S. Ill. Riverboat/Casino Cruises, Inc. v. Hnedak Bobo Grp., Inc. - No. 03-cv-4215-JPG, 2007 U.S. Dist. LEXIS 53776 (S.D. Ill. July 25, 2007)

Rule:

If the moving party meets its burden, the nonmoving party has the burden to go beyond the pleadings and affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact which requires trial. A genuine issue of material fact is not demonstrated by the existence of some alleged factual dispute between the parties, or by some metaphysical doubt as to the material facts. Rather, a genuine issue of material fact exists only if a fair-minded jury could return a verdict for the nonmoving party on the evidence presented.

Facts:

Harrahs and HBG entered into an agreement on June 29, 2000, under which HBG agreed to design the docking facility for a riverboat casino Harrahs planned to build on the Ohio River in Metropolis, Illinois. Harrahs wanted to replace the casino it was operating on the site because it was in very poor condition. The parties' contract (the Agreement) contained several provisions dealing with code compliance. Among other things, HBG agreed to assist Harrahs "in the filing of the required documents for the approval of governmental authorities having jurisdiction over the Project" and to revise "the drawings, if necessary for such approval." The Agreement also provides that, "Prior to the commencement of construction, [HBG] shall provide documentation to [Harrahs] that, in the professional judgment of [HBG], all plans specifications and drawings conform to all applicable governmental regulations, statutes and ordinances, and the improvements when built in accordance therewith will conform to applicable regulations." Pursuant to the Agreement, HBG designed a dock with four ramps providing access to the riverboat. HBG eventually determined, after employing an independent code consultant, that a cheaper, two-ramp design would satisfy the applicable codes and regulations. Upon review, Harrahs agreed to the two-ramp design. On March 23, 2000, HBG, HBG's code consultant, and Harrahs met with a representative of the State Fire Marshal to review the two-ramp plan. The Fire Marshal's representative orally confirmed that the two-ramp plan complied with applicable fire code. In the spring of 2001, after construction of the dock had begun, another Fire Marshal's representative toured the construction site with James Nolan, the facilities manager for the project. This representative told Nolan the dock did not have sufficient ramps to comply with the fire code. Nolan told his superiors at Harrahs of the problem, but they did not relay this information to HBG. HBG completed the dock in August 2001. On August 6, 2001, Harrahs moved the old boat to the new dock and continued operating the old boat there until the new boat arrived. The Fire Marshal inspected the old boat/new dock facility on August 24, 2001, and concluded that it failed to meet code because of ingress and egress problems. The Fire Marshal refused to certify the structure and told Harrahs it had to maintain a fire watch if it intended to continue its operations. Harrahs chose to keep the facility open and to maintain the fire watch. Once the new boat arrived on September 10, 2001 and its connection to the new dock was complete, the Fire Marshal inspected the set up and concluded that the facility needed additional ramps to comply with code. He concluded that the casino could not remain open unless Harrahs continued to maintain a fire watch. After an abortive appeal, Harrahs decided to build a third ramp. HBG claimed Harrahs asked it and Thompson to submit plans for building the third ramp. HBG claimed Harrahs chose to go with Thompson and fired HBG. Harrahs, on the other hand, contended that HBG continued to be involved with the third ramp until its completion. Thus, Harrahs brought the instant action against HBG, alleging that it breached both express and implied warranties by submitting a plan for the dock that did not comply with applicable code. HBG filed a motion for partial summary judgment on the issue of fire watch damages, among others.

Issue:

Is it proper to award summary judgment on the issue of fire watch damages?

Answer:

No.

Conclusion:

HBG contended that Harrahs  cannot recover its fire watch damages because it "knowingly chose to violate Illinois law and open for business without first receiving the proper permits." HBG has not, however, indicated precisely what law Harrahs violated. In its response, Harrahs noted that it received a building permit from the City of Metropolis, Metropolis does not issue Certificates of Occupancy, Harrahs had permission to operate the new boat from the OSFM, the Illinois Gambling Authority did not shut the casino down when it found out about the situation, and OSFM has previously allowed facilities not complying with applicable codes to operate with a fire watch. While HBG disputes some of the finer points of these statements and the permissible inferences to be drawn therefrom, its arguments are feeble. The flaw in HBG's case is its failure to identify how Harrahs's operation of the old boat/new barge was illegal. It has cited to no provision of local, state, or federal law indicating illegality in its actions. This was borne out by the fact that the relevant authorities let Harrahs continue operating on the condition that it employed a fire watch. Equally important, HBG relies on a general statement of the law, which it has combed from cases that are factually unrelated to the case at bar.