Alpha Marketing, Inc. v. Honeywell, Inc.

• Decision Date: 22 February 1985
• Docket Number: No. 05-84-00454-CV,05-84-00454-CV
• Parties: ALPHA MARKETING, INC., Appellant, v. HONEYWELL, INC., Appellee.
• Court: Texas Court of Appeals

Page 35

690 S.W.2d 35

ALPHA MARKETING, INC., Appellant, v. HONEYWELL, INC., Appellee.

No. 05-84-00454-CV.

Court of Appeals of Texas,

Dallas.

Feb. 22, 1985.

Rehearing Denied April 8, 1985.

Frank Edward Kohn, William Eyres, Dallas, for appellant.

Kevin Keith, Dallas, for appellee.

Before STEPHENS, ALLEN and GUILLOT, JJ.

GUILLOT, Justice.

This is an appeal from a summary judgment in which the trial court held that the liquidated damages clause contained in a contract between the parties limited Alpha Marketing's recovery to $704.70. Because we hold that there is a fact issue with regard to the applicability of the liquidated damages clause, we reverse.

In determining the propriety of a judgment based upon a summary judgment motion, the evidence must be viewed in the light most favorable to Alpha Marketing Inc., the party against whom the judgment was rendered. Valley Stockyards Company v. Kinsel, 369 S.W.2d 19, 20 (Tex.1963). Thus, it appears that on April 3, 1981, Alpha Marketing and Honeywell signed a contract for Honeywell to provide a "security alarm system" for the initial installation fee of $150.00 and for monthly "monitoring and/or service ... commencing from date of installation" in the amount of $117.45 per quarter. The contract also provided:

Since it is impractical and extremely difficult to fix actual damages which may arise due to the faulty operation of the system or failure of services provided if, notwithstanding the above provisions, there should arise any liability on the part of the Contractor, such liability shall be limited to an amount equal to one half the annual service charge provided herein or $250, whichever is greater. This sum shall be complete and exclusive and shall be paid and received as liquidated damages and not as a penalty.

Someone burglarized Alpha Marketing taking over $2,000. After the burglary, Honeywell investigated the security system and informed Alpha Marketing that the system's failure was due to a malfunction of the telephone lines. Alpha Marketing was then advised that the system was operable. On May 19, 1981, however, a second burglary occurred and over $225,000 was taken. Honeywell, again, investigated the system and informed Alpha Marketing that the system had never been connected to the telephone lines, which connection is required to make the system operate.

Alpha Marketing filed suit alleging that Honeywell was negligent in its installation of the alarm system and its inspection after the first burglary. After filing an answer, Honeywell filed a motion for summary judgment contending that the liquidated damages...