307 responseinoppositiontokrogermotionforsummaryjudgement kmartcombine

Case: 1:11-cv-00103-GHD-DAS Doc #: 307 Filed: 11/05/13 1 of 3 PageID #: 5697

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF MISSISSIPPI ABERDEEN DIVISION KMART CORPORATION, Plaintiff CIV. ACT. NO. 1:11-CV-103-GHD-DAS versus THE KROGER CO., et al.

Defendants

RESPONSE IN OPPOSITION TO THE KROGER CO.’S MOTION FOR SUMMARY JUDGMENT May It Please the Court: Plaintiff, Kmart Corporation, submits this Response to The Kroger Co.’s Motion for Summary Judgment. Kroger’s motion should be denied because material issues of fact exist regarding whether Kroger knew or should have know that its store was located in a flood-prone area, and yet it failed to take adequate measure to protect the Kmart against the risk of flooding on May 2, 2010.

In support of its Motion, Kmart submits the following: •

Exhibit “A" - John R. Krewson’s Amended Flooding Evaluation (October 11, 2013);

•

Exhibit “B" - Excerpts to Deposition of John R. Krewson;

•

Exhibit “C" - Excerpts to Deposition of James D Monohan;

•

Exhibit “D" - Bridge, Phillips, Elam Drainage District News, dated September 26, 2010;

•

Exhibit “E” - Letters dated December 24, 2001, February 4, 2002, March 28, 2002 and April 1, 2002;

•

Exhibit “F” - Letter dated February 19, 2002;

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•

Exhibit “G” - Excerpts to Deposition of Wissam Shtaih, Kroger’s corporate representative;

•

Exhibit “H” - Excerpts to Deposition of David Menendez, Kmart’s corporate representative;

•

Exhibit “I” - Order Relative to Plaintiff’s Objections to Magistrate Judge’s Order Denying Request for Leave to File Amended Report; and

•

Exhibit “J” - Memorandum Opinion Granting in Part and Denying in Part Kroger’s Motion for Judgment on the Pleadings;

Accordingly, Kmart respectfully requests that this Court deny Kroger’s Motion for Summary Judgment.

This the 5th day of November, 2013.

Respectfully submitted,

/s/ Ryan O. Luminais __________________________________________ JAMES M. GARNER (La. Bar. No. 19589) JOHN T. BALHOFF, II (La. Bar. No. 24288) RYAN O. LUMINAIS (Miss. Bar. No. 101871) SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C. 909 Poydras Street, Twenty-eighth Floor New Orleans, Louisiana 70112 Telephone: (504) 299-2100 Facsimile: (504) 299-2300 ATTORNEYS FOR KMART CORPORATION

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CERTIFICATE OF SERVICE I hereby certify that a copy of the above and foregoing has been served on all known counsel of record with the Clerk of Court using the CM/ECF system which will automatically send-email notification to all known counsel of record, this 5th day of November, 2013. /s/ Ryan O. Luminais __________________________________________ RYAN O. LUMINAIS

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Amended Flooding Evaluation

Kmart # 4883 118 Highway 72 West Corinth, Mississippi 38834

Prepared For:

0112

Mr. John T. Balhoff, II Sher Garner Cahill Richter Klein & Hilbert, L.L.C. 909 Poydras Street, Twenty-eighth Floor New Orleans, Louisiana 70112

EFI Global Job No: 98340-08794

October 11, 2013

Prepared By: EFI Global, Inc. 3039 Premiere Parkway Suite 700 Duluth, GA 30097

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3039 Premiere Parkway Suite 700 Duluth, GA 30097 Tel: 770-925-9600 Tel: 800-245-9601 Fax: 770-925-9649 www.efiglobal.com

October 11, 2013 Mr. John T. Balhoff, II Sher Garner Cahill Richter Klein & Hilbert, L.L.C. 909 Poydras Street, Twenty-eighth Floor New Orleans, Louisiana 70112

Re:

Amended Flooding Evaluation Kmart # 4883 118 Highway 72 West Corinth, Mississippi 38834 EFI Global JN: 98340-08794

Dear Mr. Balhoff: Please find our amended report related to the flooding of Kmart store # 4883 at 118 Highway 72 West, in Corinth, Mississippi. This report re-calculates the HEC-RAS results shown in the original report of September 20, 2012. The HEC-RAS results used in the September 20, 2012 report were based on an inadvertent flow data discrepancy in the HEC-RAS model.

For the purposes of this report, the front of Kmart store # 4883, hereinafter also referred to as Kmart, will be the side of the store facing the intersection of Highway 72 West and South Fulton Drive. Directions right and left will be based on a viewer facing Kmart from this intersection. Using this convention, the right side of the store faces South Fulton Drive, the left side of the store faces Highway 72 West, and the rear of the store faces State Street.

Background: The Kmart store is a large retail store located in a shopping center at the corner of Highway 72 West and South Fulton Drive in Corinth, Mississippi (Figure 1). The building housing the Kmart store has slab on grade, open plan, warehouse type construction with at-grade parking abutting the store on the front. Paved driveways

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are on the left side and rear of the store. The building housing Kmart also houses a Kroger Grocery store as a continuation of the building to the right of the Kmart. Both the Kmart and the Kroger stores were constructed in 1992 as a part of the overall development of the retail center. The two stores have the same floor elevation and share parking.

