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Aramark Sports & Entertainment Services Incorporated v. Twin Anchors Marine Limited

United States District Court, D. Arizona

April 20, 2015

Aramark Sports & Entertainment Services Incorporated, Plaintiff,
v.
Twin Anchors Marine Limited, Defendant.

ORDER

NEIL V. WAKE, District Judge.

Before the court is Defendant Twin Anchors' Motion to Dismiss Plaintiff's First Amended Complaint (Doc. 41). For the reasons that follow, the Motion will be denied.

I. BACKGROUND

Pursuant to a Houseboat Purchase Agreement ("Agreement") signed in December 2005, Twin Anchors Marine, Ltd. ("Twin Anchors") constructed and delivered to Aramark Sports and Entertainment Services, Inc. ("Aramark") six seventy-five-foot houseboats. (Doc. 37-1 at 3, 20). In the "Warranties" section of the Agreement, Twin Anchors warranted, among other things, that 1) "the Work shall be performed in accordance with the terms and conditions of this Agreement, " 2) "the Houseboat shall be free from defects in design, workmanship and materials, " and 3) "all Work will meet all applicable American Boat and Yacht Council standards as regulated and inspected by the National Marine Manufacturers Association, and the United States Coast Guard specifications and requirements applicable to houseboats." ( Id. at 10-11.) The parties agreed that the warranty for "defects in workmanship and materials" would "only extend for a period of one (1) year from the date of Final Delivery to ARAMARK." ( Id. at 10.) The Agreement also contained the following "Indemnity" provision: "[Twin Anchors] agrees to defend, indemnify and hold ARAMARK, and its officers, directors, shareholders and affiliates, harmless from and against any and all lawsuits, causes of action, claims, liabilities, damages, losses, costs and expenses (including reasonable attorneys' fees and expenses), arising out of: (i) the negligent acts or omissions or the intentional misconduct of [Twin Anchors] in the performance of this Agreement... and (iii) any breach of this Agreement by [Twin Anchors]." ( Id. at 13.)

On June 21, 2008, Robert Howeth rented one of Aramark's houseboats to use for a family vacation on Lake Powell. (Doc. 37 at 3.) While on board three days later, several members of Howeth's party experienced nausea, headaches, vomiting, and loss of consciousness; Glenn Howeth, Robert Howeth's brother, suffered a heart attack and died. ( Id. ) In July 2009, the other members of the Howeth party sued Aramark, Twin Anchors, and three other parties in federal district court in Utah, seeking damages for personal injury and wrongful death allegedly caused by a carbon monoxide leak aboard the houseboat. ( Id. at 3-4.)

As part of that litigation, Twin Anchors filed an "Answer to Third Amended Complaint and Cross Claim and Notice of Allocation of Fault" ("Twin Anchors Answer") in May 2011. The Twin Anchors Answer states twenty-three defenses and, "[p]ursuant to Utah Code Annotated §78B-5-818, and otherwise as applicable under Utah substantive law and Local Rule 9-1, " asserts "crossclaims for standing and any other purpose, as necessary to allocate fault" to the other four defendants. (Doc. 25-1 at 3-22.) Under the provision of Utah law cited by Twin Anchors, which is titled "Comparative negligence, " the "fact finder may, and when requested by a party shall, allocate the percentage or proportion of fault attributable to each person seeking recovery, to each defendant, to any person immune from suit, and to any other person identified under Subsection 78B-5-821(4) for whom there is a factual and legal basis to allocate fault." Utah Code Ann. § 78B-5-818(4)(a).

The Twin Anchors Answer explains why, in Twin Anchors' view, each of the other defendants should be held liable in lieu of Twin Anchors. For example, Twin Anchors argued that if "the death of Glenn Howeth and/or any injuries incurred by Plaintiffs... was caused, in whole or in part, by the leak of carbon monoxide from the [water separator] during the voyage or otherwise, the said leak was proximately caused by the failure of Aramark... to properly adjust the valve on the water discharge line." (Doc. 25-1 at 23.) The Twin Anchors Answer also asserts that, "In the event that Twin Anchors is held liable to any person or entity for any claim or cause of action arising from the subject incident or any damages alleged by Plaintiffs, it is entitled to an allocation of fault as against Aramark in accordance with applicable law." ( Id. at 25.) Twin Anchors sought similar allocations of fault against all codefendants. Nowhere does the Twin Anchors Answer plead causes of action against Aramark or any other defendant.

