Brondes Ford, Inc. v. Habitec Sec.

Decision Date19 June 2015
Docket NumberNo. L–12–1358.,L–12–1358.
Citation38 N.E.3d 1056
PartiesBRONDES FORD, INC., et al., Appellees/Cross–Appellants v. HABITEC SECURITY, et al., Appellant/Cross–Appellee.
CourtOhio Court of Appeals

Peter C. Munger, Toledo, Thomas G. Mackin and Randy L. Meyer, Toledo, for appellees/cross-appellants.

John T. McLandrich and Frank H. Scialdone, Cleveland, for appellant/cross-appellee.

Opinion

OSOWIK

, J.

{¶ 1} This is an appeal filed by appellant/cross-appellee, Habitec Security (Habitec), from summary judgment rulings issued by the Lucas County Court of Common Pleas on January 4, 2007, and a jury verdict issued on September 22, 2011, and a cross-appeal filed by appellees/cross-appellants, Brondes Ford, Inc. (Brondes), Phil Brondes, Sr. and Universal Underwriters, from the trial court's post-verdict rulings issued on November 20, 2012. The relevant, undisputed facts are as follows.

{¶ 2} On September 14, 1993, appellee/cross-appellant, Phil Brondes, Sr. (“Brondes, Sr.”), the owner, vice president and majority shareholder of Brondes, a 60–year–old Ford dealership located at 5715 Secor Road in Toledo, Ohio, entered into a “Commercial Lease Agreement” (“Agreement”) with Habitec. Pursuant to the Agreement, Habitec was to provide a fire detection system and monitoring services for Brondes which, at the time, housed a showroom, offices and a large bay area (“quick lube”) that was used to service vehicles.

{¶ 3} The Agreement stated that Habitec would supply and install the following equipment at Brondes' location: one Silent Knight 4724 master control panel with rechargeable battery back-up, one 24–hour digital communicator, one zone annunciator, five smoke detectors, 56 heat detectors, and five strobe horns. The Agreement further stated that Brondes agreed to pay Habitec $1,500 to install the equipment, followed by lease payments of $99 per month for five years. The fire detection system was installed by Habitec's employees.

{¶ 4} Over the next several years the system was periodically inspected by both Habitec and the city of Toledo. During that time, Brondes renovated several areas of the building, and some of the heat detectors were removed and then put back in place. In March 2002, another alarm service company, Simplex Grinnel Fire and Security (“Simplex”), was hired by Brondes to inspect the system. Simplex performed a virtual check of some of the heat detectors. However, it did not physically check each one of the heat detectors to see if they were functioning properly, and did not check any of the detectors in the quick lube area.

{¶ 5} On May 27, 2002, Memorial Day weekend, at approximately 1:48 a.m., Habitec's alarm system reported a fire at Brondes' facility. The Toledo Fire Department arrived at the scene within eight minutes of the alarm sounding but, by then, the building was totally engulfed in flames. When the fire was completely extinguished, the building was determined to be a total loss. Although several theories were proposed as to the origin of the fire, the exact cause was never determined.

{¶ 6} On May 25, 2004, Brondes and its insurer, Universal Underwriters Insurance Company (“Universal”), filed a complaint in the Lucas County Court of Common Pleas against Habitec, Simplex, the city of Toledo fire inspection department, and other parties,1 in which they set forth claims of negligent design, manufacture, installation and service of the alarm system by Habitec. The complaint further alleged that, as a result of Habitec's actions, Brondes and Universal suffered in excess of $5 million in combined damages. The amount of the damage claim was based, in part, on the cost of moving the location of the dealership to newly purchased property and greatly expanding the size of the building.

{¶ 7} Habitec filed an answer on June 15, 2004, and Simplex filed its answer on July 6, 2004. On August 2, 2004, the trial court granted summary judgment to the city of Toledo and dismissed Universal's claim against the city. On August 12, 2004, Brondes filed a motion to designate the case as complex litigation, which the trial court granted on September 15, 2004.

{¶ 8} On August 22, 2006, Simplex and Habitec filed a joint motion for summary judgment in which they asked the trial court to limit Brondes' damages to the property's diminished value. In support, Simplex and Habitec argued that their liability, if any, should be based on the difference in fair market value of the dealership before and after the fire, not the difference between the value of the 10,000 square foot, 60–year–old dealership that burned and the new, 42,000 square-foot building that Brondes relocated and built to replace the original structure.

