7ASR3d178

Series: 7ASR3d | Year: () | 7ASR3d178
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AMERICAN

SAMOA POWER AUTHORITY, and

TRAVELERS

INDEMNITY COMPANY as Subrogee of

AMERICAN

SAMOA POWER AUTHORITY, Plaintiffs,

 

v.

 

DEUTZ MWM FAR EAST (PTE) LTD., Defendant.

 

High

Court of American Samoa

Trial

Division

 

CA

No. 42-01

 

November

12, 2003

 

 

[1] An

affidavit filed in support of summary judgment that does not comply with Rule

56(e) may be stricken. 

 

[2] Court

refused to strike portions of memorandum of law filed in support of motion for

summary judgment where movant’s asserted grounds were that the memorandum

contained conclusory and unsupported statements and law cited in support of

motion to strike applied only to affidavits, not memoranda of law.

 

[3] Where

opposing party objected to exhibit submitted in support of summary judgment

motion and movant did not respond to objection, court properly excluded such

exhibit from considerations pursuant to T.C.R.C.P. 56(e).

 

[4] The court

may deny a party’s motion to strike when it has failed to specify the specific

portions of an affidavit that are objectionable.

 

[5] The parol

evidence rule “prohibits the admission of extrinsic evidence of prior or

contemporaneous oral agreements, or prior written agreements, to explain the

meaning of a contract.”

 

[6] T.C.R.C.P.

56(d) establishes a procedural mechanism whereby a district court can, with the

acquiescence of the parties, narrow the factual issues for trial. 

 

[7] The

standard for determining a Rule 56(d) motion is identical to the standard used

for determining a motion brought under Rule 56(c). 

 

[8] Under

T.C.R.C.P. 56(c), summary judgment is appropriate when the pleadings and other

supporting documents show that there is no genuine issue as to any material

fact and that the moving party is entitled to judgment as a matter of law.

 

[9] The party seeking

summary judgment bears the burden of showing there is no genuine issue of

material fact. 

 

[10] After the

movant has shown that there is no genuine issue of material fact, the

non-moving party must then affirmatively show there is a genuine issue for

trial.

 

[11] In

considering a motion for summary judgment, all inferences are construed in a

light most favorable to the non-moving party.

 

[12] When both parties file

cross motions for summary judgment, the court must consider each motion

separately and apply controverted facts in a light most favorable to the

nonmovant.

 

[13] Every action shall be prosecuted in the name of the real party in

interest.

 

[14] If a subrogee has paid an entire

loss suffered by the insured, it is the only real party in interest and must

sue in its own name. 

 

[15] If a subrogee has paid only part

of a loss, both the insured and insurer have substantive rights against the

tortfeasor which qualify them as real parties in interest.

 

[16] Express

warranties are interpreted according to general contract principles.

 

[17] Summary

judgment is properly used for interpreting a contract whose terms are

considered by opposing parties to be clear and unambiguous, despite

disagreement between the parties as to what the agreement provides.

 

[18] The

meaning of particular parts or words in a contract should be determined in

light of and consistent with the general purpose of the agreement.

 

[19] An

interpretation of a contractual provision that gives reasonable meaning to all

provisions is preferable to one that leaves part of the language useless or

inexplicable or creates surplusage.

 

[20] In

interpreting a contract, preference must be given to reasonable interpretations

as opposed to those that are unreasonable.

 

[21] Contracts should

be read in their entirety.

 

[22] Court will

not rewrite the parties’ agreement in order to fix a poorly worded contract.

 

[23] If a case

involves other defenses that raise no material issues of fact they may be the

subject of a partial summary adjudication in plaintiff’s favor in accordance

with the procedure prescribed in Rule 56(d).

 

[24] On a

motion for summary judgment, the burden on the moving party may be discharged

by ‘showing’—that is, pointing out to the district court—that there is an absence

of evidence to support the nonmoving party’s case.

 

[25] A party

opposing another’s motion for summary judgment will not be allowed to rest upon

his pleadings or the assertions of lawyers who have no personal knowledge of

the facts.

 

[26]

Comparative fault is an appropriate defense in a tort action, not a contract

one. 

 

Before

RICHMOND, Associate Justice and SAGAPOLUTELE, Associate Judge.

