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Northview Christian Church, Inc. v. J & J Group

November 8, 2010

NORTHVIEW CHRISTIAN CHURCH, INC. PLAINTIFF,
v.
J & J GROUP, INC.; JASON SOUTH; MECHANICAL SYSTEM SOLUTIONS GROUP PLLC D/B/A ENGINEERING SYSTEM SOLUTIONS; ENGINEERING STRUCTURAL DETAILING, LLC D/B/A ENGINEERING SYSTEM SOLUTIONS; MS2EE, PLLC D/B/A ENGINEERING SYSTEM SOLUTIONS; AND E&D COMPANY, PLLC D/B/A ENGINEERING SYSTEM SOLUTIONS DEFENDANTS.



The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

The Court has before it Defendants' Motion to Dismiss Northview's Claims of Engineering Malpractice (Dkt. 40), Motion for More Definite Statement (Dkt. 38), and Motion to Strike the Declaration of Pete Pierce, Jr. (Dkt. 50). Plaintiff Northview Christian Church seeks damages from Defendants for breach of contract and engineering malpractice. Defendants move to dismiss the engineering malpractice claims under the economic loss doctrine. In addition, Defendants move for a more definite statement of the claims and allegations against each of them from Northview. The Court will deny the motions for the reasons expressed below.

BACKGROUND

Plaintiff Northview Christian Church, a large church headquartered in Dothan, Alabama, contracted with Monolithic Constructors, Incorporated, a Texas company, to build two dome-shaped buildings for their expanding church campus. Compl. ¶¶ 35-36. Monolithic and other entities worked with LPDJ Architects, PLLC, a Utah architectural company, which subcontracted with Defendant engineering companies from Idaho to work on the project. Id. ¶¶ 1, 34.

The Defendant engineers consist of J&J Group, Inc. and Jason Smith in his personal capacity, Mechanical System Solutions Group, MS2EE PLLC , E&D Company PLLC, and Engineering Structural Detailing LLC. Aside from J&J Group and Jason South, all of these entities conduct business under the name of Engineering System Solutions. And aside from South, a citizen of Idaho, all are Idaho corporations. Compl. ¶ 25-29.

Northview alleges that the dome builders held themselves out as a single company that designed and constructed domes. Compl. ¶ 39. At some point, the South brothers, as part of South's Incorporated, patented a way of constructing domes. Id. ¶ 41. The company then split into two entities, South and Monolithic. Id. ¶ 42. Monolithic moved to Texas, and South remained in Idaho. Id. LPDJ, based in Utah, is the "architectural wing" of Monolithic. Id. ¶ 44. Northview refers to Monolithic, South, and LPDJ together as the "dome builders." Id. at 2.

In January of 2005, Northview contacted the dome builders about the possibility of building the domes. Compl. ¶ 47. The dome builders conducted a feasibility study, and presented Northview with a description of the project and a detailed budget. Id. ¶ 53. There is no industry-standard contract document between Northview and the dome builders -- the agreement was formed around July 1, 2005, when Northview accepted the terms of the feasibility study document, prepared by Monolithic, which contained the essentials of the project and cost for each portion of the project. Id. ¶¶ 54-56.

Around the time the agreement was formed, the dome builders made representations about the durability and quality of the domes, especially regarding the domes' ability to withstand severe weather. Compl. ¶ 48. Relying on the representations, Northview issued a press release in April 2008 about the durability of the structures, including the ability of the domes to withstand a Category 5 tornado. Id. ¶ 51. Newspaper articles about the project also included the information from the press release about the durability of the domes. Id. ¶ 50.

Around February 1, 2006, the dome builders asked Northview to sign a document that outlined the responsibilities of Monolithic and LPDJ. Compl. ¶ 55. In April 2007, dome builders asked Northview to sign a document that outlined certain responsibilities for South. Id. Northview was instructed to send payments to South and LPDJ directly.

Id. Aside from the cost of the feasibility study -- around $6000 -- Northview did not make any payments directly to Monolithic. Id. ¶ 56.

