Court Opinion

ID: 1023138
Source: CourtListenerOpinion
Date Created: 2013-07-04 23:33:06.398101+00
Date Added: 2024-06-11T15:07:55.915610
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 06-1728

PHILIP A. DUR,

                                              Plaintiff - Appellant,

           versus

WESTERN BRANCH DIESEL, INCORPORATED,

                                               Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:05-cv-01306-GBL)

Argued:   May 24, 2007                        Decided:   July 9, 2007

Before NIEMEYER and DUNCAN, Circuit Judges, and HAMILTON, Senior
Circuit Judge.

Affirmed by unpublished per curiam opinion.

ARGUED: John F. O’Connor, Jr., STEPTOE & JOHNSON, L.L.P.,
Washington, D.C., for Appellant.         Thomas Saunders Berkley,
VANDEVENTER & BLACK, L.L.P., Norfolk, Virginia, for Appellee. ON
BRIEF: Frank H. Griffin, IV, STEPTOE & JOHNSON, L.L.P., Washington,
D.C., for Appellant.     Edward J. Powers, VANDEVENTER & BLACK,
L.L.P., Norfolk, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

      This is a negligence action under Virginia substantive law.

The   district    court    granted   summary      judgment      in    favor      of    the

defendant.      The plaintiff has appealed.            We affirm.

                                          I.

      This negligence action stems from an electrical fire on board

a boat.    Philip Dur (Plaintiff), a retired Rear Admiral in the

United States Navy, owned the boat at the time of the fire.

Plaintiff had purchased the boat, named the “DeGrasse,” from the

Navy in 1998.      The DeGrasse, which Plaintiff has described as an

old admiral’s launch, had been assigned to Plaintiff when he was on

active    duty.         Following    Plaintiff’s           retirement,        the     Navy

decommissioned,      stripped,      and    sold      the   DeGrasse       “as    is”    to

Plaintiff. (J.A. 34). Plaintiff subsequently contracted with Moon

Engineering (General Contractor) in Norfolk, Virginia, to perform

“a hull, mechanics and electronics retro fit” on the DeGrasse in

order    that    Plaintiff   could    use      the    DeGrasse       as   a     personal

watercraft.       Id.     Throughout this opinion, we refer to this

contract as “the Retrofit Contract.”

      Upon what General Contractor and Plaintiff believed to be the

completion of the retrofitting work on the DeGrasse, Plaintiff

successfully piloted the DeGrasse from Norfolk to Alexandria,

Virginia. During the voyage, Plaintiff noticed that the DeGrasse’s

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tachometer had stopped working.             Upon arriving in Alexandria,

Plaintiff   also   noticed   that    a     fan    belt   running   between    the

alternator and the flywheel on the DeGrasse’s starboard engine was

missing, and that there was “melted wiring leading from the amp

meter, to the starter and then to the battery switch.”              (J.A. 34).

Plaintiff then contacted General Contractor and “demanded changes.”

Id.   See also (J.A. 24-25, Plaintiff’s Opposition to Defendant’s

Motion For Summary Judgment) (“When Admiral Dur observed that

additional electrical work needed to be completed, he contacted

Moon Engineering to insist that the work be done.”).

      General Contractor “agreed to ensure that the DeGrasse’s

electrical system was repaired” and subcontracted with Western

Branch Diesel, Inc. (Subcontractor) to perform the repair work in

Alexandria. (Plaintiff’s Opening Br. at 4). Plaintiff admits that

he never had a written contract with Subcontractor, nor does

Plaintiff   allege   that    he     ever    had    an    oral   contract     with

Subcontractor.

      Subcontractor performed work on the DeGrasse’s electrical

system on September 27-28, 2001.           On October 1, 2001, while still

in the custody of Subcontractor in Alexandria, the DeGrasse caught

fire and suffered what Plaintiff describes in his complaint in the

present negligence action as “significant damage.”              (J.A. 6).     The

fire caused no personal injuries.           The record contains no details

regarding the actual damage the DeGrasse suffered in the fire.

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     On November 15, 2005, Plaintiff filed the present diversity

action in the United States District Court for the Eastern District

of Virginia against Subcontractor, alleging that Subcontractor’s

negligence had caused the fire aboard the DeGrasse.           Among the

allegations     of   negligent   conduct,     Plaintiff   alleged   that

Subcontractor had been negligent by, inter alia, “failing to

properly service, repair and/or alter the electrical system in the

DeGrasse” and “failing to complete the work, and by allowing the

boat’s electrical system to remain in a dangerous condition.”

