Supreme Court of South Dakota.

JORGENSEN FARMS, INC., d/b/a Jorgensen Land & Cattle Partnership, Plaintiff,

v.

COUNTRY PRIDE COOPERATIVE, INC., a South Dakota Corporation, Defendant, Third–Party Plaintiff and Appellant,

v.

Agriliance, LLC; Dakota Gasification Company, and Agrium U.S. Inc., Third–Party Defendants and Appellees,

and

Charles Baker Trucking Company, and Spaans Trucking, Inc., Third–Party Defendants.

 

Nos. 26154, 26161.

Considered on Briefs March 19, 2012.

Decided Nov. 20, 2012.

 

Appeal from the Circuit Court of the Sixth Judicial Circuit Tripp County, South Dakota; Mark Barnett, Judge.

Amy Amundson, Thomas D. Jensen of Lind, Jensen, Sullivan & Peterson, PA, Minneapolis, Minnesota, Attorneys for defendant, third-party plaintiff and appellant.

 

Margo D. Northrup of Riter, Rogers, Wattier & Brown, LLP, Pierre, South Dakota and Emily Murphy, Stillwater, Minnesota, Attorneys for third-party defendant and appellee Agriliance N.O.R. # 26161.

 

Paul E. Bachand of Schmidt, Schroyer, Moreno, Lee & Bachand, PC, Pierre, South Dakota, Todd Langel of Faegre & Benson, LLP, Des Moines, Iowa and Kristin R. Eads of Faegre & Benson, LLP, Minneapolis, Minnesota, Attorneys for third-party defendant and appellee Agrium.

 

Steven J. Oberg of Lynn, Jackson, Shultz & Lebrun, PC, Rapid City, South Dakota, Attorneys for third-party defendant and appellee Dakota Gasification.

 

WILBUR, Justice.

*1 [¶ 1.] Jorgensen Farms (Jorgensen) sued Country Pride Cooperative (Country Pride) alleging that Country Pride sold Jorgensen fertilizer contaminated with rye damaging its 2007 wheat crop. Country Pride settled with Jorgensen but preserved its claims against third-party defendants Agriliance, Agrium, and Dakota Gasification Co. (Dakota Gas). The trial court granted the third-party defendants’ motions for summary judgment. We affirm.

 

FACTS AND PROCEDURAL BACKGROUND

[¶ 2.] Jorgensen grows certified and registered winter wheat seed. During late spring or early summer 2007, rye plants contaminated Jorgensen’s winter wheat crop. According to Jorgensen’s expert, Jorgensen suffered a loss of $556,070 as a result of the rye contamination as Jorgensen was unable to sell the crop as certified seed, and instead, sold the wheat for a lower price as commodity grain.

 

[¶ 3.] Jorgensen, who believed the source of the contamination was fertilizer it purchased from Country Pride, brought suit against Country Pride to recover damages. Subsequently, Country Pride brought third-party complaints against a number of parties alleging that, if Jorgensen proved that the fertilizer it purchased from Country Pride was contaminated, the rye contamination must have occurred in the chain of fertilizer distribution.FN1 Country Pride alleges that the third-party defendants’ negligence, breach of contract, and/or breach of warranty entitles Country Pride to indemnification or contribution. FN2

 

FN1. Country Pride concedes that it only joined the Agriliance–Charles Baker Trucking (Baker Trucking)-Dakota Gas chain of distribution, and thereby excluded other parties who supplied or transported ammonium sulfate and urea to Country Pride during 2006 and who could also have been joined in the lawsuit.

 

FN2. Contribution and indemnification, although similar, are distinct remedies. A right to contribution arises when “[a] party to a joint, or joint and several, obligation … satisfies more than his share of the claim against all[.]” SDCL 20–1–6. In contrast, “indemnity is an ‘all-or-nothing’ proposition where the party seeking indemnification must show an absence of proportionate fault to shift the entire liability [.]” Weiszhaar Farms, Inc. v. Tobin, 522 N.W.2d 484, 492 (S.D.1994).

 

[¶ 4.] Country Pride settled with Jorgensen and the two carriers named as third-party defendants: Charles Baker Trucking (Baker Trucking) and Spaans Trucking, Inc. The only remaining issue is whether Country Pride is entitled to indemnification or contribution from any or all remaining third-party defendants: Agriliance, Agrium, or Dakota Gas.

 

[¶ 5.] The remaining third-party defendants were involved in selling either, or both, ammonium sulfate and urea, the two chemicals used in mixing the fertilizer. Agriliance, a sales broker, and Country Pride entered into a verbal agreement whereby Country Pride would purchase ammonium sulfate from Agriliance. As the intermediate seller, Agriliance never possessed or handled the ammonium sulfate. Rather, Agriliance purchased the ammonium sulfate from third-party defendant Dakota Gas. Agrium is a producer of both ammonium sulfate and urea. Country Pride dismissed its claim based on Agrium’s sale of ammonium sulfate but, on appeal, is pursuing a claim for the urea sold by Agrium.

