Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Sunflower Electric Power Corp. v. M&S Steel, Inc.

United States District Court, D. Kansas

April 20, 2018

SUNFLOWER ELECTRIC POWER CORPORATION, Plaintiff,
v.
M&S STEEL, INC. and GLOBAL POWER GENERATION SERVICE CORPORATION OF FLORIDA d/b/a/ GLOBAL POWER GENERATION SERVICES, Defendants.

          MEMORANDUM AND ORDER

          ERIC F. MELGREN, UNITED STATES DISTRICT JUDGE.

         Sunflower Electric Power Corporation (“Sunflower”) filed a lawsuit against M&S Steel, Inc. (“M&S”) and Global Power Generation Service Corporation of Florida d/b/a/ Global Power Generation Services (“GPGS”) relating to the failure of a turbine used at Sunflower's Garden City, Kansas, facility. Sunflower's Complaint alleges various claims against each Defendant for breaches of contract, breaches of warranties, and negligence. M&S filed a four-count crossclaim against GPGS that seeks indemnification for all expenses, costs, and attorney fees associated with the present action and for any damages that may be awarded to Sunflower in this action. GPGS filed a motion to dismiss Counts I and II of M&S's crossclaim alleging that the indemnity provision in the parties' subcontract is unenforceable as it violates both K.S.A. § 16-121 and Kansas public policy. Because M&S has sufficiently pleaded Counts I and II, the Court denies GPGS's motion to dismiss Counts I and II of M&S's crossclaim (Doc. 21). The Court denies M&S's motion for leave to supplement its response in opposition to GPGS's motion to dismiss (Doc. 59) as moot.

         I. Factual and Procedural Background[1]

         Effective September 17, 2014, M&S entered into a Master Service Agreement (“MSA”) with Sunflower to perform work on an item of “personal property”-a General Electric Company, MS7001, Frame 7, combustion turbine, S/N 248854 (“turbine”)-at Sunflower's facility in Garden City, Kansas. M&S and GPGS entered a subcontract on October 30, 2014, whereunder GPGS agreed to perform certain work on the turbine under the MSA.

         The subcontract stated that the subcontractor “shall furnish the labor, materials, tools, implements, design services, and/or other work and apparatus necessary to perform and complete to Contractor's satisfaction and the Owner's [Sunflower] specifications the work described in attached Exhibit B (the “Subcontract Work”).” Exhibit B states, in part:

GPGS is please [sic] to provide one (1) full time Technical Consultant for the upcoming Sunflower Electric Power Corporation (SEPC) Garden City S-4 gas turbine combustion inspection and maintenance. Additionally, M&S and GPGS have agreed to a profit sharing agreement based on the project sale, technical consulting and tools for the subject project as outline [sic] below.
M&S / GPGS profit sharing agreement whereas M&S provides project mechanical labor, equipment, tools and GPGS provides the customer introduction, project sale, technical oversight, tools and equipment.

         The subcontract contained an indemnity provision and certain insurance requirements.

         These provisions provide, in part:

7. Indemnity by Subcontractor. To the fullest extent permitted by law, Subcontractor shall indemnify and hold Contractor, Owner, the Project Architect, their agents, consultants and employees harmless from and against all claims, losses, costs and damages, including but not limited to attorneys' fees, pertaining to the performance of the Subcontract and involving personal injury, sickness, disease, death or property damage. This indemnification agreement is binding on the Subcontractor, to the fullest extent permitted by law, regardless of whether any or all of the persons and entities indemnified hereunder are responsible in part for the claims, damages, losses or expenses for which the Subcontractor is obligated to provide indemnification. This indemnification provision does not negate, abridge or reduce any other rights or obligations of the persons and entities described herein with respect to indemnity.
8. Insurance Requirements. Subcontractor shall purchase and maintain Insurance of the following types of coverage and limits of liability:
8.1. Commercial General Liability (CGL) with limits of Insurance of not less than $1, 000, 000 each occurrence and $2, 000, 000 Annual Aggregate.
. . . .
8.1.4 Contractor, Owner and all other parties required of the General Contractor, shall be included as insureds on the CGL, using ISO Additional Insured Endorsement CG 20 10 11 85 or an endorsement(s) providing equivalent coverage to the additional insureds such as CG 2033 and CG 20 37. This insurance for the additional insureds shall be as broad as the coverage provided for the named insured subcontractor. It shall apply as Primary and Non-Contributing Insurance before any other insurance or self-insurance, including any deductible, maintained by, or provided to, the additional Insured.
. . . .

         The MSA, entered between Sunflower and M&S, defines the scope of the agreement as an agreement “for the provision of furnishing qualified labor, experienced supervision, specialized tools, equipment, and material as may be necessary to perform services (Services) to Sunflower by Supplier as outlined in the specifications set forth in Exhibit B.” The specifications attached to the MSA state that “[i]t is the intent and purpose of these specifications to describe in detail the S4 TURBINE COMBUSTION INSPECTION and GENERATOR TESTING. The inspection will include a combustion area inspection, generator testing and various technical information letters (TIL) inspections.” The unit is described as “a General Electric Co., MS7001, Frame 7, combustion turbine S/N 248854 . . . designed to use natural gas and fuel oil. Over the past years the only fuel source has been natural gas.”

         M&S and GPGS performed work on the turbine pursuant to the MSA from approximately November 3, 2014, to December 6, 2014, which included work on transition pieces, bolts, and lockplates. Sunflower alleges that on August 6, 2015, the turbine suffered a catastrophic and sudden failure, and that the subsequent visual inspection revealed that transition pieces had failed, were no longer attached, were loose, or were missing a bolt and lockplate. M&S alleges that GPGS's responsibilities under the subcontract included oversight, quality control, technical compliance, inspection, and supervision of the work performed on the turbine, that GPGS was the technical consultant and supervisory oversight for the work performed on the transition pieces, bolts, and lockplates, and that GPGS inspected the work performed on the transition pieces, bolts, and lockplates before the turbine returned to service.

         In Count I, M&S alleges that GPGS was contractually obligated to indemnify, hold harmless, defend, and insure M&S from the claims and allegations asserted by Sunflower, and that GPGS breached the subcontract by failing and refusing to accept M&S's demands and tenders, failing and refusing to indemnify and hold harmless M&S against Sunflower's claims, failing to defend and/or provide a defense to M&S against Sunflower's claims, and failing to name M&S as an additional insured or provide M&S with insurance for at least three years after completion of the work complained of by Sunflower. In Count II, M&S alleges that separate and apart from the subcontract, GPGS understood that it was to provide technical oversight, quality control, technical compliance, inspection, and supervision of the work ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.