FLORIDA STATE BOARD OF ADMINISTRATION, Plaintiff,
v.
LAW ENGINEERING AND ENVIRONMENTAL SERVICES, INC., Dеfendant.
United States District Court, D. Minnesota.
*1005 Robert J. Huber, Esq. and Leonard, Street and Deinard, Minneapolis, William R. Wildman, Esq., George A. Smith, Esq., Sarah T. Holloway, Esq. and Sutherland, Asbill & Brennan, Atlanta, GA, counsel for plaintiff.
Mary C. Yeager, Esq., Michael B. Lapicola, Esq. and Faegre & Benson, Minneapolis, J. Andrew Bertron, Jr., Esq., Thomas J. Guilday, Esq. and Huey, Guilday, Tucker, Schwartz & Williams, Tallahassee, FL, counsel for defendant.
*1006 ORDER
DOTY, District Judge.
This matter is before the court upon plaintiff Florida State Board of Administration's ("FSBA") motion for partial summary judgment on defendant Law Engineering and Environmental Services, Inc.'s ("Law") affirmative defenses of (1) improper venue, (2) statute of limitations, (3) economic loss doctrine, (4) no fiduciary duty, (5) failure to allege a cause of action for damages and (6) failure to state a cause of action for indemnity. This matter also is before the court upon defendant's motion for summary judgment on plaintiffs claims of (1) breach of fiduciary duty, (2) negligence, (3) negligent misrepresentation and (4) indemnification. Based upon a review of the file, record and proceedings herein, and for the reasons stated, the court grants plaintiffs motion for partial summary judgment on defendant's affirmative defenses of improper venue, statute of limitations, and the economic loss doctrine only as it applies to plaintiffs negligent misrepresentation claim. The court denies plaintiffs motion for partial summary judgment on defendant's affirmative defenses of the economic loss doctrine as it applies to plaintiffs fiduciary duty and negligence claims, failure to allege a cause of action for damages and failure to state a cause of action for indemnity. The court grants defendant's motion for summary judgment on plaintiffs breach of fiduciary duty, negligence and indemnification claims and denies defendant's motion for summary judgment on plaintiffs negligent misrepresentation claim.
BACKGROUND
Plaintiff is an agency of the State of Florida responsible for managing and investing the assets of various trust funds. In the summer of 1997, plaintiff expressed interest in purchasing commercially developed property in Eden Prairie, Minnesota. The property, known as the One Southwest Crossing Office Building ("One Southwest Crossing"), consists of a five-story, Class A office building and an attached three-level parking structure.
Before purchasing One Southwest Crossing, plaintiff hired defendant to assess its structural soundness. The parties executed a building assessment agreement. Pursuant to this agreement, defendant inspected One Southwest Crossing and issued a building condition assessment report. According to the report, "the structure did not exhibit signs of structural distress or excessive movement or distortion. With adequate and continued future maintenance, the parking structure should perform as designed well beyond the 10-year evaluation period." (PL's App. Tab 2, at 20.) The report also estimated that maintenance costs for the parking structure would not exceed $487,600 over the ten-year evaluation perk od, with only $34,600 of this amount needed for immediate repair. (PL's App. Tab 2, at 21.)
Plaintiff purchased One Southwest Crossing through its whollyowned subsidiary 11095 Viking, Inc. ("Viking") for $34,100,000. As plaintiff began to implement the maintenance program that defendant recommended, the parking structure experienced concrete fаilures including corroded reinforcing steel, concrete delaminations, spalling in the structural slabs, water intrusion, and distress on the structure's protective traffic coating. Plaintiff began repairs and it is estimated that the total cost of repairs and associated expenses will exceed $1.8 million. Plaintiff contends that if it had known that it would be required to spend at least $1.8 million to repair and maintain the parking structure, it would not have purchased One Southwest Crossing or would have negotiated a much lower price.