 

Counsel:          For Plaintiffs, Jeffrey Waller

                         For Respondent, Jennifer L. Joneson

 

ORDER

ON CROSS SUMMARY JUDGMENT

AND

RELATED PENDING MOTIONS

 

Plaintiffs

American Samoa Power Authority (“ASPA”) and Travelers Indemnity Company

(“Travelers”), as subrogee of ASPA, move pursuant to T.C.R.C.P. 56 for partial

summary adjudication on their breach of warranty claims against Defendant Deutz

MWM Far East (PTE), Ltd. (“Deutz”).[1]  Deutz cross moves for summary judgment on the

two claims for breach of warranty and also moves to dismiss ASPA from the lawsuit.  In addition, before the Court, are a number

of additional motions brought by the parties and discussed in detail below.

 

I.  MOTIONS TO STRIKE

 

A.  Deutz’s Motion to Strike

 

[1-2] Deutz moves to strike

portions of Travelers’ memorandum of law and exhibits 9 and 10 thereto.  Deutz argues that large portions of

Travelers’ memorandum of law should be stricken because Travelers makes

conclusory and unsupported statements in its partial motion for summary judgment.  However, none of the authorities cited by

Deutz supports its contention that portions of Travelers’ memorandum should be

stricken.  Rather, the cases cited by

Deutz merely demonstrate that an affidavit

filed in support of summary judgment that does not comply with Rule 56(e) may

be stricken.  Automatic Radio Mfg. Co. v. Hazeltine Research, 339 U.S. 827, 831

(1950), overruled in part by Lear,

Inc. v. Adkins, 395 U.S.

653 (1969); Wells Dairy, Inc. v. Travelers Indem. Co., 241

F. Supp. 2d 945, 955-58 (N.D. Iowa 2003); Servants

of Paraclete, Inc. v. Great Am. Ins. Co., 866 F. Supp. 1560, 1564-68 (D.N.M. 1994); Jewell-Rung Agency, Inc., v. Haddad Org., Ltd., 814 F. Supp. 337,

339 (S.D.N.Y. 1993).  Deutz does not seek

to strike a supporting affidavit but, rather, seeks to strike portions of

Travelers’ legal memorandum.  We refuse

to distort these cases by extending them to a party’s legal briefing.  Deutz’s motion to strike portions of

Travelers’ memorandum is denied.

 

[3] In addition, Deutz

claims that exhibits 9 and 10 to Travelers’ motion do not comply with the

requirements of T.C.R.C.P. 56(e), and Deutz moves to strike them as

inadmissible hearsay evidence.[2]  Exhibit 9 is a letter from ASPA to Deutz and

exhibit 10 is a letter from Deutz to ASPA. 

Travelers does not address the admissibility of these exhibits in its

response and fails to offer any exception to the hearsay rule that would allow

these exhibits to be considered as evidence. 

Nonetheless, we find that exhibit 10 is admissible under T.C.R.Ev. 801(d)(2)

as a party admission.  However, in the

absence of any explanation by Travelers to the contrary, we find exhibit 9 is

inadmissible hearsay evidence.  As such,

Deutz’s motion to strike is granted in part and denied in part.

 

B.  Travelers’ Motion to Strike

 

[4-5] Travelers moves to

strike all exhibits included with Deutz’s cross-motion for summary judgment

that are offered to show intent under the parol evidence rule.  Travelers fails to indicate specifically

which exhibits (or portions thereof) it seeks to exclude under the parol

evidence rule.  See, e.g., Underwood v. Waddell, 743 F. Supp. 1291,

1293 n.1 (S.D. Ind. 1990) (denying plaintiff’s motion to strike “for failure to

specify what specific portions of the affidavits are objectionable”); Seidelman Corp. v. Mollison, 10 F.R.D.

426, 428 (S.D. Ohio 1950) (“The Court cannot and should not be expected to go

through the . . . affidavit ‘with a fine-tooth comb’ and pick out the

‘certain portions’ which defendants . . . feel should be stricken.”).  Accordingly, Travelers’ motion to strike

Deutz’s exhibits is denied. 

 

II.  DEUTZ’S MOTION

FOR RELIEF FROM ORDER

 

Deutz moves

this Court, pursuant to T.C.R.C.P. 60(b)(1) and 60(b)(3), to vacate its October

24, 2002 order obliging Deutz to provide a surety bond.  Deutz argues that discovery has revealed

misrepresentations by ASPA’s counsel regarding ASPA’s claims and evidence

suggesting APSA and Travelers do not have a viable cause of action.  In response, Travelers agrees to reduce the

bond by $100,000, the amount ASPA was previously seeking for its unpaid

deductible.  Travelers claims the

remaining surety should remain intact in order to cover any adverse judgment

found in favor of Travelers against Deutz.

