DL Lee & Sons v. ADT Sec. Systems, Mid-South

• Citation: 916 F. Supp. 1571
• Decision Date: 27 April 1995
• Docket Number: Civil Action No. CV594-008.
• Parties: D.L. LEE & SONS, INC. and American Manufacturers Mutual Insurance Company, Plaintiffs, v. ADT SECURITY SYSTEMS, MID-SOUTH, INC., Defendant.
• Court: United States District Courts. 11th Circuit. United States District Court (Southern District of Georgia)

916 F. Supp. 1571

D.L. LEE & SONS, INC. and American Manufacturers Mutual Insurance Company, Plaintiffs, v. ADT SECURITY SYSTEMS, MID-SOUTH, INC., Defendant.

Civil Action No. CV594-008.

United States District Court, S.D. Georgia, Waycross Division.

April 27, 1995.

COPYRIGHT MATERIAL OMITTED

Frederick Owen Ferrand, Swift, Currie, McGhee & Hiers, Atlanta, GA, William J. Edgar, Solomon & Edgar, Alma, GA, M. Theodore Solomon, II, Solomon & Edgar, Alma, GA, Michael R. Ross, Brookhollow Central, II, Houston, TX, for American Mfrs. Mut. Ins. Co.

Frederick Owen Ferrand, Swift, Currie, McGhee & Hiers, Atlanta, GA, M. Theodore Solomon, II, Solomon & Edgar, Alma, GA, Michael R. Ross, Brookhollow Central, II, Houston, TX, for D.L. Lee & Sons, Inc.

J. Thomas Whelchel, Whelchel, Brown, Readdick & Bumgartner, Brunswick, GA, Roy E. Paul, Frank Wilkens Seiler, Bouhan, Williams & Levy, Savannah, GA, Jane L. Peeples, Bouhan, Williams & Levy, Savannah, GA, Teresa Saggese Mills, Atlanta, GA, Joseph R. Odachowski, St. Simons Island, GA, for ADT Security Systems, Mid-South, Inc.

ORDER

MOORE, District Judge.

Defendant ADT Security Systems, Mid-South, Inc. (hereinafter "ADT") moves this Court for summary judgment as to all claims asserted by Plaintiffs D.L. Lee (hereinafter "LEE") and American Manufacturers Mutual Insurance Company (hereinafter "AMM"). For the reasons stated below, Defendant's Consolidated Motion for Summary Judgment is GRANTED.

FACTS

The following facts are in a large part uncontroverted. On February 25, 1988, D.L. Lee & Sons, Inc. entered into a contract with ADT for the design, installation, and continued maintenance of an automatic fire detection and protection system. LEE operated a meat packing plant in Bacon County, Georgia. ADT contacted Jerry Lee by a letter dated January 8, 1988, and proposed installing and maintaining a fire alarm system at the LEE plant. The contract entered into in 1988 required LEE to pay an annual service charge of $2,615.00. At the time of the fire, the annual service charge required was $3,027.00.

On July 21, 1992, a fire severely damaged the premises of LEE. The total damages claimed by LEE were in excess of thirteen million ($13,000,000.00) dollars. LEE had an insurance policy with American Manufactures Mutual Insurance Company (hereinafter "AMM"). Shortly after the fire, AMM began investigating the fire. Between August 3, 1992, and December 1993, in connection with claims made by LEE under the insurance policy, AMM made eight payments to LEE totalling $9,012,734.00, an amount now sought as subrogation from LEE.

Allen Stottlemire, Night-shift Supervisor of D.L. Lee Sanitation Department, first observed the fire above "smokehouse five" at approximately 11:45 p.m. on July 20, 1992. Stottlemire extinguished the visible fire; however, unbeknownst to him, the fire was still burning in the wall of the smokehouse. When Stottlemire checked the smokehouse for the fire at approximately 11:45 p.m., he turned off the power in smokehouse five. (Def.'s Consol.Mot.Summ.J., Ex. L). After extinguishing the visible fire, Stottlemire called James Nail, his supervisor, to inform him of what had transpired. Nail told Stottlemire to watch the building and call him back if anything else happened. (Id.).

The next morning, July 21, 1992, at approximately 4:53 a.m., the fire had broken out again and Stottlemire called the Alma Fire Department. (Def.'s Consol.Mot.Summ.J., Ex. O). Due to the size of the fire, the fire department was unable to extinguish it.

Before the fire, LEE was in the process of concluding construction of a 6,300 square feet building addition at the northernmost end of the existing facility. The building addition was constructed above and surrounding smokehouse five where the fire was first observed. The building addition was built over the existing structure and had no sprinkler system or fire detection equipment at the time of the fire. LEE admits that it disconnected certain heat detectors in the area of smokehouse five while completing construction in that area. LEE maintains that ADT failed to install heat sensors in the crawl space in the attic over the hallway or "stick vat room" next to smokehouse five, an omission which prevented the detection of the fire in its incipient stage.

It is undisputed that the alarm was de-powered at the time of the fire. However, it is hotly disputed as to who de-powered the alarm system. ADT maintains that Michael Hersey, the Assistant Supervisor of the Maintenance Department at D.L. Lee, de-powered the system. LEE maintains that an employee of ADT de-powered the system.

