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Generali v. Lachel & Associates, Inc.

United States District Court, S.D. Indiana, New Albany Division

February 19, 2019

GENERALI - U.S. BRANCH Subscribing to Policy No. CAR700005, as subrogee of Walsh Construction Company/Vinci Gran Projects JV d/b/a Walsh Vinci Joint Venture, d/b/a THE GENERAL INSURANCE COMPANY OF TRIESTE & VENICE - U.S. BRANCH, Plaintiff,



         This matter is before the Court on Defendant's Motion to Dismiss or in the Alternative, for Summary Judgment, filed pursuant to Federal Rule of Civil Procedure 12(b)(6) or in the alternative, Fed.R.Civ.P. 56, by Defendant Lachel & Associates, Inc. (“Lachel”) (Filing No. 5). Plaintiff, Generali - U.S. Branch doing business as The General Insurance Company of Trieste & Venice - U.S. Branch (“Generali”), initiated this lawsuit, seeking damages as the subrogee of Walsh Construction Company/Vinci Gran Projects JV doing business as Walsh Vinci Joint Venture (“Walsh Vinci JV”). Lachel moved to dismiss Generali's claims, arguing that the applicable statute of limitations bars this action and a contractual waiver of subrogation further bars the claims asserted in this action. For the following reasons, the Court grants Lachel's Motion to Dismiss.

         I. BACKGROUND

         The following facts are not necessarily objectively true, but as required when reviewing a motion to dismiss, the Court accepts as true all factual allegations in the complaint and draws all inferences in favor of Generali as the non-moving party. See Bielanski v. County of Kane, 550 F.3d 632, 633 (7th Cir. 2008).

         Generali is a New York corporation with its principal place of business in New York. It sells and issues insurance policies. Lachel specializes in design and construction management services for tunneling and other heavy civil construction projects in the areas of transportation, water and wastewater infrastructure, and hydroelectric power. It provides consulting and design engineering services (Filing No. 1-1 at 2-3).

         The East End Crossing is a public-private partnership between the Indiana Finance Authority and WVB East End Partners, LLC for a project to develop, design, construct, finance, operate, and maintain a bridge facility and associated roadway and facilities across the Ohio River in Southern Indiana and Louisville, Kentucky (Filing No. 1-1 at 2; Filing No. 5-5). The Indiana Finance Authority and WVB East End Partners entered into a public-private agreement for construction of the project on December 27, 2012 (Filing No. 1-1 at 3; Filing No. 5-5 at 3). The project included a new bridge across the Ohio River that would tie into existing interstate highway via two new highway tunnels (Filing No. 12 at 3).

         After the public-private agreement was executed, WVB East End Partners contracted with Walsh Vinci JV to perform the design and construction work for the project. Id. at 3-4. Walsh Vinci JV “specialized in financing, designing and constructing major highway and bridges projects.” (Filing No. 1-1 at 3.) Walsh Vinci JV is “a separate entity from WVB East End Partners, LLC which was tasked with the design of the project among other duties.” Id.

         Generali issued an insurance policy to WVB East End Partners and Walsh Vinci JV, with a policy number CAR700005, to provide insurance protection for the project against builder's risk, constructional plant and equipment risk, existing property risk, and delay in startup risk (Filing No. 5-4 at 2, 6; Filing No. 1-1 at 3; Filing No. 12 at 4).

         On May 10, 2013, Lachel and Walsh Vinci JV entered into a contract for Lachel to perform consulting and design engineering services for the project. Lachel performed work on the project pursuant to this agreement. Lachel provided professional design services related to the initial support systems for the tunnel portions of the project. The agreement called for Lachel to provide professional engineering services that included design of the initial tunnel support, blasting plans, vibration monitoring, and contingency planning. The agreement required Lachel to perform its professional engineering services in a manner consistent with the professional skill and care ordinarily provided by members of the engineering profession practicing in the same locality (Filing No. 1-1 at 3, 8, 13-15; Filing No. 12 at 5).

         On Friday, September 19, 2014, at 6:30 p.m., normal tunneling activities were taking place when a noise was heard coming from the south tunnel. The workers were evacuated from the tunnel, and then rock from the roof of a portion of the south tunnel collapsed (Filing No. 12 at 7; Filing No. 1-1 at 4). After this incident occurred, Generali retained geotechnical engineers to determine the cause of the incident, and Generali's engineers determined that the primary reason for the roof collapse was inadequate design of the initial support for the tunnel provided by Lachel (Filing No. 1-1 at 4). “Pursuant to the terms of its [insurance] policy, Generali paid [Walsh Vinci] JV for its damages and became subrogated to all rights and causes of action of the Insured.” Id.