(J.A. 7).     The complaint demanded judgment against Subcontractor

“in an amount no less than $200,000, together with interest and the

cost of this action, and such other and further relief as this

Court deems just and proper.”     (J.A. 8).

     Subcontractor moved for summary judgment.            In moving for

summary judgment, Subcontractor argued that because it performed

its work aboard the DeGrasse pursuant to contract, Plaintiff could

not pursue a negligence claim against it without demonstrating a

separate common-law duty of care.        In response, Plaintiff argued

that, contrary to Subcontractor’s argument, contractors owe a

common-law duty of care, separate and apart from their contractual

duties, to use ordinary skill and care not to create a hazardous

condition that could physically injure persons or damage property.

Moreover, relevant to one of the issues on appeal, Plaintiff’s

written opposition to Subcontractor’s motion for summary judgment

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included the following footnote regarding third-party beneficiary

status:

           It is possible that Admiral Dur is a third-party
           2

     beneficiary under the contractual relationship between
     [Subcontractor] and [General Contractor].       However,
     because a common-law duty of care exists even for those
     who are actually contracting parties, the Court need not
     resolve this issue. Moreover, [Subcontractor] has not
     alleged in its motion that [Plaintiff] is a third-party
     beneficiary or argued that such status would have any
     relevance to its motion.

(J.A. 30).       In its summary judgment reply brief, Subcontractor

responded that Plaintiff’s negligence claim against it failed

because the record contained no evidence that the DeGrasse had

suffered damage caused by the fire beyond the subject of the

Retrofit Contract.       In support of this argument, Subcontractor

cited and relied upon Sensenbrenner v. Rust, Orling & Neale,

Architects, Inc., 374 S.E.2d 55, 58 (Va. 1988).

     The summary judgment record only consists of: (1) Plaintiff’s

complaint; (2) Subcontractor’s answer; (3) an affidavit by John

Beavers, service manager for Subcontractor, to the effect that

Subcontractor only worked on the DeGrasse “because of a contract to

perform repairs and service of the vessel’s electrical system,”

(J.A. 22); (4) Plaintiff’s admission, pursuant to a request to

admit,    that    no   written   contract    existed   between   him      and

Subcontractor;     (5)   the   “INTERVIEW   SUPPLEMENT”   prepared   by    an

investigator of the Alexandria Fire Department detailing his post-

                                   - 5 -
fire    interview        with     Plaintiff,       (J.A.     34-36);        and   (6)

Subcontractor’s work records concerning the DeGrasse.

       The district court granted summary judgment in favor of

Subcontractor.      Plaintiff noted the present timely appeal.

                                        II.

       The   sole   cause    of   action      in   this    case   is   Plaintiff’s

negligence cause of action against Subcontractor under Virginia

substantive law.         In order to sustain a cause of action based on

negligence under Virginia law, a plaintiff must establish “the

existence of a legal duty, a breach of the duty, and proximate

causation resulting in damages.” Atrium Unit Owners Ass’n v. King,

585 S.E.2d 545, 548 (Va. 2003).               The primary issue presented in

this appeal is whether there is a legal duty in tort owed by the

Subcontractor       to    Plaintiff.       The     determination       of    whether

Subcontractor owed Plaintiff a legal duty in the context of the

electrical work Subcontractor performed on the DeGrasse in its role

as a subcontractor is a pure question of law.                 Burns v. Johnson,

458 S.E.2d 448, 451 (Va. 1995) (“The question whether a duty of

care exists in a negligence action is a pure question of law.”).

       We review the grant of summary judgment de novo.                 Higgins v.

E.I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir. 1988).

A motion for summary judgment may be granted if “there is no

genuine issue as to any material fact and . . . the moving party is

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entitled to a judgment as a matter of law.”              Fed. R. Civ. P. 56(c).

In reviewing a district court’s grant of summary judgment, we must

construe the facts in the light most favorable to the non-moving

party; here, Plaintiff.          Smith v. Virginia Commonwealth Univ., 84

F.3d 672, 675 (4th Cir. 1996) (en banc).

      In granting summary judgment in favor of Subcontractor, the

district court primarily relied upon Sensenbrenner v. Rust, Orling

&   Neale,   Architects,        Inc.,   374     S.E.2d   55    (Va.       1988).        In

Sensenbrenner,      the    plaintiffs     contracted       with      a    builder      for

construction of a house and installation of an enclosed swimming

pool.   Id. at 56.        The builder in turn entered into a subcontract

with an architectural firm to design the home, the pool, and its

enclosure.    Id.     After the architectural firm had furnished the

requisite plans, the builder entered into a subcontract with a

swimming pool contractor for construction of the swimming pool.