*1007 Plaintiff filed this action against defendant alleging (1) breach of contract (count one) (2) breach of fiduciary duty (count two) (3) negligence (count three), (4) negligent misrepresentaion (count four) and (5) indemnification (count five). Dedendant raiases several affirmative defenses, including: (1) improper venue, (2) statute of limitations, (3) the economic loss rule, (4) no fiduciary duty, (5) failure to allege a cause of action for damages and (6) failure to state a cause of action fоr indemnity, Plaintiff moves for partial summary judgment on those six affirmative defenses and defendant moves for summary judgment on counts two through five of the complaint.
After a review of the file, record and proceedings herein, and for the reasons stated, the court grants plaintiffs motion for partial summary judgment on defendant's affirmative defenses of improper venue, statute of limitations, and the economic loss doctrine only as it applies to plaintiffs negligent misrepresentation claim. The court denies plaintiffs motion for partial summary judgment on defendant's affirmative defenses of the economic loss doctrine as it applies to plaintiffs fiduciary duty and negligence claims, failure to allege a cause of action for damages and failure to state a cause of action for indemnity. The court grants defendant's motion for summary judgment on plaintiffs breach of fiduciary duty, negligence and indemnification claims and denies defendant's motion for summary judgment on plaintiffs negligent misrepresentation claim.
DISCUSSION
I. Standard for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides that 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." In order for the moving party to prevail, it must demonstrate to the court that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett,
On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. See id. at 255,
II. Parties' Motions for Summary Judgment
As stated, plaintiff moves for partial summary judgment on six of defendant's affirmative defenses: (1) improper venue, (2) statute of limitations, (3) the economic loss rule, (4) no fiduciary duty, (5) failure to allege a cause of action for damages and (6) failure to state a cause of action for *1008 indemnity. Defendant moves for summary judgment on plaintiffs breach of fiduciary duty, negligence, negligent misrepresentation and indemnification claims. The court considers each issue in turn, and, where appropriate, considers both parties' motions together.
A. Venue
Article XIV of Paragraph E of the contract between the parties provides:
This Agreement shall be governed by and construed in accordancе with the laws of the State of Florida. Consultant hereby irrevocably agrees that any legal action or proceeding against it with regard to this Agreement may be brought in the Courts of the State of Florida or in the United States District Court of Florida located in Leon County and by its execution and delivery of this Agreement, Consultant hereby irrevocably submits to each such jurisdiction and hereby irrevocably waives any and all objections which it may have as to venue in any of said courts.
(App., Tab 1, Master Agreement, Art. XIV at ¶ E.) Based upon the forum selection clause in Paragraph E, defendant asserts that this action should be dismissed for improper venue in defendant's first affirmative defense. Plaintiff moves for summary judgment on that affirmative defense because, according to palintiff, the forum selection clause in Paragraph E is permissive rather than mandatory, and thus venu is proper in Minnesota. After careful review, the court grants that motion.[1]
In construing a contract, the court must "give effect to the intention of the parties as expressed in the language they used in drafting the whole contract." Goebel v. North Suburban Agencies, Inc.,'
A forum selection clause in a contract is presumed valid. Kirckof, 2002 WL '31718394 at *2; Taylor,
"Permissive clauses constitute nothing more than a consent to jurisdiction and venue in the named forum and do not exclude jurisdiction or venue in any other forum." Quinones,
Generally, courts have found that use of the words "may" and "should" signify permissive clauses, while use of the words "shall," "will" or "must" signify mandatory clauses. McDonnell Douglas Corp.,
The forum selection clause in Paragraph E contains no mandatory language and evinсes no intent to make jurisdiction exclusive. It merely provides that any legal action with regard to the agreement "may be brought in the Courts of the State of Florida or in the United States District Court of Florida located in Leon County...." (App., Tab 1, Master Agreement, Art. XIV at HE (emphasis added).) The fact that the clause does not contain any mandatory or exclusive language but instead includes the permissive words "may be brought" illustrates that the clause does not require but merely permits plaintiff to file suit in Florida. See GMAC,
Reading the clause within the context of the language in Paragraph E further illustrates that the forum selection clause is permissive. Paragraph E illustrates a clear distinction between the mandatory word "shall" and the permissive word "may" when providing that "[t]his Agreement shall be governed by and construed in accordance with the laws of the State of Florida," but that legal action "may be brought in the Courts of the State of Florida or in the United States District Court of Florida..." Id. (emphasis added). Because the court must give the terms of a contract their plain and ordinary meaning and because the court must attempt to avoid an interpretation of the contract that would render a provision meaningless, the court concludes that the parties intended the words "shall" and "may" to have different meanings in the contract. See McDonnell Douglas,
Therefore, based upon the language of the forum selection clause and reading it within the context of the paragraph as a whole, the court concludes that the forum selection in permissive and thus that venue is proper in Minnesota. Accordingly, the court grants plaintiffs motion for" summary judgment on defendant's affirmative defense of improper venue.
