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Charter Oak Fire Insurance Co. v. FSSI, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

July 24, 2019

Charter Oak Fire Insurance Company, Plaintiff,
v.
FSSI, Inc., Defendant.

          ORDER

          HON. JANE MAGNUS-STINSON, CHIEF JUDGE

         In this subrogation action, Plaintiff Charter Oak Fire Insurance Company (“Charter Oak”) filed a Complaint against FSSI, Inc. (“FSSI”) related to an insurance payment Charter Oak made for water damage done to inventory (including clothing and accessories) when a sprinkler cap in a warehouse's sprinkler system malfunctioned (the “Incident”). [Filing No. 1.] On April 5, 2019, Charter Oak filed a Motion in Limine, which is ripe for consideration. For the reasons set forth herein, the Court GRANTS IN PART Charter Oak's motion.

         I. Background

         The following undisputed facts are taken from the Complaint, [Filing No. 1], the Deposition Transcript of Kent Crawmer, [Filing No. 70-1], and the Deposition Transcript of Scott Scholl, [Filing No. 71-1].

         A. Parties Involved

         Plaintiff Charter Oak is a licensed insurer that provided an insurance policy to Fortna, Inc. (“Fortna”). [Filing No. 1 at 1.] Fortna was hired by OHL/Geodis to install a material handling system in a building housing inventory in Plainfield, Indiana. [Filing No. 1 at 2.] Fortna contracted with FSSI to have FSSI complete a portion of the installation-specifically, to install a "20 level pick module expansion sprinkler." [Filing No. 1 at 3.] In the agreement between Fortna and FSSI, FSSI agreed to "indemnify, defend, and hold Fortna harmless from and against all demands, claims, suits, and expenses for personal injury, property damage, or otherwise arising out of an alleged defect in the goods or services, the breach of this Agreement, or from third-party claims." [FilingNo. 1-3 at 2.]

         B. The Incident

         On January 13, 2016, FSSI was completing its portion of the sprinkler system installation when a cap on the sprinkler system "was dislodged," allowing water to stream into the warehouse, which "caus[ed] extensive damage to the OHL/Geodis premises" and to the inventory. [Filing No. 1 at 3.] It is the parties' understanding that the sprinkler cap became dislodged due to a coupling coming apart (the "Coupling"). [Filing No. 70-1 at 26-27.] (A coupling is a metal part used to join two pieces of pipe together, as shown below).

         (Image Omitted) [1]

         (Image Omitted)[2]

         Under its insurance policy with Fortna, Charter Oak was obligated to pay for the damage to the inventory. [Filing No. 1 at 3.] In this subrogation action, Charter Oak is seeking reimbursement of $106, 823.98 from FSSI to recover for the amount Charter Oak paid. [Filing No. 1 at 3.] Charter Oak alleges that FSSI “was negligent and/or breached the applicable standard of workmanship in its operation causing the dislodgement of a sprinkler head.” [Filing No. 1 at 3.]

         C. Kent Crawmer's Testimony

         Kent Crawmer-FSSI's president and part-owner-examined the Coupling and the portion of the sprinkler system near the site of the Incident. [Filing No. 70-1 at 18; Filing No. 70-1 at 21.] Mr. Crawmer took pictures of the Coupling during his examination. [Filing No. 70-1 at 21.] The day after the Incident, Mr. Crawmer wrote a letter to his contact at Fortna providing a summary of what happened and his opinion of what may have caused the Incident. [Filing No. 70-1 at 20; Filing No. 70-2.]. Mr. Crawmer wrote,

There is really only two reasons why a grooved coupling would come off - either it wasn't tight or there was a part failure. The part stayed together for well over an hour so I would doubt that the tightening of it was an issue - usually if this is the ...

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