Opinion
Civil No. 2:01-CV-0259J
December 5, 2003
ORDER
The plaintiff, MS Triad Center, L.P., ("MS") brought this action against the defendants, seeking indemnity and damages for breach of contract from the defendants, Jones Lang LaSalle Americas, Inc. ("LaSalle") and Allied Security, Inc. ("Allied"), arising out of the aftermath of an incident involving an armed intruder that occurred on January 14, 1999, at the Triad Center, a commercial office complex in downtown Salt Lake City that is co-owned by MS and Bonneville International Corporation.
On February 21, 2003, this court entered an order granting in part, denying in part, and deferring in part a series of summary judgment motions addressing various issues in this action. (Order, dated February 21, 2003 (dkt. no. 179).) At that point, the court observed:
What remains, then, for further consideration at the Pretrial Conference and perhaps, determination at trial, are MS's claims for reimbursement of attorneys' fees and costs incurred in connection with the Sleater and ATT litigation, based upon its claims for breach of contract and/or indemnity against Allied and LaSalle, and LaSalle's counterclaim for indemnity against MS, with accompanying questions of foreseeability, factual connection and the impact of insurance.
( Id. at 10.)
The matter was then calendared for a Pretrial Conference on April 7, 2003. On April 7, the Pretrial Conference commenced, but was continued to April 11 to permit the parties to exchange exhibits and to further prepare for the conference, ( See Minute Entry, dated April 7, 2003 (dkt. no. 181.) On April 11, the Pretrial Conference reconvened, and the court and counsel discussed in detail the prior Sleater and ATT litigation and the indemnity provisions of contracts between these parties, as MS seeks indemnity in this action for attorney's fees and costs incurred in defending those prior actions. ( See Transcript of Hearing, dated April 11, 2003, passim.) Court and counsel also examined plaintiffs theories of liability as against LaSalle and Allied in some detail, and the court requested further briefing on the question of cause-in-fact, the factual connection between the alleged breaches of contract by LaSalle and Allied and the fees and costs incurred by MS in defending the Skater and ATT litigation. ( Id. at 99:25-100:10.)
On April 21, MS filed a motion and memorandum "regarding causation with respect to the liability of Allied and LaSalle for breach of contract" (dkt. nos. 185, 186); on April 28, Allied and LaSalle filed responsive memoranda (dkt. nos. 187, 188), and the matter was set for further hearing on July 29, 2003.
On July 29, the Pretrial Conference reconvened. At that time, counsel advised the court that claims between MS and LaSalle had been settled. Argument was then heard concerning the causation issue as to Allied, that is, whether the expenses incurred by MS were "arising out of, based upon, or occasioned by or in connection with" the "negligent performance or nonperformance" of contractual duties by Allied, or by Allied's "negligence, gross negligence or willful misconduct." (Triad Center Allied Security, Inc. Service Contractor Agreement, dated December 1, 1997 ("Allied Agreement"), at § 8,) The court then took the matter under advisement. ( See Minute Entry, dated July 29, 2003 (dkt. no. 190).)
The court distinguished this factual connection issue from the question whether the cost incurred in defending Sleater and ATT litigation were consequential damages reasonably foreseeable to the parties at the time they entered into their indemnity agreement — in Allied's case, after the January 14, 1999 incident.
The Allied Agreement is to be found, inter alia, as Exhibit "C" to MS Triad Center L.P.'s Memorandum of Points and Authorities Regarding Causation with Respect to the Liability of Allied and LaSalle for Breah of Contract," filed April 21, 2003 (dkt. no. 186) ("MS Causation Mem.").)
Having reviewed the record in this case, including the proposed Pretrial Order, the memoranda submitted by counsel, and the arguments made at the April 11 and July 29 Pretrial Conferences, the court now concludes that MS has failed to establish the existence of a triable issue of fact as to the question of the cause-in-fact relationship between Allied's conduct and the injury asserted by MS, for which MS now seeks indemnity from Allied.
