Dur v. Western Branch Diesel, Inc. , 240 F. App'x 568 ( 2007 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1728
PHILIP A. DUR,
Plaintiff - Appellant,
versus
WESTERN BRANCH DIESEL, INCORPORATED,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:05-cv-01306-GBL)
Argued: May 24, 2007 Decided: July 9, 2007
Before NIEMEYER and DUNCAN, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
ARGUED: John F. O’Connor, Jr., STEPTOE & JOHNSON, L.L.P.,
Washington, D.C., for Appellant. Thomas Saunders Berkley,
VANDEVENTER & BLACK, L.L.P., Norfolk, Virginia, for Appellee. ON
BRIEF: Frank H. Griffin, IV, STEPTOE & JOHNSON, L.L.P., Washington,
D.C., for Appellant. Edward J. Powers, VANDEVENTER & BLACK,
L.L.P., Norfolk, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
This is a negligence action under Virginia substantive law.
The district court granted summary judgment in favor of the
defendant. The plaintiff has appealed. We affirm.
I.
This negligence action stems from an electrical fire on board
a boat. Philip Dur (Plaintiff), a retired Rear Admiral in the
United States Navy, owned the boat at the time of the fire.
Plaintiff had purchased the boat, named the “DeGrasse,” from the
Navy in 1998. The DeGrasse, which Plaintiff has described as an
old admiral’s launch, had been assigned to Plaintiff when he was on
active duty. Following Plaintiff’s retirement, the Navy
decommissioned, stripped, and sold the DeGrasse “as is” to
Plaintiff. (J.A. 34). Plaintiff subsequently contracted with Moon
Engineering (General Contractor) in Norfolk, Virginia, to perform
“a hull, mechanics and electronics retro fit” on the DeGrasse in
order that Plaintiff could use the DeGrasse as a personal
watercraft. Id. Throughout this opinion, we refer to this
contract as “the Retrofit Contract.”
Upon what General Contractor and Plaintiff believed to be the
completion of the retrofitting work on the DeGrasse, Plaintiff
successfully piloted the DeGrasse from Norfolk to Alexandria,
Virginia. During the voyage, Plaintiff noticed that the DeGrasse’s
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tachometer had stopped working. Upon arriving in Alexandria,
Plaintiff also noticed that a fan belt running between the
alternator and the flywheel on the DeGrasse’s starboard engine was
missing, and that there was “melted wiring leading from the amp
meter, to the starter and then to the battery switch.” (J.A. 34).
Plaintiff then contacted General Contractor and “demanded changes.”
Id. See also (J.A. 24-25, Plaintiff’s Opposition to Defendant’s
Motion For Summary Judgment) (“When Admiral Dur observed that
additional electrical work needed to be completed, he contacted
Moon Engineering to insist that the work be done.”).
General Contractor “agreed to ensure that the DeGrasse’s
electrical system was repaired” and subcontracted with Western
Branch Diesel, Inc. (Subcontractor) to perform the repair work in
Alexandria. (Plaintiff’s Opening Br. at 4). Plaintiff admits that
he never had a written contract with Subcontractor, nor does
Plaintiff allege that he ever had an oral contract with
Subcontractor.
Subcontractor performed work on the DeGrasse’s electrical
system on September 27-28, 2001. On October 1, 2001, while still
in the custody of Subcontractor in Alexandria, the DeGrasse caught
fire and suffered what Plaintiff describes in his complaint in the
present negligence action as “significant damage.” (J.A. 6). The
fire caused no personal injuries. The record contains no details
regarding the actual damage the DeGrasse suffered in the fire.
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On November 15, 2005, Plaintiff filed the present diversity
action in the United States District Court for the Eastern District
of Virginia against Subcontractor, alleging that Subcontractor’s
negligence had caused the fire aboard the DeGrasse. Among the
allegations of negligent conduct, Plaintiff alleged that
Subcontractor had been negligent by, inter alia, “failing to
properly service, repair and/or alter the electrical system in the
DeGrasse” and “failing to complete the work, and by allowing the
boat’s electrical system to remain in a dangerous condition.”
