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Hiram Investments LLC v. Howmedica Osteonics Corp.

United States District Court, E.D. Louisiana

April 23, 2018

HIRAM INVESTMENTS, LLC
v.
HOWMEDICA OSTEONICS CORP.

         SECTION A(5)

          ORDER AND REASONS

          JUDGE JAY C. ZAINEY, UNITED STATES DISTRICT JUDGE

         Before the Court is a Rule 12(b)(6) Motion to Dismiss Counterclaim (Rec. Doc. 13) filed by Plaintiff Hiram Investments, LLC (“Hiram”). Defendant Howmedica Osteonics Corp. (“Stryker”) opposes the motion. (Rec. Doc. 14).[1] Hiram replied to the opposition (Rec. Doc. 22) and Stryker has filed a sur-reply. (Rec. Doc. 20). The motion, set for submission on February 21, 2018, is before the Court on the briefs without oral argument.[2] This matter is set as a bench trial to commence on October 3, 2018. Having considered the motion and memoranda of counsel, the record, and the applicable law, the Court finds that Hiram's motion is DENIED for the reasons set forth below.

         I. Background

         The parties bring suit in this Court pursuant to 28 U.S.C. § 1332-diversity jurisdiction. Plaintiff Hiram alleges that it is a Louisiana Limited Liability Company with its principal place of business in Louisiana. (Rec. Doc. 1, p. 1, ¶ 1). Defendant Stryker is alleged to be a limited liability company, having its domicile and principal place of business in Mahwah, New Jersey. Id. at ¶ 2.[3]

         The following well-pleaded facts, which must be viewed as true under the applicable legal standard, are taken from Stryker's counterclaim. On January 1, 2017, Stryker assumed the lease between Hiram and a third party, Inmotion Medical Resources, LLC, for the property located at 2323 Bainbridge Street in Kenner, Louisiana (the “Leased Premises”). Pursuant to the Commercial Gross Lease Agreement through the Assignment and Assumption of the Lease & Amendment (hereinafter collectively referred to as the “Lease Agreement”), Hiram, as lessor, was responsible for, among other things, maintaining the roof and outside walls of the Leased Premises. See (Rec. Doc. 13-2, p. 4, ¶ 17) (the Lease Agreement).

         In January of 2017, immediately upon taking possession of the Leased Premises, Stryker noticed significant water intrusion after inclement weather. Stryker immediately notified Hiram of the water intrusion. Upon being notified, Hiram sent its repairmen to the Leased Premises, who erroneously determined that the leak was caused by the air conditioning unit. Stryker then contracted with an independent HVAC repair company who inspected the Leased Premises and determined that the leak was caused by the roof and not the air conditioner.[4] Hiram allegedly failed to make the necessary repairs to the roof. Subsequently, each time it rained, there was water intrusion. In April of 2017, after another rainstorm, the water intrusion was so severe that it flooded Stryker's offices, damaged equipment, furniture, interior walls, and Stryker's medical inventory. Stryker alleges that the severe leakage and flooding caused damage to its medical inventory forcing Stryker to dispose of the equipment due to water infiltration. The inventory had a retail value of approximately $1, 057, 199.00.

         On April 30, 2017, Hiram was again placed on notice of the roof leakage and the damages, and failed to make the necessary repairs. In May of 2017, Hiram's foreman was sent to the Leased Premises by Hiram's property manager. The foreman inspected the damage after another rainstorm and determined that the water intrusion was due to improper construction of the exterior of the Leased Premises and the downspouts. After each rain event, Hiram was provided notice, photographs, and videos of the damage to the Leased Premises. Stryker argues that Hiram's alleged refusal to make the necessary repairs was a material breach of the Lease Agreement.

         Stryker further argues that pursuant to Paragraph 8 of the Lease Agreement, Hiram was obligated to maintain a commercial general liability policy naming Stryker as an additional insured. Hiram allegedly failed to name Stryker as an additional insured, which Stryker contends is also a material breach of Hiram's Lease obligations.

         On August 10, 2017, formal written notice was sent to Hiram regarding its material breach of the Lease. Stryker contends that Hiram is indebted to Stryker for its damaged inventory in the amount of approximately $1, 057, 199.00 plus damages for its other property losses. Stryker also asks this Court to find Hiram indebted to Stryker for the return of the security deposit, the prepayment of the last two months of rent, and reasonable attorney's fees pursuant to the terms of the Lease. (Rec. Doc. 9).

         II. Legal Standard

         Under well-settled standards governing Rule 12(b)(6) motions to dismiss, a claim may not be dismissed unless it appears certain that the plaintiff cannot prove any set of facts that would entitle him to legal relief. In re Supreme Beef Processors, Inc., 468 F.3d 248, 251 (5th Cir. 2006) (citing Benton v. United States, 960 F.2d 19 (5th Cir. 1992)). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239 (5th Cir. 2009). But the Court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.

         A legally sufficient complaint need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Id. In other words, the face of the complaint must contain enough factual matter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiff's claim. Lormand, 565 F.3d at 257. If there are insufficient factual allegations to raise a right to relief above the speculation level, or if it is apparent from the face of the complaint that there is an insuperable bar to relief, the claim must be dismissed. Twombly, 550 U.S. at 555.

         III. ...


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