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Fireman's Fund Insurance Co. v. 360 Steel Erector's, Inc.

United States District Court, D. New Jersey

February 26, 2018

FIREMAN'S FUND INSURANCE COMPANY, a/s/o S.L. MANAGEMENT GROUP LLC and 6 AIRPORT ROAD, LLC, Plaintiff,
v.
360 STEEL ERECTORS, INC., MONMOUTH EQUIPMENT SALES CO. INC., BLUESCOPE BUILDINGS NORTH AMERICA, INC., and VARCO PRUDEN BUILDINGS, a division of BlueScope Buildings North America, Inc., Defendants.

          OPINION

          WILLIAM J. MARTINI, U.S.D.J.

         Plaintiff Fireman's Fund Insurance Company brings this action against 360 Steel Erectors, Inc. (“360 Steel”), Monmouth Equipment Sales Company, Inc. (“Monmouth”), BlueScope Buildings North America, Inc. (“BlueScope”) and an unincorporated division of BlueScope, Varco Pruden Buildings (“VP”) (collectively “Defendants”), alleging negligence and breach of contract claims, in connection with Defendants' purported faulty construction of an airport hangar. This matter comes before the Court on Defendant BlueScope's motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), or, in the alternative, motion to sever Plaintiff's Count III and transfer venue pursuant to 28 U.S.C. § 1404(a). There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, BlueScope's motions to dismiss and transfer are DENIED.

         I. BACKGROUND

         Plaintiff is an insurance company incorporated in Illinois and is the subrogee of S.L. Management Group, LLC (“SL”) and 6 Airport Road, LLC (“the insureds”). Second Am. Compl. (“2AC”) ¶ 1, ECF No. 59. 360 Steel and Monmouth are construction businesses incorporated in New Jersey. Id. ¶¶ 2-3. BlueScope is a Missouri corporation that produces unassembled, pre-engineered building components. Id. ¶ 4; see also Mem. of Law in Supp. of Def. BlueScope's Mot. to Dismiss (“Def.'s Mem.”) 1, ECF No. 67-1. VP is an unincorporated subdivision of BlueScope that furnished building components to SL. See Def.'s Mem. at 1.

         This matter arises out of the collapse of an airport hangar in Morristown, New Jersey. In December 2013, Plaintiff's insureds contracted with Monmouth to construct an airport hangar at 6 Airport Road. 2AC ¶ 9. Monmouth, in turn, subcontracted with 360 Steel to perform the steel erection of the hangar. Id. ¶ 10. The insureds purchased pre-engineered metal components from BlueScope and VR for the construction of the hangar. See Def.'s Mem. at 1. On January 16, 2015, the hangar's steel framework collapsed during construction, causing substantial damage, including severe injuries to one construction worker. Id. ¶ 12; see Def. Monmouth's Mem. of Law in Opp'n to Def. BlueScope's Mot. to Dismiss (“Monmouth's Mem.”) 2, ECF No. 76. Plaintiff paid its insureds $1, 379, 511.95 in claims, representing the insureds' damages caused by the collapse. 2AC ¶ 15.

         Plaintiff's Second Amended Complaint (the “Complaint”) asserts three causes of action:

(1) Count I: negligence against 360 Steel for its participation in the faulty construction of the hangar, id. ¶¶ 17-20;
(2) Count II: negligence against Monmouth for its participation in the faulty construction of the hangar, id. ¶¶ 21-23;
(3) Count III: breach of contract against BlueScope for failing to pay its share of costs incurred by the transportation and storage of evidence, which it agreed to pay by executing the cost-sharing agreement, id. ¶¶ 24-30.

         BlueScope now moves to dismiss Count III or, in the alternative, sever Count III and transfer venue to the Western District of Missouri (“WDM”). BlueScope advances three arguments in support of its motion. First, it argues that the Court lacks subject matter jurisdiction because the Complaint fails to demonstrate that Plaintiff has standing to sue for breach of contract. Specifically, the Complaint does not establish that Plaintiff is a party to the cost-sharing agreement and it, therefore, lacks standing to enforce it. See Def.'s Mem. at 12-15. Second, BlueScope argues that the Complaint fails to allege that it breached a contract with Plaintiff or the insureds. See id. at 15-17. Finally, BlueScope alternatively argues that the Court should sever Count III and transfer to WDM pursuant to the forum-selection clause in the purchase order, which the insureds agreed to upon purchasing the components for the hangar. See id. at 17-24.

         Plaintiff opposes, arguing that its Complaint sufficiently pleads that there is a valid contract between BlueScope and the other parties for the sharing of costs associated with preserving evidence of the collapse. In the event that the Court finds that Plaintiff was not a party to the cost-sharing agreement, Plaintiff argues that it was a beneficiary to that agreement. See Pl.'s Mem. of Law in Opp'n to Def. BlueScope's Mot. (“Pl.'s Opp'n”) 7- 10, ECF No. 73. Plaintiff also opposes transfer, arguing that the forum-selection clause in the purchase order does not apply here because the cost-sharing agreement is a wholly separate contract that does not contain that same clause. See id. 10-13.

         In its reply, BlueScope reiterates that Plaintiff is not a party to the cost-sharing agreement and further argues that the Complaint does not allege that Plaintiff is an intended third-party beneficiary to that agreement. See Def. BlueScope's Reply in Supp. of Mot. to Dismiss (“Def.'s Reply”) 1-5, ECF No. 83. BlueScope also argues that the forum-selection clause applies because the cost-sharing agreement “relates to” the sale of its components to the insureds. See id. at 8-13.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(1) provides for the dismissal of a complaint for lack of subject matter jurisdiction. There are two types of challenges to subject-matter jurisdiction: (1) facial attacks, which challenge the allegations of the complaint on their face; and (2) factual attacks, which challenge the existence of subject-matter jurisdiction, quite apart from any pleadings. Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). In reviewing a facial attack, the court must consider the allegations of the complaint in the light most ...


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