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Howell Tractor and Equipment, LLC v. Alliance Tank Service, LLC

United States District Court, N.D. Indiana, Hammond Division

March 20, 2018

HOWELL TRACTOR AND EQUIPMENT, LLC, an Illinois Corporation, Plaintiff,
v.
ALLIANCE TANK SERVICE, LLC, an Oklahoma Corporation, Defendant. ALLIANCE TANK SERVICE, LLC, Third-Party Plaintiff,
v.
GREAT AMERICAN INSURANCE COMPANY OF NEW YORK, Third-Party Defendant.

          OPINION AND ORDER

          RUDY LOZANO, JUDGE

         This matter is before the Court on the: (1)Great American Insurance Company of New York's Motion for Summary Judgment, filed by Third-Party Defendant, Great American Insurance Company of New York, on August 14, 2017 (DE #61); (2) Motion for Summary Judgment, filed by Third-Party Plaintiff, Alliance Tank Service, LLC, on August 14, 2017 (DE #62); (3) Plaintiff Howell Tractor and Equipment, LLC's Motion for Summary Judgment, filed by Plaintiff, Howell Tractor and Equipment, LLC, on August 14, 2017 (DE #65); (4) Great American Insurance Company of New York's Motion to Strike or Exclude Certain Opinions of Dr. William Warfel, filed by Third-Party Defendant, Great American Insurance Company of New York, on August 14, 2017 (DE #67); and (5) Plaintiff Howell Tractor and Equipment, LLC's Motion to Bar Third-Party Defendant, Great American Insurance Company of New York's Expert Witnesses Anthony Bond, Michael Smith, Frank Dues, Ben Glaser, Edward Kozlove, Tommie Beattie, Dave Wood, and Ron Williams, filed by Plaintiff, Howell Tractor and Equipment, LLC, on August 14, 2017 (DE #68).

         For the reasons set forth below, the Motion for Summary Judgment filed by Plaintiff, Howell Tractor and Equipment, LLC (DE #65) is GRANTED IN PART AND DENIED IN PART - it is GRANTED on the issue of liability but DENIED as to damages because there are disputed questions of material fact for the fact finder with respect to whether damages for lost profits are recoverable (and if they are recoverable, what amount is appropriate) and whether Howell is entitled to attorneys' fees and costs.

         This Court HEREBY ORDERS that the action on the third-party counterclaim is STAYED until after trial or resolution of the underlying action between Plaintiff Howell and Defendant Alliance, and until further order of the Court.

         Due to the stay in the third-party action, the Motion for Summary Judgment filed by Third-Party Defendant Great American Insurance Company of New York (DE #61) is DENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE; the Motion for Summary Judgment filed by Third-Party Plaintiff, Alliance Tank Service, LLC (DE #62) is DENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE; and Third-Party Defendant Great American Insurance's Motion to Strike or Exclude Certain Opinions of Dr. William Warfel (DE #67) is DENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE.

         Finally, Plaintiff Howell's Motion to Bar Third-Party Defendant Great American Insurance's Expert Witnesses (DE #68) is GRANTED TO THE EXTENT that Great American's experts will be barred from giving testimony in the underlying case between Plaintiff Howell and Defendant Alliance; however, this does not effect Great American Insurance's possible use of its own experts in the third-party action, when the third-party action is no longer stayed.

         BACKGROUND

         All of the controversy involved in this case began with a crane that got stuck in the mud. Under a Rental Equipment Agreement, Plaintiff, Howell Tractor and Equipment, LLC (hereinafter “Howell”), leased a crane to Defendant, Alliance Tank Service, LLC (hereinafter “Alliance”). The crane got stuck in the mud and while attempting to pull it out, Alliance concedes that it bent the boom of the crane.

         Alliance returned the crane to Howell. After conferring with the crane's manufacturer, Tadano Mantis Corporation (“Mantis”), Howell demanded in writing that the boom sections be replaced. Meanwhile, Alliance reported the claim to its insurer, third-party defendant Great American Insurance Company of New York (hereinafter “Great American”). Great American investigated the claims, consulted with several heavy equipment experts and repair shops, and concluded that the crane's boom sections could be repaired (instead of replaced).

         Great American tendered payment for only the repair costs ($48, 298.78), Alliance tendered payment of its deductible ($5, 000), and Howell accepted the payment without waiving its rights to seek recovery from Alliance for the difference between the repair cost and replacement cost of the crane's boom. Howell had the boom sections of the crane replaced.