The overall Kmart-Kroger retail center is a 16.29 acre tract located in a low area adjacent to Elam Creek, a large creek to the right of South Fulton Drive flowing north to south towards Highway 72 West. Parking for the Kmart and Kroger stores is at grade. Storm water runoff from the parking lot in front of the stores is collected in drop inlets and carried across South Fulton Drive in an underground pipe system to an existing detention facility located to the right of the site between South Fulton Drive and Elam Creek. Grades on the site are flat.

Roof drainage for the Kmart and Kroger stores is provided by gutters and downspouts on the rear of the store buildings. The downspouts discharge onto splash blocks at grade with the asphalt pavements behind the stores. Runoff from pavement behind the stores drains away from the stores across the paving to the rear curb. The runoff is collected and discharged by several flumes through the curb into an existing ditch draining left to right parallel to the curb behind the buildings.

Flow in the ditch is collected, along with runoff from the large grassed area behind the site, into a headwall for a 60 inch outfall storm drain.

The 60 inch headwall is located approximately between the Kroger and the Kmart stores, behind the rear curb of the parking lot behind the stores. The 60 inch outfall pipe runs from the headwall back towards the building to a drop inlet in the pavement behind the Kroger store. From this inlet, the pipe runs to the right behind the Kroger store through a series of drop inlets and then across South Fulton Drive. The location of the outfall headwall for the 60 inch pipe once it crosses South Fulton Drive could not be determined. Based on the location of the existing buildings to the right of South Fulton Drive and an inspection of Elam Creek in the area, it is believed the pipe turns and runs parallel to South Fulton Drive toward Highway 72 West and eventually discharges into the existing detention facility noted above.

Flooding Event: According to weather records on WeatherWarehouse.com, rain began falling in the Corinth area during the late evening of May 1, and the early morning of May 2, 2010.

By 5:00 a.m., the records for Corinth show that 5.68 inches of rain had fallen. As the morning progressed, water began rising rapidly around the Kmart. According to the store manager, Mr. Matt Hausmann, water was building up and flowing along the rear of the building, putting stress on the rear doors of the store. Eventually, landscape timbers stored on site struck the doors with enough force to break open the doors,

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lodge in the opening, and allow water to flood into the store. The quantity of water overwhelmed the staff’s ability to control it. According to Mr. Hausmann, the water in the parking lot around the building was measured at a depth of 22 inches by City of Corinth employees. Mr. Hausmann stated that there was a similar depth of water in both the Kmart and the Kroger store. The water caused considerable damage to the buildings and the inventory of the both the Kmart and Kroger stores.

Weather Data: The records for the area found on WeatherWarehouse.com show a rainfall event occurring overnight and during the morning of May 2, 2010 for the northern Mississippi and western Tennessee areas. Although hourly records for the area were not available, a review of the daily recording times and the pattern of rainfall distribution on area weather stations show that between 6 and 13 inches of rainfall fell during the period prior to 8:00 a.m., with the higher rainfall events occurring north of Corinth with Corinth being approximately on the southern extent of the heavy rainfall. Weather stations 10 or more miles south of Corinth and the Kmart site show relatively light rainfall accumulation, with the amount of rainfall recorded increasing with distance north of Corinth.

Because Elam Creek, the creek that flooded the site, heads up approximately 6 miles north of the site and flows south to the site, the pattern of increased rainfall amounts north of the site increased the flooding impact on the Kmart site. Based on NOAA Technical Paper 40 for the Corinth area, the 24 hour 100 year rainfall event is 7.6 inches. Based on the weather records, it appears that the storm of May 2, 2010 may have approached the 100 year rainfall amount.

FEMA Flooding Data: The current FEMA Firm Panel for the site, panel 28003C0067 (Figure 3), shows that the majority of the site area, including all of the Kmart and the Kroger building, is located in the designated flood limits of Elam Creek. Elam Creek is large tributary creek having an upstream drainage area of over 6 square miles draining to the site of the Kmart building. At the store site, the creek has a large, well developed flood zone designated on the FIRM panel as an AE zone. AE zones are studied zones having established base flood elevations. The Firm Panel also shows an area along both banks of the creek that is designated as the regulatory floodway for the creek.

According to the FIRM panel, approximately one half of the Kroger store is located in both the floodplain and also in the area FEMA has designated as being the regulatory floodway. The Kmart store is located in the floodplain only.

According to a Letter of Map Revision issued for the site in 2005, the 100 year flood elevation for the building is 432.4. An Elevation Certificate for the site prepared on

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November 11, 2001 places the finished floor elevation of the building at 433.0, 0.6 feet above the elevation of the FEMA 100 year flood elevation. Based on an as-built survey prepared for the site as a part of this report, the exterior grades along the perimeter of the building vary from 431.8 and 432.2, meaning the lowest adjacent grades around the building are below the flood elevation. A review of the FEMA historic FIRM records determined that the flood elevation of Elam Creek is unchanged on the current FIRM from the 100 year flood elevations at the time of construction of the building. Typically, standard design and permitting practice require building floor elevations in flood prone areas, especially in designated flood areas to be at least 3.0 feet above the 100 year flooding elevation. In the case of the Kmart and the Kroger, this would place the floor elevations at 435.4, 2.4 feet higher than the actual floor elevation. Had the building been constructed with a floor elevation of 435.4, flooding would not have occurred during the storm of 2010. The review of the elevation of the building relative to the flood elevation would typically have been the responsibility of the City of Corinth building authorities.

