Baer v. Terminix Intern. Co., Ltd. Partnership

• Decision Date: 25 July 1997
• Docket Number: No. 96-4146-SAC.,96-4146-SAC.
• Citation: 975 F.Supp. 1272
• Parties: Larry BAER, Plaintiff, v. THE TERMINIX INTERNATIONAL COMPANY, LIMITED PARTNERSHIP, Defendant.
• Court: U.S. District Court — District of Kansas

975 F.Supp. 1272

Larry BAER, Plaintiff, v. THE TERMINIX INTERNATIONAL COMPANY, LIMITED PARTNERSHIP, Defendant.

No. 96-4146-SAC.

United States District Court, D. Kansas.

July 25, 1997.

COPYRIGHT MATERIAL OMITTED

Gary E. Laughlin, Sloan, Listrom, Eisenbarth, Sloan & Glassman, Topeka, KS, for Plaintiff.

Thomas J. Lasater, Fleeson, Gooing, Coulson & Kitch, L.L.C., Wichita, KS, for Defendant.

MEMORANDUM AND ORDER

CROW, Senior District Judge.

The case comes before the court on the defendant's motion to confirm the arbitration award and for summary judgment (Dk. 10). The case arises from a dispute that began when the plaintiff continued to find termite activity after the defendant had retreated his home several times. The plaintiff asked the defendant to pay for the damages done to his home, and the defendant offered to make limited repairs. Unable to agree on the defendant's liability for additional damages and repairs, the parties submitted their dispute to arbitration pursuant to the terms of the Termite Service Plan. The arbitrator conducted a hearing and received the parties' evidence and arguments. In June of 1996, the arbitrator entered an award limiting the defendant's liability to "re-treatment" and to monetary damages of $700 for the unfinished repairs which the defendant had subsequently agreed to make in the early summer of 1995. The defendant seeks summary judgment against the plaintiff's claims and asks for an order confirming the arbitration award as requested in its counterclaim.

SUMMARY JUDGMENT STANDARDS

A court grants a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure if a genuine issue of material fact does not exist and if the movant is entitled to judgment as a matter of law. The court is to determine "whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will ... preclude summary judgment." Id. There are no genuine issues for trial if the record taken as a whole would not persuade a rational trier of fact to find for the nonmoving party. Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).

The movant first must "point to those portions of the record that demonstrate an absence of a genuine issue of material fact given the relevant substantive law." Thomas v. Wichita Coca-Cola Bottling Co., 968 F.2d 1022, 1024 (10th Cir.), cert. denied, 506 U.S. 1013, 113 S.Ct. 635, 121 L.Ed.2d 566 (1992). The nonmovant then must "come forward with specific facts showing that there is a genuine issue for trial as to elements essential to" the nonmovant's claim or position. Martin v. Nannie and Newborns, Inc., 3 F.3d 1410, 1414 (10th Cir.1993) (citations omitted). The nonmovant's burden is more than a simple showing of "some metaphysical doubt as to the material facts," Matsushita, 475 U.S. at 586, 106 S.Ct. at 1356; it requires "`present[ing] sufficient evidence in specific, factual form for a jury to return a verdict in that party's favor.'" Thomas v. International Business Machines, 48 F.3d 478, 484 (10th Cir.1995) (quoting Bacchus Industries, Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991)). The court views the evidence of record and draws all reasonable inferences in the light most favorable to the nonmovant. Id. A party relying on only conclusory allegations cannot defeat a properly supported motion for summary judgment. White v. York Intern. Corp., 45 F.3d 357, 363 (10th Cir. 1995).

More than a "disfavored procedural shortcut," summary judgment is an important procedure "designed `to secure the just, speedy and inexpensive determination of every action.' Fed.R.Civ.P. 1." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986).

STATEMENT OF UNCONTROVERTED FACTS

1. The plaintiff, Larry Baer ("Baer"), purchased on April 22, 1992, a Termite Service Plan from Terminix International Company ("Terminix") for his home at 4101 N.E. Tantara in Topeka, Kansas.

2. Terminix is a Delaware limited partnership headquartered in Memphis, Tennessee. It does business in all 48 states of the continental United States.

3. The Termite Service Plan Order Form, the Termite Service Plan Guarantee No. SR926000066-7 and the Inspections Graphs attached to both contain the terms of the parties' written agreement. The terms include disclaimers and limitations of liability.

