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Coyle v. GLS Leasco

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK


March 19, 2009

THOMAS H. COYLE, AND LINDA SUE COYLE, PLAINTIFFS,
v.
GLS LEASCO, INC., DECISION C.C. EASTERN, INC., CENTRAL TRANSPORT INTERNATIONAL, INC., HOLDING COMPANY OF GLS LEASCO, INC., AND C.C. EASTERN, INC., AND CENTRA, INC., AS HOLDING COMPANY OF CENTRAL TRANSPORT INTERNATIONAL, INC., DEFENDANTS.

The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge

REPORT and RECOMMENDATION and ORDER

JURISDICTION

This action was referred to the undersigned by Honorable Richard J. Arcara on October 27, 2005, for pretrial matters including report and recommendation on dispositive motions. The matter is presently before the court on Plaintiffs' motions for summary judgment (Doc. No. 31), filed February 14, 2008, and to preclude expert witness evidence (Doc. No. 44), filed April 28, 2008, and on Defendants' motions for summary judgment (Doc. No. 38), filed April 4, 2008, for sanctions (Doc. No. 43), filed April 22, 2008, and to strike Plaintiffs' affidavit (Doc. No. 53), filed June 6, 2008.*fn1

BACKGROUND and FACTS*fn2

On November 4, 1986, GLS Leasco, Inc. ("Leasco") purchased real property located at 850 Aero Drive, in Cheektowaga, New York ("the Premises"), from Terminal Rentals, Inc. (Halls Motor Freight) ("Terminal Rentals"). On December 30, 1986, Leasco was merged into Centra, Inc. ("Centra"), and Centra made a capital contribution of all of Leasco's real estate assets, including the Premises, to Central Transport International, Inc. ("Central Transport"). On January 1, 1990, Central Transport made a capital contribution of all its real estate assets, including the Premises, to Crown Enterprises, Inc., a Tennessee corporation. On August 31, 1990, Crown Enterprises, Inc., a Tennessee corporation, merged into Crown Enterprises, Inc., a Michigan corporation ("Crown").

On September 25, 1992, Crown and Con-Way Central Express, a part of ConWay Transportation Services, Inc. ("Con-Way"), a foreign corporation,*fn3 entered into a lease agreement ("the Lease")*fn4 whereby Crown, as the landlord of the Premises, agreed to lease the Premises to Con-Way for Con-Way's use in operating a commercial trucking business. Pursuant to the Lease, Con-Way, as tenant, agreed to "indemnify Landlord [Crown] and save it harmless from and against any and all claims, actions, suits, damages, liabilities, loss, orders, decrees, or judgments and expenses of any kind or nature whatsoever, including without limitation, attorneys' fees, costs and expenses . . . ." Lease § 9.

The Lease, which was amended on May 1, 1994, March 18, 1996, September 15, 1997, and August 30, 1999, remained in effect on February 7, 2003, when, Coyle, in connection with his employment by Con-Way, drove a tow-motor used to unload freight from trucks across a cracking and sinking portion of a concrete slab floor of a truck terminal located at the Premises. The poor condition of the concrete slab floor allegedly jostled the moving tow motor, causing Plaintiff to fall from the tow motor and sustain injuries.

On September 9, 2005, Plaintiffs Thomas H. Coyle ("Coyle"), and his wife, Linda Sue Coyle ("Mrs. Coyle") (together, "Plaintiffs"), commenced a personal injury action in New York Supreme Court, Erie County ("Coyle I"), seeking monetary damages for injuries sustained as a result of a February 7, 2003 incident ("the incident"), occurring at 850 Aero Drive, Cheektowaga, New York ("the Premises"). Named as Defendants in Coyle I are Leasco as the alleged owner of the Premises, C.C. Eastern, Inc. ("C.C. Eastern"), the alleged operator of a trucking terminal at the Premises, Central Transport, the holding company of Leasco and C.C. Eastern, and Centra, the holding company of Central Transport (together, the "Coyle I Defendants"). According to Plaintiffs, the Coyle I Defendants are all Michigan corporations. Coyle I Complaint ¶ 3.