The location of the Kroger in the floodway is a concern. As noted, approximately one half of the Kroger was built in the floodway for Elam Creek. A review of aerial photography and the current FIRM for the site shows that a number of other buildings were also built in the floodway. According to records I have examined, the floodway shown on current FIRM is unchanged from the floodway shown on the prior FIRM panel, prior to the construction of the building. FEMA’s 2009 Flood Insurance Study for Alcorn County and Incorporated Areas, states: “Encroachment on floodplains, such as structures and fill, reduces the flood carrying capacity, increases the flood heights and velocities, and increases flood hazards in areas beyond the encroachment itself. One aspect of floodplain management involves balancing the economic gain from floodplain development against the resulting increase in flood hazard. For purposes of the NFIP, a floodway is used as a tool to assist local communities in this aspect of floodplain management. Under this concept, the area of the 1-percent-annual-chance floodplain is divided into a floodway and a floodway fringe. The floodway is the channel of a stream plus any adjacent floodplain areas that must be kept free of encroachment so that the 1percent-annual-chance flood can be carried without substantial increases in flood heights. Minimum Federal standards limit such increases to 1.0 foot, provided that hazardous velocities are not produced. The floodways in this study are presented to local agencies as minimum standards that can be adopted directly or can be used as a basis for additional floodway studies.”

Simply put, floodwaters must have an open, unobstructed flowing pathway along a creek. If earth fill or buildings or other structures are built in the flow pathway floodwaters rise and move faster and cause greater damage. When FEMA prepares their maps, they calculate what a reasonable flow pathway should be and show it as

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the “Floodway” on their maps. It is the responsibility of the cities and counties that issue building permits to enforce the restriction and make sure that the floodway is not blocked.

The difference between the areas on the FEMA maps called the “Floodway” and the areas called the “Floodplain” is that nothing can be built in the “Floodway”, while careful construction is allowed in the “Floodplain” areas. The Kmart store is built entirely in the “Floodplain.” Approximately one half of the Kroger store is built in the “Floodway”, obstructing the flow of floodwater down the creek.

The construction of the Kroger and other structures in the known floodway of Elam Creek increases the flood heights and potential for flooding, as well as for increased velocities, both of the factors involved in the flooding of the Kmart store. It is not known what regularity review was in place at the time the Kroger and other buildings were constructed in the floodway, but as the above quote from the Flood Insurance Study states, it is the responsibility of the local governing authority to control and prevent construction in the floodway. According to the August 30, 2010 volume of the “Federal Register”, Corinth, Mississippi, and Alcorn County, Mississippi were among the jurisdictions subject to suspension of community eligibility under the National Flood Insurance Program (NFIP) for non-compliance with the floodplain management requirements of the program.

A review of the “Existing Conditions Plan” sheet C-2 dated 03/09/1992 from the original construction plans for the site prepared by Prime Engineering found the elevation and location of the floodplain, and the location of the floodway to be substantially different from the floodplain and floodway shown on the FEMA FIRM panel for the area at the time. The floodway on the plans is shown south of Fulton Drive. The floodplain elevation on the plan sheet is approximately 430.8 which is 1.6 feet below the FEMA FIRM flood elevation shown on 1981 FIRM in force at the time.

The derivation of the floodplain and floodway data shown on the plans is unknown.

Although the Kroger and other structures along Elam Creek were constructed in the floodway without restriction, a review of FEMA’s records found that a “Letter of Map Revision” or LOMR was issued by FEMA in November 18, 2005, removing the Kroger property from the floodway due to “Inadvertent Inclusion in the Floodway 1”.

The records do not indicate how the LOMR originated, or what studies, review or public notice was given prior to issuance. FEMA regulations require a flood study be done to determine the impact of the encroachment on flood elevations and velocities.

The studies are submitted to FEMA for review and approval. No record was found of such a study. Issuance also requires that other affected property owners along the creek be notified, and public notice be made. No record of this was found. Once the studies and public notice are complete, the local governing and review agency

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responsible for flood management and oversight makes a final review of the LOMR and recommends approval. No record of this was found.

Prior to the issuance of the FEMA’s Letter of Map Revision (LOMR) in 2005, other prior efforts had been made regarding the location of the buildings in the floodplain and floodway. Also in 2005, a Letter of Map Amendment (LOMA) was issued for the site. An Elevation Certificate was issued by FEMA in 2001.

Note: The issuance of the LOMR, LOMA, and Elevation Certificate would have no impact on the physical presence of the buildings in the floodway or floodplain, or on the potential for flooding in any given flood event. These instruments would serve to reduce the cost of flood insurance for the buildings. The buildings are still shown in the floodplain and the floodway on the 2010 FEMA FIRM map for the site.