Id.     Various     components     of   the     swimming      pool       proved   to    be

defective, causing damage to the swimming pool itself and to the

plaintiffs’ house.        Id.

      The plaintiffs sued the architectural firm and the swimming

pool subcontractor for negligence.               The Sensenbrenner court held

that the plaintiffs could not sustain a negligence cause of action

against the architectural firm nor the swimming pool subcontractor,

reasoning:

           The plaintiffs here allege nothing more than
      disappointed economic expectations. They contracted with

                                        - 7 -
     a builder for the purchase of a package. The package
     included land, design services, and construction of a
     dwelling. The package also included a foundation for the
     dwelling, a pool, and a pool enclosure. The package is
     alleged to have been defective--one or more of its
     component parts was sufficiently substandard as to cause
     damage to other parts. The effect of the failure of the
     substandard parts to meet the bargained-for level of
     quality was to cause a diminution in the value of the
     whole, measured by the cost of repair. This is a purely
     economic loss, for which the law of contracts provides
     the sole remedy.

Id. at 58.    Sensenbrenner squarely applies the economic loss rule,

which rule provides that a cause of action in which only economic

damages are sought (i.e., the benefit of a contractual bargain) can

only be maintained against a party with whom the plaintiff has

privity of contract.    Id.   The Sensenbrenner court also reiterated

that Virginia Code § 8.01-223, “which abolishes the lack-of-privity

defense in actions for the recovery of damages to persons or

property resulting from negligence,” has “no application to claims

for purely economic losses.”     Id. at 56-57.   Accordingly, Virginia

Code § 8.01-223 offered no aid to the plaintiffs in Sensenbrenner.

     In the present case, the district court applied Sensenbrenner

as follows:

          The facts here are very similar to those in
     Sensenbrenner.    [Plaintiff] contracted with [General
     Contractor] to perform electrical work on his boat.
     (Pl.’ Opp., at 2). Like the contractor in Sensenbrenner,
     [General Contractor] in turn hired a subcontractor,
     [Subcontractor], to perform the contracted services. In
     performing   its   duties,   [Subcontractor]   destroyed
     [Plaintiff’s] boat.       As the Court stressed in
     Sensenbrenner, the sole area of law available to the
     Plaintiff here is contract law because the damage caused
     to Plaintiff’s property was solely the property subject

                                 - 8 -
      to the contract and the losses were purely economic. As
      Plaintiff’s complaint states, “[Plaintiff] contracted for
      repairs, service, replacement and alterations of the
      electrical system” for his boat. (Pl.’s Complaint, at
      2.) It was precisely these activities that gave rise to
      the damages to Plaintiff’s boat. And the damages that
      Plaintiff suffered were exclusively to the boat.
      Plaintiff does not allege that any other injury to
      persons or property not contemplated by the contract in
      fact occurred.

           The Court holds that Plaintiff may only recover
      under contract law because Plaintiff’s losses were within
      the contemplation of the contract to repair his boat and
      did not cause injury to persons or property beyond the
      contemplation of the agreement.

(J.A. 55-56).

      We agree with the district court that Sensenbrenner forecloses

Plaintiff’s     negligence   cause   of   action   against       Subcontractor.

Viewing the evidence in the light most favorable to Plaintiff, the

record only supports the conclusion that the work performed by

Subcontractor on the DeGrasse’s electrical system was performed to

fulfill   General    Contractor’s     obligations        under   the   Retrofit

Contract.      The General Contractor did not initially fulfill its

obligation under the Retrofit Contract to provide the DeGrasse with

a   properly   working   electrical    system,     and    therefore,    General

Contractor     subcontracted   with    Subcontractor        to   fulfill   that

obligation once it became clear that further repair was needed.

Therefore, the damage to the DeGrasse caused by the fire fell

within the scope of the contractual package, and thus, amounted to

nothing more than economic loss for which the law of contracts

provides Plaintiff the sole remedy.