On October 20, 2005, the Coyle I Defendants removed the action to this court (Coyle I, Doc. No. 1) ("Removal Notice"), asserting diversity of citizenship under 28 U.S.C. § 1332 as the basis for subject matter jurisdiction,*fn5 and filed an answer to the Complaint.

On December 8, 2005, Plaintiffs commenced in New York Supreme Court, Erie County a second personal injury action ("Coyle II") seeking monetary damages for injuries sustained as a result of the February 7, 2003 incident. Named as the sole Defendant in Coyle II is Crown Enterprises, Inc. ("Crown"), an entity allegedly hired by Leasco to maintain and control the Premises. On December 22, 2005, Crown removed the action to this court asserting diversity of citizenship under 28 U.S.C. § 1332 as the basis for subject matter jurisdiction. Crown's answer was filed on December 23, 2005.

On February 6, 2006, Crown moved in Coyle II to consolidate Coyle I and Coyle II in light of the fact that both actions seek recovery of monetary damages for personal injuries Plaintiffs sustained as a result of the February 7, 2003 incident. On April 7, 2006, Crown filed in Coyle II a third-party complaint ("the Third Party Complaint") against Con-Way Central Express, as part of Con-Way Transportation Services, Inc.*fn6

On April 11, 2006, Plaintiffs and Crown consented in Coyle II to proceed before the undersigned. Con-Way's answer to the Third Party Complaint was filed on May 8, 2006.

On September 28, 2006, the undersigned denied the motion to consolidate Coyle I and Coyle II. Accordingly, Coyle I is before the undersigned on referral from Chief District Judge Arcara, whereas Coyle II is before the undersigned on consent. Despite the undersigned's denial of Crown's motion to consolidate Coyle I with Coyle II, the parties filed a series of duplicate motions, with identical supporting papers, in both Coyle I and Coyle II.

On February 14, 2008, Plaintiffs filed a motion for summary judgment (Coyle I, Doc. No. 31) ("Plaintiffs' Summary Judgment Motion"), supported by the attached Affirmation of John Lloyd Egan, Esq. ("First Egan Affirmation"), and Exhibits A through H ("Plaintiffs' Exh(s). __"). Plaintiffs filed the same motion with identical supporting papers in Coyle II on February 19, 2008. (Coyle II, Doc. No. 45). In opposition to Plaintiffs' Summary Judgment Motion, on April 4, 2008, the Coyle I Defendants filed the Affidavit of William C. Altreuter, Esq. (Coyle I, Doc. No. 37) ("First Altreuter Affidavit"), and an identical affidavit in Coyle II. (Coyle II, Doc. No. 50).

On April 4, 2008, the Coyle I Defendants filed a motion for summary judgment (Coyle I, Doc. No. 38) ("Coyle I Defendants' Summary Judgment Motion"), supported by the attached Affidavit of William C. Altreuter, Esq. ("Second Altreuter Affidavit"), exhibits, the Affidavit of Larry Jacobs ("Jacobs Affidavit"),*fn7 the Affidavit of Tommaso Briatico ("Briatico Affidavit"), a Statement of Uncontested Facts ("Coyle I Defendants' Uncontested Facts Statement"), and a Memorandum of Law ("Coyle I Defendants' Memorandum"), and Crown filed the same motion with identical supporting papers in Coyle II. (Coyle II, Doc. No. 51).

On April 17, 2008, Plaintiffs filed in support of Plaintiffs' Summary Judgment Motion and in response to Coyle I Defendants' Summary Judgment Motion the Affidavit of John Lloyd Egan, Esq. (Coyle I, Doc. No. 42) ("First Egan Affidavit"), with attached exhibits. Plaintiffs filed the same motion with identical supporting papers in Coyle II on April 17, 2008. (Coyle II, Doc. No. 54).

