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Hartford Fire Insurance Co. v. Ninja Jump, Inc.

United States District Court, D. Maryland

May 30, 2017

HARTFORD FIRE INSURANCE COMPANY, as subrogee of Mary M. Martin
v.
NINJA JUMP, INC., et al.

          MEMORANDUM

          Catherine C. Blake United States District Judge

         In 2016, a building in Maryland owned by Mary M. Martin (“Martin”) suffered fire damage. Hartford Fire Insurance Company (“Hartford Fire”), which insured the building, compensated Martin for her losses and then initiated the present subrogation action against two defendants: Jumpy Bounce, LLC (“Jumpy Bounce”), which leased the building from Martin, and Ninja Jump, Inc. (“Ninja Jump”), which provided equipment to Jumpy Bounce. After Hartford Fire filed suit, Ninja Jump filed a crossclaim against Jumpy Bounce, claiming it is entitled to indemnification or, in the alternative, contribution. Now pending are two motions filed by Jumpy Bounce. First, Jumpy Bounce has filed a motion to dismiss or, in the alternative, for summary judgment with respect to Hartford Fire's claim against it; according to Jumpy Bounce, that subrogation claim is precluded by the terms of the lease it negotiated with Martin. Second, Jumpy Bounce has moved to dismiss Ninja Jump's crossclaim. No oral argument is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons set forth below, the court will grant both of Jumpy Bounce's motions to dismiss, with prejudice.

         BACKGROUND

         According to Hartford Fire's complaint, Martin owns a building at 98 Industry Lane, Forest Hill, Maryland. (Compl. ¶ 6, ECF No. 1). Martin leased the building to Jumpy Bounce, which used the building for an entertainment complex open to the public. (Id. ¶¶ 7-8). Jumpy Bounce purchased inflatable slides and obstacle courses from defendant Ninja Jump for use in the entertainment complex. (Id. ¶ 9). On September 9, 2016, a blower motor that Ninja Jump had sold to Jumpy Bounce for use with a particular slide and obstacle course caught fire, causing damage to the building. (Id. ¶¶ 10-12, 14). Hartford Fire, which insured both Martin and the building, paid Martin $630, 915.53 to compensate for the damage. (Id. ¶ 17). Hartford Fire now brings a subrogation claim against Jumpy Bounce and Ninja Jump to recoup its losses caused by the fire and ensuing insurance claim. (Id. ¶¶ 16, 18).[1]

         A. Jumpy Bounce

         Hartford Fire claims Jumpy Bounce owed Martin a duty to exercise reasonable care while leasing the building and breached that duty by, inter alia, failing to periodically clean and service the blower motor, which Hartford Fire claims caused the fire damage. (Id. ¶¶ 19-23). Jumpy Bounce claims the lease precludes Hartford Fire from pursuing such a negligence claim, because the lease provides that Martin's insurance policy would be the sole source of funds to address the losses at issue here. (Mot. to Dismiss Compl. Mem. Law 1-2, ECF No. 14-1). The dispute between Hartford Fire and Jumpy Bounce thus centers on the specific terms of the lease.

         The lease contains several provisions related to property insurance in general and fire insurance in particular. With respect to property insurance, the lease required Jumpy Bounce to pay, in addition to a base rental amount, a “triple net rate” consisting of a “proportionate share of the Property's annual expenses for real estate taxes, Landlord's property insurance and common area maintenance expenses.” (Mot. to Dismiss Compl. Mem. Law, Ex. 2, Lease Agreement 4-5, ECF No. 14-2). With respect to property insurance, the original lease[2] estimated that Jumpy Bounce would pay nine cents per square foot of rented space each year to cover Martin's annual property insurance expenses. (Id.).[3] The lease also provides for a “reconciliation” of the “triple net rate” expenses each year after July 1. Pursuant to this reconciliation process, the “triple net rate” is adjusted annually to ensure it aligns with actual expenses. If the payments from Jumpy Bounce fail to cover its share of the “triple net rate” expenses, the lease mandates payment of the balance within 30 days. Similarly, if Jumpy Bounce overpaid, the lease mandates that this balance is “carried forward and included in the calculation of the adjusted Triple net rate.” (Id.).

