United States District Court, W.D. Missouri, Western Division
ORDER AND OPINION (1) DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND (2) GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
ORTRIE D. SMITH, Senior District Judge.
Pending are motions (1) from Plaintiff, seeking partial summary judgment and (2) from Defendant, seeking summary judgment. Based on the undisputed facts, the Court (1) denies Plaintiff's motion (Doc. # 70) and (2) grants Defendant's motion (Doc. # 78).
Plaintiff is a statutory entity, created by Missouri law to provide financing for community improvement projects. As an agent for the City of Kansas City, Missouri, Plaintiff oversaw the design and construction of a parking garage adjacent to the Kauffman Center for the Performing Arts. To that end, in February 2008, Plaintiff retained Moody-Nolan, Inc. ("MNI") to provide architectural and design services and Carl Walker, Inc. ("Walker") to provide structural design services. In October 2009, Plaintiff retained Walton Construction Company - a CORE Company, LLC ("Walton") to serve as the general contractor. Plaintiff's contract with Walton required Walton to obtain a Builder's Risk Policy and to have Plaintiff listed as an additional insured on the policy. Walton fulfilled this obligation by obtaining a Builder's Risk Policy from Defendant Ace American Insurance Company.
The project included installation of a fifty foot high concrete retaining wall between the garage and a limestone rock face to the north of the garage. This effort included placement of flowable concrete fill in the area between the retaining wall and the limestone embankment. MNI and Walker collectively provided both the design for the retaining wall and the specifications for the back-fill. As originally formulated, the specifications called for "no more than 18 inches of fluid fill... against the wall." However, Walton requested approval for an alternate mix for the fill, and Walker approved an increase in the amount of fill, permitting up to thirty-six inches of fill between the wall and the embankment.
Construction of the wall commenced sometime in September 2010. During installation of the fill, the wall cracked and "deflected and bulged suddenly and thereby required investigation, repair and replacement." Amended Complaint, ¶ 12. Plaintiff retained the services of a structural engineer (James Hauck) to determine why the wall failed. Hauck determined that the wall collapsed because Walker's design permitted too much fill between the wall and the embankment. Hauck explained at his deposition that the wall "was deflected out about 8 inches from the vertical, which was not an intended design condition" and his "structural analysis... showed that the wall failed under those loads. The stresses exceeded the allowable values of the materials...." Hauck Dep. at 30. In his written report, Hauck opined "that the retaining wall suddenly failed due to the cumulative moment in the wall exceeding the cracking capacity of the wall during the" backfilling. Whether the pressure behind the wall was caused by (1) excess fill in the now-enlarged space or (2) water accumulating in the now-enlarged space is matter of no consequence; clearly, it was pressure caused by the accumulation of one, the other, or both that caused the wall to fail, and the accumulation could occur only because there was sufficient space behind the wall to permit the accumulation. Hauck concluded the wall failed because of Walker's approval of the change in the plans, and that this change was inappropriate and should not have been approved:
[T]he increased fill lift height approved by Carl Walker caused the maximum moment in the failed retaining wall to exceed the cracking moment of the wall during backfilling operations. Had Carl Walker evaluated the wall deflections using the procedures outlined in ACI 318, Section 220.127.116.11 using the specified 28-day compressive strength of the concrete, they would have discovered that the original design load would have caused the wall to crack.
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It is our professional opinion that the retaining wall at the Art's District Garage failed as the direct result of Carl Walker's failure to consider the effects of calculated wall deflection on the specified backfilling sequence. At the time of the failure, the cumulative moment in the wall exceeded the cracking capacity of the wall causing an abrupt decrease in wall stiffness and a corresponding increase in wall deflection. This increased deflection allowed the liquid flowable fill to get between the previously placed fill and the back face of the wall, thereby causing it to fail.
Plaintiff concedes Walker's approval of a change to thirty-six inches of fill constituted a design error, but insists the defective design was not the direct cause of the wall's failure and instead insists the pressure build-up caused the failure.
The Builder's Risk policy states that, subject to the exclusions contained therein, it "insures against risks of direct physical loss or damage to property of every kind and description intended to become a permanent part" of the project, and there is no question that the retaining wall qualifies as such property. The policy's exclusions are set forth in Part D, where thirty-one exclusions appear. The last five exclusions appear below the following provision (which is in all-caps in the policy): "This policy does not insure loss or damage caused by any of the following, unless direct physical loss or damage by an insured cause of loss ensues and then this policy insures only such ensuing direct physical loss or damage." One of the exclusions appearing below this provision excludes coverage for "[e]rror, omission or deficiency in design, plans, specifications, engineering or surveying." In August 2013 Plaintiff requested coverage for the wall's failure, and Defendant denied coverage in November 2013. Defendant's denial indicated there had been no change in the facts since it last considered and rejected a claim for the wall's failure, which occurred when Walton previously submitted a similar claim. In that denial, Defendant advised Walton that coverage was being denied because the Walton's defective design allowed pressure to build up, either because of excessive fill or because of excessive water build-up; either way, Defendant viewed the wall's failure to be caused by the defective design and that no insurable cause occurred thereafter.
Plaintiff filed this suit, and in its Amended Complaint asserts claims for breach of contract (Count I) and vexatious refusal to pay (Count II). Plaintiff seeks partial summary judgment on the issue of liability on Count I, while Defendant seeks summary judgment on both counts.
A moving party is entitled to summary judgment on a claim only if there is a showing that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See generally Williams v. City of St. Louis, 783 F.2d 114, 115 (8th Cir. 1986). "[W]hile the materiality determination rests on the substantive law, it is the substantive law's identification of which facts are critical and which facts are irrelevant that governs." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Wierman v. Casey's Gen. Stores, 638 F.3d 984, 993 (8th Cir. 2011) (quotation omitted). In applying this standard, the Court must view the evidence in the light most favorable to the non-moving party, giving that party the benefit of all inferences that may be reasonably drawn from the evidence. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588-89 (1986); Tyler v. Harper, 744 F.2d 653, 655 (8th Cir. 1984), cert. denied, 470 U.S. 1057 ...