Nortek Inc. v. ITT LLC

Background

Nortek sought indemnification from ITT for asbestos-related claims involving the Reznor business. ITT had sold that business to FL Industries in 1985 under an Asset Purchase Agreement containing indemnification provisions. In 1993, ITT and a successor to FL Industries entered into an addendum addressing asbestos liabilities and providing that ITT would defend and pay judgments involving asbestos exposure from products made by ITT or its predecessors before the 1985 closing.

Nortek later acquired the relevant heating, ventilation, and air-conditioning business from Thomas & Betts Corporation in 2014. The transaction transferred related indemnities and liabilities to a Reznor entity. Nortek argued that it was a successor to the Reznor business and, alternatively, an assignee of Thomas & Betts Corporation’s indemnity rights. Nortek sought recovery for amounts spent defending and resolving 337 asbestos-related claims.

Both parties moved for summary judgment, which asks whether the evidence presents any genuine factual dispute requiring a trial and, if not, which party is entitled to judgment under the law. ITT sought judgment on the entire amended complaint. Nortek sought partial summary judgment establishing ITT’s liability on its first and third claims and obtaining the relief requested in its second claim. The court considered liability, not the amount of damages.

First Claim: Breach of Contract

The court held that Nortek was a successor to the Reznor business and therefore a successor-in-interest to Thomas & Betts Corporation for purposes of the indemnity rights. The court found that the agreements and undisputed evidence showed that the business Nortek acquired in 2014 was the same Reznor business that ITT had sold in 1985. The transaction also transferred indemnities related to asbestos liabilities.

The court separately held that the 1993 Addendum provided an independent basis for ITT’s indemnification obligations. Even assuming the 1985 agreement’s consent requirement for assignments remained applicable, the 1993 Addendum required ITT to assume the defense and pay judgments in the specified asbestos-related cases, and those obligations ran to assignees without consent.

The court found that ITT was liable for breach of its contractual indemnity obligations to Nortek. ITT’s motion for summary judgment was denied as to the first claim, and Nortek’s cross-motion was granted as to liability on that claim. The court did not decide the amount of damages. It also did not reach ITT’s arguments concerning delay in tendering claims or claims that Nortek allegedly failed to tender, because those arguments concerned damages.

Second Claim: Specific Performance, Injunctive, and Declaratory Relief

The court granted ITT’s motion for summary judgment and denied Nortek’s cross-motion as to the second claim. The court explained that specific performance is a remedy rather than a separate cause of action, and that monetary damages were adequate to compensate Nortek for the alleged injury. The court also stated that declaratory relief was unnecessary because Nortek’s contractual rights would be resolved through the breach-of-contract claim. Nortek’s request for injunctive relief failed for the same reasons.

The second claim was dismissed.

Third Claim: Alternative Common-Law Indemnification

Nortek pleaded common-law indemnification as an alternative claim and stated that the court did not need to reach it if Nortek prevailed on contractual indemnification. Because the court found Nortek entitled to contractual indemnification, and based on Nortek’s stated position, the court granted ITT’s motion for summary judgment and denied Nortek’s cross-motion as to the third claim.

The third claim was dismissed.

Disposition

Defendant’s motion for summary judgment was granted in part and denied in part. It was granted as to the second and third claims and denied as to the first claim. Plaintiff’s cross-motion for partial summary judgment was granted in part and denied in part: it was granted as to liability on the first claim and denied as to the second and third claims. Any damages on the first claim are to be determined at trial.