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All Metro Glass, Inc. v. Tubelite, Inc.

United States District Court, D. Minnesota

December 30, 2016

ALL METRO GLASS, INC. Plaintiff,
v.
TUBELITE, INC. Defendant.

          Michael L. Brutlag, BRUTLAG, HARTMANN & TRUCKE, P.A., for plaintiff.

          Michael R. Carey, BOWMAN AND BROOKE LLP, for defendant.

          MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          JOHN R. TUNHEIM Chief Judge

         Plaintiff All Metro Glass, Inc. (“AMG”) seeks to recover in contribution or indemnification from Defendant Tubelite, Inc. (“Tubelite”) for the amount AMG paid to satisfy an 2014 arbitration award to the Independent School District 721 (“the District”) for window remediation. AMG alleges Tubelite supplied defective window component materials - specifically, leading to shrinkage in the thermal break - that AMG installed at two of the District's schools in 2006, which resulted in water leakage at the schools in 2012, and prompted the schools' arbitration proceeding (in which Tubelite was not a party) against AMG in 2013. Tubelite counters that it only provided AMG with a limited warranty for its aluminum materials, [1] but that it conspicuously disclaimed any warranties that could apply to the thermal break material. Tubelite moves for summary judgment on AMG's claims and moves to exclude any product design or manufacture defect opinion testimony by AMG's experts.

         Viewing the evidence in the light most favorable to AMG, the Court finds AMG failed to raise a genuine factual dispute that Tubelite was commonly liable to the District in contract or tort-based liability in support of AMG's contribution claim. Additionally, pursuant to its indemnification claim, the Court finds AMG failed to raise a genuine factual dispute that it was faultless or played a secondary role for the water leakage at the schools.

         Therefore, the Court will grant Tubelite's motion for summary judgment on AMG's claims for contribution and indemnification, and the Court will dismiss as moot Tubelite's motion to exclude AMG's expert witness testimony.

         BACKGROUND

         I. FACTUAL HISTORY

         AMG is a Minnesota corporation in the business of fabricating and installing glazing systems. (Decl. of Michael R. Carey (“Carey Decl.”), Ex. F (“McGrath Dep.”) at 15:12-23, 21:2-6, Mar. 10, 2016, Docket No. 38.) Tubelite is a Michigan corporation that manufactures and sells commercial window components. (Decl. of Michael L. Brutlag (“Brutlag Decl.”), Ex. A at 15:11-23, 33:21-23, Mar. 30, 2016, Docket No. 47.) Tubelite's commercial window components include an interior and exterior frame joined by a thermal break or barrier to improve the thermal performance of the window system, impede conductivity between the interior and exterior components, and prevent water leakage. (Id. at 40:5-8; Brutlag Decl., Ex. D (“AAMA”) §§ 1.0, 4.1.3.1.)

         Thermal break shrinkage is the result of poor adhesion of the thermal barrier to the aluminum with which it is in contact. (AAMA §§ 4.1.3-4.1.3.1.) Shrinkage is problematic because the gap or void at the end of the thermal barrier material provides a path through which water can ultimately infiltrate into the wall cavity. (Carey Decl., Ex. H § 3.1.3.1, Mar. 10, 2016, Docket No. 38.) According to a technical report authored by the American Architectural Manufacturers Association, thermal break shrinkage can be caused by a variety of factors, including the design or manufacture of the window systems, fabrication, job site storage and handling, and environmental impacts. (AAMA §§ 4.2; 4.3.1; 4.3.2; 5.0.)

         A. AMG's Sales Contract with Tubelite

         On August 4, 2005, AMG entered into a construction contract with the District to perform glass and glazing work for two of the District's schools. (Carey Decl., Ex. (“Arbitration Decision”) at 2.) That contract states, in relevant part:

         The Contractor [AMG] warrants to the Owner [the District], Construction Manager, and Architect that materials and equipment furnished under the Contract will be of good quality and new unless otherwise required or permitted by the Contract Documents, that the Work [labor and materials] will be free from defects not inherent in the quality required or permitted, and that the Work will conform with the requirements of the Contract Documents. (Carey Decl., Ex. B §§ 1.1.3, 3.5.1.) This warranty to the District was not limited to any duration of time. (Id.)

