Macy's Inc. v. H & M Construction Company Inc.

          ORDER

          DOMINIC W. L.ANZA UNITED STATES DISTRICT JUDGE

         Macy's Inc. (“Macy's”) sued two defendants, H and M Construction Co., Inc. (“HMC”) and H and M Architects/Engineers, Inc. (“HMA”), after a leaky sprinkler system-which the defendants were allegedly responsible for designing, installing, and/or supervising the installation of-caused nearly $3.8 million in damage to nearly 45, 000 pairs of shoes that Macy's was holding for sale in an Arizona distribution center. The Court previously dismissed, without prejudice, the complaint against HMA because it didn't adequately allege duty or specific negligent conduct by HMA. (Doc. 64.) The Court also ordered Macy's to comply with A.R.S. § 12-2602 by filing a written certification concerning the need for expert testimony. (Id. at 5-6.)

         Macy's filed an amended complaint. (Doc. 65.) Attached to this pleading were two exhibits that were intended to satisfy A.R.S. § 12-2602. (Docs. 65-1, 65-2.) The Court struck the amended complaint and the two exhibits because Macy's failed to comply with Local Rule 15.1. (Doc. 66.) In response, Macy's refiled its amended complaint but failed to refile the two exhibits. (Doc. 67.) Accordingly, the Court issued an order requiring Macy's to refile the two exhibits by November 16, 2018. (Doc. 92.) Macy's ignored this deadline.

         Separately, HMA has moved to dismiss the amended complaint for failure to state a claim. (Doc. 70.) The motion is fully briefed and neither party has requested oral argument.

         As explained below, the Court will deny the motion to dismiss. The Court also will provide Macy's with one more opportunity to refile the two exhibits that are necessary to satisfy its obligations under A.R.S. § 12-2602. Failure to comply will result in dismissal of this action.

         BACKGROUND

         Macy's entered into a contract with HMC in March 2007 in connection with the construction of an addition to a Macy's distribution center in Goodyear, Arizona. (Doc. 67 ¶¶ 1, 8.) In the contract, HMC represented that HMA “would assume the responsibility of being the project architect.” (Id. ¶ 20.) Macy's alleges that it paid all sums due and that, under information and belief, HMC and HMA both received payment under the contract. (Id. ¶ 9.)

         Macy's contends the sprinkler heads installed at the distribution center were hand-tightened, rather than wrench-tightened, and, as a result, one of them became loose and fell off the pipe, causing water to cascade onto shoes being held for sale at the distribution center. (Id. ¶ 12.) Macy's further alleges the sprinklers were installed in a manner contrary to various standards governing the installation of sprinkler heads. (Id. ¶¶ 10-12.) The water damaged 44, 490 pairs of shoes, only some of which could be sold in a salvage sale, resulting in a net loss of nearly $3.8 million. (Id. ¶ 12.)

         The amended complaint asserts two claims: (1) a negligence claim against HMC and (2) a negligence claim against HMA. Although the complaint alleges that HMC and HMA “are affiliated corporations which represent they operate jointly as a single entity and provide construction and engineering/architectural services as ‘H&M Company'” (id. ¶ 4), it also alleges separate conduct on the part of each defendant.

         With respect to HMC, the amended complaint alleges that its “conduct in undertaking the work of installing, constructing and inspecting the work as well as supervising the work of its subcontractors fell below the standard of care governing such installations.” (Id. ¶ 17.) With respect to HMA, the amended complaint alleges that it “took numerous actions to actually supervise construction of the Macy's distribution center” (id. ¶ 21), “assumed the responsibility for providing professional engineering/architectural services to design and construct the addition to Macy's distribution center in a first-class and workmanlike manner, [and] failed to do so” (id. ¶ 23), and “assumed the responsibility of directing construction of the Macy's distribution center to achieve such a result, [and] similarly failed to properly supervise that construction” (id.). Further, the amended complaint alleges that HMA “failed to require in its plans, drawings, directives or otherwise that its employees or its subcontractors wrench-tighten the sprinkler heads in compliance with the governing standards.” (Id. ¶ 23(a).)

         LEGAL STANDARD

         “[T]o survive a motion to dismiss, a party must allege ‘sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” In re Fitness Holdings Int'l, Inc., 714 F.3d 1141, 1144 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Iqbal, 556 U.S. at 678). “[A]ll well-pleaded allegations of material fact in the complaint are accepted as true and are construed in the light most favorable to the non-moving party.” Id. at 1144-45 (citation omitted). However, the court need not accept legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 679-80. The court also may dismiss due to “a lack of a cognizable legal theory.” Mollett v. Netflix, Inc., 795 F.3d 1062, 1065 (9th Cir. 2015) (citation omitted).

         ANALYSIS

         The disputed issue here is whether HMA owed a “duty of care” to Macy's, which is one of the elements of a claim for negligence. Gipson v. Kasey, 150 P.3d 228, 230 (Ariz. 2007) (“Whether the defendant owes the plaintiff a duty of care is a threshold issue; absent some duty, an action for negligence cannot be maintained.”). “Arizona does not presume duty; rather, in every negligence case, the ...