United States District Court, E.D. Michigan, Southern Division
David
R. Grand U.S. Magistrate Judge
ORDER DENYING DEFENDANTS' MOTIONS FOR PARTIAL
SUMMARY JUDGMENT [41, 42] WITHOUT
PREJUDICE
Arthur
J. Tarnow Senior United States District Judge
Plaintiffs
are insurers who bring this diversity suit against Toledo
Engineering Company, Inc. (“TECO”) and Dreicor,
Inc. (“Dreicor”) to recoup what they paid
following a June 3, 2017 explosion at a glass plant in
Dewitt, Iowa. The plant was operated by Guardian Industries
Corp. and Guardian Industries, LLC (collectively,
“Guardian”), which were insured by Plaintiffs and
are not parties to this lawsuit. Plaintiffs allege that TECO
and Dreicor-the contractors hired by Guardian to work on the
plant-are responsible for the explosion and subsequent fire.
They brought this suit as subrogees of Guardian and allege
negligence, gross negligence, breaches of contract, and
breaches of warranty. Defendants have moved for partial
summary judgment, arguing that the waivers of subrogation
clauses in their Engineering Services Agreements with
Guardian bar all causes of action except those arising from
gross negligence.
Because
the time allotted for discovery has not elapsed, the Court
will deny Defendants' motions without prejudice. It will
reach the merits of their defenses only after the parties
have had adequate time to gather evidence in support of their
positions.
Procedural
Background
Plaintiffs
filed suit on May 11, 2018. [Dkt. # 1]. Defendants filed an
Answer on June 21, 2018 [7] and a Motion for Rule 11
Sanctions [24] on September 10, 2018. The Court entered a
scheduling order [30] on November 2, 2018, providing for
discovery to end by May 1, 2019. On February 27, 2019, both
Defendants filed Motions for Partial Summary Judgment [41,
42]. On March 6, 2019, Defendants filed a Notice of
Withdrawal [47] their Motion for Rule 11 Sanctions, which
covered the same arguments as the motions for partial summary
judgment. On March 14, 2019, the Court entered a stipulated
amended scheduling order [48], providing for discovery to
extend until March 15, 2020. On August 13, 2019, the Court
entered another stipulated amended scheduling order [54]
providing for discovery to extend until September 15, 2019,
with a dispositive motion cut-off set for October 15, 2020.
A
hearing on the motions for partial summary judgment is
currently scheduled for September 11, 2019 [53]. Because the
Court finds the motions suitable for determination without a
hearing in accord with Local Rule 7.1(f)(2), that hearing
will be cancelled.
Standard
of Review
Summary
judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.”
Fed.R.Civ.P. 56(c). Movant bears the burden of establishing
that there are no genuine issues of material fact, which may
be accomplished by demonstrating that the non-movant lacks
evidence to support an essential element of his case.
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Non-movant cannot rest on the pleadings and must show more
than “some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co., Ltd., 475
U.S. at 586-87. Non-movant must “go beyond the
pleadings and by . . . affidavits, or by the
‘depositions, answers to interrogatories, and
admissions on file,' designate ‘specific facts
showing that there is a genuine issue for trial.'”
Celotex Corp., 477 U.S. at 324 (quoting Rule 56(e)).
Procedural
Analysis
Defendants'
position is that the Engineering Service Agreements between
Guardian and the Defendants bar the subrogation of claims to
third parties except in cases of gross negligence. In
response, Plaintiffs argue that those contracts are not
controlling and that their purported waiver of subrogation
provisions are ambiguous. Plaintiffs also argue that the
motions are premature, and that they should be able to avail
themselves of full discovery before being forced to defend
their case on summary judgment.
“Before
ruling on summary judgment motions, a district judge must
afford the parties adequate time for discovery, in light of
the circumstances of the case.” Plott v. Gen.
Motors Corp., Packard Elec. Div., 71 F.3d 1190, 1195
(6th Cir. 1995) (citing Celotex Corp., 477 U.S. at
322, 326 (1986)). In this case, the Court need not determine
an “adequate time for discovery”, because it has
already signed a stipulated Order [54] providing for
discovery to extend until September 15, 2020.
Defendants
argue that an exception to this rule is warranted because the
issue of the waiver of subrogation clause is ripe for
adjudication. They have provided no authority, however, for
their assumption that it is appropriate to grant summary
judgment on portions of a plaintiff's suit as discovery
proceeds. Defendants' position-that Plaintiffs have not
identified how what they are seeking to discover would affect
the arguments raised in Defendants' motion-asks the
Court, in effect, to add extra requirements to the discovery
rules of Fed.R.Civ.P. 26. Parties do not need to show how the
evidence they seek would disprove Defendants' arguments
in order to be entitled to discovery.
Without
getting into the substance of the arguments, it appears that
the issues raised in Defendants' motions will turn on the
applicability and/or scope of the waiver of subrogation
clause in the Engineering Services Agreements between
Guardian and the Defendants. Plaintiffs argue that
Guardian's Contract Terms for Purchase Orders governs
this contract. (Pl. Ex. A; Aff. of Kirk McMenamin). Though
Defendants' position is that no possible extrinsic
evidence could make a difference in this analysis, the Court
prefers to analyze the contract in light of the ...