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Continental Western Insurance Co. v. Superior Fire Protection, Inc.

United States District Court, D. New Hampshire

March 22, 2019

Continental Western Insurance Co.
v.
Superior Fire Protection, Inc.
v.
Hampshire Fire Protection Co., LLC

          Michael F. Wallace, Esq.

          Mark D. Wiseman, Esq.

          Mark S. Bodner, Esq.

          George D. Bogris, Esq.

          Clara E. Lyons, Esq.

          Douglas N. Steere, Esq.

          MEMORANDUM ORDER

          JOSPH N. LAPLANTE UNITED STATES DISTRICT JUDGE.

         A summary-judgment motion in this action to recover for property damage after a burst sprinkler pipe flooded portions of hotel turns on whether New Hampshire's statute of repose for construction damages, N.H. Rev. Stat. Ann. § 508:4-b, imposes a time limit on contribution and common-law indemnification claims. Plaintiff Continental Western Insurance Company, as subrogee of the entity that owned the Holiday Inn Express hotel in Rochester, New Hampshire, brought claims for negligence and breach of contract against defendant Superior Fire Protection, Inc., which inspected and tested the sprinkler system. Superior Fire, in turn, filed a third-party complaint seeking common-law indemnification and contribution from Hampshire Fire Protection Company, which originally installed the sprinkler system. This court has subject-matter jurisdiction over this action pursuant to 28 U.S.C. § 1332(a) (diversity) and over the third-party claims pursuant to 28 U.S.C. § 1367(a) (supplemental jurisdiction).

         Hampshire Fire moves for summary judgment on Superior Fire's claims. The parties do not dispute that Hampshire Fire installed the sprinkler system more than eight years before that system damaged the hotel. Hampshire Fire's motion therefore presents the purely legal question of whether New Hampshire's eight-year construction statute of repose bars Superior Fire's indemnification and contribution claims against Hampshire Fire. Concluding that it does, after reviewing the parties' submissions and holding a telephonic conference in lieu of oral argument, [1] the court grants Hampshire Fire's motion.

         I. Applicable legal standard

         “The 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). “A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party. A fact is material if it carries with it the potential to affect the outcome of the suit under the applicable law.” DeAndrade v. Trans Union LLC, 523 F.3d 61, 65 (1st Cir. 2008) (internal quotations omitted). When “[t]he parties agree upon all material facts, ” as Superior Fire and Hampshire Fire do here, the court “is left to address pure questions of law.” Bonneau v. Plumbers & Pipefitters Local Union 51 Pension Tr. Fund ex rel. Bolton, 736 F.3d 33, 36 (1st Cir. 2013) .

         II. Background

         The facts, which the court draws from the parties' submissions, are undisputed for purposes of this motion.[2] In 2007, Hampshire Fire designed and installed an automatic sprinkler system at the Holiday Inn Express in Rochester, New Hampshire. Hampshire Fire completed the system's installation and testing by October 16, 2007. Hampshire Fire took no further action with respect to the system.

         The Holiday Inn Express contracted Superior Fire to inspect and test the sprinkler system. It conducted multiple inspections and tests over the four-year period between October 13, 2011, and October 9, 2015. The plaintiff alleges that, a few months after the last inspection, part of the sprinkler system in an unheated attic froze and broke on February 15, 2016, causing water damage to the hotel.

         As a result of the damage, Continental Western claims that it made payments to or on behalf of its insured in the amount of $719, 061.44. It then brought this action against Superior Fire on February 7, 2018, asserting one claim each for negligence and breach of contract.[3] Specifically, Continental Western claimed in its complaint that Superior Fire designed, manufactured, and installed the sprinkler system, as well as testing and inspecting it, and that Superior Fire breached a duty to exercise reasonable care in doing so and by failing to drain water from the pipe before winter.[4]

         Superior Fire, which only tested and inspected the sprinkler system, [5] filed a third-party complaint against Hampshire Fire, which designed and installed the system, for common-law indemnity and contribution.[6] It alleges that any damage resulting from the frozen pipe was caused by Hampshire Fire's design and installation, not Superior Fire's testing and inspection.[7]

         III. Analysis

         New Hampshire's statute of repose for construction-related claims provides:

Except as otherwise provided in this section, all actions to recover damages for injury to property, injury to the person, wrongful death or economic loss arising out of any deficiency in the creation of an improvement to real property, including without limitation the design, labor, materials, engineering, planning, surveying, construction, observation, supervision or inspection of that improvement, shall be brought within 8 years from the date of substantial completion of the improvement, and not thereafter.

N.H. Rev. Stat. Ann. § 508:4-b, I. Hampshire Fire's design and installation of the sprinkler system constituted “the creation of an improvement to real property” under this statute.[8] “[Substantial completion of [that] improvement” occurred no later than October 16, 2007, more than eight years before Superior Fire filed its third-party complaint on August 22, 2018.[9] The only question before the court is whether Superior Fire's ...


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