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Great Northern Ins. Co. v. Iron Mountain Water Servs. Co., Inc.

2019-09-19

Summary

Holding. The court denied Iron Mountain's motion for judgment on the pleadings, holding that Iron Mountain owed a duty of care to the insureds based on the foreseeable risk of harm created by its operation of the water system serving their property.

Great Northern Insurance Company, acting as subrogee for its insureds, sued Iron Mountain Water Services for negligence after a water pressure spike damaged the insureds' property, resulting in nearly $400,000 in insurance payments. Iron Mountain moved to dismiss the complaint, arguing it owed no duty of care to the insureds because it provided water services pursuant to contracts with a homeowners' association rather than directly to the property owners.

The court applied the standard for evaluating motions for judgment on the pleadings and rejected Iron Mountain's duty-of-care argument. Under New Hampshire law, a defendant owes a duty of care when its conduct creates a reasonably foreseeable risk of harm to another person or property. The court found that harm to a property is obviously foreseeable when a business operates the water system serving that property, regardless of whether the service agreement is with a third party such as a homeowners' association. The contractual relationships Iron Mountain highlighted were irrelevant to the existence of a general common-law duty to exercise reasonable care in operating the water system.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a water utility operator owes a duty of care to property owners when service is provided under contract with a homeowners' association rather than directly to the owner
  • Application of the foreseeability test to establish duty of care in negligence
  • Relevance of contractual relationships to the existence of common-law duty of care

Procedural posture

Great Northern filed a negligence action in federal district court, and Iron Mountain filed a motion to dismiss that was construed as a motion for judgment on the pleadings.

Authorities cited

Opinion

majority opinion

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

Great Northern Ins. Co.

v. Case No. 19-cv-160-AJ

Opinion No. 2019 DNH 157

Iron Mountain Water Servs.

Co., Inc.

O R D E R

Plaintiff Great Northern Insurance Company, as subrogee for

its insureds, Michael and Tracy Roberge, filed this lawsuit

against Iron Mountain Water Services Company. Great Northern

alleges that Iron Mountain negligently operated the water system

that provided water service to Great Northern’s insureds’

property, resulting in damage to the insureds’ property.

The parties have consented to the jurisdiction of the

undersigned magistrate judge. Doc. No. 12. Iron Mountain filed

a motion to dismiss (Doc. No. 14) the complaint, which contains

a sole claim of negligence. Great Northern opposes dismissal.

For the reasons that follow, the court construes the motion to

dismiss as a motion for judgment on the pleadings and denies it.

Standard of Review

A. Motion for Judgment on the Pleadings

Because Iron Mountain filed its answer before filing the

motion to dismiss, the motion to dismiss is construed as a motion for judgment on the pleadings under Federal Rule of Civil

Procedure 12(c). See e.g., Weeks v. Five Bros. Mortg. Servs. &

Securing, Inc., 2014 WL 1379335, at *3 (D.N.H. April 9, 2014).

When a motion for a judgment on the pleadings is used to

attack the plausibility of a complaint, the motion is evaluated

under the same standard as a motion to dismiss under Federal

Rule of Civil Procedure 12(b)(6). Diaz-Nieves v. United States,

858 F.3d 678, 689 (1st Cir. 2017); Grajales v. P.R. Ports Auth.,

682 F.3d 40, 44 (1st Cir. 2012). Judgment on the pleadings,

therefore, is appropriate if the facts from the pleadings, taken

in the light most favorable to the nonmovant, fail to allege a

plausible entitlement to relief. Perez-Acevedo v. RiveroCubano, 520 F.3d 26, 29 (1st Cir. 2008) (citing Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 555-58 (2007)). As usual, the court

disregards conclusory allegations. Manning v. Boston Med. Ctr.

Corp., 725 F.3d 34, 43 (1st Cir. 2013). At bottom, the

complaint must allege “factual content that allows the court to

draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (citing Twombly, 550 U.S. at 556).

B. Evidence Attached to Motion to Dismiss

Because Iron Mountain attached evidence to its motion to

dismiss, Great Northern suggests that the court would have to

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convert the motion into one for summary judgment before ruling

on it. See Fed. R. Civ. P. 12(d). 1 Iron Mountain contends that

this evidence shows that it operated the water system for the

insureds’ property pursuant to contracts with a homeowners’

association for the insureds’ neighborhood. As explained below,

however, the contracts are irrelevant to the negligence claim

before the court. Accordingly, the court need not and does not

consider them for purposes of resolving the motion. Therefore,

it is not necessary to convert the motion to a summary judgment

motion. See id. (requiring conversion to summary judgment only

if the material is not excluded by the court).

Background

According to Great Northern’s complaint, Iron Mountain

“operated the water system providing domestic water service” to

a real estate property owned by Great Northern’s insureds. Doc.