Along with the placement of the Kroger and other structures in the regulatory floodway, several other conditions that would increase the flood elevations on the site were noted along the creek and in the floodplain at the time of the initial inspection: 

Southeast of the Kmart near Highway 72, at the point where Kansas Southern Railroad’s north-south railroad line crosses Elam Creek on a timber bridge, a considerable debris field was noted upstream of the bridge. The debris blocked approximately the lower quarter of the bridge opening. Mr. David Huwe, the Director of Community Development and Planning for the City of Corinth stated during an interview in his office that the railroad had a poor record of maintenance and that the debris at the railroad bridge had been an ongoing problem for some time prior to the flood event.

Pictures taken during our initial investigation (Figure19 thru 21) show a debris field upstream of the ridge on the floor of the creek. It was noted during the field survey done in August, 2010, approximately 3 months after the initial inspection, that the debris field had been removed. It is not known who cleaned up the debris. Pictures taken April 28, 2011 by others show another, larger debris field upstream of the bridge.



A bridge for an abandoned railroad spur crossing Elam Creek remains in place with narrowly spaced abutments obstructing the creek channel.



The creek channel was badly overgrown with vegetation and poorly maintained. Near the spur railroad bridge noted above, utility and sanitary sewer pipes crossing the channel were apparently abandoned in place, obstructing the channel.

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

The approximately 4.5 acre grassed field immediately behind the Kmart and Kroger building was originally a number of feet lower in elevation. According to Mr. Huwe with the City of Corinth, the city filled the area over time with excess earth material from various projects around the city. Evidence that dumping of excess fill was still underway was found at the time of the initial inspection of the area (Figure 10). Filling the area reduced the flood storage and flood protection for the Kmart and Kroger building.

HEC-RAS Flood Studies: To determine the impact of the Kroger encroachment and general conditions of the flood hazard at the time of the May 2, 2010 flood, a preliminary HEC-RAS evaluation was prepared for the site using as-built survey data and the flows for the area listed in FEMA’s 2009 Flood Insurance Study. As noted there was a discrepancy in this preliminary initial report. Two conflicting flow data values were used in preparing the model. This conflict resulted in a conclusion in the report that placement of the Kroger store in the floodway caused a rise in the flood of 1.0 feet. The original study also compared the overgrown existing Elam creek channel with a theoretical well maintained channel and concluded that there would be a 2.0 foot drop in the water surface if the creek channel were well maintained. This report revises those values.

For this amendment, the HEC-RAS flow data was revised and the flow data discrepancy was corrected from 3702 cfs to 5202 cfs. The Manning’s N values were also corrected to reflect the conditions of the channel and the flooding depths occurring at the time of the loss. This amended report pertains to re-calculated runs using the same scenarios described in the original results dated September 20th, 2012 and in the original modeling. This amended report does not use the scenarios described in the amended report dated July 23, 2013 and does not use the HECRAS model used in that report.

Three models were run. The first model was run with the Kmart building alone. The second model was the combined Kmart- Kroger building. In these models, the N values were set based on the overgrown channel as it existed at the time of loss.

The results of these models found that the addition of the Kroger store to the site resulted in two inch rise in the flood elevation compared to the flood elevation for the Kmart only site with no Kroger. The models showed water levels at the store site that were approximately comparable to the water levels reported at the time of the flood.

A third model was run based on an unobstructed floodway with no Kroger and a channel having only light brush and grasses as would be appropriate for a properly maintained channel. This profile produced 100 year flood elevations on the site comparable with those shown in the 2009 Flood Insurance Study, and on the FEMA FIRM panel.

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A review of the flow and velocity data from the model found that the addition of the Kroger to the Kmart building reduced the overbank width of flow at the building by 193 feet and increased the average velocity of flow at the building by 16 percent.

Prior to the addition of the Kroger building the Kmart building was essentially outside the active overbank flow of water. When the Kroger building was added, the overbank flow overlapped the combined building by 129 feet, increasing the exposure of the building to flowing water. Flowing water carrying debris along the back of the Kmart building that damaged the rear door was reported as the cause of the water intruding into the Kmart building on the date of loss.

During the flooding of 2010, water levels above the FEMA 100 year flood level were reported in the building. This model reported water levels at the building comparable to the water levels found at the building during the 2010 flood indicating water levels at the site during the flood could occur at the 100 year flow level. Given the impact of the other building obstructions located in the floodway and floodplain that are not included in the model, it appears that the actual flow at the site was likely less than the 100 flooding year event.

Conclusions: 1. The drainage basin upstream from the Kmart site received rainfall that appears to approximate the 1-percent-annual-chance rainfall event (100 year storm). Using the FEMA 1-percent-annual-chance (100 year) flow data, and using a model with an overgrown channel similar to that existing at the time of the flood, flooding in Elam Creek exceeds the FEMA 1-percent-annual-chance (100 year flood) elevation and approaches the actual depths of flooding at the building reported. The presence of the Kroger store increased the impact and depth of flooding during the flood event of May 2, 2010 and caused damage to Kmart.

2. The presence of the Kroger in the FEMA floodway reduced the flooding width resulting increased velocities as anticipated by FEMA, increasing the depth of flooding and the impact on the Kmart store.

3. The lack of maintenance of the creek channel, coupled with obstructions and debris in the channel increased the depth of flooding and caused increased damage to the Kmart during the flood event of May 2, 2010.

4. Filling in the low area behind the Kmart and Kroger stores reduced the flood storage volume and likely increased the depth of flooding damage to Kmart.

