Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lumbermens Mutual Casualty Co. v. Banco Espanol de Credito

October 13, 2006

LUMBERMENS MUTUAL CASUALTY COMPANY, A/S/O FRED MOHEBAN ORIENTAL RUG COMPANY, INC., PLAINTIFF,
v.
BANCO ESPANOL DE CREDITO, S.A., DEFENDANT.
BANCO ESPANOL DE CREDITO, S.A., THIRD-PARTY PLAINTIFF,
v.
CUNO, INC. AND A-Z VENDING SERVICES CORP., THIRD-PARTY DEFENDANT.
BANCO SPANOL DE CREDITO, S.A., SECOND THIRD-PARTY PLAINTIFF,
v.
OASIS CORP., SECOND THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.

ORDER

I. Overview

Plaintiff insurance company Lumbermens Mutual Casualty Company ("Lumbermens") brings this action as subrogee of Fred Moheban Oriental Rug Company, Inc. ("Moheban"), for damages suffered by Moheban, on July 15, 2003, to its premises and carpet inventory. Plaintiff claims that the damage was caused by a leak from a water cooler located in the offices of defendant Banco Espanol de Credito, S.A. ("the Bank"), located one floor above Moheban's location at 730 Fifth Avenue in Manhattan. Lumbermens paid Moheban $325,000, for the loss and now seeks indemnification from the Bank. The Bank in turn filed a third-party complaint against A-Z Vending Services Corporation ("A-Z") - the company that leased the water cooler to the Bank and was paid by the Bank to maintain it - and a second third-party complaint against Oasis Corporation ("Oasis"), the company that sold the water-cooler to A-Z.*fn1

The parties have filed several motions. Plaintiff has moved to amend its pleadings to add: 1) claims directly against A-Z and Oasis for negligence, products liability, breach of warranty, and breach of contract; and 2) a claim against the Bank and A-Z for negligent (and possibly intentional) spoliation of evidence. A-Z has moved to amend its third-party answer to assert a counterclaim for contractual indemnification against the Bank.

In addition, the Bank has moved for summary judgment against Plaintiff. A-Z has moved for summary judgment against the Bank's third-party claims and any cross-claims.*fn2 Oasis has moved for summary judgment against the Bank's third-party claims and any cross-claims.

On September 30, 2005, Magistrate Judge Michael H. Dolinger issued a Report and Recommendation (the "Report"), recommending that: 1) Plaintiff's motion to amend be granted in part and denied in part; 2) A-Z's motion to amend its answer to the Bank's third-party complaint be granted; 3) the Bank's summary judgment motion be granted in part and denied in part; and 4) A-Z's and Oasis's summary judgment motions be denied.

For the reasons set forth below, the Court adopts the Report only in part. Plaintiff's motion to amend its complaint is granted in part and denied in part; A-Z's motion to amend its third-party answer is denied as moot; the Bank's motion for summary judgment is granted; and A-Z's and Oasis's motions for summary judgment are denied. Regarding Plaintiff's motion to amend, specifically, it is granted insofar as Plaintiff seeks to assert claims of products liability (including failure to warn), and negligent installation and maintenance, against A-Z, and claims of products liability (including failure to warn), and negligent design and manufacture, against Oasis.

II. Standard of Review

The Bank, A-Z, and Oasis have filed objections to the Report. Plaintiff has filed a response to these objections, but no objections of its own; rather, Plaintiff urges the Court to adopt the Report in its entirety. See Plaintiff's Response to Objections to the Report and Recommendation ("Pl. Resp.") 3. The Court reviews the Report's recommendations as to the nondispositive motions to amend, insofar as objections have been filed as to those recommendations, to determine if they are "clearly erroneous or contrary to law." Fed. R. Civ. P. 72(a).*fn3

The Court reviews de novo the portions of the Report regarding the dispositive motions for summary judgment, insofar as objections have been filed to the Report's recommendations as to those summary judgment motions. See Fed. R. Civ. P. 72(b).

