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Arena Holdings Charitable, LLC v. Harman Prof'l, Inc.

United States District Court, D. North Dakota, Southwestern Division

March 12, 2014

Arena Holdings Charitable, LLC, a Delaware limited liability company; and RE Arena, Inc., a Nevada Foreign corporation, Plaintiffs,
v.
Harman Professional, Inc., a Delaware corporation, Defendant and Third-Party Plaintiff,
v.
Impulse Group, Inc.; Impulse Group, LLC; HB Sound & Light, Inc.; and ON Semiconductor Corporation, Third-Party Defendants

For Arena Holdings Charitable, LLC, a Delaware limited liability company, RE Arena, Inc., a Nevada Foreign corporation, Plaintiffs: Bradley J. Beehler, LEAD ATTORNEY, MORLEY LAW FIRM, GRAND FORKS, ND; Brad W. Breslau, Richard R. Rardin, Cozen O'Connor, Denver, CO.

For Harman Professional, Inc., a Delaware corporation, Defendant, 3rd Party Plaintiff: Randall J. Bakke, LEAD ATTORNEY, Bradley Neuman Wiederholt, SMITH BAKKE PORSBORG SCHWEIGERT & ARMSTRONG, BISMARCK, ND; Shawn A. Grinolds, LEAD ATTORNEY, SMITH BAKKE PORSBORG & SCHWEIGERT, BISMARCK, ND.

For HB Sound & Light, Inc., 3rd Party Defendant: Christopher P. Malone, PRO HAC VICE, Cousineau McGuire Chartered, Minneapolis, MN; Tamara L. Novotny, Cousineau McGuire Chartered, Minneapolis, MN.

For ON Semiconductor Corporation, 3rd Party Defendant: Joel A. Flom, FLOM LAW OFFICE, P.A., FARGO, ND.

Page 732

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

Daniel L. Hovland, United States District Judge.

Before the Court is the Defendant and Third-Party Plaintiff Harman Professional, Inc.'s motion for summary judgment filed on November 1, 2013.[1] See Docket No. 51. The Plaintiffs, Arena Holdings Charitable, LLC, and RE Arena, Inc., filed a response in opposition to the motion on November 22, 2013. See Docket No. 62. The Third-Party Defendant, ON Semiconductor Corporation, filed a memorandum in support of the motion for summary judgment on November 22, 2013. See Docket No. 64. Harman Professional, Inc. filed a reply on December 2, 2013. See Docket No. 68. Also before the Court is the Third-Party Defendant ON Semiconductor's motion to dismiss the third-party complaint, filed on November 27, 2013. See Docket Nos. 64 and 66. For the reasons set forth below, the motion for summary judgment is granted.

I. BACKGROUND

On March 8, 2012, the Plaintiffs, Arena Holdings Charitable, LLC, (" Arena Holdings" ) and RE Arena, Inc., initiated this action in District Court for the Northeast Central Judicial District, Grand Forks County, North Dakota, against Harman Professional, Inc. and Harman International Industries, Inc. alleging negligence and strict liability claims. See Docket No. 1-1. The case was removed to federal district court on March 23, 2012. See Docket No. 1. On July 27, 2012, the Defendants filed a third-party complaint against Impulse Group, Inc.; Impulse Group, LLC; HB Sound & Light, Inc.; and ON Semiconductor Corporation, alleging negligence, products liability, breach of express warranties, and breach of implied warranties, as well as seeking contribution and/or indemnification. See Docket No. 20.

This matter arises from a fire that occurred at the Ralph Engelstad Arena (" Engelstad Arena" ) in Grand Forks, North Dakota, on July 3, 2011. The Plaintiffs allege the fire started when a Crown Macro-Tech 5002VZ amplifier produced a direct current to a speaker that spread to adjoining speakers located in the catwalk area of the Engelstad Arena. See Docket No. 1-1, p. 4. The fire caused approximately $5,000,000.00 of damage throughout the Engelstad Arena, including damage to the building and fixtures, as well as damage to personal property. See Docket No. 57, p. 1. The fire directly damaged the Engelstad Arena structure and equipment in the vicinity of the amplifier and speakers. The presence of smoke and soot

Page 733

throughout the Engelstad Arena after the fire caused additional damage.

During construction of the Engelstad Arena in 2001, Arena Construction, Inc.,[2] the predecessor in interest of Arena Holdings, contracted with Impulse Group, Inc.[3] for the installation of Engelstad Arena's sound reinforcement system. Pursuant to the contract with Arena Holdings, Impulse Group installed the amplifier alleged to have caused the fire. See Docket No. 53-1. Harman Professional manufactured and sold multiple amplifiers, including the Crown Macro-Tech 5002VZ amplifier alleged to have started the fire, to Impulse Group for installation at the Engelstad Arena. Construction of the Engelstad Arena was completed in 2001, with operations at the facility commencing by October, 2001. See Docket No. 62-2, p. 3.

Harman Professional asserts " [e]very Crown Amplifier, including the subject amplifier, ships with a reference manual, which includes the 3-year Crown Warranty, and standard disclaimer of incidental and consequential damages." See Docket No. 52, pp. 6-7. Pursuant to the reference manual, Crown/Harman warranted Crown's products were free of defects in material and workmanship for a period of three (3) years. Additionally, the warranty specifically disclaimed consequential and incidental damages:

DISCLAIMER OF CONSEQUENTIAL AND INCIDENTAL DAMAGES YOU ARE NOT ENTITLED TO RECOVER FROM U.S. ANY INCIDENTAL DAMAGES RESULTING FROM ANY DEFECT IN THE NEW CROWN PRODUCT. THIS INCLUDES ANY DAMAGE TO ANOTHER PRODUCT OR PRODUCTS RESULTING FROM SUCH A DEFECT. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATIONS OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU.

See Docket No. 20-6, p. 2.

It is undisputed the Plaintiffs did not receive the above-described reference manual from Impulse Group until after November 20, 2001. See Docket No. 62-4. During the course of litigation, a Macro-Tech Reference Manual was located in an employee's office at the Engelstad Arena. See Docket No. 57-2, pp. 36-37. Therefore, the Court reasonably concludes a representative for the Plaintiffs received the reference manual sometime after November 20, 2001. It is, however, unclear from the record the exact date the Plaintiffs or their predecessors in interest received such reference manual.[4]

Page 734

The specifications for the sound reinforcement system at the Engelstad Arena required Impulse Group, as the sound reinforcement system contractor, to assure the quality of the sound reinforcement system equipment:

1.2 QUALITY ASSURANCE

A. It is critical that the sound reinforcement system equipment is designed and installed as a system to meet the performance, quality, and appearance based on requirements specified herein.
B. The SRSC [sound reinforcement system contractor] shall provide a five-year warranty on the complete sound reinforcement system, equipment and installation. This warranty shall not void specific warranties issued by manufacturers for greater periods of time. The SRSC shall provide satisfactory evidence that he maintains a service ...

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