         Howell then initiated this lawsuit against Alliance. Plaintiff's Complaint (DE #1) states a claim against Alliance for negligence for damaging the crane (Count I) and breach of contract (Count II) for failure to pay the full replacement damages ($142, 645.55) and the monthly rent lost while the crane was being repaired ($105, 000).

         Alliance then filed a third-party complaint against Great American, which it amended several times. In the second amended third-party compliant (DE #45), Alliance states a claim against third-party defendant Great American for breach of contract (Count I) and bad faith (Count II).

         Three motions for summary judgment have been filed. Third-Party Defendant Great American filed a motion for summary judgment, arguing that Alliance's claims against it are premature and unripe, the bad faith claim fails, and it does not owe anything for the lost rents. (DE ##61, 69.) In response, Howell argues that the breach of contract claim against Great American is ripe for adjudication, there is a genuine issue of material fact regarding whether Great American acted in bad faith, and damages for lost rent are recoverable under Alliance's bad-faith claim. (DE #75.) Third-Party Plaintiff, Alliance, filed a cross-motion for summary judgment against Great American, arguing that applicable OSHA regulations precluded repair of the boom. (DE #62.) In response, Great American contended it did not breach its contract and that the OSHA regulations cited by Alliance do not prohibit repair of the boom sections. (DE #76.) Additionally, Howell filed a motion for summary judgment, arguing Alliance breached the Equipment Rental Agreement when it failed to pay for the replacement of the boom sections, Great American's expert witnesses are irrelevant to the contractual cause of action between Howell and Alliance, and that it is also entitled to lost rental fees and attorneys' fees and costs. (DE #65, 66.) Alliance responds in opposition that there are genuine disputes as to whether Howell is entitled to lost rental income, the amount of lost rental income and other damages, whether eight to ten months of lost rental income was foreseeable, and whether Howell failed to mitigate its damages. (DE #74.)

         In addition to the three motions for summary judgment, there are two motions to bar expert witnesses. Plaintiff Howell filed a motion to bar Third-Party Defendant Great American's expert witnesses Anthony Bond, Michael Smith, Frank Dues, Ben Glaser, Edward Kozlove, Tommie Beattie, Dave Wood, and Ron Williams, arguing these expert opinions are irrelevant to the cause of action between Howell and Alliance. (DE #68.) In response, Great American argues that Howell does not have any standing to bar expert testimony in an action between Alliance and Great American. (DE #70.) Finally, Great American moves to strike the opinions of Alliance's expert, Dr. William Warfel, arguing Warfel offers improper legal conclusions and that his expert opinions were not timely disclosed. (DE #67.) In opposition, Alliance contends that Dr. Warfel is qualified, his opinions will assist the trier of fact, and the opinions expressed during his deposition were timely. (DE #71.)

         All five motions are fully briefed and ready for adjudication.

         DISCUSSION

         Summary judgment must be granted when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine dispute of material fact exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Not every dispute between the parties makes summary judgment inappropriate; “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Id. To determine whether a genuine dispute of material fact exists, the Court must construe all facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. See Ogden v. Atterholt, 606 F.3d 355, 358 (7th Cir. 2010). However, “a court may not make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts; these are jobs for a factfinder.” Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003) (citations omitted).

         A party opposing a properly supported summary judgment motion may not rely on allegations in his own pleading but rather must “marshal and present the court with the evidence [he] contends will prove [his] case.” Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010). “[I]nferences relying on mere speculation or conjecture will not suffice.” Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009) (citation omitted). If the non-moving party fails to establish the existence of an essential element on which he bears the burden of proof at trial, summary judgment is proper. See Massey v. Johnson, 457 F.3d 711, 716 (7th Cir. 2006).

         Where the parties file cross-motions for summary judgment, like Third-Party Plaintiff Alliance and Third-Party Defendant Great American, the Court must consider each motion and, even if the parties agree that no genuine issue of material fact exists, the Court can deny all motions if the parties do not establish their rights to judgment as a matter of law. Grabach v. Evans, 196 F.Supp.2d 746, 747 (N.D. Ind. 2002). As the Seventh Circuit has stated:

It is true that cross-motions for summary judgment do not waive the right to a trial, but this rule does not alter the respective burdens on cross-motions for summary judgment - more particularly here, the responsive burden of a plaintiff who moves for summary judgment and is confronted with a cross-motion for summary judgment. The motions are treated separately.

McKinney v. Cadleway Props., Inc., 548 F.3d 496, 504 n.4(7th Cir. 2008) (abrogated on different grounds).

         I. Howell's Motion ...


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