B. Statute of Limitations
Plaintiff also moves for summary judgment on defendant's statutе of limitations defense because plaintiff alleges that Minnesota's statute of limitations applies and that Minnesota's statute of limitations does not bar its claims.[3] After conducting Minnesota's choice of law analysis, the court concludes that Minnesota's statute of limitations applies and, because the parties do not appear to dispute that plaintiff timely filed its case within Minnesota's statute of limitations, the court grant's plaintiffs motion for summary judgment on defendant's statute of limitations defense.
A federal court sitting in diversity must apply the choice of law principles of the state in which it sits, in this case Minnesota. Fuller v. Hartford Life Ins. Co.,
However, if the court concludes that the law involved is substantive, then it must apply the five choice-influencing factors first articulated by the Minnesota Supreme Court in Milkovich v. Saari: (1) predictability of result, (2) maintenance of interstate order, (3) simplification of the judicial task, (4) advancement of the forum's governmental interest and (5) application of the better rule of law.
Finally, as a general matter, the court must bear in mind the requirements of the federal constitution when conducting the foregoing analysis: "`[F]or a State's substantive law to be selected in a constitutionally permissible manner, the State must have a significant contact or significant aggregation of contacts, creаting state interests, such that choice of its law is neither arbitrary of fundamentally unfair.' " Phillips Petroleum Co. v. Shutts,
In this case, there is an apparent tension between Minnesota and Florida statute of limitations law. Statute of limitations is a procedural matter in Minnesota because it relates to remedy. See, e.g., Fredin,
C. Economic Loss Rule
Plaintiff next moves for partial summary judgment on defendant's affirmative defense based on the economic loss doctrine. Plaintiff argues that the choice of law clause does not govern its tort claims. Instead, *1012 plaintiff asserts that Minnesota law applies and that Minnesota does not apply the economic loss doctrine to claims against engineers for negligence. In opposing plaintiffs motion, defendant responds that the choice of law clause governs plaintiffs tort claims. Defendant therefore argues for summary judgment on plaintiffs breach of fiduciary duty, negligence and negligent misrepresentation claims because, according to defendant, Florida's economic loss rule applies to and bars those tort claims. Plaintiff responds that even under Florida law, the economic loss doctrine does not bar plaintiffs claims. The court first considers whether the choice of law clause governs plaintiffs tort claims and then evaluates whether the economic loss doctrine bars those claims under the relevant law.
1. Choice of Law Clause Governs Plaintiffs Torts Claims
As a threshold matter, the court must determine whether the choice of law clause governs plaintiffs tort claims and thus defendant's economic loss doctrine defense. In determining whether a choice of lаw provision in the parties' agreement will be given effect, a federal court sitting in diversity looks to the choice of law principles of the forum state, in this case Minnesota. Minn. Mining and Mfg. Co. v. Kirkevold,
Many courts, though not applying Minnesota law, have distinguished between broad and narrow choice of law provisions in order to determine whether a choice of law agreement includes tort claims. See Inacom Corp. v. Sears, Roebuck and Co.,
*1013 However, in Northwest Airlines, Inc. v. Astraea Aviation Servs., inc.,
Astraea claimed that the choice of law provisions did not govern the tort claims of negligent performance, misreрresentation, deceptive trade practices and unjust enrichment because they were not contract claims. Despite the seemingly narrow language of the choice of the law provision, the court disagreed, explaining:
Astraea's claims for negligent performance, misrepresentation, deceptive trade practices, and unjust enrichment raise issues of performance and compensation for work done under the refurbishment contracts. Although mainly styled as torts, these claims stem for Northwest's alleged failure promptly to provide functioning parts and adequate support for the refurbishment project, as required under the contracts. The unjust enrichment claim concerns the amount of compensation which Astraea should receive for refurbishing aircraft pursuant to a contract. These claims are closely related to the interpretation of the contracts and fall within the ambit of the express agreement that the cоntract would be governed by Minnesota law. Astraea thus consented to the application of Minnesota law to such claims.
