27 F. Supp. 3d 636
E.D. Pa.2014Background
- Phoenix Lithographing contracted Bind‑Rite to bind 750,000 26‑page booklets; Phoenix delivered ~560,000 printed sheets to Bind‑Rite’s Bergen County facility days before Hurricane Sandy.
- Hurricane Sandy produced an unprecedented tidal surge that flooded Bind‑Rite’s single‑story warehouse (water rose ~40 inches) and destroyed the printing project stored on pallets on the floor.
- Bind‑Rite made minimal preparations (sent third‑shift workers home early) and had previously declined flood insurance due to high premiums; Phoenix contends Bind‑Rite had several days' notice from forecasts and advisories.
- Phoenix sued for negligence and breach of bailment, claiming >$180,000 in losses for reprinting and hiring another vendor; Bind‑Rite asserted affirmative defenses including act of God.
- On summary judgment, the court treated two categories of damages separately: (1) loss/reprinting of the ~560,000 sheets, and (2) costs of engaging another vendor to finish the project.
- The court found factual disputes about whether Bind‑Rite could have reasonably mitigated the sheet loss (so summary judgment denied as to that category) but held the shutdown and inability to complete the project were caused solely by the storm, so summary judgment granted as to vendor‑replacement costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hurricane Sandy constitutes an "act of God" excusing liability | Bind‑Rite could have taken steps (move stock off floor, offsite, racking, buy insurance) given forecasts; loss not solely inevitable | Sandy was an extraordinary, unforeseeable natural event making Bind‑Rite’s breach excused | Act of God applies in part: not to sheet destruction (fact dispute), yes to inability to finish project (sustained shutdown) |
| Whether Bind‑Rite did all a reasonable person could to avoid the loss | Phoenix says warnings and local alerts made reasonable mitigation possible | Bind‑Rite says building historically withstood storms and event was unprecedented; no reasonable preparations would prevent loss | Fact issue remains for jury on reasonable mitigation re: sheets; court denied summary judgment on that point |
| Whether damages for hiring another vendor are recoverable | Phoenix seeks those costs as consequential damages from Bind‑Rite’s breach | Bind‑Rite says inability to finish was caused solely by the storm (act of God) and thus excused | Court granted summary judgment for Bind‑Rite on vendor costs — dismissed those damages |
| Allocation/burden at summary judgment regarding affirmative defense | Phoenix emphasizes disputed facts preclude summary judgment | Bind‑Rite bears burden to prove act of God; submitted storm evidence but insufficient on mitigation | Court: Bind‑Rite failed to show as a matter of law it did all reasonable measures re: sheets, but did show shutdown unavoidable as matter of undisputed evidence |
Key Cases Cited
- Engle v. West Penn Power Co., 598 A.2d 290 (Pa. Super. Ct.) (defines act of God as an extraordinary, unexpected natural force preventable only by human care, skill, or foresight)
- Goldberg v. R. Grier Miller & Sons, Inc., 182 A.2d 759 (Pa.) (recognizes act of God defense under Pennsylvania law)
- Bowman v. Columbia Tel. Co., 179 A.2d 197 (Pa.) (test: did defendant do all a reasonable person could to avoid the event causing plaintiff's injury)
- Carlson v. A & P Corrugated Box Corp., 72 A.2d 290 (Pa.) (court must consider character of stream, territory, and flood history when assessing whether flood is extraordinary)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard: genuine dispute of material fact requires a jury)
- Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575 (3d Cir.) (summary judgment principles in the Third Circuit)