 

[¶ 6.] The trial court granted summary judgment in favor of Agriliance, Agrium, and Dakota Gas, reasoning that Country Pride failed “to provide a specific fact upon which a jury could find a party responsible without resorting to speculation.” Country Pride appeals. We review Country Pride’s remaining claims against each Agriliance, Agrium, and Dakota Gas separately to determine whether summary judgment was appropriate as to each.FN3

 

FN3. The trial court noted Country Pride provided a “handful” of “evolving theories.” Alternative theories are allowed by SDCL 15–6–8(e)(2), which provides:

 

A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one count or defense or in separate counts or defenses. When two or more statements are made in the alternative and one of them if made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. A party may also state as many separate claims or defenses as he has regardless of consistency and whether based on legal or on equitable grounds or on both.

 

STANDARD OF REVIEW

*2 [¶ 7.] In reviewing a trial court’s grant or denial of summary judgment under SDCL 15–6–56(c), we must view evidence in the light most favorable to the non-moving party and decide both “ ‘whether the moving party has demonstrated the absence of any genuine issue of material fact’ “ and whether the trial court correctly decided all legal questions. Bertelsen v. Allstate Ins. Co., 2011 S.D. 13, ¶ 15, 796 N.W.2d 685, 692 (quoting Advanced Recycling Sys., L.L.C. v. Se. Prop., Ltd., 2010 S.D. 70, ¶ 10, 787 N.W.2d 778, 783). We make these determinations de novo, with “ ‘no deference to the [trial] court’s ruling.’ “ Highmark Fed. Credit Union v. Hunter, 2012 S.D. 37, ¶ 7, 814 N.W.2d 413, 415 (quoting Adrian v. Vonk, 2011 S.D. 84, ¶ 8, 807 N.W.2d 119, 122).

 

ANALYSIS AND DECISION

[¶ 8.] On appeal, the parties dispute whether Country Pride has set forth sufficient evidence to survive summary judgment. Country Pride concedes that it has not provided direct evidence as to which of the three third-party defendants, if any, are responsible for the rye contamination. However, Country Pride argues, despite the absence of direct evidence, it has provided sufficient circumstantial evidence to survive summary judgment.

 

[¶ 9.] Country Pride’s position at the summary judgment hearing was that circumstantial evidence of “inspection negligence” established that rye entered the ammonium sulfate due to Baker Trucking’s negligence in its failure to properly inspect its delivery trucks. With this backdrop in mind, we examine the evidence presented in this case, viewing it “in [the] light most favorable to the nonmoving part[ies][.]” Cashman v. Van Dyke, 2012 S.D. 43, ¶ 6, 815 N.W.2d 308, 311.

 

[¶ 10.] 1. Agriliance is not liable as a matter of law under either a breach of contract or negligence theory.

[¶ 11.] Country Pride presents alternative theories under which Agriliance could be liable for the damages to Jorgensen’s wheat crop. First, Country Pride argues that a September 17, 2006 delivery of ammonium sulfate by Baker Trucking, which Country Pride ordered from Agriliance, contained the rye contamination. Second, Country Pride argues that Agriliance supplied approximately 65.3% of Country Pride’s ammonium sulfate prior to September 2006 and that this supply contained the contamination.

 

[¶ 12.] There are disputed facts regarding the date the first load of ammonium sulfate was delivered to Country Pride by Baker Trucking.FN4 In addition, Country Pride offered the testimony of former Baker Trucking employee, David Sherman, regarding the presence of rye in Baker Trucking’s trucks.FN5 When the evidence is viewed in the light most favorable to Country Pride, the non-moving party, the date of delivery, and whether the trailer used by Baker Trucking was contaminated are disputed facts that should ordinarily be decided by a jury. In this case, however, resolution of those disputed facts is not determinative as to any liability on the part of Agriliance.

 

FN4. Country Pride and Agriliance dispute when the first load of ammonium sulfate was delivered to Country Pride. Based on its timeline of events, Country Pride asserts that it received its first load of ammonium sulfate from Baker Trucking on September 17 or 18. Agriliance argues that Country Pride’s own receipt, or “hand ticket,” which contains handwritten notations providing a date of “9/14/06” and “delivered by Ted @ 1:00 PM,” establishes a September 14 delivery date. Country Pride concedes that if Baker Trucking delivered the ammonium sulfate to Country Pride on September 14, Agriliance cannot be held liable.

 

FN5. Sherman, after initially stating that he had never come across rye seed in any of his deliveries, recanted, and stated that Charles Baker, owner of Baker Trucking, told Sherman he had rye in his fields and that, if Baker had gotten rye in his fields, “there’s a good possibility that rye got in between the two floors” of the trailer that delivered ammonium sulfate to Country Pride, and therefore, was the source of Jorgensen’s rye contamination.

 

*3 [¶ 13.] Country Pride is suing Agriliance for breach of warranty FN6 and negligence. Country Pride conceded that the ammonium sulfate was defect-free when it was manufactured and shipped from Dakota Gas. In light of this concession, Agriliance cannot be liable as a matter of law for breach of warranty because the goods were as warranted from the manufacturer when the goods were shipped. See Shaffer v. Honeywell, Inc., 249 N.W.2d 251, 256 (S.D.1976) overruled on other grounds by First Premier Bank v. Kolcraft Enters., Inc., 2004 S.D. 92, 686 N.W.2d 430 (stating that, in a case with claims for breach of warranty, negligence, and strict liability involving a valve manufactured by Honeywell, “plaintiff [injured homeowner] has the burden of showing that the defect existed when the product left the manufacturer’s hands”).

