Free Reply to Response to Motion - District Court of Delaware - Delaware

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE FEDERAL INSURANCE COMPANY a/s/oEzibz.com, Inc./Avacet, Inc., EZIBA SECURITIES CORP., and MILLERS CAPITAL INSURANCE COMPANY a/s/o Del-Homes Catalog Group LLC, Plaintiffs, v. LIGHTHOUSE CONSTRUCTION, INC., BECKER MORGAN GROUP, INC., O'DONNELL, NACCARATO & MACINTOSH, INC., and EAST COAST ERECTORS, INC. Defendants. and LIGHTHOUSE CONSTRUCTION, INC., Defendant and Third-Party Plaintiff, v. EAST COAST ERECTORS, INC., Third-Party Defendant. : : : : JURY TRIAL OF TWELVE : DEMANDED : : : : : : C.A. No. 04-339/04-1322-JJF : (Consolidated) : : : :

PLAINTIFF MILLER CAPITAL INSURANCE COMPANY'S REPLY TO DEFENDANT/THIRD PARTY DEFENDANT EAST COAST ERECTORS, INC.'S OPPOSITION TO PLAINTIFF'S MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT COMES NOW, plaintiff Millers Capital Insurance Company as subrogee of Del Homes Catalog Group, LLC and files this Reply to defendant/third party defendant East Coast Erectors, Inc.'s Opposition to plaintiff's Motion for Leave to File a Second Amended Complaint as follows: 1. Plaintiff timely filed a Motion for Leave to File a Second Amended on September

30, 2005. On August 29, 2005 the parties stipulated to a Modified Rule 16 Scheduling Order with an agreed to date of September 30, 2005 to file any motion to amend. The Order was granted September 1, 2005. Plaintiff requested leave to assert a Gross Negligence claim against

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East Coast Erectors, Inc., Lighthouse Construction, Inc. and O'Donnell, Naccarato & MacIntosh, Inc. ("ONM"). 2. Defendant East Coast Erectors, Inc. ("ECE") filed its opposition to plaintiff's

Motion on October 14, 2005. The other defendants have not opposed plaintiff's Motion. 3. ECE argues, in opposition to plaintiff's Motion, that: a) ECE would be unduly

prejudiced if the Motion is granted; b) discovery is complete; and c) plaintiff failed to state a claim for gross negligence and/or such a claim is futile. Plaintiff's reply is as follows: A. 4. There Is No Undue Prejudice The parties agreed that all motions to amend must be filed by September 30,

2005. Plaintiff complied with the agreement. Discovery closes November 30, 2005 and is continuing. Moreover, a trial date has not yet been set. ECE cannot be prejudiced under these circumstances. See, e.g., Centerforce Technologies, Inc. v. Austin Logistics Inc., 2000 U.S. Dist. LEXIS 6924 (D. Del. Mar. 10, 2000) (cited by ECE; holding that where discovery had not closed, the claims involve the same product and a trial date has not been set, the opposing party will not be prejudiced by granting the motion to amend). Plaintiff is seeking leave to include a claim based on Gross Negligence, a higher level of negligence representing an extreme departure from the ordinary standard of care. This claim will not change the factual complexion of the case. B. 5. Discovery Has Not Closed ­ No Undue Delay The discovery period has not closed. In fact, expert depositions are being

scheduled for November and plaintiff anticipates taking at least one additional fact witness deposition. It was only 21 days before filing its Motion that plaintiff received an expert report from ECE's co-defendant and subcontractor, ONM, written by Glenn Rentschler, Ph.D., P.E.

