Insurance Co. of Greater New York v. Fire Fighter Sales & Service Co.
120 F. Supp. 3d 449
W.D. Pa.2015Background
- Five Star bought a Holiday Inn in 2005 and contracted with Fire Fighter Sales & Service to add an automatic sprinkler system, with a December 15, 2005 signed proposal (modified from an earlier bid) that included a term promising "P.E. Stamped Drawings" and compliance with local codes.
- Fire Fighter designed and installed the system using an existing Monroeville standpipe; the hotel had two hydraulically connected standpipes (Monroeville and Pittsburgh).
- In December 2008, extreme cold and open/pressurized stairwell doors allowed cold air infiltration; a standpipe froze, burst, and caused extensive water damage; insurer GNY (subrogee of Five Star) paid a $6.9M claim.
- GNY sued Fire Fighter for professional negligence and breach of contract; discovery showed Fire Fighter’s only in-house professional engineer did not review drawings or stamp them, and Fire Fighter never provided P.E.-stamped drawings.
- Experts offered competing causation opinions: Fire Fighter’s expert blamed cold-air infiltration and hotel maintenance/operations; GNY’s expert said noncompliance with codes and failure to ensure adequate heat/placement of a wet system caused the freeze.
- Court denied summary judgment on breach-of-contract (genuine factual disputes on contract formation, breach, causation, and damages) but granted summary judgment for Fire Fighter on professional-negligence under the gist-of-the-action doctrine (claim collapses into contract claim because no independent duty imposed by law requiring engineer involvement).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a binding contract (December 15 Proposal) | December 15 Proposal, signed by both sides, embodied essential terms and parties acted on it, so it is binding | Proposal was a counter-offer or non-final; parties operated under a separate oral agreement with different terms | Genuine issue for jury; reasonable juror could find the December 15 Proposal binding — summary judgment denied on contract formation |
| Breach (failure to provide P.E.-stamped drawings and other contract terms) | Fire Fighter failed to deliver P.E.-stamped drawings and other specified items required by the signed proposal | Parties orally agreed P.E. stamp only if local authority required it; Fire Fighter did not breach | Material factual disputes over whether the written proposal governed; summary judgment denied on breach |
| Causation (contract breach caused the freeze and loss) | GNY’s expert links failure to follow codes and placement/heat issues to the freeze | Fire Fighter’s expert attributes freeze to cold-air infiltration, hotel maintenance, and open doors/fans — independent of installation | Competing expert opinions create a classic jury question; summary judgment denied on causation |
| Professional negligence (whether tort claim stands independent of contract) | GNY seeks to hold Fire Fighter liable for professional negligence based on alleged failure to provide engineer-reviewed work | Fire Fighter notes no engineer actually participated; any expectation for engineering came from the contract term | Court: claim duplicates contract obligations and no independent, noncontractual duty from law required engineer involvement — professional-negligence claim dismissed (summary judgment for defendant) |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden and standard)
- Hartman v. Baker, 766 A.2d 347 (Pa. Super. 2000) (contract may be formed though parties intend to adopt formal document later)
- Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418 (Pa. 2001) (clear written agreement construed by its contents alone)
- USX Corp. v. Prime Leasing, Inc., 988 F.2d 433 (3d Cir.) (gist-of-the-action doctrine bars tort claims duplicative of contract claims)
- Ingrassia Constr. Co. v. Walsh, 486 A.2d 478 (Pa. Super. 1984) (objective manifestations of assent determine contractual intent)