On April 22, 2008, the Coyle I Defendants filed a motion to preclude Plaintiffs from offering expert evidence (Coyle I, Doc. No. 43) ("Coyle I Defendants' Sanctions Motion"), supported by the attached Affidavit of William C. Altreuter, Esq. ("Third Altreuter Affidavit"), and exhibits. Crown filed the same motion with identical supporting papers in Coyle II on April 22, 2008. (Coyle II, Doc. No. 56).

On April 25, 2008, Con-Way joined in the consent to proceed before the undersigned filed by Plaintiffs and the Coyle II Defendants on April 11, 2006 in Coyle II. (Coyle II, Doc. No. 57).

On April 28, 2008, Plaintiffs filed a motion to preclude the Coyle I Defendants from offering expert evidence (Coyle I, Doc. No. 44) ("Plaintiffs' Sanctions Motion"), supported by the attached Affirmation of John Lloyd Egan, Esq. ("Second Egan Affirmation"), and also filed the same motion with identical supporting papers in Coyle II. (Coyle II, Doc. No. 58).

On May 5, 2008, the Coyle I Defendants filed in opposition to Plaintiffs' Sanctions Motion the Affidavit of William C. Altreuter, Esq. (Coyle I, Doc. No. 47) ("Fourth Altreuter Affidavit"), with attached exhibits. Crown filed the same papers in Coyle II also on May 5, 2008. (Coyle II, Doc. No. 61).

On May 6, 2008, Plaintiffs filed in support of Plaintiffs' Summary Judgment Motion the Affidavit of Thomas Coyle (Coyle I, Doc. No. 48) ("Coyle Affidavit"), with an attached exhibit, and filed the same papers in Coyle II. (Coyle II, Doc. No. 62). On May 13, 2008, Plaintiffs filed a document (Coyle I, Doc. No. 49) containing the Affidavit of John Lloyd Egan, Esq, in further support of Plaintiffs' Sanctions Motion ("Second Egan Affidavit"), the Affidavit of John Lloyd Egan, Esq. in opposition to Coyle I Defendants' Sanctions Motion ("Third Egan Affidavit"), with attached; Plaintiffs filed the same papers in Coyle II. (Coyle II, Doc. No. 64).

On May 20, 2008, the Coyle I Defendants filed in opposition to Plaintiffs' Sanctions Motion the Reply Affidavit of William C. Altreuter, Esq. (Coyle I, Doc. No. 50) ("Fifth Altreuter Affidavit"), and Crown filed an identical affidavit in Coyle II. (Coyle II, Doc. No. 66).

On May 30, 2008, the Coyle I Defendants filed in further support of Coyle I Defendants' Sanctions Motion the Reply Affidavit of William C. Altreuter, Esq. (Coyle I, Doc. No. 51) ("Sixth Altreuter Affidavit"), with attached exhibits, and Crown filed identical papers in Coyle II. (Coyle II, Doc. No. 67).

On June 5, 2008, Plaintiffs filed the Reply Affidavit of John Lloyd Egan, Esq. (Coyle I, Doc. No. 52) ("Fourth Egan Affidavit"), with attached exhibits, and also filed an identical affidavit in Coyle II. (Coyle II, Doc. No. 68). On June 6, 2008, the Coyle I Defendants filed a motion to strike the Fourth Egan Affidavit (Coyle I, Doc. No. 53) ("Coyle I Defendants' Motion to Strike"), supported by the attached Affidavit of William C. Altreuter, Esq. ("Seventh Altreuter Affidavit"), and Crown filed an identical motion with the same supporting papers in Coyle II. (Coyle II, Doc. No. 69). On June 23, 2008, Plaintiffs filed in opposition to Coyle I Defendants' Motion to Strike the Reply Affidavit of John Lloyd Egan (Coyle I, Doc. No. 55) ("Fifth Egan Affidavit"), and also filed the same affidavit in Coyle II. (Coyle II, Doc. No. 71).

Oral argument was deemed unnecessary.