 

FN6. Country Pride advances that Agriliance violated the implied warranty of merchantability (SDCL 57A–2–314); the implied warranty of fitness for a particular purpose (SDCL 57A–2–315); and an express warranty by affirmation, promise, description, sample (SDCL 57A–2–313).

 

[¶ 14.] Additionally, Country Pride’s negligence claim against Agriliance is based upon its failure to inspect the shipper’s, Baker Trucking, trucks. Agriliance, however, cannot be liable for negligence because it is the carrier’s duty, under state law, to inspect its truck.FN7 Berry v. Chicago, M. & St. P. Ry. Co., 24 S.D. 611, 124 N.W. 859, 862–63 (1910). Country Pride has settled with and dismissed Baker Trucking from this lawsuit. Based on the undisputed material fact that the ammonium sulfate was defect-free when manufactured and shipped, as conceded by Country Pride, and that Agriliance did not have a duty to inspect the carrier, Agriliance is entitled to summary judgment as a matter of law.

 

FN7. The parties disagree whether the Carmack Amendment affects the outcome of this case. The Carmack Amendment governs the liability of carriers and freight forwarders for damage to goods during transportation. 49 U.S.C. §§ 11706 and 14706. Although this case involves transportation by truck, both motor carriers and rail carriers, are “carriers” under the Carmack Amendment. And, as the Supreme Court has explained, “in cases where it applies,” the Carmack Amendment

 

imposes upon receiving rail carriers and delivering rail carriers liability for damage caused during the rail route under the bill of lading, regardless of which carrier caused the damage. Carmack’s purpose is to relieve cargo owners of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.

 

Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., ––– U.S. ––––, ––––, 130 S.Ct. 2433, 2441, 177 L.Ed.2d 424 (2010) (internal citations and quotations omitted). See generally Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 145–46 (2nd Cir.2010) (considering whether a United States Supreme Court case involving rail carriers is applicable to a case involving motor carriers and freight forwarders).

 

We first observe that the Carmack Amendment does not apply here because Agriliance is neither a carrier nor freight forwarder. See 49 U.S.C. §§ 13102(3), (8). Second, even if the Carmack Amendment applied, it would only impose liability on the carrier, Baker Trucking, not Agriliance, a sales broker. See, e.g., Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 117–18 (2nd Cir.1999).

 

[¶ 15.] Country Pride offered the possibility that the doctrine of alternative liability could apply in this case.FN8 However, because Country Pride did not join all potential defendants, i.e., all parties who produced, shipped, manufactured, or sold ammonium sulfate or urea to Country Pride in 2006, even if this Court were to consider adopting the doctrine, it would not be applicable for that reason. See Bradley v. Firestone Tire and Rubber Co., 590 F.Supp. 1177, 1179 (D.S.D.1984) (quoting Starling v. Seaboard Coastline R.R. Co., 533 F.Supp. 183, 188 (S.D.Ga.1982) (stating that “[u]nder alternative liability, however, all the possible wrongdoers responsible for the injury must be before the Court, and the negligent acts must have been committed simultaneously”)).

 

FN8. The alternative liability theory is

 

[w]here the conduct of two or more actors is tortious, and it is proved that harm has been caused to the plaintiff by only one of them, but there is uncertainty as to which one has caused it, the burden is upon each such actor to prove that he has not caused the harm.

 

Restatement (Second) of Torts § 433B(3) (1965).

 

[¶ 16.] 2. Country Pride’s claims against Agrium are barred by (a) Country Pride’s failure to give notice, (b) the economic loss doctrine, and (c) the statute of limitations.

[¶ 17.] Country Pride argues, in the alternative, that if the ammonium sulfate it purchased from Agriliance was not the source of the rye contamination, the urea Country Pride purchased from Agrium in fall 2006 caused the contamination. Country Pride concedes that the more likely source of the rye contamination is the fertilizer sold by Agriliance. Despite this concession, Country Pride believes it has set forth sufficient facts for a jury to determine that Agrium is the source of the rye contamination.

 

*4 [¶ 18.] Country Pride asserts that it can prove that: (1) it purchased 100% of its August 2006 urea from Agrium; (2) Jorgensen purchased 66,090 pounds of urea from Country Pride on September 14; (3) on one or more occasions, Agrium used Drueke Trucking, a party not joined in this action, to deliver urea to Country Pride; and (4) that Country Pride has previously discovered contaminated urea in Drueke Trucking deliveries.FN9 Thus, according to Country Pride, a reasonable jury could infer that the urea supplied by Agrium in August 2006 contained the offending rye.

 

FN9. Dale Vogt, a Country Pride employee, testified that, on several occasions, he discovered corn contaminated urea in fertilizer delivered by Drueke. Vogt did not testify, nor does Country Pride allege, that it previously discovered rye contaminated urea delivered by Drueke.