The factual connection, or causation issue must be distinguished from the question whether consequential losses of the kind alleged by the plaintiff were reasonably within the contemplation of or reasonably foreseeable to the parties, cf. Beck v, Farmers Insurance Exchange, 701 P.2d 795, 801 (Utah 1985), or whether the defendant in fact breached one or more duties owed to the plaintiff pursuant to the terms of their contract. To go to trial on its claims against Allied, MS must establish that a triable issue of fact exists as to whether the losses it now seeks to recover were losses "arising out of, based upon, or occasioned by or in connection with" the alleged wrongful conduct of Allied and its employees. (Allied Agreement at § 8.)
MS acknowledges that to obtain an award of actual damages for breach of contract, it must show that defendant's breach caused the losses claimed, but MS argues that it need not make a showing that "but for" the conduct of Allied, it would not have incurred expenses in the defense of the Sleater and ATT litigation. Rather, "all MS need to do is `spin together a myriad of facts into a durable thread that reasonably connects' LaSalle's and Allied's respective breaches to MS's attorneys fees in Sleater and ATT." (MS Causation Mem. at 32 (quoting Kilpatrick v. Wiley, 909 P.2d 1283, 1283 (Utah Ct. App, 1996).) Causation, MS insists, "is a question for the jury where, as here, there is any evidence (including expert testimony) upon which a jury could infer the `causal connection'." ( Id. (emphasis in original).)
Allied responds that MS merely invites speculation by the jury on the question of causation; that *"[t]he evidence must do more than merely raise a conjecture or show a probability,"; and that where "`the proximate cause of the injury is left to conjecture, the plaintiff must fail as a matter of law.'" (Allied Security, Inc.'s Memorandum of Points and Authorities in Opposition to MS Triad Center, LP's Motion Regarding Causation, filed April 28, 2003 (dkt. no. 187) ("Allied Causation Mem."), at 28 (quoting Mahmood v. Ross, 990 P.2d 933, 938 (Utah 1999)).) Allied also argues that the attorney's fees claimed by MS were incurred because MS chose to retain two law firms in addition to the legal representation already furnished by MS's insurer to defend the Sleater and ATT litigation at no cost to MS. ( Id. at 33-34.) Allied points out that MS has already been reimbursed for over $300,000 of the additional attorney's fees by its own insurer pursuant to a settlement between those parties, and argues that MS "has not shown why MS should recover the remainder of its attorneys' fee claim from Allied." ( Id. at 37.)
MS has repeatedly detailed the facts supporting its assertion that (1) neither LaSalle nor Allied had trained its employees to deal with an armed intruder situation; and (2) neither LaSalle nor Allied had complied with the existing written armed intruder policy during those fateful few minuted on January 14, 1999; and (3) that such negligence breached their contracts with MS. In turn, Allied has repeatedly denied that its employees were inadequately trained, or that they failed to follow the policy in any material respect. Allied disputes MS's assertion that Allied's conduct caused MS to incur the additional attorney's fees now at issue.
"Demonstrating material issues of fact with respect to defendants' negligence is not sufficient to preclude summary judgment if there is no evidence that establishes a direct causal connection between that alleged negligence and the injury.'" Mitchell v. Pearson Enterprises, 697 P.2d 240, 245 (Utah 1985). In Mitchell, a hotel guest was murdered in his hotel room, and claims were made that the hotel's security was inadequate, resulting in the guest's death. The Utah Supreme Court affirmed the district court's grant of summary judgment based upon the lack of evidence of a factual connection between the guest's death and the allegedly inadequate security. 697 P.2d at 245-46. The homicide in Mitchell was never solved, and no one could say whether the hotel's security measures had any bearing on the assailant's access to the victim. The court concluded that the possibility that better hotel security might have prevented the guest's death did not raise a triable issue of fact, and the claim failed as a matter of law.