{¶ 9} Habitec and Simplex filed a joint motion for summary judgment on September 1, 2006, in which they argued that Brondes and Universal failed as a matter of law to allege facts that prove Habitec either caused the fire or contributed to their damages. On September 7, 2006, Habitec filed a separate motion for summary judgment and memorandum in support, in which Habitec asserted that it is either not liable to Brondes and Universal in damages, or the damages are limited by the terms of the Agreement. In support, Habitec argued that: (1) Pursuant to section 25 of the Agreement, any legal action arising out of the Agreement must be brought within one year, (2) Pursuant to section 19 of the Agreement, Brondes agreed to hold Habitec harmless from any third party claims, including those of Underwriters, and (3) Section 21 of the Agreement limits Habitec's liability in damages, if any, to $250.

{¶ 10} Attached to Habitec's motion was the affidavit of its salesman, Robert Seymour, who stated that Phil Brondes, Sr. signed the Agreement, and a reduced-size copy of the original, legal-sized Agreement.

{¶ 11} On September 8, 2006, Habitec filed yet another motion for summary judgment, in which it argued that the record contains no evidence to show that Habitec negligently manufactured, designed, sold, installed, serviced, or inspected the alarm system that was installed at the Brondes dealership. In support, Habitec argued that Brondes and Universal did not meet their burden to show that either Habitec's alleged negligence or a product defect caused the fire.

{¶ 12} On September 18, 2006, Habitec filed four motions in limine. The first was a motion to exclude any evidence by lay and/or expert witnesses at trial concerning a causal connection between witnesses' reports that they smelled smoke, and the fire that was later reported at Brondes' dealership. Habitec also filed a motion in which it asked the trial court to prohibit Brondes and Universal from presenting evidence of property damage relating to the fire. In addition, Habitec filed motions to exclude both the expert testimony of Gary Wymer as to the actual cause of the fire, and any evidence related to “fire modeling, Fire Dynamics Simulator (“FDS”) and/or Smokeview technology” which it characterized as “unfounded” and “speculative.”

{¶ 13} On September 25, 2006, Brondes and Universal filed a combined memorandum in opposition to Habitec's and Simplex's motions for summary judgment, in which they argued that summary judgment is not appropriate in this case because: (1) negligence and proximate cause are issues to be resolved by the trier of fact, and Habitec and Simplex are “negligent per se” for violating applicable statutes. On October 6, 2006, Habitec filed a combined reply in support of all of its summary judgment motions, in which it argued that: (1) Brondes and Universal did not meet their burden to establish the actual cause of the fire, (2) the one-year limitation period established by the Agreement is enforceable and does not violate public policy, (3) the clause in the Agreement limiting Habitec's liability to $250 is not unconscionable on its face, and (4) damages claimed by Brondes to rebuild the dealership are outrageous and not related to the fair market value of the original dealership.

{¶ 14} On October 17, 2006, four years after the fire, Brondes and Universal filed a motion to amend their complaint “by interlineation” to add Phil Brondes, Jr., Phil Brondes, Sr., and Brondes Land Management, Ltd. (“BLM”) as additional party-plaintiffs. In support of the motion, Brondes and Universal argued that, “but for” Habitec's actions, the original dealership would not have been a total loss, and asked the court to allow Phil Brondes, Jr. and/or Phil Brondes, Sr. and/or BLM, to be added as plaintiffs four years after the fire occurred because their respective connections to the Brondes dealership did not exist at the time that the original complaint was filed. On November 1, 2006, Habitec filed a memorandum in opposition, in which it argued that [n]one of [the] proposed parties relate back to the original pleading,” and the motion to add them at this point in the proceedings is really “an attempt to extend the statute of limitations for this action.”

{¶ 15} On November 9, 2006, a summary judgment hearing was held on all of Habitec's outstanding motions. On January 4, 2007, the trial court filed an opinion and judgment entry, in which it found that the issues of whether Brondes' damages should be limited to the $1,270,000 diminution in the value of the property, as well as “the reasonableness and necessity of rebuilding a more modern and updated dealership,” are questions of fact for a jury to decide. The trial court further found that the one-year limitation clause and the limitation of Habitec's damages to $250, as stated in the Agreement, are unconscionable. Accordingly, Habitec's and Simplex's motions for summary judgment were denied. Habitec filed a motion for reconsideration on January 23, 2007, which the trial court denied on June 6, 2007.

{¶ 16} On November 16 and December 17, 2007, a hearing was held pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)

(Daubert hearing), to determine...

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