Phila. judge issues defense ruling in contract case between Burlington Coat Factory and construction co.

By Jon Campisi | Aug 26, 2013

A state trial judge last month issued a defense ruling in a breach of contract case between Burlington Coat Factory and a construction company arising from a workplace injury.

In a July order made public late last week, Judge Albert Snite, Jr., entered judgment in favor of Grace Construction Management Co. in a case brought by Burlington Coat Factory of Pennsylvania and Burlington Coat Factory Warehouse Corp.

The lawsuit stemmed from an incident in which a man identified as Brian Eddis, an employee of one of Grace’s sub-contractors on a project to renovate a Burlington Coat Factory store in Philadelphia, became injured while using a freight elevator at the store.

Eddis, an employee of Belfi Brothers, filed suit against the BCF entities and the Schindler Elevator Corp. The latter had a contract to service and maintain the freight elevator.

The parties ended up settling the underlying action with both the BCF entities and Schindler contributing $35,000 toward the settlement, which included a finding of no liability, the record shows.

When the underlying complaint was filed, the BCF entities demanded a defense and indemnification from Grace and its insurer, but their demand was refused, according to the record.

Grace’s insurance company maintained that its coverage was not primary.

The BCF entities then sued Grace for breach of contract, contribution and indemnity.

Last month, Snite, addressing both parties’ cross-motions for summary judgment, ruled in favor of Grace, writing that while Burlington had been added to Grace’s insurance policy as an additional insured, there was nothing in the contract that required that Grace’s insurance be primary.

Lawyers for BCF had argued that Grace breached the contract because its insurance carrier refused to provide coverage relating to the workplace incident.

BCF attorneys also argued that under the contract, they were entitled to complete indemnification from Grace “regardless of issues of negligence or fault,” Snite’s opinion notes.

The judge, however, pointed out that neither of the indemnification provisions in the contract contain language expressly requiring Grace to indemnify the BCF entities for the entities’ or their agents’ own negligence.

Under either contract provision, Snite wrote, the court could not determine whether Grace has any duty to indemnify the BCF entities until their relative fault for Eddis’ accident is decided.

Snite also wrote that the evidence of Grace’s fault is “scant.”

The only evidence the BCF entities point to in support of their claim that Grace negligently trained and supervised Eddis with respect to his use of the freight elevator was the testimony by Grace’s project supervisor in which the man admitted that he told the subcontractors’ foremen that BCF had requested that an assistant store manager or a security guard help operate the freight elevators for workers.

“While this admission may be sufficient evidence of Grace’s (and Mr. Eddis’) duty to obtain assistance before using the elevator, it is not evidence that a breach of that duty caused Mr. Eddis’ damages,” Snite wrote.

“In this case, there is no evidence, expert or otherwise, that Mr. Eddis’ or Grace’s failure to request assistance, rather than an alleged malfunction of the elevator, was the cause of his injuries. Therefore, there is no evidence that Grace’s breach of duty, or that of anyone other than the BCF Entities, was the cause of Mr. Eddis’ injuries.”

Snite went on to write that because Grace didn’t expressly agree to indemnify the BCF entities for the entities’ own negligence, and they are the only ones who could be found liable at trial based on the evidence presented, Grace has no duty under the contract to indemnify the BCF entities for the expenses they incurred in connection with the underlying Eddis action.

The court docket in the case shows that Heather M. Eichenbaum, an attorney representing the BCF entities, appealed the trial court’s decision to the state Superior Court.

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