(J.A. 7). The complaint demanded judgment against Subcontractor
“in an amount no less than $200,000, together with interest and the
cost of this action, and such other and further relief as this
Court deems just and proper.” (J.A. 8).
Subcontractor moved for summary judgment. In moving for
summary judgment, Subcontractor argued that because it performed
its work aboard the DeGrasse pursuant to contract, Plaintiff could
not pursue a negligence claim against it without demonstrating a
separate common-law duty of care. In response, Plaintiff argued
that, contrary to Subcontractor’s argument, contractors owe a
common-law duty of care, separate and apart from their contractual
duties, to use ordinary skill and care not to create a hazardous
condition that could physically injure persons or damage property.
Moreover, relevant to one of the issues on appeal, Plaintiff’s
written opposition to Subcontractor’s motion for summary judgment
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included the following footnote regarding third-party beneficiary
status:
It is possible that Admiral Dur is a third-party
2
beneficiary under the contractual relationship between
[Subcontractor] and [General Contractor]. However,
because a common-law duty of care exists even for those
who are actually contracting parties, the Court need not
resolve this issue. Moreover, [Subcontractor] has not
alleged in its motion that [Plaintiff] is a third-party
beneficiary or argued that such status would have any
relevance to its motion.
(J.A. 30). In its summary judgment reply brief, Subcontractor
responded that Plaintiff’s negligence claim against it failed
because the record contained no evidence that the DeGrasse had
suffered damage caused by the fire beyond the subject of the
Retrofit Contract. In support of this argument, Subcontractor
cited and relied upon Sensenbrenner v. Rust, Orling & Neale,
Architects, Inc., 374 S.E.2d 55, 58 (Va. 1988).
The summary judgment record only consists of: (1) Plaintiff’s
complaint; (2) Subcontractor’s answer; (3) an affidavit by John
Beavers, service manager for Subcontractor, to the effect that
Subcontractor only worked on the DeGrasse “because of a contract to
perform repairs and service of the vessel’s electrical system,”
(J.A. 22); (4) Plaintiff’s admission, pursuant to a request to
admit, that no written contract existed between him and
Subcontractor; (5) the “INTERVIEW SUPPLEMENT” prepared by an
investigator of the Alexandria Fire Department detailing his post-
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fire interview with Plaintiff, (J.A. 34-36); and (6)
Subcontractor’s work records concerning the DeGrasse.
The district court granted summary judgment in favor of
Subcontractor. Plaintiff noted the present timely appeal.
II.
The sole cause of action in this case is Plaintiff’s
negligence cause of action against Subcontractor under Virginia
substantive law. In order to sustain a cause of action based on
negligence under Virginia law, a plaintiff must establish “the
existence of a legal duty, a breach of the duty, and proximate
causation resulting in damages.” Atrium Unit Owners Ass’n v. King,
585 S.E.2d 545, 548 (Va. 2003). The primary issue presented in
this appeal is whether there is a legal duty in tort owed by the
Subcontractor to Plaintiff. The determination of whether
Subcontractor owed Plaintiff a legal duty in the context of the
electrical work Subcontractor performed on the DeGrasse in its role
as a subcontractor is a pure question of law. Burns v. Johnson,
458 S.E.2d 448, 451 (Va. 1995) (“The question whether a duty of
care exists in a negligence action is a pure question of law.”).
We review the grant of summary judgment de novo. Higgins v.
E.I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir. 1988).
A motion for summary judgment may be granted if “there is no
genuine issue as to any material fact and . . . the moving party is
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entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c).
In reviewing a district court’s grant of summary judgment, we must
construe the facts in the light most favorable to the non-moving
party; here, Plaintiff. Smith v. Virginia Commonwealth Univ., 84
F.3d 672, 675 (4th Cir. 1996) (en banc).
In granting summary judgment in favor of Subcontractor, the
district court primarily relied upon Sensenbrenner v. Rust, Orling
& Neale, Architects, Inc., 374 S.E.2d 55 (Va. 1988). In
Sensenbrenner, the plaintiffs contracted with a builder for
construction of a house and installation of an enclosed swimming
pool. Id. at 56. The builder in turn entered into a subcontract
with an architectural firm to design the home, the pool, and its
enclosure. Id. After the architectural firm had furnished the
requisite plans, the builder entered into a subcontract with a
swimming pool contractor for construction of the swimming pool.
