United States District Court, D. New Hampshire
N. Laplante, United States District Judge
action, arising out of flood damage to commercial property
following a hurricane, implicates a party's liability for
breach of a contract to which it is not party. Plaintiffs
Sears Roebuck and Company and Kmart Corporation both suffered
property damage at stores located in West Lebanon, New
Hampshire, as a result of flooding brought on by Hurricane
Irene in 2013. They brought separate actions against their
respective landlords (W/S Lebanon LLC and Windalier West
Lebanon, LLC) and property managers (W/S Development
Associates, LLC, WS Asset Management, K.G.I. Properties, LLC,
and Keypoint Partners, LLC), which were later consolidated
for all purposes.
plaintiffs bring various breach of contract, negligence,
promissory estoppel, and accounting claims against the
defendants. Specifically, Kmart asserts claims of
negligence and breach of contract against its lessor,
Windalier, and Windalier's property managers, K.G.I. and
Keypoint. Sears asserts claims of negligence, breach of
contract, promissory estoppel, and a claim for accounting
against its lessor, W/S Lebanon, and W/S Lebanon's
property managers, W/S Development and WS Asset Management
(the “WS defendants”).
defendants moved for summary judgment on all claims against
them. Both plaintiffs also moved for summary
judgment, albeit only on their breach of contract
claims. The court denied the plaintiffs'
motion for partial summary judgment entirely, and granted
Windalier's and the WS defendants' motion for summary
judgment in part and denied it in part, for the reasons
stated on the record at the September 1, 2017 oral argument.
order resolves K.G.I.'s and Keypoint's motions for
summary judgment. Because there is no privity of contract
between Kmart and its property managers and because Kmart has
not identified a legal duty owed it by its property managers,
the court grants K.G.I.'s and Keypoint's motions for
Applicable legal standard
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). The moving party must “assert the
absence of a genuine issue of material fact and then support
that assertion by affidavits, admissions, or other materials
of evidentiary quality.” Mulvihill v. Top-Flite
Golf Co., 335 F.3d 15, 19 (1st Cir. 2003). “A
genuine issue is one that could be resolved in favor of
either party, and a material fact is one that has the
potential of affecting the outcome of the case.”
Vera v. McHugh, 622 F.3d 17, 26 (1st Cir. 2010)
(internal quotation omitted).
the movant has made the requisite showing, “the burden
shifts to the summary judgment target to demonstrate that a
trialworthy issue exists.” Mulvihill, 335 F.3d at 19.
The nonmoving party “‘may not rest upon the mere
allegations or denials of [the] pleading, but must set forth
specific facts showing that there is a genuine issue' of
material fact as to each issue upon which he or she would
bear the ultimate burden of proof at trial.”
Santiago-Ramos v. Centennial P.R. Wireless Corp.,
217 F.3d 46, 52-53 (1st Cir. 2000) (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986)).
is obligated to do in the summary judgment context, the court
“rehearse[s] the facts in the light most favorable to
the nonmoving party (here, the plaintiff) consistent with
record support, ” and gives them “the benefit of
all reasonable inferences that those facts will bear.”
Noviello v. City of Boston, 398 F.3d 76, 82-83 (1st
Cir. 2005) (internal citation omitted). The following
background takes this approach, drawing on the parties'
recitations of undisputed facts.
has leased and occupied commercial property in a shopping
plaza (the “Kmart Plaza”) in West Lebanon, New
Hampshire, since May 1974. The Kmart Plaza sits on the east
side of the Connecticut River and south of the Mascoma River.
On August 29, 2011, Hurricane Irene caused much of the
Connecticut River and its tributaries to flood. The flooding
caused water damage to the Kmart Plaza, including the
building occupied by Kmart. The contents of Kmart's
building were also damaged.
time of the event, Kmart leased its building from Windalier.
From July 2003 until a month before the event, K.G.I. managed
the property pursuant to an agreement between it and
Windalier. That agreement terminated, however, on July 31,
2011. Windalier then contracted with Keypoint to manage the
property, and Keypoint was the property manager when
Hurricane Irene struck.
discussed supra, Kmart has brought claims for breach
of its lease against its landlord, Windalier, and against
Windalier's property managers, K.G.I. and Keypoint. Kmart
has also brought negligence claims against all three of these
court grants K.G.I.'s and Keypoint's motions for
summary judgment on Kmart's breach of contract claims
against them because they were not parties to the lease and,
further, Kmart has not pleaded breach of, nor offered any
evidence suggesting it has standing as a third-party
beneficiary to sue under, the property managers'
contracts with Windalier. Because these defendants owe Kmart
no common-law duty under New Hampshire law, the court also
grants the defendants' motions for summary judgment on to
Kmart's negligence claims.
Kmart's contract claim against K.G.I. and Keypoint Count
succeed on a breach of contract claim under New Hampshire
law, the plaintiff must show: “(1) that a valid,
binding contract existed between the parties, and (2) that
[the defendant] breached the terms of the contract.”
Wilcox Indus. Corp. v. Hansen, 870 F.Supp.2d 296,
311 (D.N.H. 2012) (citing Lassonde v. Stanton, 157
N.H. 582, 588 (2008); Bronstein v. GZA GeoEnvironmental,
Inc., 140 N.H. 253, 255 (1995)). This case does not
implicate the contract's existence or validity, but only
whether a breach of existing, valid contracts occurred.
“A breach of contract occurs when there is a
‘[f]ailure without legal excuse, to perform any promise
which forms the whole or part of a contract.'”
Bronstein, 140 N.H. at 255 (quoting Black' Law Dictionary
188 (6th ed. 1990)).
parties' arguments touch on three contracts: the lease
agreement between Kmart and Windalier,  the property
management agreement between Windalier and K.G.I.,
the property management agreement between Windalier and
Keypoint. Kmart bases its contract claim against
K.G.I. and Keypoint on a lease to which neither of the
property managers was party: the Kmart-Windalier lease.
Sections of that lease, Kmart alleged,
obligated Windalier, and its agents KGI and Keypoint, to
maintain, replace and repair the roof, outer walls and
structural portions of the building necessary to maintain the
building in a “safe, dry and tenantable
condition” and in “good order and
repair”[;] . . . to maintain, replace and repair the
underground utility installations, which include storm sewer
systems[; and] . . . to properly service the building's
damage that Kmart sustained as a result of the flooding
caused by Hurricane Irene, Kmart further alleged, was
“proximately caused by Windalier, K.G.I. and
Keypoint's breach of their duties” under the
contract between Windalier and Kmart.It is undisputed that neither
K.G.I. nor Keypoint is party to that lease. Because a valid,
binding contract does not exist between Kmart, on the one
hand, and K.G.I. or Keypoint, on the other, Kmart's
breach of contract claim against K.G.I. and Keypoint fails as