5. Despite the location of the building in a large and documented floodplain and floodway no actions such as caulking and waterproofing the exterior walls, or

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construction of a protective membrane around the building were done to protect the building.

It is our belief that: had the creek channel been maintained, had building construction in FEMA’s regulatory floodway been restricted, had the area behind the Kroger and Kmart stores not been filled, and had the building been protected by waterproofing, the Kmart store would not have flooded, or had flooding occurred, it would have been occurred at such a depth that normal preventive actions by the store’s staff at the time of the event would have been able to protect the store from damage.

Qualifications Our services have been performed using that degree of skill and care ordinarily exercised under similar conditions by reputable members of EFI Global’s profession.

If any additional information is encountered which relates to this evaluation, EFI Global reserves the right to review our conclusions and opinions accordingly. In some cases, additional studies may be warranted to fully evaluate concerns noted.

Any verbal statements made before, during, or after the course of the investigation were made as a courtesy only and are not considered a part of this report.

Closing EFI Global, Inc. appreciates the opportunity to provide consulting services to you in this matter. Please contact us should any questions arise concerning this report, or if we may be of further assistance.

Sincerely, EFI Global, Inc.

John R. Krewson Engineering Consultant

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FIGURE 1 - OVERALL SITE

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FIGURE 2 – CLOSE AERIAL VIEW OF SITE

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FIGURE 3 – FEMA FIRM PANEL OF THE SITE Panel No.2803C0067C Effective Date: Sept. 17, 2010

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FIGURE 4 FRONT VIEW OF KMART AND KROGER

FIGURE 5 LEFT SIDE OF THE KMART

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FIGURE 6 VIEW ALONG THE FRONT OF KMART LOOKING FROM THE LEFT SIDE

FIGURE 7 VIEW ALONG THE REAR OF KMART LOOKING FROM THE LEFT SIDE

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FIGURE 8 LEFT SIDE OF KMART LOOKING FROM THE REAR CORNER WITH TYPICAL DROP INLET IN FOREGROUND

FIGURE 9 TYPICAL DOWN DRAIN ON REAR OF BUILDING

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FIGURE 10 CURB CUT IN REAR PARKING CURB NEAR LEFT SIDE OF KMART WITH DITCH BEYOND

FIGURE 11 FLUME THROUGH CURB BEHIND KMART

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FIGURE 5 12 DITCH BEHIND KMART

FIGURE 13 GRASSED FIELD IN AREA THAT WAS FILLED IN BEHIND THE SITE WITH NEW FILL IN THE BACKGROUND

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FIGURE 14 INLET TO 60 INCH PIPE COLLECTING WATER FROM THE DITCH BEHIND THE SITE

FIGURE 15 VIEW OF THE FIELD BEIND THE SITE NEAR THE RIGHT CORNER OF KROGER

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FIGURE 16 PILE OF FILL MATERIAL IN THE FIELD BEHIND THE SITE WITH KMART AND KROGER IN THE BACKGROUND

FIGURE 17 RIGHT SIDE OF THE KROGER LOOKING BACK TOWARD HIGHWAY 72 WEST

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FIGURE 18 FLOODING DEBRIS IN THE FENCE ON THE RIGHT SIDE OF THE ROAD RUNNING BESIDE KROGER

FIGURE 19 LOOKING UPSTREAM AT DEBRIS FIELD AT RAILROAD BRIDGE SOUTHEAST OF THE SITE

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FIGURE 20 LOOKING DOWNSTREAM AT DEBRIS FIELD AT RAILROAD BRIDGE

FIGURE 21 DEBRIS FIELD AT RAILROAD BRIDGE

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FIGURE 5 22 ABANDONED UTILITY LINES OBSTRUCTING ELAM CREEK WITH SPUR RAILROAD BRIDGE OBSTRUCTION AND OVERGROWN CHANNEL

FIGURE 23 OVERGROWN AND UNMAINTAINED CREEK CHANNEL

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FIGURE 24 TREE AND OVERGROWN AND UNMAINTAINED CREEK CHANNEL AT BRIDGE

FIGURE 25 OVERGROWN SPUR RAILROAD BRIDGE WITH UTILITY OBSTRUCTIONS IN BACKGROUND

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF MISSISSIPPI

ABERDEEN DIVISION

PLAINTIFF

KMART CORPORATION

v.

CIVIL ACTION NO. 1:11-CV-OOI03-GHD-DAS

THE KROGER CO.; E & A SOUTHEAST LIMITED PARTNERSHIP; FULTON IMPROVEMENTS, LLC; KANSAS CITY RAILWAY COMPANY; and CITY OF CORINTH

DEFENDANTS

ORDER RELATIVE TO PLAINTIFF'S OBJECTIONS TO MAGISTRATE JUDGE'S ORDER DENYING REQUEST FOR LEAVE TO FILE AMENDED REPORT Upon the Court's review of Plaintiff's objections to United States Magistrate Judge David Sanders' Order denying its motion for leave to file an amended report of its expert, John R. Krewson, the Court will consider an amendment of mathematical errors only.

The Court

accordingly requests that the Plaintiff submit to the Court a proposed amendment of only mathematical errors in Krewson's report, and further, that copies of this proposed amendment be timely furnished to Defendants. The proposed amendment of mathematical errors should be submitted to Court and Defendants within two (2) weeks of the date of this Order.