 

[¶ 19.] In response, Agrium argues that summary judgment was appropriate for four reasons: (1) the trial court correctly concluded that there was no genuine issue of material fact regarding the source of the contamination; (2) Country Pride’s breach of warranty claims fail because Country Pride did not give reasonable notice as required by SDCL 57A–2–607(3); (3) Country Pride’s tort claims are barred by the economic loss doctrine; and (4) Country Pride’s claims are barred by the statute of limitations contained in SDCL 57A–2–725.

 

[¶ 20.] This Court has often stated that, “ ‘[i]f there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.’ “ Murray v. Mansheim, 2010 S .D. 18, ¶ 4, 779 N.W.2d 379, 382 (quoting Jacobson v. Leisinger, 2008 S.D. 19, ¶ 24, 746 N.W.2d 739, 745). We hold that Country Pride’s breach of warranty claims are barred by its failure to give reasonable notice; its tort claims are barred by the economic loss doctrine; and its indemnification and contribution claim is barred by the statute of limitations. Therefore, we affirm summary judgment in favor of Agrium.

 

(a) Country Pride’s breach of warranty claims against Agrium are barred by the notice requirement contained in SDCL 57A–2–607(3).

[¶ 21.] Both Country Pride and Agrium agree that Agrium’s sale of urea to Country Pride was a sales transaction, and thus governed by the Uniform Commercial Code (UCC). See City of Lennox v. Mitek Indus. Ins., 519 N.W.2d 330, 332 (S.D.1994) (stating that “[i]n order for the UCC to govern the transaction, the sale must be for a sale of goods”). Accordingly, Country Pride must comply with the notice requirement contained in SDCL 57A–2–607(3)(a). This statute provides, “[w]here a tender [of goods] has been accepted [,] … [t]he buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy[.]” (Emphasis added.)

 

[¶ 22.] We previously interpreted this notice requirement in Hepper v. Triple U Enterprises., Inc., 388 N.W.2d 525 (S.D.1986). In Hepper, we reasoned that “[t]he purpose of requiring notice within a reasonable time is to give the seller sufficient time to investigate the breach of warranty claim while facts are still fresh[,] … foster[ ] settlement through negotiation, permit[ ] a seller to avoid future defects, allow[ ] a seller to minimize damages, and protect[ ] a seller from stale claims.” Id . at 527 (additional citations omitted). Importantly, “[n]otice is an element that must be specifically proven; it is not an affirmative defense” and “[n]otice of breach by summons and complaint is obviously insufficient.” Id. at 527,529.

 

*5 [¶ 23.] Agrium argues that Country Pride “never even pleaded notice in its complaint and cannot provide that it ever gave Agrium anything resembling notice of the breach it claims.” We agree. Notably, Country Pride, in its reply brief, responds to Agrium’s notice argument by stating “notice was … given to Agrium in a reasonable time per the statute” without stating, nor citing to the record, when this notice was provided and through what means. Thus, Country Pride has not shown facts in the record to support its assertion that it provided reasonable notice, nor did our review of the record bear out this assertion. As a result, we affirm summary judgment on its breach of warranty claims on the basis that Country Pride failed to provide notice.

 

(b) Country Pride’s negligence claim against Agrium is barred by the economic loss doctrine.

[¶ 24.] In addition to its warranty theory, Country Pride also argues that Agrium is liable under a negligence theory. In UCC cases, this Court has adopted the economic loss doctrine which provides that “ ‘economic losses are not recoverable under tort theories’ “ such as negligence. Diamond Surface, Inc. v. State Cement Plant Comm’n, 1998 S.D. 97, ¶ 24, 583 N.W.2d 155, 161 (quoting City of Lennox, 519 N.W.2d at 333). Rather, a plaintiff is “ ‘limited to the commercial theories found in the UCC.’ “ Id .FN10

 

FN10. The underlying purpose of the rule “is to maintain the separateness of tort law and contract law.” Lesiak v. Cent. Valley Agric. Coop., Inc., 808 N.W.2d 67, 83 (Neb.2012).

 

[¶ 25.] This doctrine has two exceptions. Id. ¶ 25. First, tort damages are not barred in cases where personal injury is involved. Id. ¶ 25 n. 5 (citing City of Lennox, 519 N.W .2d at 333). Neither Country Pride nor Agrium asserts that this first exception applies in this case. Rather, the parties dispute the application of the second exception. The second exception, commonly referred to as the “other property exception,” applies “when the damage is to ‘other property’ as opposed to the specific goods that were part of the transaction.” Id.

 

[¶ 26.] Country Pride reasons that the “other property” exception applies because the damage was to the winter wheat crop, rather than the specific goods that were part of the transaction (the fertilizer). This Court has previously noted, “[o]ther property has been defined as damage to property collateral to the product itself.” City of Lennox, 519 N.W.2d at 333. Examples include, “1) [a] defective heater that exploded and destroyed a major portion of a refinery” and “2) defective brakes that hypothetically caused [a] truck to run into [a] home.” Id. (internal footnotes omitted). However “[w]hen a defect in a component part damages the product into which that component was incorporated, economic losses to the product as a whole are not losses to ‘other property’ and are therefore not recoverable in tort .” Id.