         On August 10, 2017, Generali filed a Complaint in the Clark County Circuit Court of Indiana as subrogee of Walsh Vinci JV. Id. at 1. In its Complaint, Generali alleged that Lachel breached the agreement between Walsh Vinci JV and Lachel by failing to provide adequate initial support design and contingency plans for the tunnel and that Lachel's design failure was the proximate cause of Walsh Vinci JV's loss. Generali made payments in excess of $13 million, and it alleged in the Complaint that it is now subrogated to the extent of the payments made to Walsh Vinci JV. Id. at 5. Generali asserted a second claim in the Complaint, alleging that Lachel is required to indemnify Walsh Vinci JV for “property damage that may arise from the performance of the Services to the extent caused by the negligent acts or omissions of [Lachel], ” and this claim for indemnification was subrogated to Generali. Id. at 5-6.

         On September 5, 2017, Lachel removed the lawsuit from state court to this Court on the basis of diversity jurisdiction. Then six days later, Lachel filed its Motion to Dismiss, asserting that the applicable statute of limitations bars Generali's claims and a contractual waiver of subrogation also bars the claims.


         Federal Rule of Civil Procedure 12(b)(6) allows a defendant to move to dismiss a complaint that has failed to “state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). When deciding a motion to dismiss under Rule 12(b)(6), the court accepts as true all factual allegations in the complaint and draws all inferences in favor of the plaintiff. Bielanski, 550 F.3d at 633. However, courts “are not obliged to accept as true legal conclusions or unsupported conclusions of fact.” Hickey v. O'Bannon, 287 F.3d 656, 658 (7th Cir. 2002).

         The complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In Bell Atlantic Corp. v. Twombly, the Supreme Court explained that the complaint must allege facts that are “enough to raise a right to relief above the speculative level.” 550 U.S. 544, 555 (2007). Although “detailed factual allegations” are not required, mere “labels, ” “conclusions, ” or “formulaic recitation[s] of the elements of a cause of action” are insufficient. Id.; see also Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 603 (7th Cir. 2009) (“it is not enough to give a threadbare recitation of the elements of a claim without factual support”). The allegations must “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555. Stated differently, the complaint must include “enough facts to state a claim to relief that is plausible on its face.” Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009) (citation and quotation marks omitted). To be facially plausible, the complaint must allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).


         Lachel filed the instant Motion seeking dismissal pursuant to Rule 12(b)(6) or alternatively, pursuant to Rule 56 for summary judgment. As an initial matter, the Court determines that it need not consider the Motion under Rule 56 because, “[i]n deciding a Rule 12(b)(6) motion, the court may consider documents attached to a complaint, such as contract documents, without converting the motion into one for summary judgment. See Fed.R.Civ.P. 10(c).” Bible v. United Student Aid Funds, Inc., 799 F.3d 633, 639-40 (7th Cir. 2015). While review under Rule 12(b)(6) is limited to the complaint, courts consider documents attached to and incorporated in the complaint as part of the complaint and will consider documents that are referred to in the complaint, which are concededly authentic and central to the plaintiff's claim. Santana v. Cook County Bd. of Review, 679 F.3d 614, 619 (7th Cir. 2012); Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 764 (7th Cir. 2010). “As a general rule, we may take judicial notice of public records not attached to the complaint in ruling on a motion to dismiss under Rule 12(b)(6).” Olson v. Champaign Cty., 784 F.3d 1093, 1097 n.1 (7th Cir. 2015). The documents filed in connection with the Motion to Dismiss are public records and contract documents, which can be considered as part of the Complaint, so the Court will decide Lachel's Motion under Rule 12(b)(6).

         In its Motion to Dismiss, Lachel asserts two arguments for the dismissal of this action. First, Lachel argues that the applicable statute of limitations bars Generali's claims. Second, it argues that a waiver of subrogation among the contracting parties also bars the claims. The Court will first address the statute of limitations argument and then turn to the waiver of subrogation argument.

         A. Statute of Limitations

          Liability for professional services related actions are defined in Indiana Code § 34-11-2-3, specifically, that code provides:

An action of any kind for damages, whether brought in contract or tort, based upon professional services rendered or which should have been rendered, may not be brought, commenced, or maintained, in any of the courts of Indiana against physicians, dentists, surgeons, hospitals, sanitariums, or others, unless the action is filed within ...

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