Id. Various components of the swimming pool proved to be
defective, causing damage to the swimming pool itself and to the
plaintiffs’ house. Id.The plaintiffs sued the architectural firm and the swimming
pool subcontractor for negligence. The Sensenbrenner court held
that the plaintiffs could not sustain a negligence cause of action
against the architectural firm nor the swimming pool subcontractor,
reasoning:
The plaintiffs here allege nothing more than
disappointed economic expectations. They contracted with
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a builder for the purchase of a package. The package
included land, design services, and construction of a
dwelling. The package also included a foundation for the
dwelling, a pool, and a pool enclosure. The package is
alleged to have been defective--one or more of its
component parts was sufficiently substandard as to cause
damage to other parts. The effect of the failure of the
substandard parts to meet the bargained-for level of
quality was to cause a diminution in the value of the
whole, measured by the cost of repair. This is a purely
economic loss, for which the law of contracts provides
the sole remedy.
Id. at 58. Sensenbrenner squarely applies the economic loss rule,
which rule provides that a cause of action in which only economic
damages are sought (i.e., the benefit of a contractual bargain) can
only be maintained against a party with whom the plaintiff has
privity of contract. Id. The Sensenbrenner court also reiterated
that Virginia Code § 8.01-223, “which abolishes the lack-of-privity
defense in actions for the recovery of damages to persons or
property resulting from negligence,” has “no application to claims
for purely economic losses.” Id. at 56-57. Accordingly, Virginia
Code § 8.01-223 offered no aid to the plaintiffs in Sensenbrenner.
In the present case, the district court applied Sensenbrenner
as follows:
The facts here are very similar to those in
Sensenbrenner. [Plaintiff] contracted with [General
Contractor] to perform electrical work on his boat.
(Pl.’ Opp., at 2). Like the contractor in Sensenbrenner,
[General Contractor] in turn hired a subcontractor,
[Subcontractor], to perform the contracted services. In
performing its duties, [Subcontractor] destroyed
[Plaintiff’s] boat. As the Court stressed in
Sensenbrenner, the sole area of law available to the
Plaintiff here is contract law because the damage caused
to Plaintiff’s property was solely the property subject
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to the contract and the losses were purely economic. As
Plaintiff’s complaint states, “[Plaintiff] contracted for
repairs, service, replacement and alterations of the
electrical system” for his boat. (Pl.’s Complaint, at
2.) It was precisely these activities that gave rise to
the damages to Plaintiff’s boat. And the damages that
Plaintiff suffered were exclusively to the boat.
Plaintiff does not allege that any other injury to
persons or property not contemplated by the contract in
fact occurred.
The Court holds that Plaintiff may only recover
under contract law because Plaintiff’s losses were within
the contemplation of the contract to repair his boat and
did not cause injury to persons or property beyond the
contemplation of the agreement.
(J.A. 55-56).
We agree with the district court that Sensenbrenner forecloses
Plaintiff’s negligence cause of action against Subcontractor.
Viewing the evidence in the light most favorable to Plaintiff, the
record only supports the conclusion that the work performed by
Subcontractor on the DeGrasse’s electrical system was performed to
fulfill General Contractor’s obligations under the Retrofit
Contract. The General Contractor did not initially fulfill its
obligation under the Retrofit Contract to provide the DeGrasse with
a properly working electrical system, and therefore, General
Contractor subcontracted with Subcontractor to fulfill that
obligation once it became clear that further repair was needed.
Therefore, the damage to the DeGrasse caused by the fire fell
within the scope of the contractual package, and thus, amounted to
nothing more than economic loss for which the law of contracts
provides Plaintiff the sole remedy.