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(Exhibit A to plaintiff's Motion) further detailing the extreme departure from ordinary care by ECE. For example, Mr. Rentschler writes, at page 4: It was incumbent on Lighthouse Construction and East Coast Erectors to supply correct data as to existing conditions including interior collateral and exterior roof loads. . . . East Coast and Lighthouse did not convey the various discrepancies, hereinabove referred, to the attention of ONM, but instead indicated that the plans (Varco Pruden) were accurate and were in fact, a true representation of existing field conditions. . . . The failure of East Coast to communicate to ONM that the beam braces specified on the Varco drawings were not in the proper quantity or were omitted was a deviation from the standard of care expected of those parties. Mr. Rentschler is scheduled to be deposed on November 9th. C. 6. Plaintiff Has Stated A Claim That Is Not Futile It cannot be disputed that ECE was aware of the fact that the 1999 building would

create an increased snow load on the existing 1995 building.1 Likewise, it cannot be disputed that ECE subcontracted with ONM to participate in the design process.2 To that end, ECE participated by taking field measurements for ONM, after securing what it represented as "As Built" drawings. While ECE argues otherwise, according to ONM's designer, Mr. Anastasi, ECE did participate in the evaluation of the 1995 building: Q. Okay. So what was your understanding of the accuracy of the drawings that you received [for the 1995 building] vis-à-vis the conditions in the field? A. There was a, I believe, a phone call that I had requested for East Coast, either to go out to the site, or when they were out on site surveying information for the new addition, if they could go up, once we got the drawings, to verify the depths of the existing members of the spacings, the spans, to make sure that they were at least consistent with the drawings, at whatever stage they were presented to us.
1

See Exhibit B to plaintiff's Motion (Deposition Excerpts from Michael Williams of ECE). See, also, footnotes 3 and 5 of plaintiff's Motion. 2 See Exhibit B to plaintiff's Motion (Deposition Excerpts from Michael Williams of ECE, pp. 52-57).

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Exhibit A, Anastasi deposition pp. 114-115 (attached hereto). 7. ECE knew it needed a sealed plan to modify the existing structure, but instead

proceeded with only the benefit of an incomplete sketch created by an unlicensed person. ECE's principal, Mr. Williams, testified as follows on the need to secure sealed plans for structural modifications: Q. Are there other drawings to your understanding that must be sealed? A. The structural drawings for the project must be sealed.

Exhibit B to plaintiff's Motion ­ Williams dep. p. 95. Q. Would you consider the work depicted in Exhibit 125 [sketch showing modification to existing building] to be structural in nature? A. I guess that's a fair statement, yes.

Exhibit B to plaintiff's Motion ­ Williams dep. pp. 107-108. Q. And to your knowledge, was this document [Exhibit 125] ever sealed by a registered engineer? A. Not to my knowledge.

Exhibit B to plaintiff's Motion ­ Williams dep. p. 105. 8. Moreover, ECE failed to communicate important deviations from the plans for the

1995 building that it had actual knowledge of in 1995 when it represented the plans as "As Built" during the design phase of the 1999 project. Mr. Williams testified on the subject as follows: Q. Sitting here today, are you aware of any deviations from the erection drawings with respect to the actual condition of the 1995 building as of the time of the collapse? Mr. Hill: I'm going to object to the form of that question. Q. You can answer it. A. Am I aware of any deviation from the erection drawing is your question?

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Q. Right. A. Yes. Q. What are you aware of? A. There were braces at the column omitted, which were shown on the erection drawings. * * *

Q. And how did that come to be known by you? A. My recollection was the quantity shipped was not consistent with the quantity shown on the erection drawings, and I was informed of that by my field people, which I relayed to Mr. MacLeish and was told that those braces were not necessary due to a stiffener added to the girder beam at every interior column. Q. And when was this conversation? A. This would have been probably early in the erection of the 1995 building. * * *

Q. Did relay any part of that conversation to O'Donnell Naccarato as part of their involvement in the 1999 project and evaluation of the 1995 building? A. I don't recall. Exhibit B to plaintiff's Motion ­ Williams dep. pp. 111-114. 9. Mr. Rentschler's September 9, 2005 report, as quoted above, confirmed for the

first time in this case that, from ONM's perspective, the missing brace condition was not brought to the attention of ONM in 1999. 10. Gross negligence has been defined as a higher level of negligence representing an

extreme departure from the ordinary standard of care. Browne v. Robb, 583 A.2d 949, 953 (Del.1990). Plaintiff's claim is based on, inter alia, the fact that ECE: 1) was aware of the hazard to life and property presented by the drifted snow load; 2) was part of the design team that