According to ADT's admission, at the time of the fire, "the Control Panel plug had been unplugged from the A.C. outlet" and "there was neither battery backup/direct current (D.C.) power to the Control Panel nor to the balance of the ADT equipment installed at the premises because at least one battery wire leading to the standby battery supply was disconnected." (Def.'s Consol.Mot.Summ.J., Ex. N). Additionally, ADT admits that the "Fire Department disconnect button on the Control Panel was depressed" which rendered the system unable to transmit a fire alarm signal to the City of Alma Dispatcher Station. (Def.'s Consol.Mot.Summ.J., Ex. N).

The control panel was installed by ADT at the LEE facility and was powered by alternating current electric power (A.C. power). The system also had direct current battery back-up power (D.C. power). An illuminated green light would indicate that the system was powered; conversely, the absence of this light would indicate that the system was not powered by A.C. power. ADT claims that this illuminated green light was observable through the glass window portion of the door of the control panel. The control panel had a lock and the key was given to LEE at the time of the installation and remained in LEE's possession. Plaintiffs have retained custody of this control panel.

In the event of the activation of a heat detector, a fire alarm signal was to be electronically transmitted from the control panel to the police and fire dispatcher's office. The control panel had a fire department disconnect button which, when depressed, inhibited transmission of a fire alarm signal to the local authorities and thus, rendered the fire alarm signal transmission capability inoperable. The control panel had a trouble silence button which, when depressed, silenced the annunciation of beeping signals at LEE, signals which would be emitted if the system was troubled, e.g., the A.C. power was interrupted or disconnected.

In the contract between ADT and LEE (Def.'s Consol.Mot.Summ.J. Ex. A), there is a limitation of actions clause which states:

NO SUIT OR ACTION SHALL BE BROUGHT AGAINST ADT MORE THAN ONE (1) YEAR AFTER THE ACCRUAL OF THE CAUSE OF ACTION THEREFOR. (emphasis in original).

Also, there is a limitation of liability clause, Paragraph "E" which states in pertinent part:

IT IS UNDERSTOOD THAT ADT IS NOT AN INSURER, THAT INSURANCE, IF ANY, SHALL BE OBTAINED BY THE CUSTOMER AND THAT THE AMOUNTS PAYABLE TO ADT HEREUNDER ARE BASED UPON THE VALUE OF THE SERVICES AND THE SCOPE OF LIABILITY AS HEREIN SET FORTH AND ARE UNRELATED TO THE VALUE OF THE CUSTOMER'S PROPERTY OR PROPERTY OF OTHERS LOCAT-

ED IN CUSTOMER'S PREMISES.... THE CUSTOMER DOES NOT DESIRE THIS CONTRACT TO PROVIDE FOR FULL LIABILITY OF ADT AND AGREES THAT ADT SHALL BE EXEMPT FROM LIABILITY FOR LOSS, DAMAGE OR INJURY DUE DIRECTLY OR INDIRECTLY TO OCCURRENCE, OR CONSEQUENCES THEREFROM, WHICH THE SERVICES OR SYSTEM IS DESIGNED TO DETECT OR AVERT; THAT IF ADT SHOULD BE FOUND LIABLE FOR LOSS, DAMAGE OR INJURY DUE TO A FAILURE OF SERVICE OR EQUIPMENT IN ANY RESPECT, ITS LIABILITY SHALL BE LIMITED TO A SUM EQUAL TO 10% OF THE ANNUAL SERVICE CHARGE OR $250.00 WHICHEVER IS GREATER, AS THE AGREED UPON DAMAGES AND NOT AS A PENALTY, AS THE EXCLUSIVE REMEDY. (emphasis in original).

LEE's copy of the aforementioned contract was destroyed in the fire. On September 22, 1992, Michael Ross, attorney for AMM and LEE, wrote a letter to Ms. Belsole, Assistant General Counsel of ADT, requesting ADT documents and, among other things, a complete copy of the contract between LEE and ADT. (Def.'s Consol.Mot.Summ.J. Ex. C). LEE maintains that ADT did not send them a complete copy of the contract until January 28, 1994. ADT contends that William Von Waldner, the Service Manager of ADT's Savannah office, delivered by hand a copy of the contract to LEE's headquarters on August 3, 1992, approximately six weeks before receiving the request for documents. (Def.'s Consol.Mot.Summ.J. Ex. B).

ADT contends that it responded to LEE's request of September 22, 1992, in a letter dated November 4, 1992 which stated that ADT would be "glad to consider your recent request for copies of ADT records once the documents that were to have been sent to ADT are received," (Def.'s Consol.Mot.Summ.J. Ex. D), but that Michael Ross did not reply to their letter until December 6, 1993, which was thirteen months after ADT's response letter of November 4, 1992, and approximately five months after the contractual limitations of action expired. (Def.'s Consol.Mot.Summ.J. Ex. E).

ANALYSIS

Summary Judgment Standard

The Court should grant summary judgment only if "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The "purpose of summary judgment is to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56 advisory committee's note). The Court's analysis ends "where there is no genuine issue of material fact and where the moving party is entitled to judgment as a matter of law." Great Lakes Dredge & Dock Co. v. Miller, 957 F.2d 1575, 1578 (11th Cir.1992); Real Estate Fin. v....