In the event the Court allows any modification of the expert report, the Court acknowledges that a continuance of certain pretrial and trial settings might become appropriate.

It is SO ORDERED, this, the

Jj!; septem~ 1/ ~~ of

SENIOR JUDGE

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IN THE UNITED STATES DISTRlCT COURT

FOR THE NORTHERN DISTRlCT OF MISSISSIPPI

ABERDEEN DIVISION

PLAINTIFF

KtvlART CORPORATION

CIVIL ACTION NO.1 :11-CV-00I03-GHD-DAS

v.

THE KROGER CO.; E & A SOUTHEAST LIMITED PARTNERSHIP; FULTON IMPROVEMENTS, LLC; KANSAS CITY RAIL WAY COMPANY; and CITY OF CORINTH

DEFENDANTS

MEMORANDUM OPINION GRANTING IN PART AND DENYING IN PART

DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS AND

GRANTING DEFENDANT'S MOTION TO STRIKE

Presently before the Court are Defendant The Kroger Co.'s motion for judgment on the pleadings [66] and motion to strike [88]. Upon due consideration, the Court finds that the motion for judgment on the pleadings [66] should be granted in part and denied in part, and the motion to strike [88] should be granted.

A. Factual and Procedural Background From the evening of May 1,2010 until the early morning hours of May 2, 2010, heavy rain pelted the Corinth, Mississippi area, causing nearby Elam Creek to flood.

Plaintiff Kmart

Corporation ("Kmart") alleges that due to the acts and omissions of several Defendants the flood water rose and flowed forcefully into the back of the Corinth Kmart store, rushing in the rear doors and causing extensive damage to the store. The Corinth Kmart store was closed for repairs from the time of the May 2010 flood until February 2011, when the store reopened for business. On April 27, 2011, Kmart alleges its Corinth store incurred additional costs to prevent subsequent damage from another anticipated flood event. Kmart brings this action against Defendants The Kroger Co. ("Kroger"); E & A Southeast Limited Partnership; Fulton Improvements, LLC;

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Kansas City Southern Railway Company; and the City of Corinth. I The Court will limit its analysis to Kmart's claims against Kroger, as the present motion forjudgment on the pleadings [66] and motion to strike [88] concern only those particular claims. The Court will first address the motion to strike and will then address the Rule 12(c) motion.

B. Motion to Strike

In ruling on a Rule 12(c) motion for judgment on the pleadings, a court must determine upon a review limited to the pleadings whether the plaintiff has stated a valid claim for relief. See FED. R. Crv. P. 12(c). "If, on a motion under Rule ... 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." FED. R. Cry. P. 12(d).

Kmart has attached to its response a flooding evaluation report by EFI Global. Kroger correctly states in its motion to strike that this report contains factual matters outside the pleadings, and thus would not be properly considered on a Rule 12(c) motion for judgment on the pleadings.

The Court finds that Kroger's motion to strike [88J is well taken; the flooding evaluation report by EFI Global, as well as any references to or statements of reliance on said report, shall be stricken from Kmart's response to the Rule 12(c) motion for judgment on the pleadings.

Having

addressed this preliminary matter, the Court now turns to the Rule 12(c) motion.

C. Rule 12(c) Standard "After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings." FED. R. Crv. P. 12(c). A Rule 12(c) motion is governed by the same

I Although Kmart also brought this action against the Federal Emergency Management Agency ("FEMA"), FEMA has since been dismissed from the case on sovereign immunity grounds. See Court's Order [50] and Mem. Op. [51] Granting FEMA's Mot. Dismiss.

2

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standards as a Rule 12(b)(6) motion-that is, that the court must determine upon a review of the pleadings whether the plaintiff has stated a valid claim for relief. Brown v. CitiMortgage, Inc., 472 F. App'x 302, 303 (5th Cir. 2012) (per curiam) (citing St. Paul Mercury Ins. Co. v.

Williamson, 224 F.3d 425, 440 n.8 (5th Cir. 2000Âť. To survive dismissal, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007); see Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305,312-13 (5th Cir. 2002). The Fifth Circuit has explained the Iqbal/Twombly standard as follows: In order for a claim to be plausible at the pleading stage, the complaint need not strike the reviewing court as probably meritorious, but it must raise more than a sheer possibility that the defendant has violated the law as alleged. Furthermore, the factual allegations must be enough to raise a right to relief above the speculative level. In determining whether a complaint states a claim that is plausible on its face, the court draws on its judicial experience and common sense.

Oceanic Exploration Co. v. Phillips Petroleum Co. ZOC, 352 F. App'x 945,950 (5th Cir. 2009) (per curiam) (internal quotation marks and citations omitted).

Although the Court need not "accept as true conclusory allegations or unwarranted deductions of fact," see Great Plains Trust Co., 313 F 3d at 313, dismissal is appropriate on a motion for judgment on the pleadings only "when it is clear that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief," id at 302-03. "A motion brought pursuant to [Rule] 12(c) is designed to dispose of cases where the material facts are not in dispute and ajudgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts." Hebert Abstract Co. v. Touchstone Props., Ltd, 914 F.2d 74, 76 (5th 3

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Cir. 1990) (per curiam) (citing SA CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE ยง 1367, at 509-10 (1990)). "Pleadings should be construed liberally, and judgment on the pleadings is appropriate only if there are no disputed issues of fact and only questions oflaw remain." Hughes v. Tobacco Inst., Inc., 278 F.3d 417,420 (5th Cir. 2001) (citing

Voest-Alpine Trading USA Corp. v. Bank of China, 142 F.3d 887, 891 (5th Cir. 1998)). "The issue is not whether the plaintiffs will ultimately prevail, but whether they are entitled to offer evidence to support their claims." Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007).

