JAAA v. MAVO SYSTEMS, INC.

RESPONSE in Opposition re MOTION for Summary Judgment Renewed

E.D. Pa.July 5, 2018

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA SEIF JAAA, Plaintiff, v. MAVO SYSTEMS, INC., COVANTA ENERGY, LLC, COVANTA HENNEPIN ENERGY RESOURCE CO., LP/LLC, and COVANTA HOLDING CORP., Defendants. : : : : : : : : : : : Civil Action No. 16-cv-2494 Filed Electronically MEMORANDUM OF LAW IN OPPOSITION TO MAVO’S RENEWED MOTION FOR SUMMARY JUDGMENT Defendants, Covanta Energy, LLC, Covanta Hennepin Energy Resource Co., LLC (improperly sued as “Covanta Hennepin Energy Resource Co., LP/LLC”) and Covanta Holding Corp. (collectively, “Covanta”), by and through their counsel, Stradley Ronon Stevens & Young, LLP, hereby submit this Memorandum of Law in Opposition to the Renewed Motion for Summary Judgment of Mavo Systems, Inc. (“Mavo”) (Dkt. No. 45) (Mavo’s “Renewed MSJ”). I. INTRODUCTION There are material questions of fact that preclude the dismissal of Covanta’s cross-claims against Mavo on the record currently before the Court. Moreover, as a matter of law, Covanta’s cross-claims are cognizable. The Court should not dismiss Covanta’s cross-claims against Mavo. II. ARGUMENT A. Choice of Law As an initial matter, it is Minnesota law, not Pennsylvania law, that governs this matter. The Court must employ Pennsylvania’s choice of law rules. See, e.g., Shuder v. McDonald’s Corp., 859 F.2d 266, 269 (3d Cir. 1988) (“It is well established that a district court in a diversity Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 1 of 9 - 2 - action will apply the choice of law rules of the forum state in determining which state’s law will be applied to the substantive issues before it.”). Pennsylvania uses a two-part analysis to answer choice-of-law questions. See, e.g., LeJeune v. Bliss-Salem, Inc., 85 F.3d 1069, 1071 (3d. Cir. 1996) (“Pennsylvania choice-of-law analysis consists of two parts.”). The first step is to determine whether a conflict is a “true conflict” or a “false conflict.” Id. A true conflict is where each state’s interests would be offended by the application of the other’s law. Id.; see also Ladenheim v. Starr Transit Company, Inc., 242 F.Supp.3d 395, 403 (E.D. Pa. 2017) (citing Hammersmith v. TIG, Ins. Co., 480 F.3d 220, 230 (3d Cir. 2007) (“A true conflict occurs when both jurisdictions’ interests would be impaired by the application of the other’s laws.”)). In contrast, a false conflict is where only one state’s interests would be offended by application of the other’s law. See LeJeune, 85 F.3d at 1071. In that situation, the law to be applied is that of the state whose interests would be harmed if its laws were not applied. See id. Otherwise, where there is a true conflict, the Court must move on to the second step – an analysis to determine which state has the greater interest in the application of its law. See id. There is a true conflict here between Minnesota and Pennsylvania law. Minnesota, like Pennsylvania, has a comparative negligence statute. See Minn. Stat. § 604.01; 42 Pa. C.S.A. § 7102. There is a critical difference between these two statutes. In Pennsylvania, a plaintiff may not recover damages for personal injury if a fact finder determines that he was more negligent than the defendants in the aggregate. See, e.g., Elder v. Orluck, 515 A.2d 517, 518-519 (Pa. 1986). For example, in a one-plaintiff/two-defendant case, a Pennsylvania plaintiff may recover damages so long as he is not found to be more liable than both of the defendants put together. So, if a jury apportioned 40% of the liability to a plaintiff and 30% to each defendant, the Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 2 of 9 - 3 - plaintiff would still be able to recover damages because his apportionment of liability (40%) was less than the sum of the apportionment between the two defendants (60%). He would recover 60% of the verdict. See 42 Pa. C.S.A. § 7102 (discounting any verdict in favor of a plaintiff by the percentage of the plaintiff’s own negligence). In Minnesota, the law does not allow any such aggregation. See, e.g,, Cambern v. Sioux Tools, Inc., 323 N.W.2d 795, 798 (Minn. 1982) (holding that “Minnesota law is clear that defendants’ fault is not to be aggregated in applying our Comparative Fault Statue, Minn. Stat. § 604.01 (1980).”); Erickson v. Whirlpool Corp., 731 F.Supp. 1426, 1428 (D. Minn. 1990) (explaining that “Minnesota law is perfectly clear: the fault of multiple defendants is not