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State Auto Insurance Companies v. Siemens Building Technologies

May 4, 2010

STATE AUTO INSURANCE COMPANIES, PLAINTIFF,
v.
SIEMENS BUILDING TECHNOLOGIES, INC., DEFENDANT.



The opinion of the court was delivered by: Victoria A. Roberts United States District Judge

Hon. Victoria A. Roberts

ORDER DENYING MOTION TO DISMISS

I. INTRODUCTION

This matter is before the Court on Defendant's Motion to Dismiss. For the reasons stated, the Court DENIES the Motion.

II. BACKGROUND

Plaintiff State Auto Insurance Companies filed this subrogation action against Defendant Siemens Building Technologies, Inc. On February 19, 2007, Plaintiff's subrogor, J & J Electric Service, Inc., was contracted to install a new fire-detection system manufactured and designed by Defendant, at a commercial property located in Bloomfield Hills, Michigan. On the same date, a fire-suppression system manufactured and designed by Defendant was installed at the same location by a fire equipment company; the fire-suppression system uses FM-200 gas to extinguish fire.

Apparently, the fire-detection and fire-suppression systems are supposed to work in tandem. Plaintiff, however, alleges the systems malfunctioned upon inspection, causing the release and complete emptying of the FM-200 gas tanks. Plaintiff paid $75,488.06 to refill the tanks, then brought this action to recover.

The Complaint alleges: Count I - Products Liability, Count II - Negligent Design and/or Maintenance, Count III - Breach of Implied Warranty of Merchantability, and Count VI (sic) - Subrogation Rights. Defendant filed this Motion to Dismiss as its first responsive pleading.

III. STANDARD OF REVIEW

Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6), where a plaintiff fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Rule 12(b)(6) requires the Court to construe the complaint in the light most favorable to the plaintiff, accept all of the complaint's factual allegations as true, and determine whether the plaintiff's allegations plausibly establish a case which would entitle the plaintiff to relief. Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1968-70 (2007).

When a court is presented with a Rule 12(b)(6) motion, it may consider the complaint and any attached exhibits, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the complaint and are central to the claims contained therein. See Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001). "[T]o avoid dismissal under Rule 12(b)(6), a complaint must contain either direct or inferential allegations with respect to all the material elements of the claim." Wittstock v. Mark a Van Sile, Inc., 330 F.3d 899, 902 (6th Cir. 2003).

IV. CASE LAW AND ANALYSIS

Defendant cites Neibarger v. Univ. Coop. Inc., 439 Mich 512 (1992) in support of its Motion to Dismiss. Defendant says the economic loss doctrine bars Plaintiff's tort claims as a matter of law. In Neibarger, the Michigan Supreme Court adopted and stated the general rule that where claims arise from a commercial transaction in goods and the plaintiff suffers only economic loss, tort claims are barred by the economic loss doctrine; in such cases, the Uniform Commercial Code ("UCC") is the exclusive remedy. Id. at 520. The court noted there was support for the view that the UCC did not bar a tort claim where the plaintiffs sought to recover for property other than the product itself, but ruled that where the damage to other property was caused by the failure of a product to perform as expected, and that damage was in the contemplation of the parties, the occurrence of such damage could have been negotiated by the parties. Id. at 532.

In response, Plaintiff argues that Defendant misapprehends the scope and coverage of the economic loss doctrine. Plaintiff cites Quest Diagnostics v. MCI Worldcom, 254 Mich App 372 (2002) in support of its position that the economic loss doctrine does not apply when a plaintiff could not have anticipated a safety hazard involved in a product through bargaining or negotiation at the time of the transaction or purchase. Notably, in Quest, the doctrine did not apply because it involved only negligence claims and there was no underlying sale of goods, ...


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