 

[¶ 27.] Here, the urea was a component part that was later incorporated into both the fertilizer and the wheat crop. The alleged defect, the rye-contamination, damaged the fertilizer and wheat crop, resulting in lost profits. “Economic loss … is defined as that loss resulting from the failure of the product to perform to the level expected by the buyer and the consequential losses resulting from the buyer’s inability to make use of the ineffective product, such as lost profits.” Diamond Surface, 1998 S.D. 97, ¶ 25, 583 N.W.2d at 161 (quoting City of Lennox, 519 N.W.2d at 333). Country Pride’s claimed damages are consequential losses, specifically lost profits, from defective fertilizer rather than damage to collateral property. Accordingly, Country Pride’s claimed damages fall under the scope of the general rule and not the “other property” exception; thus, the economic loss doctrine bars Country Pride’s negligence claim against Agrium.

 

(c) Country Pride’s indemnity and contribution claim against Agrium is barred by the statute of limitations.

*6 [¶ 28.] Country Pride’s initial complaint in December 2008 did not include any claims against Agrium. On April 20, 2010, Country Pride amended its complaint to assert an indemnification claim against Agrium. Country Pride pleaded that ammonium sulfate supplied by Agrium was the source of the contamination. This ammonium sulfate claim was later dismissed. Only Agrium’s supply of urea is now at issue.

 

[¶ 29.] However, Country Pride never amended its complaint to plead that urea purchased from Agrium was the source of contamination. Indeed, Agrium was not notified that its urea deliveries to Country Pride were the subject of Country Pride’s suit until October 2010.

 

[¶ 30.] SDCL 57A–2–725(1) provides, “[a]n action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.” This Court has “consistently held that ‘compliance with statutes of limitations is strictly required and doctrines of substantial compliance or equitable tolling are not invoked to alleviate a claimant from a loss of his right to proceed with a claim.’ “ Murray, 2010 S.D. 18, ¶ 21, 779 N.W.2d at 389 (quoting Dakota Truck Underwriters v. S.D. Subsequent Injury Fund, 2004 S.D. 120, ¶ 17, 689 N.W.2d 196, 201).

 

[¶ 31.] The parties agree that this action accrued when the urea was delivered to Country Pride in August 2006. Country Pride never formally commenced an action regarding the urea claim nor did it move to amend under SDCL 15–6–15(a). Agrium was not put on notice that its August 2006 urea delivery would be the subject of this suit until October 2010. As a result, Country Pride’s indemnification and contribution claim against Agrium is barred by the four-year statute of limitations for an action for breach of a sales contract.

 

[¶ 32.] 3. Dakota Gas did not have a duty to inspect Baker Trucking’s vehicles.

[¶ 33.] The only claim that Country Pride makes with respect to Dakota Gas is negligence. Country Pride argues that Dakota Gas, as the manufacturer of the ammonium sulfate sold by Agriliance, had a duty to ensure that trailers used by Baker Trucking for delivery were free from contaminants, and therefore, Dakota Gas was negligent when it failed to inspect Baker Trucking’s vehicles. The trial court granted Dakota Gas’s motion for summary judgment on the basis that, regardless of any factual disputes, under South Dakota law, the duty to ensure a properly cleaned trailer rested solely upon the carrier, Baker Trucking. We agree.

 

[¶ 34.] This Court has previously stated that:

 

[T]he duty of furnishing suitable vehicles rests upon the carrier, and not upon the shipper, and the failure to discharge this duty is negligence from the consequences of which the carrier is not permitted to free himself by a stipulation in the bill of lading which devolves upon the shipper the duty of selecting vehicles which are suitable. Such a stipulation is void, as an attempt by the carrier to limit his liability against his own negligence in providing defective vehicles.

 

*7 Berry, 24 S.D. 611, 124 N.W. at 862 (emphasis added).

 

[¶ 35.] Based on Berry, we hold that the duty to provide a contaminant-free vehicle rested upon Baker Trucking, the carrier, not Dakota Gas, the shipper. “ ‘Summary judgment in a negligence case is appropriate when the trial judge resolves the duty question in the defendant’s favor.’ “ Highmark Fed. Credit Union, 2012 S.D. 37, ¶ 7, 814 N.W.2d at 415 (quoting Hendrix v. Schulte, 2007 S.D. 73, ¶ 8, 736 N.W.2d 845, 847). Consequently, because Dakota Gas did not breach any duty owed to Country Pride, we affirm the trial court’s grant of summary judgment.

 

CONCLUSION

[¶ 36.] We affirm the summary judgment motions granted in favor of Agriliance, Agrium, and Dakota Gas.

 

[¶ 37.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and SEVERSON, Justices, concur.

United States District Court,

M.D. Pennsylvania.

Rafael ESTRADA, Plaintiff,

v.

Joseph J. WASS, et al, Defendants.

 

Civil Action No. 3:10–CV–1560.

Nov. 21, 2012.