to be aggregated pursuant to a comparative fault statute.”). Accordingly, using the example above, a 40%-liable plaintiff in Minnesota would not be able to recover any against either of the 30%- liable defendants since he was 10% more negligent than either of them standing alone. Instead, he would recover nothing. In the Erickson case, for example, the jury apportioned liability as follows: 20% to the plaintiff, 56% to a defendant that had been dismissed and 12% each to the remaining two defendants. See 731 F.Supp. at 1427. The Court applied Minnesota law and entered judgement in favor of the defendants, since the plaintiff’s 20% share of liability was more than either of the remaining defendants’ 12% share. In Pennsylvania, the result would have been precisely the opposite since the aggregate liability of the remaining defendants would have been 24% as compared to the plaintiff’s 20%. On this issue, Minnesota law and Pennsylvania law are in direct conflict. The Court cannot apply one state’s law without offending the other’s and, for that reason, there is a true conflict between Minnesota and Pennsylvania on this issue. See Ladenheim, 242 F.Supp.3d 395 at 403. And, since there is a true conflict, the Court must move on to the second step of Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 3 of 9 - 4 - Pennsylvania’s choice of law analysis and determine which state has the greater interest in the application of its law. See LeJeune, 85 F.3d at 1071l. As between Pennsylvania and Minnesota, Minnesota has the greater interest in the application of its law to the facts of this case. Though “Pennsylvania has rejected strict adherence to lex loci delicti, this rejection cannot be read as discontinuing the importance of location of an accident.” Ramey v. Wal-Mart, Inc., 967 F.Supp. 843, 844 (E.D. Pa. 1997). Indeed, as noted in one recent decision of this Court, District Courts may “first look to Section 145(2) of the Restatement (Second) of Conflicts which sets forth the contacts to be considered in a personal injury choice of law analysis.” See Ladenheim, 242 F.Supp.3d at 403. “Those contacts include: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered.” Id. (emphasis added). Here, it is undisputed – in fact, alleged – that: Plaintiff’s alleged injury occurred in Minnesota, that Minnesota was the place where the conduct allegedly causing that alleged injury occurred and where the relationship between the parties was centered. (See Am. Complaint, ¶¶ 7, 10, 20, 28.) Based on these factors alone, the choice is clear: Minnesota law governs. Moreover, of these four factors, the Third Circuit has demonstrated repeatedly that the location of the accident is the most important. In LeJeune, for example, a Pennsylvania resident worked at a steel mill in Delaware and was injured on the job. 85 F.3d. at 1071. The Third Circuit balanced the facts that “Pennsylvania’s only contact with the accident is the fact that Mr. LeJeune is a Pennsylvania resident and that a small portion of General Electric’s work took place at a shop in Pennsylvania” against the facts that “the accident occurred in Delaware, and most of Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 4 of 9 - 5 - the alleged negligent conduct took place there as well.” Id. That balance, the Court found, tipped in favor of Delaware. Id. (“The Delaware contacts, however, are more substantial.”) See also, e.g., Shuder, 859 F.2d at 269 (applying Virginia law to slip and fall at a Virginia restaurant by a Pennsylvania plaintiff and explaining that “[t]o start with, the accident occurred in Virginia” and continuing that “the accident arose from the use and condition of property, traditionally matters of local control.”); Blakesley v. Wolford, 789 A.2d 236, 241-43 (3d. Cir. 1986) (applying Texas law in dental malpractice action brought by Pennsylvania-resident plaintiff, in part, because the allegedly offending surgical procedure took place in Texas and because the plaintiff “voluntarily and intentionally went to Texas to undergo” the procedure.). The location of an accident is particularly important in cases where that location was not “fortuitous.” See LeJeune, 85 F.3d at 1072 (“Where the site of an accident is not fortuitous, the place of injury assumes much greater importance, and in some instances may be determinative.”) (citing Shields v. Consolidated Rail Corp., 810 F.2d 397, 401 (3d Cir. 1987); Shuder, 859 F.2d at 272 (3d Cir. 1988)); Taylor v. Mooney Aircraft