D. Discussion alld Analysis Kroger maintains in its motion for judgment on the pleadings [66J that Kmart's claims against it should be dismissed, because the pleadings indicate that Kmart can prove no set of facts in support of its claims. Kmart's complaint presents three basic theories of negligence against Kroger. Kmart alleges that Kroger (1) improperly remained in the flood way; (2) participated in securing an improperly granted Letter of Map Revision ("LOMR"), which allowed the Corinth Kroger store to improperly remain in the floodway; and (3) otherwise failed to take necessary steps to prevent harm to Kmart due to Kroger's presence in the floodway.

Kmart further alleges that

these acts and omissions caused the Corinth Kmart store to sustain extensive flood damage?

Kmart avers that Kroger's presence in the floodway on March 1, 2010 "caused a displacement of water and rise in the water level" and "altered the water flow from standing water to a rushing, forceful water flow," both of which resulted in extensive flood damages to the Kmart store.

2 Kmart additionally alleges in its complaint that the Corinth "Kroger store was built in a floodway that existed at the time of the store's construction." Kmart's Compl. [IJ 'II J 5. However, it is now an undisputed fact that the building occupied by Kroger was not constructed, owned, or initially occupied by Kroger following the building's construction. Kmart concedes that "Kmart has not sued Kroger for the construction of the Kroger store in a floodway." See Kmart's Resp. Opp'n to Kroger's Rule 12(c) Mot. [78] at 8. Thus, it is not necessary for the Court to address this factual allegation.

4

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Kmart's Compl. [1] ~~ 26-27. Kmart further avers that Kroger's presence in the floodway on April 27, 2011 "caused a displacement of water and a rise in the water level, resulting in Kmart having to incur expenses to prevent water from entering" its Corinth store. Id.

~

28.

Kroger presents three basic arguments in support of dismissal. First, Kroger contends that it owes no legal duties to Kmart, as Kroger was merely a tenant of the building it occupied, and any

such negligence action would instead lie against the owner of the building occupied by Kroger.

Kroger next contends that any role it played in the issuanee of the LOMR that allowed the Corinth Kroger store to remain in the floodway is no basis for a cause of aetion against Kroger, and further, that any such action would be preempted under the National Flood Insurance Act (the "NFIA").

Finally, Kroger contends that it had no authority to alter the leased premises and that any such action would have eonstituted waste against the landlord. The Court will address each argument for dismissal in tum.

The Court finds with respect to Kroger's first argument that Kroger's status as a tenant of the subject building does not absolve it from liability.3 Under general negligence principles, it is conceivable that Kroger and Kmart were neighboring store tenants with a duty of reasonable care to prevent harm to each other. See, e.g., Rhaly v. Waste Mgmt. ofll1iss., Inc., 43 So. 3d 509, 51 12 (Miss. Ct. App. 2010) (waste management company serving store had duty of reasonable care to prevent damage to neighboring landmvners' property from placing garbage receptacle too close 3 The Corinth Kroger store apparently has been a tenant of the building it occupies since September 11, 1998. See Kmart's Compl. [I] ';'Il 29, 52; E & A's Answer [21] 'Il 29; Fulton's Answer [16] at 2; Krnart's Resp. to Kroger's Rule l2(c) Mot. [78] at 8. The Corinth Krnart store apparently has been a tenant of the building it occupies since December 17,1991. See Mem. of Lease [66-3] at 1 (referenced in Kmart's Compl. [1] 'Il19).

E & A Southeast Limited Partnership was the landlord of both the building occupied by Kroger and the building occupied by Krnart from September 11, 1998 through December 14,2007. See Kmart's Compl. [1] ,; 29; E & A's Answer [21] 4,'; 29. Fulton Improvements, LLC apparently is now the landlord of both the building occupied 2011. See Krnart's Compl.

by Kroger and the building occupied by Kmart, and was as of May 2,2010 and April [1] 'Il52; Fulton's Answer [21] 2, 'Il11.

5

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to drainage ditch). The Court finds that Kmart should be allowed to present evidence of Kroger's alleged duty to Kmart with respect to preventing the flood damage to the Corinth Kmart store.

The Court now addresses Kroger's second argument, that Kroger's alleged participation in the issuance of the LOMR is no basis for a cause of action against Kroger, and that even if Kroger's alleged participation in the issuance of the LOMR is the basis of a cause of action against Kroger, the cause of action is preempted under the NFIA. Turning to the face of the pleadings, Kmart alleges in the complaint that Kroger "improperly sought and received" a LOMR from FEMA in 2005, thirteen years after the Kroger store building was constructed. Kmart's CompI. [1]

~

24. Kmart further alleges that the LOMR "improperly permitted the Kroger store to remain

in the floodway." Id.

Kmart alternatively alleges that "Kroger was aware of the [LOMR] and

knowingly and improperly allowed its store to remain in the floodway." Id.