 

MEMORANDUM

A. RICHARD CAPUTO, District Judge.

*1 Presently before the Court is a Motion for Summary Judgment by the “Flying J Defendants.” FN1 (Doc. 62.) In his Amended Complaint, Plaintiff Rafael Estrada alleges that he was injured as a result of being struck by a tractor trailer driven by Defendant Joseph J. Wass in the parking lot of the Flying J Travel Plaza (“Flying J”) in New Milford, Pennsylvania. Estrada alleges claims for negligence against Wass, Defendant Wass Trucking Company, Inc., and the Flying J Defendants. In their motion for summary judgment, the Flying J Defendants assert that Estrada has failed to establish any duty, breach thereof, or causal connection between the alleged breach and any resulting injury. (Doc. 63 at 6.) Because the Flying J Defendants owed no duty to Estrada, as the danger of Wass’ moving tractor trailer driving through Flying J’s parking lot was both obvious and known to him, their motion for summary judgment will be granted

 

FN1. The “Flying J Defendants” are Defendants Flying J, Inc.; Free VI LLC; Flying J, Inc. t/a and d/b/a/ Flying J Travel Plaza; Flying J PDG, Inc.; PDG, Inc.; FJI Management, Inc.; FJI II Management, Inc .; CFJ Properties, Individually and/or t/a and d/b/a Flying J Travel Plaza; Travel Plaza, LLC t/a and d/b/a Flying J Travel Plaza, and AFJ, LLC, a subsidiary of Flying J, Inc.

 

I. Background

At approximately 5:00 PM on October 29, 2008, Plaintiff Rafael Estrada, who worked as a truck driver, parked his truck in the parking lot of the Flying J Travel Plaza (“Flying J”) in New Milford, Pennsylvania after fueling it with diesel fuel. (Pl.’s Statement of Material Facts, “Pl.’s SMF”, ¶¶ 1–2, 4–5, 7; Estrada Dep. at 15:11–16.) It was still daylight at that time, and the weather conditions were “cloudy” but “fine.” (Id. at ¶¶ 2, 4; Estrada Dep. at 36:6.) The parking lot of the Flying J was wet and “very congested.” (Pl.’s SMF, ¶ 4; Wass Dep. at 37:16.) After parking, Estrada exited his truck and began walking alongside it toward Flying J’s shop. (Pl.’s SMF ¶ 7.) Estrada, who had been to the New Milford Flying J approximately six (6) to eight (8) times before, was aware that the parking lot had no posted speed limit signs or lines directing pedestrians how or where to walk from the parking lot to the shop. (Id. at ¶ ¶ 10–11; Estrada Dep. at 109:4.) On his prior trips to the New Milford Flying J, he had been able to cross the parking lot without incident. (Id. at ¶ 12.)

 

After reaching the rear of his trailer, Estrada stopped and looked to his right and his left to see if any traffic was coming. (Estrada Dep. at 117:2–15.) Seeing no traffic, he walked approximately twenty (20) to twenty-four (24) feet toward the store and then saw a tractor trailer driven by Defendant Joseph J. Wass traveling through the parking lot at approximately ten (10) or twelve (12) miles per hour. (Id. at ¶¶ 7–8; Estrada Dep. at 112:21–25, 117:16–21.) Estrada, who frequented truck stops for a number of years prior to October 29, 2008, would always look for vehicles, including tractor trailers, when walking through the stops’ parking lots. (Estrada Dep. at 112:1–16.) Estrada momentarily stopped walking upon seeing Wass’s tractor trailer, which was approximately five (5) to seven (7) feet away and had partially passed in front of him, and then changed direction by walking to his right. (Id. at 118:23–119:7, 120:4–7, 120:16–21.) He changed direction to go toward the store, which was to his right, and away from the tractor trailer, which was passing in front of him from right to left. (Id. at 119:10–12, 120:16–121:16.) Estrada continued walking until he was struck by the trailer of Wass’s truck, which knocked him to the ground. (Id. at 121:22–25, 46:6–11.) The four tires on the fourth axle of the truck’s left side dragged Estrada’s legs on the parking lot. (Id. at 47:12–48:15.) Estrada suffered various injuries to his hip and legs and has undergone numerous medical treatments, including surgeries and rehabilitation, as a result of the incident. (Am. Compl., Doc. 13 at 6–7.)

 

*2 On July 27, 2010, Estrada, a California resident, brought this action under diversity jurisdiction pursuant to 28 U.S.C. § 1332. In his Amended Complaint, Estrada alleges claims for negligence against Wass, Defendant Wass Trucking Company, Inc., and the Flying J Defendants. With regard to the Flying J Defendants, he alleges that the accident and his resulting injuries were caused by the negligent conduct of their agents, servants, workmen, employees and/or owners, which included:

 

a. failure to prove clear and designated travel lanes for commercial motor vehicles while on the premises;

 

b. failure to implement proper routing or signaling of commercial motor vehicles while on the premises;

 

c. failure to have designated pedestrian zones for their sole use for travel between the Flying J Travel Center and the other facilities located on the premises;

 

d. failure to warn of the increased dangers posed to individuals on the premises because of [Defendants’] failures to implement procedures and rules to prevent injury described herein;

 

e. failure to design the property to facilitate the safe movement of commercial vehicles;

 

f. failure to conduct adequate traffic studies to determine the movements, traffic flow and volume of commercial vehicles upon the property;

 

g. failure to discover and warn of commercial motor vehicles making sudden and unexpected turns and transitions in order to maneuver the property;

 

h. failure to protect against the known or knowable dangers alleged herein;

 

i. failure to provide adequate security on the premises to control the movement of commercial vehicles;

 

j. failure to maintain the premise in such a manner as to ensure the safety of its customers;

 

k. failure to operate the premises in such a manner that its customers were not placed at a high risk of injury;

 

l. failure to take any steps to protect the patrons of its premises when it knew or should have known that pedestrians were likely to be struck by other vehicles entering and maneuvering into the parking lot;

 

m. failure to utilize speed limits and signs;

 

n. failure to have adequate lighting in said parking area;

 

o. failure to inspect the premises;

 

p. inspecting the premises in an improper manner;

 

q. failure to keep the premises in a safe condition for persons lawfully using it.