Id.
Although plaintiff claims that Astraea is distinguishable from this case, (Pl's Mem. Opp'n Def.'s Mot. Partial Summ. J. at 4), plaintiff never explains how Astraea is distinguishable. Like plaintiff, the court finds it hard to distinguish Astraea because the circumstances in Astraea are so similar to the circumstances in this case. Here, the choice of law clause in the contract between the parties appears to be narrow, providing that "|t]his Agreement shall be governed by and construed in accordance with the laws of the State of Florida." (Pl's App., Tab 1, Art. XIV at f E (emphasis added).) However, as in Astraea, plaintiffs tort claims are closely related to the parties' contractual relationship.
Specifically, plaintiffs breach of fiduciary duty claim is related to contract performance. In the introduction of the complaint, plaintiff alleges that defendant "breached the express fiduciary duties it undertook pursuant to [its] agreement" with plaintiff. (Compl. at 1.) Plaintiff further alleges that "[i]n the Building Assessment Agreement, Law Engineering explicitly undertook to act as a fiduciary for FSBA in its performance of the agreement...." (Compl. § 14.) Plaintiffs allegation is based upon Section XIII.B of the contract, which provides, in part: "Consultant accepts the relationship of trust and confidence established between Consultant and the Board by this Agreement and acknowledges that the Board may rely on Consultant's advice and counsel." Plaintiff *1014 further emphasizes the connection between the breach of fiduciary duty claim and contract performance throughout count two of the complaint. (Compl. at ¶ 35 41.) Thus the court finds that plaintiffs fiduciary duty claim arises from the contract between the parties and is closely related to defendant's performance under the contract.
Plaintiffs negligence claim also is closely related to defendant's performance under the contract. In count three of the complaint, plaintiff alleges: "Law Engineering agreed to perform its assessment services 'with sufficient detail and scope to meet the standards of practice exercised by a responsible engineering professional in performing such services for an institutional investor of real estate in the current marketplace.'" Plaintiff then cites Section XIII.B of the contract. The issues raised in the negligence claim essentially concern whether defendant's assessment sufficiently met the contract's requirements and whether defendant failed to sufficiently perform its obligation under Section XIII.B. While the complaint also alleges that defendant has a duty to exercise reasonable care, that duty is largely the same as defendant's duty under the contract, as plaintiff conceded in oral argument. Thus, plaintiffs negligence claim is closely intertwined with defendant's performance under the contract.
Further, plaintiffs claim of negligent misrepresentation closely relates to defendant's performance of the contract because that allеgation is premised upon plaintiffs allegation that the report defendant delivered pursuant to the contract did not accurately reflect the condition of the structure, the extent of project repair or the total cost of maintenance.
Thus, Astraea is directly on point. As in Astraea, this case involves the application of Minnesota law, the law of the forum, to determine whether a seemingly narrow choice of law clause includes tort claims that, as in Astraea, are closely related to contract performance. Following the reasoning in Astraea, the court finds that the tort claims involved in this case are closely intertwined with the interpretation of the contract and "fall within the ambit of the express agreement that the contract would be governed by [Floridal] law." Astraea, 111 F.3d at-1392.
Even though Astraea is directly on point, plaintiff nevertheless relies on the Eighth Circuit case Inacom Corp. v. Sears, Roebuck and Co.,
While this provision adequately covers disputes concerning how to construe the [agreement], the language is not broad enough to govern the choice of law for the fraudulent concealment claim, which sounds in tort. Although the claim arose out of the circumstances surrounding the formation of the contract, there *1015 is no indicarion in the [agreement] that the parties intended to elect Illinois law as the forum for every contract-related claim.
Id.