Based on the following, Plaintiffs' Summary Judgment Motion should be DENIED; the Coyle I Defendants' Summary Judgment Motion should be GRANTED; the Coyle I Defendants' Sanctions Motion is DISMISSED as moot; Plaintiffs' Sanctions Motion is DISMISSED as moot; the Coyle I Defendants' Motion to Strike is DISMISSED as moot, and the Clerk of the Court should be directed to close the file.

DISCUSSION

Both Plaintiffs and Coyle I Defendants have filed motions seeking summary judgment of all claims in their favor. In particular, Plaintiffs argue in support of summary judgment against Coyle I Defendants that Coyle I Defendants have admitted having both prior knowledge of the concrete slab floor's deteriorating condition that caused the incident, and control of the Premises and, as such, cannot escape liability for Plaintiffs' injuries. First Egan Affirmation ¶ 2.*fn8 Coyle I Defendants seek summary judgment dismissing the action against all Coyle I Defendants on the basis that Crown, the sole Defendant in Coyle II, was, at all time relevant to the instant case, both owner and Landlord of the Premises and, as such, is the only proper defendant to the pending claims. Second Altreuter Affidavit ¶¶ 5-6.*fn9

Summary judgment of a claim or defense will be granted when a moving party demonstrates that there are no genuine issues as to any material fact and that a moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) and (b); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986); Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991). The party moving for summary judgment bears the burden of establishing the nonexistence of any genuine issue of material fact and if there is any evidence in the record based upon any source from which a reasonable inference in the non-moving party's favor may be drawn, a moving party cannot obtain a summary judgment. Celotex, 477 U.S. at 322. Once a party moving for summary judgment has made a properly supported showing as to the absence of any genuine issue as to all material facts, the nonmoving party must, to defeat summary judgment, come forward with evidence that would be sufficient to support a jury verdict in its favor. Goenaga v. March of Dimes Birth Defects Foundation, 51 F.3d 14, 18 (2d Cir. 1995).

Further, Local Rule 56 of Federal Civil Procedure for the Western District of New York Rule require that a motion for summary judgment be supported by "a separate, short, and concise statement of the material facts as to which the moving party contends there is no genuine issue to be tried." Local Rule 56.1(a). The party opposing summary judgment is required to provide "a separate short, and concise statement of the material facts as to which it is contended that there exists a genuine issue of fact." Local Rule 56.1(b). Moreover, "[a]ll material facts set forth in the statement required to be served by the moving party will be deemed to be admitted unless controverted by the statement required to be served by the opposing party." Local Rule 56.1(c).

The Second Circuit, however, has held that a moving party's "allegations of uncontested fact cannot be deemed true simply by virtue of their assertion in a Local Rule 56.1 statement." Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 73 (2d Cir. 2001).*fn10

Rather, "[t]he local rule does not absolve the party seeking summary judgment of the burden of showing that it is entitled to judgment as a matter of law, and a Local Rule 56.1 statement is not itself a vehicle for making factual assertions that are otherwise unsupported in the record." Id. at 74. Nevertheless, where the factual assertions contained in Local Rule 56.1 are both supported by evidence in the record and uncontested, it is within the court's discretion to deem such facts admitted. See Zahorik v. Cornell University, 729 F.2d 85, 91 (2d Cir. 1984) (observing that where plaintiffs failed to file responding statement of facts allegedly in dispute in accordance with local rule, and failed to present any statistical evidence substantiating plaintiffs' theory of disparate impact, district judge had discretion to deem defendants' entire statement of material facts admitted).