 

(Doc. 13 at 15–16.)

 

The Flying J Defendants moved for summary judgment on July 31, 2012, contending that Estrada has failed to establish any duty, breach thereof, or causal connection between an alleged breach of duty and Estrada’s resulting injuries. (Doc. 63 at 6.) This motion is now ripe and ready for the Court’s review.

 

II. Analysis

A. Legal Standard

Summary judgment shall be granted “if the movant shows that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “Summary judgment is appropriate when ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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.’ “ Wright v. Corning, 679 F.3d 101, 103 (3d Cir.2012) (quoting Orsatti v. N.J. State Police, 71 F.3d 480, 482 (3d Cir.1995)). A fact is material if proof of its existence or nonexistence might affect the outcome of the suit under the applicable substantive law.   Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

 

*3 Where there is no material fact in dispute, the moving party need only establish that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c)(2). Where, however, there is a disputed issue of material fact, summary judgment is appropriate only if the factual dispute is not a genuine one.   Anderson, 477 U.S. at 248. An issue of material fact is genuine if “a reasonable jury could return a verdict for the nonmoving party.” Id. Where there is a material fact in dispute, the moving party has the initial burden of proving that: (1) there is no genuine issue of material fact; and (2) the moving party is entitled to judgment as a matter of law. See 2D Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2727 (2d ed.1983). The moving party may present its own evidence or, where the nonmoving party has the burden of proof, simply point out to the court that “the nonmoving party has failed to make a sufficient showing on an essential element of her case.”   Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

 

“When considering whether there exist genuine issues of material fact, the court is required to examine the evidence of record in the light most favorable to the party opposing summary judgment, and resolve all reasonable inferences in that party’s favor.” Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir.2007). Once the moving party has satisfied its initial burden, the burden shifts to the non-moving party to either present affirmative evidence supporting its version of the material facts or to refute the moving party’s contention that the facts entitle it to judgment as a matter of law. Anderson, 477 U.S. at 256–57. The Court need not accept mere conclusory allegations, whether they are made in the complaint or a sworn statement. Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990).

 

“To prevail on a motion for summary judgment, the non-moving party must show specific facts such that a reasonable jury could find in that party’s favor, thereby establishing a genuine issue of fact for trial.” Galli v. New Jersey Meadowlands Comm’n, 490 F.3d 265, 270 (3d Cir.2007) (citing Fed.R.Civ.P. 56(e)). “While the evidence that the non-moving party presents may be either direct or circumstantial, and need not be as great as a preponderance, the evidence must be more than a scintilla.” Id. (quoting Hugh v. Butler Cnty. Family YMCA, 418 F.3d 265, 267 (3d Cir.2005)). In deciding a motion for summary judgment, “the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249.

 

B. Known or Obvious Danger

To prevail on a cause of action in negligence under Pennsylvania law,FN2 a plaintiff must establish:

 

FN2. In this diversity action, Estrada’s negligence claims are governed by Pennsylvania law.

 

(1) a duty or obligation recognized by the law, requiring the actor to conform to a certain standard of conduct; (2) a failure to conform to the standard required; (3) a causal connection between the conduct and the resulting injury; and (4) actual loss or damage resulting in harm to the interests of another.

*4 Nw. Mut. Life Ins. Co. v. Babayan, 430 F.3d 121, 139 (3d Cir.2005). In other words, a plaintiff must show the usual (1) duty, (2) breach, (3) causation, and (4) damages. See Farbaugh v. Pa. Turnpike Comm’n, 590 Pa. 46, 911 A.3d 1264, 1272–73 (2006).

 

The Flying J Defendants first argue that they are entitled to summary judgment because Estrada has not established any duty that the Flying J Defendants owed to him. They argue that they did not owe Estrada any duty because the condition of Wass’ tractor trailer moving through the Flying J’s parking lot was both obvious and known to him.

 

A possessor of land is one “who is in occupation of land with intent to control it.” RESTATEMENT (SECOND) OF TORTS § 328E(a) (1965). Pennsylvania has adopted the standard from the Restatement (Second) of Torts § 343 for when a possessor of land owes and breaches a duty to an invitee:

 

A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if, but only if, he

 

(a) knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and

 

(b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and

 

(c) fails to exercise reasonable care to protect them against the danger.

 

RESTATEMENT (SECOND) OF TORTS § 343; see Carrender v. Fitterer, 503 Pa. 178, 469 A.2d 120, 123 (1983) (adopting RESTATEMENT (SECOND) OF TORTS § 343).