 

We agree with

Travelers and decline to relieve Deutz of its obligation to provide a surety

bond.  Deutz still faces the possibility

of an adverse judgment and therefore, the surety bond should remain

intact.  However, during the September

29, 2003 hearing, the parties agreed to reduce the bond by $100,000, the amount

attributable to the deductible that ASPA is no longer seeking to recover from

Deutz.  As such, Deutz’s motion for

relief from order is denied; however, the surety bond may be reduced by

$100,000 in accordance with our September 29, 2003 ruling. 

 

III.  DEUTZ’S MOTION FOR CONTEMPT

 

Deutz moves this Court to find

Travelers’ counsel in indirect contempt of court under H.C.R. 114 for failing

to dismiss ASPA and for pursuing non-existent legal theories.  As an initial matter, H.C.R. 114 requires “an

affidavit stating the facts constituting the contempt and an Order to Show

Cause re: Contempt must be filed with the Court.”  Deutz has failed to comply with these

procedural requirements.  Moreover, we do

not believe H.C.R. 114 was intended to be used in this manner.  Deutz’s motion would have been more

appropriately styled as a motion for sanctions under T.C.R.C.P. 11.  In any event, Deutz’s motion lacks any merit

and is denied.

 

IV.  SUMMARY JUDGMENT

 

A.  Background

 

ASPA is a

quasi-independent governmental agency in American Samoa.  A.S.C.A. § 15.0101.  Travelers is an Illinois corporation with its

principal place of business in Connecticut. 

Travelers insures some of ASPA’s equipment in the event of a covered

loss.  Deutz is a corporation organized

under the laws of Singapore but is no longer in business.

 

ASPA purchased

generating equipment for its Satala and Tafuna plants from Deutz.  The parties originally entered into a

contract on November 13, 1991.  On July 29,

1993, ASPA and Deutz entered into Change Order Number 2 (“Change Order No. 2”),

which revised the parties’ original contract. 

Change Order No. 2 provided for the sale and installation of a new

generating unit and accompanying equipment. 

In addition, Change Order No. 2 provided ASPA with an extended warranty

for certain parts.  At issue in this case

is the interpretation of the extended warranty provision in Change Order No. 2.

 

In 1999, the

crankshaft failed.  The parties dispute

whether or not the damages caused by the crankshaft failure are covered by the

extended warranty.  Deutz claims it is

not financially responsible under the terms of the warranty.  On the other hand, Travelers claims Deutz

breached its obligations under the warranty when it refused to compensate ASPA

for the damages.

 

Eventually,

ASPA replaced the generator.  Travelers,

ASPA’s insurer, compensated ASPA for the replacement of the generator minus a

$100,000 deductible.[3]  In the initial complaint, Travelers brought

this breach of warranty action as the subrogor of ASPA, and ASPA sought to

recover its deductible.  Travelers has

since filed an amended complaint in which ASPA essentially abandons its claim

for its $100,000 deductible.

 

On July 8,

2003, Travelers moved for partial summary judgment with respect to various

issues regarding the breach of warranty claims. 

On September 4, 2003, Deutz responded to Travelers’ motion and filed its

cross-motion for summary judgment on the breach of warranty claims and

requested that ASPA be dismissed from this action.

 

B. 

Standard of Review

 

[6-7] Since Travelers is

seeking partial summary adjudication, its motion must be considered pursuant to

T.C.R.C.P. 56(d).  See, e.g., Wing Hop Lee, Ltd. v. Soo, 30 A.S.R.2d

76, 77 (Trial Div. 1996).  Rule 56(d)

“establishes a procedural mechanism whereby a district court can

. . . with the acquiescence of the parties, narrow the factual issues

for trial.”  Aurelio v. R.I. Dep’t of Admin., 985 F. Supp. 48, 53 (D.R.I. 1997)

(quoting Rivera-Flores v. P.R. Tel. Co., 64 F.3d 742, 747 (1st Cir.

1995)).  The standard for determining a

Rule 56(d) motion is identical to the standard used for determining a motion

brought under Rule 56(c).  Id. 