Aramark filed an "Amended Answer of Defendants Aramark Corporation and Aramark Sports and Entertainment Services, LLC's to Plaintiffs' Third Amended Complaint, Counterclaim Against Robert Howeth, and Cross-Claim for Apportionment of Fault" ("Aramark Answer") on July 5, 2011. (Doc. 25-1 at 60.) In addition to asserting thirty-eight affirmative defenses, the Aramark Answer includes a counterclaim against Robert Howeth, seeking indemnification for any damages awarded against Aramark in the Utah litigation, pursuant to an indemnity clause in Howeth's rental agreement with Aramark. ( Id. at 54-58.) The Aramark Answer also contains a clause, similar to that in the Twin Anchors Answer, declaring, "In the event that ARAMARK is held liable to any person or entity for any claim or cause of action arising from the subject incident or any damages alleged by the Plaintiffs, it is entitled [to] an allocation of fault against [the other defendants, including Twin Anchors] in accordance with applicable law." ( Id. at 60.) Like the Twin Anchors Answer, the Aramark Answer does not plead any causes of action against any co-defendants.

The Utah litigation settled in November 2011. ( Id. at 72.) Under the settlement agreement, all defendants released any claims they might have against one another, with one exception: "Aramark and Twin Anchors specifically reserve all of their rights to assert an indemnification action pursuant to the [Agreement] between them, which rights are not being discharged by this [settlement agreement]." ( Id. at 75.) Aramark then brought this action against Twin Anchors on August 18, 2014. (Doc. 1.) The First Amended Complaint (Doc. 37), filed January 7, 2015, seeks damages under the Agreement's indemnity provision for sums Aramark paid out in the Utah litigation. Specifically, Aramark claims Twin Anchors is responsible for those payments because (1) "Twin Anchors breached its contractual obligations to Aramark and delivered the [houseboat] with defects in its design, workmanship and materials, which did not meet the applicable standards, " and (2) Twin Anchors "negligently designed, constructed, sold and failed to give warnings and/or instructions about the [houseboat], such that, unknown to Aramark, users and others, [carbon monoxide] was released under the houseboat, where it accumulated and then migrated into the living spaces." (Doc. 37 at 4-5.) In essence, Aramark's first cause of action seeks indemnification for Twin Anchors' breach of the warranties in the Agreement; the second seeks indemnification for general negligence in design and construction of the houseboat. At oral argument, counsel for Aramark conceded that these causes of action merely apply different labels to the same underlying facts.

Twin Anchors' Motion, filed February 4, 2015, urges dismissal of Aramark's First Amended Complaint on the grounds that it fails to state a claim upon which relief can be granted, as required by Rule 12(b)(6) of the Federal Rules of Civil Procedure.

II. STANDARD OF REVIEW

Dismissal under Rule 12(b)(6) can be based on "the lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). On a motion to dismiss under Rule 12(b)(6), all allegations of material fact are assumed to be true and construed in the light most favorable to the non-moving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). The principle that a court accepts as true all of the allegations in a complaint, however, does not apply to legal conclusions or conclusory factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive, a claim must have "facial plausibility"-the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Finally, courts generally may not consider any material beyond the pleadings when ruling on a Rule 12(b)(6) motion. One exception, however, is that a court may take judicial notice of matters of public record under Federal Rule of Evidence 201. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Courts do not have to accept alleged facts as true when they contradict those matters subject to judicial notice. Sears, Roebuck & Co. v. Metro. Engraver, Ltd., 245 F.2d 67, 70 (9th Cir. 1956).

Twin Anchors alleges several deficiencies in the First Amended Complaint, which the ...


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