                                     - 9 -
      Moreover, the record is completely absent of any evidence that

the DeGrasse suffered damage beyond the scope of the Retrofit

Contract.       As such, Virginia Code § 8.01-223 has no application

here.      In   Plaintiff’s   own   words    to   the   investigator   of    the

Alexandria Fire Department, Plaintiff purchased the DeGrasse “as

is”   in   “stripped”   condition    and     subsequently   contracted      with

General Contractor to perform a “hull, mechanics and electronics

retro fit.”      (J.A. 34).   The record contains insufficient evidence

(in fact no evidence) for a reasonable jury to find that the

original, stripped portion of the DeGrasse suffered damage during

the fire.1       In conclusion, we hold the district court properly

granted summary judgment in favor of Subcontractor with respect to

Plaintiff’s negligence claim.

      1
      Plaintiff argues that he should be excused from his failure
of proof on this point by claiming that he did not have an
opportunity to put in evidence regarding damages because
Subcontractor raised the economic loss rule from Sensenbrenner for
the first time in its reply brief to his opposition brief to
Subcontractor’s motion for summary judgment. We reject Plaintiff’s
argument. First, in the face of a properly supported motion for
summary judgment, as was the case here, Plaintiff was obligated to
come forward with any and all such evidence to support his
negligence cause of action. See Fed. R. Civ. P. 56(e). Second,
Subcontractor’s initial Memorandum in Support of its Motion for
Summary Judgment contained sufficient legal argument regarding
Subcontractor’s lack of a legal duty owed to Plaintiff to put
Plaintiff on notice that it should have come forward with any
evidence it had showing that the original, stripped portion of the
DeGrasse suffered damage during the fire.

                                    - 10 -
                                       III.

      Lastly, Plaintiff argues that the district court erred in

granting summary judgment to Subcontractor based upon a lack of

privity   of     contract    between      him    and   Subcontractor     without

addressing whether Plaintiff was a third-party beneficiary of the

contract between General Contractor and Subcontractor.                  Va. Code

§ 55-22 (“[I]f a covenant or promise be made for the benefit, in

whole or in part, of a person with whom it is not made . . . such

person . . . may maintain in his own name any action thereon which

he might maintain in case it had been made with him only and the

consideration had moved from him to the party making such covenant

or promise.”).

      Plaintiff’s      argument   is    without      merit.    First,   assuming

arguendo the district court erred in failing to address whether

Plaintiff was a third-party beneficiary of the contract between

General Contractor and Subcontractor, Plaintiff invited the error

by telling the district court:            “the Court need not resolve this

issue.”   (J.A. 30).        See United States v. Jackson, 124 F.3d 607,

617 (4th Cir. 1997) (According to the invited error doctrine, “‘a

court cannot be asked by counsel to take a step in a case and later

be   convicted    of    error,    because       it   has   complied   with   such

request.’”).      Second, Plaintiff’s failure to make the argument

below that he now makes on appeal with regard to third-party

beneficiary status constitutes a waiver of the issue, subject only

                                       - 11 -
to plain error review.          See In re: Celotex Corp., 124 F.3d 619,

630-31 (4th Cir. 1997) (adopting plain error standard of review

used in criminal cases, as set forth in United States v. Olano, 507

U.S. 725 (1993), for application in civil cases).2                 Although, in

the final footnote of his written response to Subcontractor’s

motion    for    summary      judgment,     Plaintiff     mentioned    the     mere

possibility that he is a third-party beneficiary to the contract

between    General     Contractor     and      Subcontractor,     he   presented

absolutely no argument on the matter.

     Assuming arguendo that Plaintiff could satisfy the first three

prongs of Olano’s plain error test, he certainly cannot satisfy the

final miscarriage of justice prong.                There simply can be no

miscarriage of justice in our refusing to vacate and remand this

case for the district court to consider a third-party beneficiary

theory    when   not   only    did   Plaintiff    never    move   to   amend    his

complaint to allege a cause of action based upon a third-party

beneficiary theory, but Plaintiff was so confident in his primary

theory of recovery that he expressly told the district court not to

consider a third-party beneficiary theory.

     2
      Under Olano’s plain error test, we may only exercise our
discretion to correct a forfeited error, if we: (1) find error; (2)
find the error is plain; (3) find the error affects the substantial
rights of the party or parties alleging the error; and (4) after
examining the particulars of the case, find the error seriously
affects the fairness, integrity or public reputation of judicial
proceedings. Id. at 731.

                                      - 12 -
                                IV.

     For the foregoing reasons, we hold the district court did not

commit reversible error in granting Subcontractor’s motion for

summary judgment.   Accordingly, we affirm.

                                                         AFFIRMED

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