 

[8-11] Deutz brings its

motion for summary judgment pursuant to T.C.R.C.P. 56(c).  According to T.C.R.C.P. 56(c), summary

judgment is appropriate when the pleadings and other supporting documents “show

that there is no genuine issue as to any material fact and that the moving

party is entitled to judgment as a matter of law.”  The party seeking summary judgment bears the

burden of showing there is no genuine issue of material fact.  Celotex

Corp. v. Catrett, 477 U.S. 317, 323 (1986). 

The non-moving party must then affirmatively show there is a genuine

issue for trial.  Id. at 324.  “[A]ll

inferences are construed in a light most favorable to the non-moving

party.”  Am. Samoa Power Auth. v. Nat’l Pac. Ins. Co., 30 A.S.R.2d 145,

146-47 (Trial Div. 1996); see also Pal

Air Int’l, Inc. v. Porter, 30 A.S.R.2d 104, 105 (Trial Div. 1996).

 

[12]When both parties file

cross motions for summary judgment, the court must consider each motion

separately and apply controverted facts in a light most favorable to the

nonmovant.”  Stewart v. Nation Lease of Kansas City, Inc., 920

F. Supp. 1188, 1202 (D. Kan. 1996).

 

C.  Discussion

 

1.  Deutz’s Motion for

Summary Judgment to Dismiss ASPA

 

Deutz seeks to

dismiss ASPA from this action because ASPA no longer wishes to pursue its claim

to recover its unpaid $100,000 deductible. 

Deutz does not challenge Travelers’ ability to sue as the subrogee of

ASPA but, rather, claims that Travelers must sue in its own name.[4]  In response, Travelers has filed an amended

complaint in which ASPA abandons its claim for the deductible, and Travelers

now is the only party seeking relief. 

Travelers asserts that the Subrogation Receipt entitles it to sue in

ASPA’s name.  While this may be true,

Travelers purports to sue both in ASPA’s name and in its own name as the

subrogor of ASPA.

 

[13-15] According to

T.C.R.C.P. 17(a), “[e]very action shall be prosecuted in the name of the real

party in interest.”  In United States v. Aetna Casualty & Surety

Co., 338 U.S. 366 (1949), the Supreme Court noted:

 

If the subrogee has paid an entire

loss suffered by the insured, it is the only real party in interest and must

sue in its own name.  If it has paid only

part of the loss, both the insured and insurer . . . have substantive

rights against the tortfeasor which qualify them as real parties in interest.

 

Id.

at 381 (citation omitted); see also

Travelers Ins. Co. v. Riggs, 671

F.2d 810, 812-13 (4th Cir. 1982); Wattles

v. Sears, Roebuck & Co., 82

F.R.D. 446, 448-50 (D. Neb. 1979).  In

the original complaint, ASPA sued in its own name to recover its deductible and

Travelers sued as the partial subrogee to ASPA’s remaining claim.  See,

e.g., Interocean Ships, Inc. v. Samoan Gases, 24 A.S.R.2d 108, 110-11 (Trial Div. 1993).  However, because ASPA no longer seeks

reimbursement of its deductible, it is no longer a real party in interest in

this case.  Assuming Travelers’ assertion

that it can sue in ASPA’s name is correct, why did Travelers bring suit in its

own name in both the original and amended complaint?  Under Rule 17(a), Travelers, as the subrogee

for ASPA, is the real party in interest in this action.  Accordingly, ASPA’s name shall be stricken

from future pleadings.[5] 

 

2.  The Warranty

 

[16-17]

Travelers and Deutz seek partial summary adjudication and summary judgment

respectively, arguing different interpretations of the warranty.  Contract interpretation is well suited to

decision by summary judgment.  See Enron

Oil Trading & Transp. Co. v. Walbrook Ins. Co., 132 F.3d 526, 530 (9th

Cir. 1997); ECHO, Inc. v. Whitson Co., 52 F.3d 702, 705 (7th Cir.

1995).  “Express warranties are

interpreted according to general contract principles.”  Bay

Lines, Inc. v. Stoughton Trailers Inc., 838 So. 2d 1013, 1018 (Ala.

2002).  Both parties agree that the

warranty is unambiguous; however, the parties have vastly different interpretations

of the warranty.  “Summary judgment is

properly used for interpreting a contract whose terms are considered by

opposing parties to be clear and unambiguous, despite disagreement between the

parties as to what the agreement provides.” 

Stradling v. Southland Corp.,

924 F. Supp. 38, 40 (M.D. Penn. 1996); see

also Klamath Water Users Prot. Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th

Cir. 1999); ECHO, Inc., 52 F.3d at

705.  We have considered the evidence and

agree with the parties that the warranty is unambiguous and therefore, ripe for

our interpretation.