4. Baer initially purchased the Termite Service Plan for one year running from April of 1992 through April of 1993. Baer's home was first treated for termites on May 6, 1992. Baer later extended the Plan for additional years by timely paying the annual service fee.

5. The chemicals that Terminix used to treat Baer's home were manufactured in Missouri, transported to Terminix's warehouse in Tennessee, and subsequently shipped to the Terminix branch office in Topeka.

6. Baer continued to find live termites after the original treatment. From July 16, 1992, through April 24, 1996, Terminix has retreated Baer's home many times based on the discovery of additional termite activity. Terminix retreated Baer's home when requested or necessary.

7. After several re-treatments, Baer demanded that Terminix pay for the termite damage done to his home. The branch manager for Terminix initially agreed to make certain repairs based on the mistaken belief that Baer had purchased a protection guarantee under his Service Plan. After discovering his error, the branch manager told Baer he would honor his agreement to make certain repairs. By letter, the branch manager specified the repairs to be completed by this agreement, disclaimed liability for all other present and future damages, and offered the same to Baer for his acceptance and signature.

8. Baer refused this offer and disclaimer. He eventually claimed that Terminix was liable for more than $75,000 in damages to his home.

9. Pursuant to the terms of the arbitration clause found in the written agreement, Terminix filed a request for arbitration with the American Arbitration Association in November of 1995. Terminix sought as relief a finding that Baer was not entitled to damages and Terminix's liability was limited to re-treatment under the Plan that Baer had purchased.

10. In December of 1995, Baer filed his answering statement and counterclaim in the arbitration proceeding. For his claim and prayer for relief, Baer alleged the following:

Larry Baer seeks an award that claimant, Terminix International Company, L.P., is liable to him in damages amounting somewhere between $50,000 and $250,000 by virtue of negligence, gross negligence, and breach of contract.

(Dk. 11, Lasater Aff., Ex. 2). Terminix filed an answering statement to the counterclaim denying liability under the Plan for such damages and asserting a limitation of remedies to re-treatment of the property.

11. On May 6, 1996, the assigned arbitrator heard the parties' evidence and arguments. The parties subsequently submitted proposed findings of fact and conclusions of law.

12. In an opinion and award dated June 10, 1996, the arbitrator made the following findings with respect to Baer's counterclaim. Baer did not present sufficient evidence that Terminix's services were so lacking as to violate some statutory requirement or as to commit an independent tort for which liability could exist beyond what the parties had contracted. Baer did not prove a legal justification for relieving him from the liability limitations found in the written agreement. Relying on the doctrine that recognizes the sanctity of contracts which specify the remedies for breach, the arbitrator found that "Terminix has complied with the written documents in that it has retreated the premises on every occasion a request was made by Baer." (Dk. 111, Lasater Aff., Ex. 9).

13. In the same opinion and award, the arbitrator found that while the Plan relieved Terminix from liability for damages, "equitable principles of the law" obligated Terminix to complete the repairs which it had promised to make. (Dk. 111, Lasater Aff., Ex. 9). The arbitrator awarded $700 to Baer as the difference between the $2,400 estimated cost of the repairs that Terminix had agreed to make and the $1,700 already paid by Terminix for the repair work.

14. Baer subsequently refused Terminix's tendered payment of the amount awarded in the arbitration proceeding.

15. Baer did not file a motion to vacate the arbitration award. On July 17, 1996, Baer filed a petition against Terminix in the District Court of Shawnee County, Kansas. Baer alleges in his petition that Terminix's original and subsequent treatments did not protect his home from termites resulting in damages in excess of $50,000. Baer seeks to recover his damages on claims that Terminix's conduct amounts to a "breach of contract, negligence and gross negligence." (Dk. 2, Plaintiff's Petition). The defendant later removed the plaintiff's suit to federal court.

ARGUMENTS

Terminix argues that this matter is governed by the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16 (1994); that the arbitration award must be confirmed unless vacated, modified, or corrected; and that Baer did not file within the statutory period any pleading which could be construed as a motion to vacate, modify, or correct. Terminix further argues that Baer waived his right to challenge the arbitrability of his negligence claim by asserting this claim in the arbitration proceeding and not otherwise objecting to arbitrator's authority to decide the claim. Alternatively, Terminix contends Baer's only appropriate cause of action lies in contract, not tort. Even if Baer has a valid...