         The construction contract's performance specifications identified Tubelite as an acceptable window manufacturer and required AMG to obtain a 3-year warranty against defects from whichever window manufacturer it selected. (Carey Decl., Ex. (“Arbitration Tr.”) at 180:19-181:12; Carey Decl., Ex. E § 1.09.) This manufacturer warranty was supposed to cover defects for “leakage or air infiltration” for a period of three years. (Carey Decl., Ex. E § 1.09.)

         On December 13, 2005, Tubelite issued AMG a price quotation to supply materials for the job. (Decl. of Paul Kitching (“Kitching Decl.”), Ex. A, Mar. 30, 2016, Docket No. 46.) The quote noted: “Tubelite has provided their standard two (2) year warranty on this (these) unit(s) for material and workmanship only. Warranty on installation to be provided by customer (installer).” (Id. at 1.) The quote also stated: “ACCEPTANCE HEREOF IS EXPRESSLY LIMITED TO ACCEPTANCE OF THE TERMS AND CONDITIONS APPEARING ON THE FRONT AND REVERSE SIDE HEREOF . . . .” (Id. at 4.) On the same date, AMG issued its purchase order accepting the quote. (Kitching Decl., Ex. B.)

         On three later occasions in 2006 - January 17, March 21, and May 18 - Tubelite issued quotes or worksheets and AMG issued corresponding purchase orders for materials necessary to finish the job. (Kitching Decl., Ex. C- H.) Several of Tubelite's quotes and worksheets displayed the word, “[d]ependable.” (Kitching Decl., Ex. A, C, E, and I.)

         B. Tubelite's Limited Warranty to AMG

         On June 26, 2006, about six months after AMG accepted Tubelite's first quote, Tubelite sent AMG a written limited warranty. (Decl. of Ron Schaaf (“Schaaf Decl.”), Ex. 1 (“Tubelite's Limited Warranty”), Mar. 10, 2016, Docket No. 34.) Tubelite's Limited Warranty provides, in pertinent part:

A. If any of the aluminum materials (the “Products”) furnished by Tubelite Inc. (“Tubelite”) that have been properly installed and not subject to abuse or misuse prove to be defective (as defined below) within 2 years from the date of shipment, then Tubelite will, at its option, repair or replace the defect, or pay the reasonable cost of repair or replacement for the defect, provided that notice of the defect is given to Tubelite within 30 days after discovery of such defect by Purchaser. . . .
DISCLAIMER: LIMITATION OF LIABILITY. THE WARRANTIES STATED HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. TUBELITE MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

(Id.) Other than aluminum materials, Tubelite's Limited Warranty does not mention any other materials, such as thermal barrier materials. Despite the District's performance specifications, AMG did not obtain from Tubelite the required 3-year manufacturer warranty against defects for “leakage or air infiltration.”

         C. The District's Arbitration Award Against AMG

         AMG's work for the District was certified as substantially complete in October 2006. (Arbitration Decision at 6.) However, in July 2008, the District's consultant, Encompass, Inc. (“Encompass”) reported water leakage concerns relating to the window frames, but did not identify any thermal break issues. (Id.; McGrath Dep., at 100:2-13.) At the District's request, AMG repaired those window frames. (Arbitration Decision at 6.)

         Nevertheless, despite AMG's 2008 repairs, window leaks continued from 2009 to 2012. (Id. at 6-7.) After re-inspecting the work, in a 2012 report, Encompass identified shrinkage in the window thermal break materials. (Carey Decl., Ex. H §§ 4.3-4.4.) In April 2013, the District commenced an arbitration proceeding against AMG, arguing that AMG breached its warranty to provide materials and labor “free from defects not inherent in the quality required or permitted.” (Brutlag Decl., Ex. C; Arbitration Decision at 4.) For purposes of the arbitration, the District and AMG stipulated Tubelite's windows were defective. (Arbitration Decision at 8; Arbitration Tr. at 18:19-19:9.) AMG countered at the arbitration that the District was liable for any defects in materials so long as AMG complied with performance specifications and that the District failed to mitigate its damages. (Arbitration Decision at 12-16.)