 

The parties primarily dispute the

interpretation of two parts of the extended warranty: (1) the parties dispute

proper interpretation of the warranty coverage for years 6-10 and (2) the

parties dispute whether a condition precedent existed which required ASPA to

perform preventative maintenance in years 6-10. 

The language of the extended warranty for years 6-10 is as follows:

 

YEARS 6-10.  During the five (5) year period following the

four (4) year extended warranty the contractor shall warrant the following

parts against failure or defect on a pro-rata basis based upon a useful life of

fifteen (15) years . . . Crankshaft . . . .  In the event of defect in any of these parts,

or failure as a result of such defect, during the coverage period ASPA shall be

entitled to credit against the replacement cost of the defective and/or damaged

equipment in an amount equal to the percentage of assumed useful life then remaining

on the date of discovery of defect or failure as a result of defect.

 

Travelers argues that the warranty

covers the crankshaft in the event of either a failure or defect.  Deutz argues that the warranty only covers a

failure that is the result of a defect. 

We agree with Deutz.

 

[18]

Travelers’ position fails to view the warranty provision in its entirety but,

rather, parses out the “failure or defect” language to create what we believe

is an unreasonable interpretation.  “The

meaning of particular parts or words in a contract should be determined in

light of and consistent with the general purpose of the agreement.”  Eliasen

v. Itel Corp., 883 F. Supp. 280, 289 (N.D. Ill. 1995).  We believe the warranty when read in its

entirety demonstrates that the parties intended the warranty to cover the

crankshaft in the event of a defect or a failure as a result of such

defect. 

 

[19-20]

The language in the warranty which describes the remedy for a failure as a

result of defect or for a defect in a covered part is instructive.  The remedy sentence indicates that ASPA will

be entitled to a specific sort of recovery in the event of a defect or a

failure as a result of such defect.  Nowhere

is there any language indicating another remedy is available for a failure

absent a defect.  Travelers argues that

this means the parties intended for the remedy to be unlimited in the event of

a failure without a defect.  We think

this interpretation is unreasonable.  Kennewick Irrigation Dist. v. United States, 880 F.2d 1018, 1032 (9th Cir. 1989)

(“Preference must be given to reasonable interpretations as opposed to those

that are unreasonable . . . .”) (citation omitted); Eliasen, 883 F. Supp. at 289-90 (“[A]n interpretation that gives

reasonable meaning to all provisions is preferable to one that leaves part of

the language useless or inexplicable or creates surplusage.”).

 

Plaintiffs suggested interpretation

expanding the warranty to cover any failure does not comport with the warranty

when read in its entirety and is unreasonable. 

As such, we find that in order for Travelers to recover on its breach of

warranty claim, it must prove either a defect in the crankshaft or a failure in

the crankshaft as a result of such defect. 

We believe this is a material issue of fact that should be reserved for

trial.[6] 

 

The parties also disagree as to whether

the warranty contained a condition precedent requiring ASPA to perform

preventative maintenance.  Deutz

maintains that the warranty was only effective, “so long as ASPA shall perform the

preventative maintenance program recommended by the manufacturer(s), as

established by the contractor in commissioning and pursuant to its service

contract.”  Travelers argues that the “so

long as” language was in the provision covering years 2-5 and was only

applicable to those years.  We agree with

Travelers. 

 

The disputed language is found in

section 20.1 of the warranty, in the list of coverage for years 2-5.  The part of the warranty covering years 6-10

is void of this language or any language regarding preventative maintenance.

 

[21-22]

Contracts should be read in their entirety; however, there is no language in

the warranty to indicate the parties intended the condition precedent to apply

to years 6-10.  See, e.g., Emerg. Med. Care, Inc. v. Marion Mem. Hosp.,

94 F.3d 1059, 1061 (7th Cir. 1996); Kennewick

Irrigation Dist., 880 F.2d at 1032. 

In fact, based on the language in the warranty, the parties specifically

limited the preventative maintenance provision to years 2-5.  Although we may feel it would have been

prudent for Deutz to impose a preventative maintenance requirement in years

6-10, we will not rewrite the parties’ agreement in order to fix a poorly

worded contract.  See, e.g., Pennbarr Corp. v. Ins. Co. of N. Am.,

976 F.2d 145, 151 (3d Cir. 1992) (“[Courts] may not make a different or better

contract than the parties themselves saw fit to enter into.”); Towers Hotel Corp. v. Rimmel, 871 F.2d

766, 774 (8th Cir. 1989) (“[Courts] are to determine what the parties intended

by what they said and not what they might have said or what perhaps they should

have said.”) (citations omitted).  As

such, we find that the warranty’s preventative maintenance provision does not

apply to years 6-10.