South's construction team arrived around September 2007 and finished construction in June 2008. Compl. ¶¶ 34, 59. Work on the interior then began by other contractors. Id. ¶¶ 34, 60. Northview held its first services in the domes on December 31, 2008. Id. ¶ 60.

According to the Complaint, the domes quickly suffered from structural problems to the exterior parts of the domes resulting from design and construction flaws. Compl. ¶¶ 2-7, 61. Northview alleges many problems with the domes, including problems with the roof, beams, rebars, walls, pressurization, mold, corrosion, insulation, gutter system, water collection, and duct work. Id. ¶ 61. Northview concluded that the structural problems could not be practicably fixed -- the dome builders attempted different methods of repair to no avail. Id. ¶ 63. The structural problems grow worse with time and will lead to the eventual collapse of the roof. Id. ¶ 64. Northview also cites problems with layout mistakes, unpaid contractors, damage to the church's reputation, and decreased donations. Id. ¶ 61.

On February 25, 2010, Northview filed its Complaint in the Northern District of Texas against the dome builders, architects, and engineers for breach of contract and professional malpractice (Dkt. 2). The Texas Court dismissed the claims against the engineers from Idaho for lack of personal jurisdiction (Dkt. 1) and transferred only the claims against the Idaho engineers to this Court.

ANALYSIS

1. Motion to Dismiss Engineering Malpractice Claims

The Defendant Idaho engineers move to dismiss the engineering malpractice claim solely on the grounds that Northview's claim is barred by Idaho's economic-loss rule, which bars tort recovery for purely economic harm. Northview argues that Alabama law, and not Idaho law, should apply for purposes of this Motion under Idaho's choice of law rules. Alabama law allows a plaintiff to recover for purely economic damage for most tort claims. Under Idaho law, the claim would be barred unless Defendants fall under the "special relationship" exception.

Northview's alleged damages include the 1) amount paid to dome builders, 2) amounts paid to other contractors for completing the domes, 3) costs to compensate still unpaid local contractors, 4) mitigation costs, 5) costs necessary to obtain substitute performance and obtain benefit of bargain, 6) damages occasioned by delay in completion of building project, 7) decline in donations, 8) devaluation of the real property of the church, 9) injury to the church's and the Pastor's reputation, 10) administrative costs, 11) attorney's fees, and 12) other damages.

A. Legal Standard

Providing too much in the complaint may be fatal to a plaintiff. Dismissal may be appropriate when the plaintiff has included sufficient allegations disclosing some absolute defense or bar to recovery. See Weisbuch v. County of L.A., 119 F.3d 778, 783 n.1 (9th Cir. 1997) (stating that "[i]f the pleadings establish facts compelling a decision one way, that is as good as if depositions and other . . . evidence on summary judgment establishes the identical facts").

Under Rule 12(b)(6), the Court may consider matters that are subject to judicial notice. Mullis v. United States Bank, 828 F.2d 1385, 1388 (9th Cir. 1987). The Court may take judicial notice "of the records of state agencies and other undisputed matters of public record" without transforming the motions to dismiss into motions for summary judgment. Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866 (9th Cir. 2004).

The Court may also examine documents referred to in the complaint, although not attached thereto, without transforming the motion to dismiss into a motion for summary judgment. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).However, mere mention of the existence of a document is insufficient to incorporate its contents; the Complaint must rely on the document or allege the contents of the document. Coto Settlement v. Eisenberg, 593 F.3d 1030, 1038 (9th Cir. 2010).

Northview's Complaint alleges the existence of contracts between the Defendant engineers and the dome builders to provide design and engineering services for the Northview project. In support of their Motion to Dismiss for Lack of Personal Jurisdiction (Dkt. 3), Defendants attached two documents (Dkt. 5). The first, entitled "Electrical Consulting Services Agreement," is dated June 14, 2006 and signed by representatives from LPDJ and Mechanical System Solutions Group. The second, entitled "Structural Consulting Services Agreement," is dated August 6, 2006 and signed by representatives from LPDJ and Engineering Structural Solutions, a previously assumed business name for E&D. Article I of both agreements describes the project as "new sanctuary and supporting facilities for the Northview Christian Church in Dothan, Alabama." Because these contracts between ...


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