Corp., 430 F.Supp.2d 417, 427 (E.D. Pa. 2007) (“In a choice-of-law analysis, the difference between fortuitous and nonfortuitous is crucial.”). The location of an accident is fortuitous only where the state in which the accident occurred “has no interest in or relationship to the parties or the accident except that the accident occurred within its borders.” Taylor, 430 F.Supp.2d at 427 (citations omitted). An airplane crash is the classic example of when the location of an accident – i.e., where the plane happened to crash land – is merely fortuitous. Id. (citing Griffith v. United Air Lines, Inc., 203 A.2d 796 (Pa. 1964); Kuchinic v. McCrory, 222 A.2d 897, 899 (Pa. 1966)). On the other hand, the location of an accident is not fortuitous “if a party intentionally and voluntarily enters a state.” Id.; see also LeJeune, 85 F.3d at 1072; Scuder, 859 F.2d at 272; Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 5 of 9 - 6 - Shields, 810 F.2d at 501. Here, there is no dispute but that Plaintiff entered Minnesota intentionally and voluntarily. (See Transcript of Deposition of Plaintiff, attached as Ex. L to Mavo’s Motion for Summary Judgment (Dkt. 28-15), at 36:19-24 (“I got a phone call from my general manager, Chris Lucarini, telling me - - I was supposed to go to Virginia, and the night before, he called me and asked me a favor, if I can please go to Minneapolis and help out. And that’s what I did.”).) As such, the location of the alleged accident – Minnesota – is the most important factor in the Court’s determination of whether Minnesota or Pennsylvania has the greater interest in the application of its law to this case. Against that backdrop, Minnesota law is the clear choice. Under the Third Circuit’s binding precedent, Minnesota has the greater interest in the application of its law. As such, it is Minnesota law that governs Plaintiff’s claims in this case, not Pennsylvania’s. And, since Covanta’s common law cross-claims against Mavo necessarily flow from Plaintiff’s claims, they too are governed by Minnesota law.1 B. Covanta’s Cross-Claims2 Against Mavo are Valid Mavo contends that it owes Covanta neither indemnity nor contribution. But it makes only one argument in support of that contention: That it is not liable to Plaintiff and, thus, cannot share in any liability with Covanta. (See Renewed MSJ, pp. 8-10.) There are material questions of fact that preclude a judicial determination on that issue at this time. And, though Covanta 1 The exception to this was Covanta’s cross-claim against Mavo for contractual indemnity, which was governed by New Jersey law pursuant to the Covanta-Mavo Agreement. (See Covanta-Mavo Agreement, attached as Ex. C to Covanta’s Partial Motion for Summary Judgment (Dkt. No. ¶ 29), at ¶ 33.) 2 On May 31, 2018, the Court denied Covanta’s Partial Motion for Summary Judgment and, in a related opinion, held that the Covanta-Mavo Agreement did not extend to Mavo a contractual requirement that it indemnify Covanta. Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 6 of 9 - 7 - does not anticipate that Plaintiff will be able to establish any liability as to either itself or as to Mavo, it is for the jury to make that determination. In its June 7, 2018 Order, in which it denied Mavo’s Motion for Summary Judgment without prejudice (Dkt. No. 44), the Court directed Mavo and Plaintiff to re-brief the specific issue of whether Mavo is liable for the allegedly defective design of the scaffolding on which Plaintiff allegedly slipped and fell. (See 6/7/18 Order, p. 2.) For his part, Plaintiff points to, amongst other things, the report of his expert, James Stanley. (See Plaintiff’s Opposition to Mavo’s Renewed MSJ, p. 7 (Dkt. No. 46.).) In his report, Mr. Staley opines that: Mavo designed the scaffolding in a way that created a known uneven area and tripping hazard in the area at the top of the stairs where Mr. Jaaa fell. By design, the use of a wood-top plan and a steel plank in that area was known to Mavo to create at least a half inch uneven surface and tripping hazard for those approaching the steps. Admittedly, if an aluminum plank (which was eventually used to replace the wood-top plank involved in the fall) was used, the elevation difference would have been under a quarter inch rather than a half inch. Mavo's design using different height planks at the top of a staircase on this project was unreasonable and unsafe, and directly led to plaintiff's trip and fall. (See Report of James