Rci Contractors & Engineers, Inc. v. Joe Rainero Tile Company, Inc.

Citations: 677 F. Supp. 2d 914; 2010 U.S. Dist. LEXIS 1674; 2010 WL 92783Docket: Case 1:09CV00054

Court: District Court, W.D. Virginia; January 11, 2010; Federal District Court

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In the case RCI Contractors. Engineers, Inc. v. Joe Rainero Tile Company, Inc., the United States District Court for the Western District of Virginia addressed a products liability claim involving the grout "EpoxyPro," supplied by Kaiser Building Products, Ltd. RCI, a subcontractor, alleged that EpoxyPro, which was marketed as non-staining and ideal for high-traffic areas, actually stained easily and could not be cleaned. After initially suing Kaiser in Alabama and consenting to dismiss that case, RCI refiled against Kaiser and Rainero in Virginia, claiming breach of contract, breach of warranty, fraud, and false advertising.

Kaiser moved to dismiss the breach of contract claim, arguing RCI was not an intended third-party beneficiary of the contract between Rainero and Kaiser. The court found that RCI's Amended Complaint did not sufficiently demonstrate that status, agreeing with Kaiser. Additionally, RCI consented to summary judgment on the fraud and false advertising claims. The court referenced the Federal Rules of Civil Procedure, specifically Rule 8, which requires a "short and plain statement" of the claim, and emphasized the need for a "plausible" claim per the standard set by Ashcroft v. Iqbal. The court's decisions on Kaiser's motions are pending.

Virginia law governs this case, allowing a third party to sue under a contract if the contracting parties intended to confer a benefit upon that third party. A mere incidental benefit does not suffice for third-party beneficiary claims. RCI's Amended Complaint must show a plausible inference that Rainero and Kaiser intended to benefit RCI, but it fails to do so. RCI argues it is interconnected with Rainero, but this does not establish that the Kaiser-Rainero contract was primarily for RCI’s benefit. The factual allegations suggest RCI only received an incidental benefit.

Kaiser has moved for summary judgment on RCI's breach of implied warranty claim, asserting it is barred by the statute of limitations. Under the Uniform Commercial Code, claims must be initiated within four years of the cause of action accruing, which occurs upon delivery of goods, regardless of breach awareness. RCI’s cause of action accrued in March 2005, but the complaint was not filed until June 30, 2009, exceeding the limit. RCI contends that the statute was tolled during an Alabama lawsuit, which was filed within the limitations period but dismissed without merit determination. Kaiser disputes the tolling applicability on two grounds: that the Alabama lawsuit did not involve the same cause of action as this case, as it only claimed breach of express warranty, while the current claim involves breach of implied warranty.

Kaiser's interpretation of section 8.01-229(E)(1) is overly restrictive and contradicts the statute's intended remedial purpose, which advocates for a liberal construction. Virginia law defines a cause of action broadly as a collection of operative facts that establish a right to action. RCI's Alabama lawsuit, similar to the current action, alleged damages from the use of Epoxy-Pro in jails due to staining and discoloration, despite not explicitly invoking "implied warranty." The essence of both lawsuits is consistent, focusing on the same operative facts and relief against the same defendant. Kaiser's argument against tolling, based on the Alabama lawsuit's dismissal timing, relies on an inapplicable case interpreting a different tolling provision. Section 8.01-229(E)(1) does not limit tolling to actions dismissed prior to filing another suit. Therefore, RCI's breach of implied warranty claim remains valid under the statute of limitations, as the Alabama suit was timely filed, preserving the cause of action. Consequently, Kaiser’s Motion to Dismiss Count III is granted due to failure to state a claim, and Kaiser’s Motion for Partial Summary Judgment is granted for Counts V and VI but denied for Count IV. Additionally, RCI and Rainero have settled, making Rainero's Motion to Dismiss unnecessary to address. The court also dismissed a Kaiser-affiliated company for lack of personal jurisdiction. RCI's claim for breach of express warranty remains unaffected by summary judgment motions, and alternative arguments regarding the statute of limitations are not addressed.