~

25. Kmart then

alleges that it was Kroger's presence in the floodway (allowed by the LOMR) that caused a displacement of water and rise in the water level, resulting in the flood damage incurred at the neighboring [Corinth Kmart store].

Kroger's location within the floodway also altered the water flow from standing water to a rushing water flow. The displaced, rushing, and forceful water flow resulted in extensive flood damages to [the Corinth Kmart store].

Id.

~~

26-27. Finally, Kmart alleges that Kroger's presence in the floodway on April 27, 2011

"caused a displacement of water and a rise in the water level, resulting in Kmart having to incur expenses to prevent water from entering [the Corinth Kmart store]." Jd.

~

28.

It is apparent to the Court that Kmart is attempting to state a claim for Kroger's alleged

negligence in remaining in the floodway, and that Kroger's alleged participation in obtaining the LOMR is but one patch of the quilt. Kmart has conceded it seeks no recovery from Kroger under the NFIA and that its claims against Kroger lie in common-law negligence. See Kmart's Mem. 6

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Br. Supp. Resp. Opp'n to Kroger's Mot. Judgment on Pleadings [78] at 11. Kmart's common-law negligence claim is apart from any cause of action under the NFIA and thus is not foreclosed by the NFIA. See Paul v. Landsafe Flood Determination, Inc., 550 F.3d 511,514 (5th Cir. 2008) (citing

Till v. Unifirst Federal Sav. and Loan Ass 'n, 653 F .2d 152, 154 (5th Cir. 1981 )). However, Kmart's allegations challenging the issuance of the LOMR fall squarely within the ambit of the NFIA. See, e.g., Great Rivers Habitat Alliance v. FEAfA, 615 F.3d 985,987-89 (8th Cir. 2010);

Coal. for a Sustainable Delta v. FE\1A, 812 F. Supp. 2d 1089, 1102 (E.D. Cal. 2011).

Common-law negligence is not the proper vehicle for such allegations, as any alleged duty to provide correct tlood zone determinations arises out of the NFIA, and not from any state law. See

Ellis v. Countrywide Home Loans, Inc., 541 F. Supp. 2d 833, 837 (S.D. Miss. 2008); Kearney v.

First Horizon Home Loan Corp., No.1 :07cv121 LG-JMR, 2007 WL 4302963 (S.D. Miss. Dec. 6, 2007); Lusins v. First Am. Real Estate Solutions of Tex., L.P., No.1 :06cv646, 2007 WL 1745625 (S.D. Miss. June 14, 2007).

Therefore, such allegations are not tenable in a common-law

negligence claim, and furthermore, could only be brought against FEMA, which has the primary responsibility for issuing LOMRs as part of the National Flood Insurance Program. As the Court has already dismissed FEMA from the case sub judice on immunity grounds, Kmart is not entitled to offer evidence to prove the allegations concerning the issuance of the LOMR, specifically, that the LOMR "improperly permitted the Kroger store to remain in the tloodway." See Kmart's Compl. [1]

~

24.

However, with respect to Kmart's alternative allegation that Kroger was aware of the LOMR and knowingly and improperly allowed its store to remain in the tloodway, the Court finds

7

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that Kmart should be allowed to present evidence to support this allegation, as the same supports Kmart's common-law negligence claim.

Finally, with respect to Kroger's third argument that Kroger had no authority to alter the leased premises, Kmart alleges in the complaint that "[t]he Kroger store should have been leveled" instead of being allowed to remain in the floodway. Id (" 15. To the extent this allegation pertains to the leveling of land around the Kroger store, the Court notes that it is well settled in Mississippi that a lessee does not have the right to alter his leased premises unless he has authority from his landlord to do so. See Yazoo & 1\11 VR. Co. v. Sultan, 63 So. 672, 674 (Miss. 1913) ("Without the authority from his landlord, we do not see that [the lessee] had the right to construct a new ditch through the land."). However, the Court cannot determine based on the face of the pleadings whether Kroger was authorized to alter the leased premises under the terms of the leasehold agreements for the time periods in question. Accordingly, Kmart should be allowed to offer evidence on this point. For all the foregoing reasons, Kroger's Rule 12(c) motion for judgment on the pleadings [66] shall be granted in part and denied in part.

E. Conclusion

Accordingly, the Court finds that Kroger's motion for judgment on the pleadings [66] shall be GRANTED only insofar as it pertains to the specific allegations by Kmart that Kroger "improperly received" a LOMR, and that the LOMR "improperly permitted the Kroger store to remain in the floodway." In all other respects, Kroger's motion for judgment on the pleadings [66] shall be DENIED. Therefore, Kmart's claims that Kroger negligently remained in the flood way and otherwise failed to exercise reasonable care to prevent harm to the Corinth Kmart store from flooding shall survive this Rule 12(c) motion.

8

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The Court further finds that Kroger's motion to strike [88] shall be GRANTED. Exhibit 1 to Krnart's response [77] to the Rule 12(c) motion, as well as any references in the response to said exhibit, shall be stricken from Krnart's response [77] to the motion for judgment on the pleadings [66].

A separate THIS,

or~n

accordance with this opinion will be issued this day.

~day of August, 2013.

JL.~

SENIOR JUDGE

9