         In December 2014, the arbitrator found that AMG had breached its warranty to the District because the “[window] materials were not of ‘good quality' ” and “the ‘Work' was not free from defects, ” and ordered that AMG pay an award of $607, 000.00, to the District for costs of window repairs, and also ordered that AMG pay half of the arbitration costs and fees, amounting to an additional liability of $16, 990.00. (Arbitration Decision at 11, 20-21.) In January 2015, AMG filed this action against Tubelite seeking indemnification or contribution of $624, 490.00 for the arbitration award, costs, and fees AMG paid. (Compl. at 4-6, Jan. 21, 2015, Docket No. 1.)

         D. Expert Testimony Proffered

         In the present action, AMG offers the same expert reports that it offered in the underlying arbitration - one report prepared in 2013 by Richard Johnson of Construction Defect Consulting (“CDC”) and two reports prepared in 2012 and 2014 respectively by various experts at Encompass, an engineering consulting firm.[2] Tubelite disclosed a report prepared in 2015 by its expert, Kenneth Lies, an engineering architect, and AMG responded with a report prepared in 2015 by Johnson of CDC, as well as a report prepared in 2015 by various experts at Encompass.

         In arbitration, AMG disclosed Richard Johnson of CDC as its construction failure expert. (See Carey Decl., Ex. I.) Johnson has participated in numerous forensic inspections to determine causes of water intrusion and damage. (Carey Decl., Ex. U.) In his 2013 report, Johnson opined that, “[w]ater leakage at windows in the two school buildings passed through gaps created by dry shrinkage of the thermal break urethane material, ” “[Tubelite's] manufactured material used to form the thermal break failed sometime after the expiration of the contract warranty period, ” and that “[n]o evidence has been presented that AMG's workmanship caused the shrinkage of the thermal break material.” (Carey Decl., Ex. I §§ 3.1, 3.7, 3.8.)

         AMG also offered Encompass's 2012 report prepared by engineering consultants and forensic analysts Tim Schulz and Mark Blazevic for the District in the underlying arbitration. (Carey Decl., Ex. H.) In that report, Schulz and Blazevic opined that in addition to thermal break shrinkage, water leakage resulted from AMG's faulty workmanship. (Id. § 4.1.) AMG also filed a supplemental 2014 report authored by Blazevic and Kent Jones from Encompass. (Carey Decl., Ex. N.) In their 2014 report, Blazevic and Jones referred to an American Architectural Manufacturers Association technical document, which states that multiple factors contribute to dry shrinkage, such as “contaminated bonding surfaces, design of the extrusion, distortion of the extrusion, resin type, and extrusion in cavity size.” (Id. at 1-2.) Blazevic and Jones concluded that since all of those factors are associated with manufacturing of the system, the “[t]hermal break shrinkage, discovered during the course of our investigation in 2012, supports our opinion that the schools were provided a defective product that ultimately resulted in the observed water intrusion.” (Id. at 2.)

         Tubelite subsequently disclosed the 2015 report of its expert architect, Kenneth Lies, for purposes of this case. (Carey Decl., Ex. R.) Lies opined that “[t]he cause of water intrusion at the windows is due to the failure to install the required sub-flashing below the windows. The responsibility for the omitted required sub-flashing is not the responsibility of Tubelite, Inc. but AMG and others.” (Brutlag Decl., Ex. H at 12.)

         In response, AMG filed a 2015 report authored by Johnson from CDC, which rebutted Lies's report and concluded that, “[w]ater intrusion was not the result of anything other than window frame thermal barrier shrinkage” and that “All Metro Glass assembled and installed the windows properly, in compliance with Tubelite instructions, applicable building codes and industry standards.” (Carey Decl., Ex. S §§ 4.3.1; 4.3.4.)

         Johnson further opined that “Tubelite failed to design a thermal barrier system that was resistant to dry shrinkage. This failure resulted in dry shrinkage of exceptional lengths in frame extrusions.”[3] (Id. § 4.3.5.)

         AMG also filed a 2015 report from Encompass authored by Blazevic and Jones to rebut Lies's report, in which they concluded that, “[o]ur previously stated opinions about the condition of the windows and the cause of water intrusion are unchanged.” (Carey Decl., Ex. X at 2.) Blazevic and Jones also challenged the way that Lies's report characterized their observations from their 2012 report.

         None of these expert reports discussed or analyzed Tubelite's design or manufacturing process, or identified any of the factors associated with Tubelite's window components ...


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