While plaintiff argues that the court should follow Inacom, Inacom is clearly distinguishable from this case for three reasons. The court in Inacom applied Nebraska law rather than Minnesota law, the law of the forum in this case. The tort claims involved in Inacom did not relate to contractual performance, as they do in this case, but instead related to allegations that arose from contract formation. And, the choice of law provision in Inacom was narrower than the provision in this case, providing that "the Agreement shall be governed by and construed in accordance with the law of the State of Illinois, as applied to contracts." Id. at 687 (emphasis added). Thus, because the court concludes that Astraea rather than Inacom Corp. governs this case, the court finds that the choice of law provision in the contract between the parties incorporates plaintiffs tort claims alleged in counts two, three and four of the complaint and the court applies Florida law to those claims.
2. Economic Loss Doctrine in Florida.
The court next must consider whether the economic loss doctrine bars plaintiffs tort claims under Florida law. Defendant argues that Florida's economic loss doctrine bars plaintiffs breach of fiduciary duty, negligence and negligent misrepresentation claims because, according to defendant, plaintiff has not alleged that defendant's conduct resulted in personal injury or damage to other property and has not alleged a tort independent from defendant's alleged breach of contract. (Mem. Law Supp. D.'s Mot. Partial Summ. J. at 6.) Plaintiff responds that, pursuant to the Florida Supreme Court's decision Moransais v. Heathman,
The economic loss doctrine originally appeared in product liability cases. Moransais,
In Moransais v. Heathman, the most recent Florida Supreme Court case analyzing the doctrine, a homeowner brought a negligence action against engineers who conducted a pre-purchase inspection of the house pursuant to their employer's contract with the homeowner. Having recognized that a cause of action for professional negligence existed against the individual engineers despite no privity of contract between the engineers and homeowner, the court considered whether the ecоnomic loss rule barred such claims where there was no personal injuries or property damage other than the defects in the home inspected. Id. at 979. The court concluded that the economic loss rule did not bar the professional negligence claim against the engineers. Id. at 983.
In reaching that conclusion, the court acknowledged that its "pronouncements on the rule have not always been clear..." and explained that its holdings on the doctrine "have appeared to expand the application of the rule beyond its principled *1016 origins and have contributed to applications of the rule by trial and appellate courts to situations well beyond [the court's] original intent." Id. The court cited its decisions in PK Ventures, Inc. v. Raymond James & Assocs.,
The economic loss rule has not eliminated causes of action based upon torts independent of the contractual breaсh even though there exists a beach [sic] of contract action. Where a contract exists, a tort action will lie for either intentional or negligent acts considered to be independent from acts that breached the contract.
Id. (quoting HTP,
The Moransais court then concluded: Today, we again emphasize that by recognizing that the economic loss rule may have some genuine, but limited, value in our damages law, we never intended to bar well-established common law causes of action, such as those for neglect in providing professional services. Rather, the rule was primarily intended to limit actions in the product liability context, and its application should generally be limited to those contexts or situations where the policy considerations are substantially identical to those underlying the product liabilitytype analysis. We hesitate to speculate further on situations not actually before us. The rule, in any case, should not be invoked to bar well-established causes of aсtion in tort, such as professional malpractice. Id. at 983.