Furthermore, as to those portions of the Report to which no objections have been filed, the Second Circuit "ha[s] adopted the rule that failure to object timely to a magistrate's report operates as a waiver of any further judicial review of the magistrate's decision," Small v. Sec'y of Health & Human Servs., 892 F.2d 15, 16 (2d Cir. 1989); "[t]he Supreme Court upheld this practice, at least when the parties receive clear notice of the consequences of their failure to object," id. (citing Thomas v. Arn, 474 U.S. 140, 155 (1985)). The Report specifically warned the parties that "[f]ailure to file timely objections may constitute a waiver of those objections both in the District Court and on later appeal to the United States Court of Appeals." Report 70.

III. Analysis

A. Motions to Amend

"A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served . . . . Otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). Rule 15(a) has a "lenient standard." Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000). But "where amendment would be futile, denial of leave to amend is proper."

In re Tamoxifen Citrate Antitrust Litig., 429 F.3d 370, 404 (2d Cir. 2005).*fn4 Thus, when a plaintiff seeks to file a proposed amended complaint in response to a motion to dismiss the original complaint pursuant to Rule 12(b)(6), a district court "need not allow [the proposed amended complaint's] filing if it does not state a claim upon which relief can be granted," provided that "[t]he adequacy of the proposed amended complaint . . . is . . . judged by the same standards as those governing the adequacy of a filed pleading." Ricciuti v. N.Y.C. Transit Auth., 941 F.2d 119, 123 (2d Cir. 1991).

But when a plaintiff seeks to amend the complaint "in response to a Fed. R. Civ. P. 56 motion for summary judgment, and the parties have fully briefed the issue whether the proposed amended complaint could raise a genuine issue of fact and have presented all relevant evidence in support of their positions," then, "even if the amended complaint would state a valid claim on its face, the court may deny the amendment as futile when the evidence in support of the plaintiff's proposed new claim creates no triable issue of fact and the defendant would be entitled to judgment as a matter of law under Fed. R. Civ. P. 56(c)." Milanese v. Rust-Oleum Corp., 244 F.3d 104, 110 (2d Cir. 2001).

In the instant case, insofar as Plaintiff's motion to amend seeks to amend the complaint to add claims against A-Z and Oasis, it has not been filed "in response" to a motion for summary judgment as to Plaintiff's complaint (because A-Z's and Oasis's summary judgment motions were filed as to the Bank's third-party claims against them).*fn5 However, because discovery is complete, and to the extent that the parties have "briefed the issue whether the proposed amendments could raise a genuine issue of fact and have presented all relevant evidence in support of their positions," Milanese, 244 F.3d at 110, the amended pleadings may be considered under the summary judgment standard when determining whether the amendments would be futile.*fn6

1. Plaintiff's Motion to Amend

Plaintiff appears to move to amend its pleadings to add: 1) claims directly against A-Z and Oasis for strict products liability (based on the distribution of an allegedly defective product and an alleged failure to warn of hazards), negligence (including negligent manufacturing, installation and maintenance, and negligent design and manufacture, of the water-cooler system and filter), breach of warranty, and breach of contract; and 2) a claim against the Bank and A-Z for negligent (and possibly intentional) spoliation of evidence.*fn7 The Report recommends:

1) denying Plaintiff's motion, primarily on the basis of futility, insofar as it seeks to add: a) claims of breaches of warranties and contract against A-Z and Oasis, b) a claim of negligent installation and maintenance against Oasis, and c) a claim against the Bank and A-Z for spoliation of evidence; but 2) granting Plaintiff's motion insofar as it seeks to add: a) claims of products liability (failure to warn) and negligent installation and maintenance against A-Z, and b) claims of products liability (failure to warn) and negligent design and manufacture against Oasis.

a. Proposed New Claims against A-Z and Oasis for Breaches of Warranties and Contract, against Oasis for Negligent Installation and Maintenance, and ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.