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failed to properly evaluated the conditions; 3) unlawfully failed to secure sealed construction plans and/or a building permit; and 4) failed to disclose known deviations from the erection plans for the 1995 building that weakened it structurally. 11. Finally, ECE's opposition states that the only potential reason for permitting

plaintiff to allege gross negligence would be to recover punitive damages. Plaintiff disagrees. Plaintiff can recover its damages under gross negligence. Plaintiff should be entitled to argue, at trial, that ECE's conduct was grossly negligent and to characterize it as such. The claim of gross negligence is not futile. For the reasons stated herein and in Plaintiff Millers Capital's Motion for Leave to File a Second Amended Complaint, Plaintiff respectfully requests that its Motion be Granted.

Dated: October 21, 2005 WHITE AND WILLIAMS LLP

BY: _____________________________ Frank E. Noyes, Esquire (#3988) 824 North Market Street, Suite 902 Wilmington, DE 19899 302-654-0424 Attorney for Plaintiff Millers Capital Insurance Company Of Counsel: Ron Pingitore, Esquire WHITE AND WILLIAMS LLP 1800 One Liberty Place Philadelphia, PA 19135-7395

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EXHIBIT A

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE FEDERAL INSURANCE COMPANY a/s/o Ezibz.com, Inc./Avacet, Inc., EZIBA SECURITIES CORP., and MILLERS CAPITAL INSURANCE COMPANY a/s/o Del-Homes Catalog Group LLC, Plaintiffs, v. LIGHTHOUSE CONSTRUCTION, INC., BECKER MORGAN GROUP, INC., O'DONNELL, NACCARATO & MACINTOSH, INC., and EAST COAST ERECTORS, INC. Defendants. and LIGHTHOUSE CONSTRUCTION, INC., Defendant and Third-Party Plaintiff, v. EAST COAST ERECTORS, INC., Third-Party Defendant. ORDER AND NOW, upon consideration of plaintiff, Millers Capital Insurance Company as subrogee of Del-Homes Catalog Group, LLC's, Motion for Leave to File a Second Amended Complaint, and any response and opposition thereto, it is hereby ORDERED this ______ day of _________________________, 2005, that plaintiff's motion is GRANTED. BY THE COURT: : : : : : : : : : : C.A. No. 04-339/04-1322-JJF : (Consolidated) : : : : : : JURY TRIAL OF TWELVE : DEMANDED : : : : : : : : : :

J.

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CERTIFICATE OF SERVICE I, Frank E. Noyes, hereby certify that on this 21st day of October, 2005, I served a true and correct copy of this Reply upon the following counsel: By CM/ECF e-filing: James F. Bailey, Esquire Bailey & Associates, P.A. 716 Tatnall Street P.O. Box 2034 Wilmington, DE 19899-2034 Victoria K. Petrone, Esquire Tighe, Cottrell & Logan, P.A. First Federal Plaza P.O. Box 1031 Wilmington, DE 19899

David L. Baumberger, Esquire Chrissinger & Baumberger Three Mill Road Suite 301 Wilmington, DE 19806 Bruce W. McCullogh, Esquire McCullough & McKenty 1225 N. King Street, Suite 1100 P.O. Box 397 Wilmington ,DE 19899 By First Class Mail postage pre-paid:

Natalie M. Ippolito The Carriage House, Suite 201 1100 N. Grant Avenue Wilmington, DE 19805

Geoffrey W. Veith, Esquie Rogut, McCarthy Troy, LLC One First Avenue-Suite 410 Conshohocken, PA 19428

Robert K. Beste, Jr. Esquire Cohen, Seglias, Pallas, Greenhall & Furman, P.C. Nemours Building 1007 Orange Street, Suite 205 Wilmington, DE 19801

Steven K. Gerber, Esquire Cozen O'Connor 1900 Market Street Philadelphia, PA 19103

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WHITE AND WILLIAMS LLP

BY: _____________________________ Frank E. Noyes, Esquire (#3988) 824 North Market Street, Suite 902 Wilmington, DE 19899 302-654-0424 Attorney for Plaintiff Millers Capital Insurance Company

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