It is significant that in the instant action, the Coyle I Defendants submitted in support of summary judgment the Coyle I Defendants' Uncontested Facts Statement, but Plaintiffs did not file a statement pursuant to Local Rule 56.1, nor did Plaintiffs submit a separate statement opposing the Coyle I Defendants' Uncontested Facts Statement. In particular, the Coyle I Defendants assert that there is no genuine issue requiring trial as to the fact that "Crown Enterprises, Inc. was the owner and landlord of 850 Aero Drive, Cheektowaga, New York." Coyle I Defendants' Uncontested Facts Statement ¶ 1. Coyle I Defendants further assert that Con-Way occupied the Premises pursuant to the Lease, as amended, and which defined the relationship between Crown and Con-Way, including the duties and responsibilities of the parties, id. ¶¶ 3, 5, and that Con-Way was the tenant of the Premises as of February 7, 2003, when Coyle "was injured in the course of his employment with Con-Way . . . ." Id. ¶¶ 2, 4.

The undisputed facts asserted by the Coyle I Defendants are supported by the statements of Crown's real estate portfolio manager Larry Jacobs ("Jacobs"), contained in the Jacobs Affidavit, and relevant portions of the Lease and its amendments. Jacobs, based on his review of the contents of files maintained by Crown regarding the Premises, recounts a series of business transactions by which Crown became owner of the Premises. In particular, Leasco initially purchased the Premises from Terminal Rentals on November 4, 1986. Jacobs Affidavit ¶ 2. On December 30, 1986, Leasco was merged into Centra, and Centra made a capital contribution of all of Leasco's real estate assets to Central Transport which, on January 1, 1990, made a capital contribution of all its real estate assets to Crown Enterprises, Inc., a Tennessee Corporation which, on August 31, 1990, merged into Crown Enterprises, Inc., a Michigan corporation ("Crown"). Id. On September 25, 1992, Crown and Con-Way entered into the Lease whereby Crown, as the landlord of the Premises, agreed to lease the Premises to Con-Way for Con-Way's use in operating a commercial trucking business. Id. Jacobs's statements are supported by the copy of the Lease and its amendments, and are uncontested by Plaintiffs.

Pursuant to an Amendment to Lease Agreement dated May 1, 1994 ("May 1, 1994 Lease Amendment"),*fn11 the term of the Lease was extended to September 30, 1996. The May 1, 1994 Lease Amendment further provides that

It is understood that the Landlord's name has changed as a result of a transfer of ownership from Central Transport, Inc. to Crown Enterprises, Inc. May 1, 1994 Lease Amendment § 5.

The May 1, 1994 Lease Amendment was executed by Crown's Vice President - Real Estate Gerald A. Rauch, and Con-Way's Vice President - Operations Richard Palazzo. May 1, 1994 Lease Amendment. Each subsequent amendment to the Lease is also executed by officers of Crown and Con-Way, with no further mention of Central Transport. See March 18, 1996 Lease Amendment (extending Lease's term through September 30, 1997); September 15, 1997 Lease Amendment (extending Lease's term through September 30, 1999); August 30, 1999 Lease Amendment (extending Lease's term through September 30, 2001); June 22, 2001 Lease Amendment (extending Lease's term through September 30, 2003); and June 26, 2003 Lease Amendment (extending Lease's term through September 30, 2005).*fn12 The Lease and its Amendments thus establish that as of the date of the incident, Crown was the owner and Landlord of the Premises.

Plaintiffs' only response in opposition to the Coyle I Defendants' Uncontested Facts Statements is a bare assertion that the most recent recorded real estate transaction pertaining to the Premises is a Deed recorded in Liber 9719 at page 188 on June 1, 1987 in the Erie County Clerk's Office which shows Leasco's November 4, 1986 purchase of the Premises from Terminal Rental. Fourth Egan Affidavit at 2 and Exhibit A. Upon Leasco's December 30, 1986 merger into Centra, however, under both Michigan and New York law, all of Leasco's real estate holdings became assets of Centra as Leasco's successor, without the need to record any deed pertaining to such transfer. Mich. Comp. Laws § 450.1724(1)(b) (2002) (providing that when a merger takes effect, "[t]he title to all real estate and other property and rights owned by each corporation party to the merger are vested in the surviving corporation without reversion or impairment."); N.Y. Bus. Corp. Law § 906(a) and (b)(2) (McKinney's 2003) (providing that upon the filing of the certificate of merger by the department of state, the merger is effected and "[a]ll the property, real and personal, including subscriptions to shares, causes of action and every other asset of each of the constituent entities, shall vest in such surviving or consolidated corporation without further act or deed."). Insofar as Plaintiffs allege all Coyle I Defendants are Michigan corporations, Coyle I Complaint ¶ 3, Plaintiffs fail to assert any other state's law relevant to the acquisition by merger of corporate real property assets would require any different result.*fn13 As such, upon merging with Centra, Leasco's real estate assets became assets of Centra, and Centra was then able to dispose of the Premises through a capital contribution to Central Transport, which in turn disposed of the Premises through a capital contribution to Crown.