 

In sum, Deutz’s motion for summary

judgment on counts one and two of Travelers’ amended complaint is denied.  Whether or not the crankshaft was defective

or failed as a result of such defect is a fact issue more properly reserved for

trial.    

 

3.  Deutz’s Affirmative Defenses

 

[23]

Travelers seeks partial summary adjudication with respect to Deutz’s

affirmative defenses.  “[I]f [a] case

involves other defenses that raise no material issues of fact they may be the

subject of a partial summary adjudication in plaintiff’s favor in accordance

with the procedure prescribed in Rule 56(d).” 

10B Charles Alan Wright, Arthur R.

Miller & Mary Kay Kane, Federal Practice and Procedure § 2734 (3d

ed. 1998); see also URI Cogeneration

Partners, L.P. v. Bd. of Governors for Higher Educ., 915 F. Supp. 1267, 1279 (D.R.I. 1996) (“[I]n order to distill the

issues to be tried, the Court may bar certain legal arguments and affirmative

defenses if it is clear that they run counter to the governing law.”); Koch Indus., Inc. v. United Gas Pipe Line

Co., 700 F. Supp. 865, 867 (M.D. La. 1988) (granting plaintiff’s motion for

partial summary judgment on defendant’s affirmative defenses).

 

[24-25]

Deutz bears the burden of proving its affirmative defenses at trial.  Therefore, Travelers does not have the burden

to produce any evidence demonstrating the absence of a genuine issue of

material fact with respect to Deutz’s defenses. 

Rather, “the burden on the moving party may be discharged by

‘showing’—that is, pointing out to the district court—that there is an absence

of evidence to support the nonmoving party’s case.”  Celotex

Corp., 477 U.S. at 323.  Indeed,

Travelers claims that Deutz has no evidence to support its affirmative

defenses.  As such, Deutz “must set forth

specific facts showing that there is a genuine issue for trial.”  T.C.R.C.P. 56(e).  This showing must go beyond the

pleadings.  Id.  “[A] party opposing

another’s motion for summary judgment will not be allowed to rest upon his

pleadings or the assertions of lawyers who have no personal knowledge of the

facts.”  Carpenters Fiji, Ltd. v. Pen, 28 A.S.R.2d 202, 203 (Trial Div.

1995) (citation omitted).

 

Deutz’s first affirmative defense is

that ASPA failed to mitigate damages. 

While this is a viable defense in contract actions, Deutz has failed to

provide any evidence that would support this defense.  Deutz argues in its supporting memorandum

that oils and metals were found in the crankshaft and claims that ASPA failed

to maintain the machine.  However, Deutz

failed to provide the sort of supporting evidence required under Rule 56(e) to

maintain these allegations.  Absent any

shred of evidence that ASPA failed to mitigate damages, this defense must fail.

 

Deutz’s second affirmative defense

includes both laches and estoppel[7].  Deutz offers no response to Travelers’

arguments and suggests that Travelers has not met its burden on this

issue.  Deutz bears the burden at trial

of proving this affirmative defense. 

After Travelers argued that Deutz has no evidence to support these

defenses, Deutz, as the non-moving party, is required to come forward with some

evidence of a dispute of material fact. 

Deutz has failed to do so and therefore, the affirmative defenses of

laches and estoppel also fail.  See, e.g., Fresnel Tech., Inc. v.

Rokonet Indus. USA, Inc., No.

4:01-CV-1091-A, 2003 WL 21047137, at *4 (N.D. Tex. May 7, 2003) (granting

judgment to plaintiff because the defendant failed to “come forward with

summary judgment evidence to raise a genuine fact issue”).

 

Deutz’s third affirmative defense is

that ASPA failed to fulfill a condition precedent by replacing the generator

instead of pursuing a warranty claim or providing notice of defect or a

reasonable demand.  Travelers claims

Deutz has no evidence to support this defense. 

Deutz’s response does not address this “condition precedent” but,

rather, refers to other alleged conditions, specifically, that the component

must be listed in the warranty and that a defect in the warranted component

must have caused the failure.  As such,

Deutz has failed to point to any evidence supporting this defense.  This defense fails.

