compl. [Doc. No. 1] ¶ 1.) Both Defendant Omega Flex, Inc. (" Omega" ) and Defendant Drexel HVAC, Inc. (" Drexel" ) are incorporated and maintain their principal places of business in the Commonwealth of Pennsylvania and are therefore citizens of Pennsylvania. (Id. ¶ 4.) Accordingly, complete diversity of citizenship exists between the parties in this action. The amount in controversy is met because the allegations contained in Plaintiff's complaint sufficiently demonstrate that the damages sought are in excess of $75,000, exclusive of interest and costs.

II. BACKGROUND

Fidelity brings this action as subrogee of its insured, Ralph Santaniello, seeking to recover payments previously made to Santaniello under a homeowners' insurance policy as a result of a fire at Santaniello's home that occurred on or about May 14, 2010. (Id. ¶ ¶ 2-3, 12, 15, 18-19.) According to Fidelity, the fire resulted from the failure of a product known as corrugated stainless steel tubing (" CSST" ) which was installed at the Santaniello home by Drexel sometime prior to May 14, 2010. (Id. ¶ 14, 16.) Fidelity contends that Drexel installed a brand of CSST known as TracPipe and manufactured by Omega for use in the distribution of natural gas and propane in, inter alia, residential homes, such as Santaniello's. (Id. ¶ ¶ 5.)

Fidelity alleges that on approximately " May 14, 2010, a lightning strike occurred at or near" the Santaniello home that " energized the CSST, which failed and punctured." (Id. ¶ 15.) Fidelity further contends that the " failure of the CSST allowed gas to escape[,]" resulting in a " substantial fire that caused significant damage" to the home and its contents. (Id. ¶ 16.) Ultimately the home required reconstruction and Santaniello's personal property was destroyed. (Id. ¶ 17.) As a result of the damage and the need for reconstruction, Santaniello was forced to temporarily relocate and thereby incurred living expenses during the time the home was under construction. (Id.) Contractually, legally, and equitably subrogated to the rights of recovery of Santaniello as the insured, Fidelity now seeks to recover damages for payments made to, or on behalf of, Santaniello under the policy as a result of the damage from the fire. (Id. ¶ 19.)

Based on these allegations, Fidelity asserts claims against Omega for negligence in Count I, breach of warranty in Count II, and strict liability in Count III. (Id. ¶ ¶ 20-28.) Fidelity similarly brings claims against Drexel for the same three causes of action -- negligence in Count IV, breach of warranty in Count V, and strict liability in Count VI. (Id. ¶ ¶ 39-57.)

III. DISCUSSION

At this time, Drexel moves for the dismissal of Counts IV, V, and VI pursuant to

Page 445

Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. In considering Defendant's motion, the Court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir. 2005). It is well settled that a pleading is sufficient if it contains " a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2).

A district court, in weighing a motion to dismiss, asks " 'not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims[.]'" Bell A. Corp. v. Twombly, 550 U.S. 544, 563 n.8, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)); see also Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1953, 173 L.Ed.2d 868 (2009) (" Our decision in Twombly expounded the pleading standard for 'all civil actions[.]'" ) (citation omitted). First, under the Twombly/Iqbal standard, a district court " must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions." Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (citing Iqbal, 129 S.Ct. at 1949).

Second, a district court " must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Fowler, 578 F.3d at 211 (citing Iqbal, 129 S.Ct. at 1950). " [A] complaint must do more than allege the plaintiff's entitlement to relief." Fowler, 578 F.3d at 211; see also Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (" The Supreme Court's Twombly formulation of the pleading standard can be summed up thus: 'stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest' the required element. This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of' the necessary element." ) (citing Twombly, 550 U.S. at 556). " The defendant bears the burden of showing that no claim has been presented." Hedges v. U.S., 404 F.3d 744, 750 (3d Cir. 2005).

IV. ANALYSIS

In seeking to dismiss Counts IV, V, and VI, Drexel makes three primary arguments. Initially, Drexel asserts that under New Jersey law,[2] the Products Liability Act (" PLA" ) provides the exclusive remedy for all claims brought based on harm caused by a product. (Drexel's Mem. of Law [Doc. No. 12-2] 4.) Therefore, Drexel argues that Fidelity's ...


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