Stanley, Ex. “A” to Plaintiff’s Opposition to Mavo’s Motion for Summary Judgment (Dkt. No. 33), p. 19.) Mr. Stanley’s opinion is that Mavo was negligent in its design of the scaffold because, amongst other things, it allowed a half-inch gap between the planks at issue. (See id.) For its part, Mavo rebuts Mr. Stanly’s opinion with the deposition testimony of two of its own employees, Scott Such and Steven McCombie, both of whom testified that Mavo’s scaffolding, as designed, was fine. (See Mavo’s Renewed MSJ, p. 5.) Mavo suggests that this self-serving deposition testimony is “uncontroverted.” (See id.) But that cannot square with Mr. Stanley’s report, which comes to the exact opposite conclusion on this critical issue. Taking these disputed, material “facts in the light most favorable to the [Plaintiff] and [making] all Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 7 of 9 - 8 - reasonable inferences in [his] favor,” the Court cannot dismiss Plaintiff’s claims against Mavo at this time. The question of whether Mavo was negligent is for the jury. Other than that it is not liable to Plaintiff, Mavo does not offer any other argument as to why Covanta’s cross-claims fail. (See Renewed MSJ, pp. 8-10.) And, for the reasons set forth above, that argument is insufficient to defeat Covanta’s cross-claims on summary judgment. Moreover, as matter of well-established Minnesota law, indemnity and contribution are cognizable claims between cross-claimants in personal injury cases. This is a second, separate reason for the Court to deny Mavo’s Renewed MSJ as to Covanta’s cross-claims. In Tolbert v. Gerber Industries, Inc., 255 N.W.2d 362, 366 (Minn. 1977), the Minnesota Supreme Court explained that, among the circumstances in which one party would be liable to another for common law indemnity, was where the “one seeking indemnity has incurred liability because of a breach of duty owed to him by the one sought to be charged.” The Tolbert Court further explained that, in such a situation, the party seeking indemnification “is without personal fault but is exposed to liability because of the failure of another to perform a duty which he was legally or contractually obligated to perform.” Id. at 367. Likewise, with regard to contribution, the Tolbert Court expressly adopted contribution as Minnesota law where there are joint tortfeasors. Id. (“limiting the reallocation of loss between joint tortfeasors to contribution based upon relative fault . . . .”). Here, it is undisputed that Mavo had a contractual obligation to provide and assemble the scaffolding at issue, and that that obligation included the responsibility to design the scaffolding. (See Covanta-Mavo Agreement, attached as Ex. C to Covanta’s Partial Motion for Summary Judgment (Dkt. No. ¶ 29), at Appendix A; Mavo’s Renewed MSJ, p. 4 (arguing that Mavo cannot be liable here as a result of its “designing the scaffolding set-up and erecting the Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 8 of 9 - 9 - scaffolding which had a half-inch elevation change.”); Transcript of Deposition of Scott Such, attached as Ex. I to Plaintiff’s Opposition to Mavo’s Motion for Summary Judgment (Dkt. No. 33-8), p. 32:10-23).) If the jury determines that Plaintiff’s alleged injury was caused by Mavo’s allegedly defective scaffolding design/assembly – and not by Covanta – then, under Tolbert, Covanta would be entitled to common law indemnity from Mavo for any judgment. Id. at 367. If, on the other hand, the jury determines that Mavo and Covanta are each partially at fault, than Covanta would be entitled to contribution from Mavo for Mavo’s apportionment of any damages award. Id. In either case, the validity of Covanta’s cross-claims for contribution and indemnity cannot be determined by the Court now. III. CONCLUSION For the foregoing reasons, the Court should deny Mavo’s Renewed Motion for Summary Judgment with regard to Covanta’s cross-claims enter an Order in the form attached hereto Respectfully submitted, /s/ Benjamin E. Gordon Benjamin E. Gordon (PA I.D. No. 311741) STRADLEY RONON STEVENS & YOUNG, LLP 2005 Market Street, Suite 2600 Philadelphia, PA 19103-7018 T: (215) 564-8000 F: (215) 564-8120 E: bgordon@stradley.com Attorneys for Defendants, Covanta Energy, LLC, Covanta Hennepin Energy Resource Co., LLC (improperly sued as “Covanta Hennepin Energy Resource Co., LP/LLC”) and Covanta Holding Corp. Dated: July 5, 2018 Case 2:16-cv-02494-PD Document 47 Filed 07/05/18 Page 9 of 9