 

For the landowner’s duty of reasonable care to attach, “the condition must be non-obvious. In addition, there is no duty if the [invitee] is in the same position as the landowner to discover the dangerous condition or if the [invitee] is the party that created the dangerous condition in the first place.” Warnick v. Home Depot U.S.A., Inc., 516 F.Supp.2d 459, 465–66 (E.D.Pa.2007). The Restatement provides that “[a] possessor of land is not liable to his invitees for physical harm caused to them by any activity or condition on the land whose danger is known or obvious to them, unless the possessor should anticipate the harm despite such knowledge or obviousness.” RESTATEMENT (SECOND) OF TORTS § 343A; see also Atkins v. Urban Redevelopment Auth. of Pittsburgh, 489 Pa. 344, 352–53, 414 A.2d 100, 104 (1980) (“the law of Pennsylvania does not impose liability if it is reasonable for the possessor to believe that the dangerous condition would be obvious to and discovered by his invitee”). A danger is “obvious” when “both the condition and the risk are apparent to and would be recognized by a reasonable man, in the position of the visitor, exercising normal perception, intelligence, and judgment.” RESTATEMENT (SECOND) OF TORTS § 343A, cmt. b. A “known” danger “must not only be known to exist, but it must also be recognized that it is dangerous and the probability and gravity of the threatened harm must be appreciated.” Id.

 

*5 “Although the question of whether a danger was known or obvious is usually a question of fact for the jury, the question may be decided by the court where reasonable minds could not differ as to the conclusion.” Carrender, 503 Pa. at 124 (citing RESTATEMENT (SECOND) OF TORTS § 328B, cmts. c and d).

 

The Court finds that even when viewing the evidence in the light most favorable to Estrada, reasonable minds could not disagree on whether the danger of Wass’ tractor trailer driving through Flying J’s parking lot was known or obvious to Estrada. The evidence shows that prior to October 29, 2008, Estrada, who worked as a truck driver, frequented truck stops, including some six (6) to eight (8) visits to the New Milford Flying J. (Estrada Dep. at 15:11–16, 109:4, 112:1–4.) On that day, he was aware that the Flying J’s parking lot had no posted speed limit signs or lines directing pedestrians where to walk from the parking lot to the store. (Pl.’s SMF ¶¶ 10–11.) In his deposition, Estrada testified that he always looked for moving vehicles and tractor trailers when walking through the truck stops’ parking lots. (Estrada Dep. at 112:5–16.) He also testified that upon reaching the rear of his trailer on October 29, 2008, he stopped and checked for oncoming traffic before crossing the parking lot to reach the Flying J store. (Id. at 117:2–15.) After walking twenty (20) to twenty-four (24) more feet through the parking lot toward the store, Estrada saw Wass’ tractor trailer, located some five (5) to seven (7) feet in front of him, traveling at approximately ten (10) to twelve (12) miles per hour. (Pl.’s SMF ¶ 8, Estrada Dep. at 112:22–25, 120:4–10.) He briefly stopped walking and then changed direction by walking to his right so as to go to the store and away from Wass’ tractor trailer, which had partially passed in front of him from his right to his left. (Estrada Dep. at 118:23–119:7, 120:4–7, 120:16–21.) Estrada was then struck by Wass’ tractor trailer. (Id. at 121:22–25.)

 

The danger posed by Wass’ tractor trailer was obvious to Estrada, as he recognized the apparent condition and risk that it posed and exercised “normal perception, intelligence, and judgment” in doing so. See RESTATEMENT (SECOND) OF TORTSS § 343A, cmt. b. The evidence shows that Estrada, who was familiar with truck stops and the New Milford Flying J, looked for oncoming traffic before he started walking through the parking lot and stopped walking upon seeing Wass’ tractor trailer in front of him. The danger posed by the tractor trailer was also known to Estrada. See RESTATEMENT (SECOND) OF TORTS § 343A, cmt. b. He demonstrated that he recognized the dangerousness of the moving tractor trailer and appreciated the potential grave harm that it could inflict upon him when he stopped walking upon observing it and changed his direction so as to walk around it and reach the store. Therefore, because reasonable minds could not disagree that the danger posed by Wass’ tractor trailer was both known and obvious to Estrada, the Flying J Defendants owed no duty to him and are not liable for his injuries.

 

*6 Plaintiff’s arguments in support of the existence of a genuine issue of material fact do not suggest issues of fact so much as a set of safety standards for truck stop parking areas. However, the common law provides the standard to be used by courts in cases or controversies involving privately owned property and that standard is that of the duty of a landowner owed to an invitee. The elements of this standard are set out above. An element of the standard is that if the danger is open and obvious to the invitee (Mr. Estrada), the owner or occupier (Flying J) owes no duty to the invitee (Mr. Estrada). As noted, given the admitted openness and obviousness of the danger by and to Mr. Estrada, no reasonable jury can find a duty to Mr. Estrada, much less a breach thereof.

 

III. Conclusion

Because the Flying J Defendants owed no duty to Estrada, as the danger of Wass’ moving tractor trailer driving through Flying J’s parking lot was both obvious and known to him, their motion for summary judgment will be granted. An appropriate order follows.