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American Manufacturers Mutual Insurance Co. v. Cosmec

September 5, 2007

AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY, PLAINTIFF,
v.
COSMEC, INC., DEFENDANT.
COSMEC, INC., THIRD-PARTY PLAINTIFF,
v.
FABREEKA INTERNATIONAL, INC., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Brieant, J.

Memorandum and Order

Before the Court for decision are two motions by third-party defendant Fabreeka International, Inc ("Fabreeka"). The first is a motion to strike Plaintiff's pleadings pursuant to Fed. R. Civ. P. 37(b) on the grounds of spoliation of evidence. (Doc. 47). The second motion is for summary judgment pursuant to Rule 56. (Doc. 57).

The facts presented below are assumed to be true for the purposes of these motions only.

On or about March 2, 2001, New Rochelle Contracting Corp. ("NRCC") entered into a written agreement with the Thruway Authority of the State of New York ("TANY") for the replacement of six bridges over the New York State Thruway in Yonkers. Plaintiff, American Manufactures Mutual Insurance Company (AMM), was the surety of the bridge project. NRCC placed an order for fixed and expansion bearings with Defendant and third-party plaintiff Cosmec, Inc., ("Cosmec") which then supplied the bridge bearings. The bearings were manufactured by third-party defendant Fabreeka International, Inc. ("Fabreeka"). Compl. ¶¶ 1-7.

This case stems from the alleged failure of the pre-formed fabric bearings that were supplied to the contractor by Cosmec and manufactured by Fabreeka for the TANY project. The bearings pads which are intended to act as a cushioned shock absorber between the substructure and the superstructure of the bridge, allowing expansion and contraction. The pads are made of cotton duck impregnated with rubber and cut to the appropriate size. In order to meet the contract specifications requiring the pads to be 1 1/2 inches in diameter, Fabreeka "glued" two separate pads together.*fn1 Plaintiff alleges that the pads failed because the glued joints of many of the pads came apart.

Employees of Defendant Cosmec visited the job sites after the alleged failure of the bearings. They reported that "[i]nitial review indicates there exists substantial de-lamination within the pads located in all of the structures where the bearings have been installed." The report further explained that, where the bearings were installed, the majority of the pads had either completely or partially separated. The report explained that workers at the site described the failure as having occurred during the "pouring of the deck" of the bridge. The workers who were present during the apparent failure reported to Cosmec's investigators that:

"during this operation the camber came out of the girders all at once. There was an actual 'pop' when the camber came out (it was not gradual), which also caused some of the wooden bracing to let go. Some of the girders ended up with reverse camber. This undoubtedly transferred extreme one time loads to the bearings." (Emphasis added.)

After this incident, the surety sent the pads to Phoenix Labs for testing. These tests reportedly led lab technicians to believe "that the Fabreeka pads met the specifications required for the project."

Plaintiff brought this action against Cosmec by filing a complaint in New York Supreme Court, Westchester County, on July 12, 2005, alleging one cause of action for breach of contract. Cosmec filed a notice of removal on August 18, 2005. (Doc. 1). Cosmec also filed a third-party complaint against Fabreeka on August 23, 2005, asserting claims for breach of contract, breach of merchantability, breach of warranty for a particular purpose, and for contribution and indemnity. (Doc. 5).

On May 25, 2007, the parties appeared in this Court to argue motions that had been filed by Defendants. The first motion was Defendant Cosmec's renewed motion in limine to preclude Plaintiff's Expert's Supplemental Report. In that motion, Cosmec argued that the expert's conclusions were not scientifically valid and did not satisfy the standards for admissibility required by the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993). The Court denied that motion in its entirety by oral decision on May 25. (Tr. 34.)

The second motion was Fabreeka's motion to strike Plaintiff's pleadings pursuant to Rule 37 of the Federal Rules of Civil Procedure based upon Plaintiff's alleged spoliation of evidence. (Doc. 47). Cosmec joined Fabreeka in the motion to strike. (Doc. 48).

During oral argument, the Court indicated to the parties that it did not believe that Plaintiff acted with the requisite intent required to find that its actions constituted spoliation of evidence. (Tr. 7). The Court did note, however, that Plaintiff might have difficulties carrying its burden of proof in regard to defectiveness of the pads, and that the case might be ripe for a motion for summary judgment based on the issue of ultimate liability, based upon its handling of the physical evidence. (Tr. 9-10).

The Court also inquired as to how Fabreeka, as a manufacturer and third-party defendant, could be held liable if it sold the pads as a standard product, without notice of the TANY specifications. The Court invited Fabreeka to submit papers on this issue, and allowed Cosmec to respond. The Court stated that it would consider the Rule 37 motion now to be a Rule 56 motion on the issue of Fabreeka's liability as manufacturer of the pads.

On June 8, 2007, Fabreeka filed a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. (Doc. 57).*fn2 In that motion, Fabreeka seeks a grant of summary judgment in its ...


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