In this case, in contrast to Mitchell, the parties know who the assailant was, and that she was an armed intruder on the Triad Center premises of the kind contemplated in the "armed intruder policy" furnished to Allied by LaSalle. On the other hand, the factual connection between Allied's own conduct and MS's claimed injury becomes more attenuated because of a number of additional facts, including MS's assertions concerning LaSalle's failure to give proper and timely instructions to Allied personnel to lock off the elevators to prevent the intruder from gaining access to the floor where the ATT offices were found, the failure of ATT employees to close and lock an office door through which the intruder ultimately gained access to Ms. Sleater's office, as well as the more remote nature of the asserted losses, arising as they do from MS's own decision to retain no less than two additional law firms to defend MS in litigation in which MS had already been furnished with legal representation. MS has offered no substantive explanation as to why the allegedly wrongful conduct of Allied resulted in a need to retain additional counsel to defend MS.
MS now attempts to realign this alleged failure by asserting that Allied's employees should have asked LaSalle's employees for the instructions that LaSalle allegedly neglected to give. ( See MS Causation Mem. at 15, 16, 27.) However, MS proffers its own expert witness's opinion that "even if Stroh [Allied] had called LaSalle, he couldn't have carried out management's instructions at the time because Erin Curtis was the only LaSalle employee available for instruction and she had only been there one month." ( Id. at 18 ¶ 70.)
It is not enough merely to assert that "it cannot be disputed that, as a result of Allied's nonperformance of these Contract Duties, MS was named as a defendant in both the ATT and Sleater actions." (MS Triad Center L.P.'s Memorandum of Points and Authorities in Support of Motion for Summary Judgment with Respect to Liability for Breach of Contract and Indemnity Against Allied and LaSalle, filed July 18, 2002 (dkt no. 133), at 34 (emphasis in original).)
MS's allegations concerning LaSalle's conduct in breach of its contract raise additional problems for MS's claim under the terms of MS's contract with Allied: Section 8 expressly provides that
Owner's . . . right to indemnification under this section shall not cover any act, omission, conduct, misconduct, negligence or default . . . of Owner or Agent [LaSalle] or any employee of . . . Agent who contributed or may be alleged to have contributed thereto, to which extent Owner agrees to indemnify and hold harmless Service Contractor [Allied].
(Allied Agreement at § 8.) The alleged failures by LaSalle to meet its contractual duties to
Allied has raised this question by motion for summary judgment. ( See Defendant Allied Security, Inc.'s Motion for Partial Summary Judgment re: Plaintiffs Indemnity Claim, filed July 16, 2002 (dkt no. 128).)
MS largely overlap the nonperformance now alleged by MS as against Allied, excluding those acts or omissions from MS's right to indemnity under Section 8 of the Allied Agreement.
MS maintains that had LaSalle employees "immediately instructed Stroh [Allied] to do any of the procedures contemplated by the armed intruder policy (recalling the elevators, locking off the stairwells, and/or contacting tenants), the shooter may not have ever accessed the 2nd floor much less the 4th floor where ATT was located." (MS Causation Mem. at 20 ¶ 78.)
Pursuant to Fed.R.Civ.P. 16 and 56, therefore, this court now rules as a matter of law that MS has not demonstrated the existence of a triable issue of fact concerning the factual connection between the conduct alleged on the part of Allied and the losses for which MS now seeks to recover pursuant to Section 8 of the Allied Agreement. The summary judgment motions of MS and Allied, respectively, are denied and granted to that extent, and the court determines pursuant to Fed.R.Civ.P. 16 that there remains no genuine issue of fact to be tried on MS's claims against Allied.
The Clerk of the Court shall forthwith enter judgment in favor of Allied Security, Inc., that plaintiff MS Triad Center L.P. take nothing, and dismissing MS Triad Center L.P/s complaint with prejudice, each party to bear its own costs.