         With respect to fire insurance, the lease separately states, “Fire Insurance. The Tenant agrees to do nothing to contravene the policy or policies of fire insurance by the Landlord on said property or to cause any increase in the rates of fire insurance for said Premises or property; in the event . . . an increase in the rates of fire insurance is caused by an act on the part of the Tenant, then said increase in the fire insurance premium shall be paid by the said Tenant promptly on demand by the Landlord and the Tenant agrees to pay said additional premium as rent during each year of this Lease.” (Id. 10).

         The lease also contains a section on abatement of rent in case of fire damage. First, that section states that, “[s]hould the Premises be damaged by fire . . . but not to such an extent as to render the same untenantable, the Landlord shall restore the Premises within seventy-five (75) days and there shall be no abatement of rent.” (Id. 18). Second, the section states that should the premises become “partially damaged” by fire such that they are “untenantable, ” the landlord “shall restore said Premises as promptly as possible and the rent shall abate proportionately to the untenantability of said Premises until the Premises are made fit for occupancy.” (Id.). Finally, the lease states that, should the premises become “entirely untenantable” due to fire damage, the lease “shall thereupon become null and void and all liability of the Tenant shall terminate upon payment of all rent due and payable to the date of such damage.” (Id.).[4]

         Jumpy Bounce filed a motion to dismiss for failure to state a claim or, in the alternative, for summary judgment, with respect to Hartford Fire's negligence claim. According to Jumpy Bounce, the lease terms detailed above preclude the subrogation action. (Mot. to Dismiss Compl., ECF No. 14). Hartford Fire responded, (Resp. in Opp'n to Mot. to Dismiss Compl., ECF No. 15), and Jumpy Bounce replied, (Reply, Mot. to Dismiss Compl., ECF No. 17).

         B. Ninja Jump

         Hartford Fire also brings three claims against Ninja Jump. First, it claims a defect in the motor caused the fire and resulting losses and that Ninja Jump is liable, because Ninja Jump “designed, manufactured, assembled, and/or distributed the blower motor.” (Compl. ¶¶ 24-29). It also claims Ninja Jump is liable for breach of warranty and failure to exercise reasonable care with respect to the design, manufacture, assembly, and distribution of the blower motor. (Id. ¶¶ 30-37). Ninja Jump has filed an Answer, which includes a variety of affirmative defenses. (Ninja Jump Answer, ECF No. 6). Ninja Jump also has filed a crossclaim against Jumpy Bounce, claiming it is entitled to indemnification from Jumpy Bounce. Alternatively, if Ninja Jump is determined to be liable, it claims that Jumpy Bounce was also negligent and must contribute to any damages awarded to Hartford Fire. (Crossclaim ¶¶ 6-11, ECF No. 16). Jumpy Bounce has moved to dismiss Ninja Jump's crossclaim, (Mot. to Dismiss Crossclaim, ECF No. 18), Ninja Jump responded, (Resp. in Opp'n to Mot. to Dismiss Crossclaim, ECF No. 21), and Jumpy Bounce replied, (Reply, Mot. to Dismiss Crossclaim, ECF No. 22).

         LEGAL STANDARD

         When ruling on a motion under Fed.R.Civ.P. 12(b)(6), the court must “accept the well-pled allegations of the complaint as true, ” and “construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff.” Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). “Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). “The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6).” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, the factual allegations of a complaint “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “To satisfy this standard, a plaintiff need not ‘forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements.” Walters, 684 F.3d at 439 (citation omitted). ‚ÄúThus, while a plaintiff does not need to demonstrate in a ...


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