Based upon the court's analysis in Moransais, especially its favorable citation to the language in HTTP, the court concludes that Moransais affirmed the proposition that the economic loss rule generally "bars tort claims that are based on actions inextricably intertwined with the acts constituting the breach of contract." Excess Risk Underwriters, Inc. v. Lafayette Life Ins. Co.,
a. Fiduciary Duty
While the Moransais court stated that the economic loss rule "should not be invoked to bar well-established causes of actions in tort, such as professional malpractice," the court also "hesitate[d] to speculate ... on situations not actually before [the court]." Moransais
Despite the fact that the Moransais court explicitly limited its holding to the claim of professional negligence, courts interpreting Florida's economic loss doctrine since Moransais appеar to disagree over whether the economic loss doctrine bars breach of fiduciary duty claims after Moransais. See Excess Risk,
Because the Moransais court "reiterated the principle that, in order for a plaintiff to sustain a tort claim, the allegations establishing the tortious conduct must be independent from the allegations supporting a breach of contract," Excess Risk,
In Excess Risk, a post-Moransais decision, plaintiff Excess Risk Underwriters, Inc., ("ERU"), an insurance administration company, sued defendants Robert Dube, an underwriter, and Lafayette Life Insurance Company, alleging, among other claims, breach of contract and breach of fiduciary duty. Excess Risk,
As in Excess Risk, plaintiffs breach of fiduciary duty claim against defendant is barred by the economic loss doctrine because, as discussed, plaintiffs breach of *1018 fiduciary duty claim is dependent upon the contract between the parties and because the facts establishing the breach of fiduciary duty claim are interwoven with the contract claim. Since plaintiffs breach of fiduciary duty claim arose solely as a result of the existence of the contract between the parties, the economic loss doctrine bars that claim. See Excess Risk,
Plaintiff nevertheless seems to argue that the economic loss doctrine does not bar its breach of fiduciary duty claim based upon Moransais and subsequent case law allowing breach of fiduciary duty claims even when the duty arises from an underlying contract. See Invo Florida Inc.,
The court, "therefore, is not bound by those decision that hold that the economic loss doctrine does not bar a breach of fiduciary duty claim after Moransais because the supreme court's description of the economic loss rule in Moransais is a persuasive indication that the state's highest court would decide those cases otherwise.[7]Excess Risk,
b. Negligence
The parties also dispute whether the economic loss doctrine bars plaintiffs negligence claim. Moransais clearly stated that the economic loss rule "should not be invoked to bar well-established causes of action in tort, such as professional malpractice." Moransais,
This court can only resolve the apparent tension in the court's reasoning in Moransais by emphasizing that the Florida Supreme Court limited the holding in Moransais to the facts of that case, a case in which the defendants did not have a contract with the plaintiff. The court has no choice but to limit Moransais to the facts of that case and conclude that the Moransais court intended that the economic loss doctrine would not bar a professional malpractice claim where the defendants do not have a contract with the plaintiff, as in that ease. Where a contract exists between the parties, the court left open the possibility that the economic loss doctrine would bar a claim for professional malpractice if the claim is dependent upon a contract.
In this case, the economic loss doctrine bars plaintiffs negligence claim because plaintiffs negligence claim is dependent upon its breach of contract claim, as discussed above. See Perfumeria Ultra, S.A. de C.V., v. Miami Customs Servs., Inc.,
c. Negligent Misrepresentation
While the economic loss doctrine bars plaintiffs breach of fiduciary duty and negligence claims, it does not bar plaintiffs negligent misrepresentation claim because the Florida Supreme Court has carved out an exception for that category of torts from the economic loss rule. In PK Ventures, Inc. v. Raymond James & Assocs.,
Based upon the Florida's Supreme Court's decision to except negligent misrepresentation claims from the economic loss doctrine, the court concludes that the economic loss rule does not bar plaintiffs negligent misrepresentation claim, despite the fact that plaintiffs negligent misrepresentation claim is closely related to its contract claim. Accordingly, the court grants plaintiffs motion for partial summary judgment based on the economic loss doctrine as it applies to plaintiffs negligent misrepresentation claim and denies defendant's motion for summary judgment on that claim.
D. Lack of Damages
As part of plaintiffs motion for partial summary judgment, plaintiff also seeks summary judgment on defendant's sixth affirmative defense. In that affirmative defense, defendant alleges that plaintiffs complaint fails to allege a cause of action for damages because the cost of repair to the parking garage was incurred by plaintiffs subsidiary, 11095 Viking, Inc. Viewing the record in the light most favorable to the non-moving party, as is required under Fed.R.Civ.P. 56, the court concludes that genuine issues of material fact exist as to defendant's affirmative defense. Therefore, summary judgment is inappropriate on defendant's sixth affirmative defense.[8]See Celotex Corp. v. Catrett,
E. Indemnity.
Finally, defendant moves for summary judgment on plaintiff's indemnity claim. As part of its argument, defendant asserts that plaintiff can only seek indemnity for claims brought by third parties. After careful consideration, the court grants defendant's motion for summary judgment on plaintiffs indemnity claim because plaintiff does not allege that third parties have asserted a claim against it.