1 ¶¶ 6, 9. On July 16, 2017, “there was a spike in the water

pressure” at the insureds’ property, which “caused water to

discharge” through the insureds’ property. Id. ¶¶ 10-11. As a

result of the damage caused by the water discharge, the insureds

made a claim to Great Northern, which paid $398,453.99 to the

1 To be sure, Great Northern urges the court to deny the motion as procedurally improper rather than converting it to a summary judgment motion.

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insureds. Id. ¶¶ 12-14. Great Northern filed this lawsuit

against Iron Mountain to recover that amount, accusing it of

negligently operating the water system that it says provided

service to its insureds’ property and caused the damage to it.

Discussion

Iron Mountain argues that it had no “relationship” with the

insureds from which a duty to act with reasonable care could

arise. As noted above, Iron Mountain attached contracts to its

motion that, it asserts, establishes that it provided services

to a homeowners’ association for the insureds’ neighborhood.

Iron Mountain argues that the insureds cannot rely on the

contracts to create a duty of care or relationship between it

and the insureds because the insureds were not parties to the

contracts.

In response, Great Northern argues that Iron Mountain’s

motion is procedurally improper, a subject which the court has

addressed above in discussing the appropriate standard of

review. Great Northern further contends that the motion fails

on its merits because Iron Mountain had a general common law

duty to act with reasonable care, and it asserts that the

contract is irrelevant to the negligence claim.

To show negligence, the plaintiff must show that the

defendant owed it a duty, that the duty was breached, that the

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plaintiff suffered an injury, and that the defendant’s breach

was the proximate cause of the injury. Laramie v. Sears,

Roebuck & Co., 142 N.H. 653, 655 (1998). A defendant is charged

with a duty of care to the extent his conduct creates a

sufficiently foreseeable risk of harm to others. See, e.g.,

Macie v. Helms, 156 N.H. 222, 224 (2007) (“The scope of the duty

of care imposed upon the defendants . . . is limited by what

risks, if any, are reasonably foreseeable.”); Manchenton v. Auto

Leasing Corp., 135 N.H. 298, 305-06 (1992) (holding that the

defendant “owed no common law duty to members of the general

public to remove his keys from his vehicle” because the risk of

harm to the general public created by failing to remove the keys

was not reasonably foreseeable). In other words, if a defendant

acts, and if that act creates a reasonably foreseeable harm to

another, he is charged with a duty to take reasonable care with

respect to that act. See Macie, 156 N.H. at 224.

Iron Mountain contends that a “relationship” between the

harmed party and the defendant is required to impose a duty of

care. A special relationship between a harmed party and

defendant may be used to impose a duty of care, if that

relationship shows the harm that occurred was reasonably

foreseeable to the defendant. See, e.g., Simpson v. Calivas,

139 N.H. 1, 5-6 (1994) (holding that an attorney’s duty of

reasonable care in drafting a contract extended to the intended

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beneficiary of that contract because that relationship created

an “obvious foreseeability of injury to the beneficiary”);

Jacobson v. Yoken’s, Inc., 104 N.H. 331, 333 (1962) (“The extent

of the defendant’s duty depended on the nature of the

relationship existing between the parties at the time of the

accident.”). That is to say, while the existence of a

particular type of relationship between the harmed party and the

defendant is a fact that can show that certain harms were

reasonably foreseeable to the defendant, it is not itself an

element of the duty of care. See Walls v. Oxford Mgmt. Co., 137

N.H. 653, 656 (1993) (“In some cases, a party’s actions give

rise to a duty. . . . In other cases, a duty to act exists

based on a special relationship between two parties. . . . In

either case, the scope of the duty imposed is limited by what

risks, if any, are reasonably foreseeable.”).

Here, Great Northern alleged that Iron Mountain provided

water service to the insureds’ property. Great Northern also

alleged that a problem with the water pressure caused water to

flood the insureds’ property. Nothing more than common sense is

necessary to conclude that harm to a property is reasonably

foreseeable to a business that provides water service to that

property. Whether Iron Mountain provided its water service

pursuant to a contract with a third party is irrelevant to

whether it owed Great Northern’s insureds a duty of care in

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providing water service to their property. Accordingly, Iron

Mountain’s argument that no duty of care exists under the

circumstances alleged by Great Northern lacks merit.

Conclusion

For the foregoing reasons, Iron Mountain’s motion for

judgment on the pleadings (Doc. No. 14) is denied.

SO ORDERED.

Andrea K. Johnstone

United States Magistrate Judge

September 19, 2019

cc: Christopher H. Boyle, Esq.

John P. Sherman, Esq.

Naomi L. Getman, Esq.

Heather S. Ward, Esq.

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