 

Deutz’s fourth affirmative defense is

that the warranty was voided because ASPA neglected to maintain or misused the

equipment.  Again, Travelers argues that

Deutz has no evidence to support this defense. 

In response, Deutz fails to offer evidence to establish that ASPA failed

to perform maintenance or misused the equipment.  Deutz’s bare assertion in its memorandum that

oils and metals were found in the generator standing alone does not suffice to

defeat Travelers’ motion. 

 

[26]

Deutz’s fifth affirmative defense is that ASPA negligently maintained and

operated the equipment and therefore, any damage should be reduced according to

ASPA’s comparative fault.  Comparative fault

is an appropriate defense in a tort action, not a contract one.  A.S.C.A. § 43.5101; see also United States v. NHC Health Care Corp., No. 00-3128-CV-S-4-ECF, 2000 WL

33146582, at *2 (W.D. Mo. Nov. 15, 2000); Bank

Brussels Lambert v. Chase Manhattan Bank, No. 93 Civ. 5298(LMM), 1999 WL

710778, at *3 (S.D.N.Y. Sept. 10, 1999). 

Moreover, Deutz has failed to present any evidence to support its

assertion.  Accordingly, Deutz’s fifth

affirmative defense fails as a matter of law.

 

V.  ORDER

           

1. Deutz’s motion for relief from order

is denied.

 

2. Deutz’s motion to strike is granted

in part.  Travelers’ exhibit no. 9 is

stricken from the record.

 

3. Travelers’ motion to strike is

denied.

 

4. Deutz’s motion for contempt is

denied.

 

5. Deutz’s motion for summary judgment

is denied as to counts 1 and 2 of Travelers’ amended complaint.  Deutz’s motion for summary judgment to

dismiss ASPA is denied.  However, because

ASPA is no longer a party plaintiff to these proceedings, its name will be

stricken from future pleadings.

 

6. Travelers’ motion for partial

summary adjudication is granted in part. 

Deutz’s affirmative defenses 1-5 are stricken. 

 

It is so ordered.

 

**********

 



[1] Since the filing

of its motion for partial summary judgment, Travelers has filed an amended

complaint essentially abandoning any claim by ASPA.  As such, we refer to Travelers as the moving

party throughout this order.  See discussion infra.

[2] Rule 56(e) “does

not require an unequivocal conclusion that the evidence will be admissible at

trial as a condition precedent to its consideration on a summary judgment

motion.”  Reed v. Ford Motor Co., 679 F. Supp. 873, 874 (S.D. Ind. 1988).

[3] Travelers claims

it paid ASPA approximately $1.6 million.

[4] Travelers, as

ASPA’s insurer, “by a right of subrogation, steps into the shoes of the insured

and can recover only if the insured could have recovered.”  E.H.

Ashley & Co. v. Wells Fargo Alarm Servs., 907 F.2d 1274, 1277 (1st Cir.

1990).  Moreover, a subrogee “may assert

claims against the subrogor’s contractual obligor.”  Vitkus

v. Beatrice Co., 127 F.3d 936, 942 (10th Cir. 1997) (quoting Dome Petroleum Ltd. v. Employers Mut. Liab. Ins. Co., 767 F.2d 43,

45 (3d Cir. 1985)); see also Am.

Employers Ins. Co. v. City of Chicago, No. 02 C 9304, 2003 WL 21254266, *1

(N.D. Ill. May 29, 2003).

[5] We decline to

grant Deutz summary judgment dismissing ASPA from this case.  The more appropriate action is to strike

ASPA’s name from the pleadings since it is no longer a party plaintiff. 

[6] Travelers asks this

Court to find that its remedies are not limited based on the express

warranty.  We decline to do so.  Travelers is not only limited by the language

of the warranty (see discussion supra) but also is limited by law.  “[A]s a general rule, an insurer can recover

by way of subrogation against a wrongdoer responsible for a loss only such

amounts as it has been compelled to pay under its policy.”  See

Lee R. Russ & Thomas F. Segalla,

16 Couch on Insurance § 223:85 (3d

ed. 2000).  Accordingly, we deny Travelers’

request for partial summary adjudication on this ground.

[7] Although Deutz discusses the legal standards of

estoppel in its memorandum, it fails to offer facts to show that it has met or

could possibly meet each of the elements listed above.