The Florida Supreme Court long has defined a contract for indemnity as "an agreement by which the promisor agrees to protect the promisee against loss or damages by reason of liability to a third party." Dade County School Board v. Radio Station WQBA,
Section X.A of the contract between the parties provides:
[Law] agrees to indemnify, defend and hold harmless [FSBA] ... from any lawsuit, claim demand, fine, damage, cause of action, loss, liability or expense arising in connection with any injury to or death of persons or damage to or loss of property resulting from ... breach of contract, willful misconduct, intentional torts, negligent acts or omissions to act *1021 of [Law]... in performing the Services under this Agreement.
(Pl.'s App., Tab 1 at 5.) The language of the contract providing for indemnification from "any lawsuit, claim, demand, fire, damage, cause оf action, loss, liability or expense" illustrates that the parties intended the contract to protect plaintiff against third-party claims.
Plaintiff nevertheless claims that the damage it suffered in this case amounts to a "loss." Reading the term "loss" together with the other terms listed in Section X.A and considering florida law, which requires indemnification against third party claims, illustrates that plaintiff's loss is not the kind of loss that the parties intended the indemnity contract to cover. See Raytheon subsidiary Support Co. v. Crouch,
CONCLUSION
Accordingly, IT IS HEREBY ODERED that:
1. Plaintiffs motion for partial summary judgment on defendant's improper venue [Docket No. 20] defense is granted.
2. Plaintiffs motion for partial summary judgment on defendant's statute of limitations defense is granted.
3. Plaintiffs motion for partial summary judgment on defendant's economic loss rule defense is granted only as it relates to plaintiffs negligent misrepresentation claim.
4. Plaintiffs motion for partial summary judgment on defendant's economic loss rule defense is denied as it applies to plaintiffs fiduciary duty and negligence claims.
5. Plaintiffs motion for partial summary judgment on defendant's defense of failure to state a cause of action for damages is denied.
6. Plaintiffs motion for partial summary judgment on defendant's defense of failure to state a cause of action for indemnity is denied.
7. Defendant's motion for summary judgment on plaintiffs breach of fiduciary duty claim [Docket No. 20] is granted
8. Defendant's motion for summary judgment on plaintiffs negligence claim is granted.
9. Defendant's motion for summary judgment on plaintiffs indemnification claim is granted.
10. Defendant's motion for summary judgment on plaintiffs negligent misrepresentation claim is denied.
NOTES
Notes
[1] An initial question is whether state or federal law provides the rule for аnalyzing the forum selection clause in the parties' agreement. See Benge v. Software Galena, Inc.,
[2] The court in Kirckof provided an example of a permissive forum selection clause (Example 1) and a mandatory forum selection clause (Example 2):
Ex. 1. "The courts of California, County of Orange, shall have jurisdiction over the parties in any action at law relating to the subject matter or interpretation of this contract.". . .
Ex. 2. "Any legal action by either party under this agreement will be brought in Minnesota."
Kirckof,
[3] Defendant concedes that its defense is based in part upon the applicability of Florida's procedural and remedial law to plaintiff's claims in connection with defendant's first affirmative defense that the forum selection clause requires this action to be filed in Florida. However, as discussed, venue is proper in Minnesota.
[4] While the parties choice of law clause dictates that Florida law shall apply, the choice of law provisions only incоrporate the substantive law of the chosen forum. Fredin,
[5] The holding in Excess Risk is consistent with the HIP rule that the Florida Supreme Court cited with approval in Moransais.
[6] While the Moransais court expressed some reservations about its reasoning in AFM, the court "continue[s] to believe the outcome of that case is sound." Moransais,
[7] In diversity cases arising under Florida law, a federal court is bound by the law articulated by the Florida Supreme Court. Hilliard,
[8] Defendant moved for an order granting its motion for a continuance of hearing on plaintiff's motion for partial summary judgment on defendant's sixth affirmative defense. The court denies that motion as moot based upon the parties' stipulation and their representations during oral argument.