Absent any evidence from Plaintiffs challenging the accuracy or veracity of the Coyle I Defendants' Uncontested Facts Statement, and in light of the objective evidence supporting such statement, there is no question that none of the Coyle I Defendants are proper parties to this action as they had no interest in the Premises at the time of Coyle's injuries upon which to predicate a negligence claim based on landlord or owner liability. See Kilmer v. White, 171 N.E. 908, 909 (N.Y. 1930) (holding former landlord, after selling and delivering possession of apartment building to purchaser, was not responsible for injuries to tenant who subsequently fell from apartment building's piazza when defective railing gave way because "[o]ne's liability in negligence for the condition of land ceases when the premises pass out of one's control before injury results."). Furthermore, insofar as Plaintiffs' Sanctions Motion has already been DENIED, and Coyle I Defendants' Sanctions Motion and Motion to Strike have already been GRANTED in the Decision and Order rendered in Coyle II, contemporaneously with the instant combined Report and Recommendation and Decision and Order, such determination, by virtue of the doctrine of res judicata, and to promote judicial economy, further litigation on the same issues in this action is barred and such motions are DISMISSED as moot.

Accordingly, summary judgment should be GRANTED in favor of all Coyle I Defendants and DENIED as to Plaintiffs. Coyle I Defendants' Sanctions Motion, Plaintiffs' Sanctions Motion and Coyle I Defendants' Motion to Strike are DISMISSED as moot.

CONCLUSION

Based on the foregoing, Plaintiffs' Summary Judgment Motion (Doc. No. 31) should be DENIED; Coyle I Defendants' Summary Judgment Motion (Doc. No. 38) should be GRANTED; Coyle I Defendants' Sanctions Motion (Doc. No. 43) is DISMISSED as moot; Plaintiffs' Sanctions Motion (Doc. No. 44) is DISMISSED as moot; Coyle I Defendants' Motion to Strike (Doc. No. 53) is DISMISSED as moot, and the Clerk of the Court should be directed to close the file.

SO ORDERED, as to Coyle I Defendants' Sanctions Motion, Plaintiffs' Sanctions Motion, and Coyle I Defendants' Motion to Strike,

Buffalo, New York

Respectfully submitted, as to Plaintiffs' Summary Judgment Motion, and Coyle I Defendants' Summary Judgment Motion,

Pursuant to 28 U.S.C. §636(b)(1), it is hereby

ORDERED that this Report and Recommendation be filed with the Clerk of the Court.

ANY OBJECTIONS to this Report and Recommendation must be filed with the Clerk of the Court within ten (10) days of receipt of this Report and Recommendation in accordance with the above statute, Rules 72(b), 6(a) and 6(e) of the Federal Rules of Civil Procedure and Local Rule 72.3.

Failure to file objections within the specified time or to request an extension of such time waives the right to appeal the District Court's Order. Thomas v. Arn, 474 U.S. 140 (1985); Small v. Secretary of Health and Human Services, 892 F.2d 15 (2d Cir. 1989); Wesolek v. Canadair Limited, 838 F.2d 55 (2d Cir. 1988).

Let the Clerk send a copy of this Report and Recommendation to the attorneys for the Plaintiff and the Defendants.

SO ORDERED.


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