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Moreover, the record is completely absent of any evidence that
the DeGrasse suffered damage beyond the scope of the Retrofit
Contract. As such, Virginia Code § 8.01-223 has no application
here. In Plaintiff’s own words to the investigator of the
Alexandria Fire Department, Plaintiff purchased the DeGrasse “as
is” in “stripped” condition and subsequently contracted with
General Contractor to perform a “hull, mechanics and electronics
retro fit.” (J.A. 34). The record contains insufficient evidence
(in fact no evidence) for a reasonable jury to find that the
original, stripped portion of the DeGrasse suffered damage during
the fire.1 In conclusion, we hold the district court properly
granted summary judgment in favor of Subcontractor with respect to
Plaintiff’s negligence claim.
1
Plaintiff argues that he should be excused from his failure
of proof on this point by claiming that he did not have an
opportunity to put in evidence regarding damages because
Subcontractor raised the economic loss rule from Sensenbrenner for
the first time in its reply brief to his opposition brief to
Subcontractor’s motion for summary judgment. We reject Plaintiff’s
argument. First, in the face of a properly supported motion for
summary judgment, as was the case here, Plaintiff was obligated to
come forward with any and all such evidence to support his
negligence cause of action. See Fed. R. Civ. P. 56(e). Second,
Subcontractor’s initial Memorandum in Support of its Motion for
Summary Judgment contained sufficient legal argument regarding
Subcontractor’s lack of a legal duty owed to Plaintiff to put
Plaintiff on notice that it should have come forward with any
evidence it had showing that the original, stripped portion of the
DeGrasse suffered damage during the fire.
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III.
Lastly, Plaintiff argues that the district court erred in
granting summary judgment to Subcontractor based upon a lack of
privity of contract between him and Subcontractor without
addressing whether Plaintiff was a third-party beneficiary of the
contract between General Contractor and Subcontractor. Va. Code
§ 55-22 (“[I]f a covenant or promise be made for the benefit, in
whole or in part, of a person with whom it is not made . . . such
person . . . may maintain in his own name any action thereon which
he might maintain in case it had been made with him only and the
consideration had moved from him to the party making such covenant
or promise.”).
Plaintiff’s argument is without merit. First, assuming
arguendo the district court erred in failing to address whether
Plaintiff was a third-party beneficiary of the contract between
General Contractor and Subcontractor, Plaintiff invited the error
by telling the district court: “the Court need not resolve this
issue.” (J.A. 30). See United States v. Jackson, 124 F.3d 607,
617 (4th Cir. 1997) (According to the invited error doctrine, “‘a
court cannot be asked by counsel to take a step in a case and later
be convicted of error, because it has complied with such
request.’”). Second, Plaintiff’s failure to make the argument
below that he now makes on appeal with regard to third-party
beneficiary status constitutes a waiver of the issue, subject only
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to plain error review. See In re: Celotex Corp., 124 F.3d 619,
630-31 (4th Cir. 1997) (adopting plain error standard of review
used in criminal cases, as set forth in United States v. Olano, 507
U.S. 725 (1993), for application in civil cases).2 Although, in
the final footnote of his written response to Subcontractor’s
motion for summary judgment, Plaintiff mentioned the mere
possibility that he is a third-party beneficiary to the contract
between General Contractor and Subcontractor, he presented
absolutely no argument on the matter.
Assuming arguendo that Plaintiff could satisfy the first three
prongs of Olano’s plain error test, he certainly cannot satisfy the
final miscarriage of justice prong. There simply can be no
miscarriage of justice in our refusing to vacate and remand this
case for the district court to consider a third-party beneficiary
theory when not only did Plaintiff never move to amend his
complaint to allege a cause of action based upon a third-party
beneficiary theory, but Plaintiff was so confident in his primary
theory of recovery that he expressly told the district court not to
consider a third-party beneficiary theory.
2
Under Olano’s plain error test, we may only exercise our
discretion to correct a forfeited error, if we: (1) find error; (2)
find the error is plain; (3) find the error affects the substantial
rights of the party or parties alleging the error; and (4) after
examining the particulars of the case, find the error seriously
affects the fairness, integrity or public reputation of judicial
proceedings. Id. at 731.
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IV.
For the foregoing reasons, we hold the district court did not
commit reversible error in granting Subcontractor’s motion for
summary judgment. Accordingly, we affirm.
AFFIRMED
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