Clark v. Orkin Exterminating Co., Inc.

• Decision Date: 16 May 2001
• Docket Number: No. 5:00CV00022.,5:00CV00022.
• Citation: 147 F.Supp.2d 458
• Parties: John W. CLARK, II, and Roslyn A. Clark, Plaintiffs, v. ORKIN EXTERMINATING COMPANY, INC., Defendant.
• Court: U.S. District Court — Western District of Virginia

Page 458

147 F.Supp.2d 458

John W. CLARK, II, and Roslyn A. Clark, Plaintiffs, v. ORKIN EXTERMINATING COMPANY, INC., Defendant.

No. 5:00CV00022.

United States District Court, W.D. Virginia, Harrisonburg Division.

May 16, 2001.

Edward Morton Burns, II, Waynesboro, VA, for Plaintiff.

John Mason Claytor, David Patrick Corrigan, Glen A. Lea, Harmon, Claytor, Corrigan & Wellman, Richmond, VA, Joseph C. Winner, McFadden, Winner and Savage, Columbus, OH, for Defendant.

MEMORANDUM OPINION

KISER, Senior District Judge.

Background and Facts

In spring of 1989, Plaintiffs John W. Clark, II, and Roslyn Clark ("Plaintiffs") executed a Subterranean Termite Agreement ("Agreement") with Defendant Orkin Exterminating Company ("Orkin"). This Agreement called for Orkin to inspect, evaluate, and treat as necessary Plaintiffs' home. Plaintiffs paid $1,192.00 for the initial treatment, and have continued to make timely annual renewal payments to keep the Agreement in force to this very date.

Typically, termite prevention techniques call for the placement of a chemical barrier between a house's foundation and the earth. The peculiar construction of Plaintiffs' house caused Orkin to modify the guarantee it offered to Plaintiffs, however. Plaintiffs' house is built partially over a slab foundation (by placing a wood floor on top of a concrete garage floor) and partially over a basement foundation, making part of Plaintiffs' residence inaccessible for inspection. As a result, the Agreement between Plaintiffs and Orkin specified a "Lifetime Renewable Subterranean Termite Re-Treatment Guarantee (LC)" ("Limited Guarantee") under the heading of the "Orkin Continuous Protection Guarantee." Orkin's Charlottesville office was responsible for Plaintiffs' account between 1989—December 1999, and Orkin's Roanoke office has been responsible since.

Since 1989, Orkin conducted periodic follow-up inspections and re-treatments of the residence with commonly-used termiticides. The assortment of different Orkin employees always used the same chemical, Dragnet; such a course of treatment was, not surprisingly, ineffective. In 1993, Orkin asked Plaintiffs to remove various coverings (i.e., ceiling covering, floor covering, etc.) from the converted garage-guest bedroom; Plaintiffs employed a contractor to do so and found termites swarming everywhere. In 1997, Plaintiffs again found significant termite damage and were forced to replace various parts of an upstairs bathroom at a cost of $5,000.00. Apparently, the earlier treatments only led to the termites moving around the house. After Plaintiffs' lawyer sent a letter to Orkin, Orkin sent a branch manager to supervise treatment personally.¹

Nevertheless, in June 1999, Orkin supplemented the chemical barrier strategy with bait/monitoring stations. This change of treatment apparently occurred because the Charlottesville manager was served with a copy of Plaintiffs' legal claim and realized that the previous treatment was not long enough to be effective. In September 1999, the Charlottesville office was closed.

During these events, it is interesting to note the repeated violations of Orkin's business procedures that occurred with regards to Orkin's conduct towards Plaintiffs. For instance, all Orkin records prior to March 1998 regarding Plaintiffs disappeared, despite a company policy of saving all records for seven years. Moreover, there is no ex ante indication why the Limited Guarantee was applied, since no diagrams of the infestation or damage were attached, contrary to Orkin procedures. Similarly, numerous termite retreatment reports omitted also descriptions and diagrams that Orkin policy requires (i.e., conditions requiring treatment, location of infestation, location of termiticide applied, or diagrams illustrating such). Another odd fact is that, with one exception, different personnel treated Plaintiffs home on each occasion, despite the fact that the Charlottesville office contained only three field employees. These factors combine to produce a situation where Orkin's employees were continually inspecting and treating Plaintiffs' home with no prior knowledge of the house and minimal, if any, records.

Given these events, Plaintiffs now bring suit arising from damage to their house by termites. They assert that Orkin employees repeatedly assured them that the treatments were efficacious and would rid their house of any termite infestation. Moreover, Plaintiffs contend that Orkin did not follow several industry guidelines and employed inexperienced technicians, and that this negligence is the reason for unsuccessful treatments over the past eleven years.

Interestingly, however, while Plaintiffs state that they had no alternative but to continue with Orkin treatment, I note that their contract with Orkin is renewable annually. Moreover, while Plaintiff's expert report identifying the problems was produced in 1998, Plaintiffs never hired him or one of Orkin's competitors to provide proper treatment in the intervening time. Instead, Plaintiffs simply renewed their Agreement with Orkin in the spring of 1999 and again in the spring of 2000, so that they remain a faithfully paying Orkin customer in good standing.

Defendant now brings both a Motion for Summary Judgment on all three counts contained in the Complaint and an appeal of a Magistrate ruling allowing Plaintiffs to add a fourth count. Counts I and II of the Complaint allege breach of contract and breach of implied warranty, requesting $500,000 in compensatory damages. Count III alleges a negligence claim and requests $500,000 in compensatory damages. Proposed Count IV, which Magistrate Judge Waugh B. Crigler allowed to be added to the Complaint, adds a claim under the Virginia Consumer Protection Act, Va.Code § 59.1-198.

For the reasons stated below, I deny Orkin's Motion to Summary Judgment as to Count II, grant the Motion for Summary Judgment on Counts I and III, and grant their appeal of the Magistrate's ruling on Plaintiff's Motion to Amend. As such, Plaintiffs' action is reduced to consisting of solely Count II (implied warranty claim), the only issue that will proceed to trial.

Legal Standard

Summary judgment is appropriate where no genuine issue exists as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). A genuine issue of a material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In making this determination, "the court is required to view the facts and draw reasonable inferences in a light most favorable to the nonmoving party." Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.1994) (citations omitted), cert. denied, 513 U.S. 813, 115 S.Ct. 67, 130 L.Ed.2d 24 (1994); Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1129 (4th Cir.1987). Nevertheless, where the record taken as a whole cannot lead a rational trier of fact to find for the nonmoving party, then no genuine issue exists for trial and summary judgment is appropriate. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475. U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Discussion

Motion for Summary Judgment on Counts I (Breach of Contract) and Count II (Breach of Implied Warranty)

Orkin contends that the terms of the contract preclude Plaintiffs from recovery of damages in either the breach of contract or the breach of implied warranty claims (Count I and II). Under this view, a strict view of the contract, the blackletter terms would be enforced. Carter v. Carter, 202 Va. 892, 896, 121 S.E.2d 482 (1961); accord Sully Station II Comm. Ass'n, Inc. v. Dye, 259 Va. 282, 525 S.E.2d 555 (2000); Norfolk and Western Ry. v. Accident Cas. Ins. Co., 41 F.3d 928 (4th Cir.1994).

This rigid type of approach has previously been applied by courts facing similar issues and this same defendant. In Harmon v. Orkin Exterminating Co., 794 F.Supp. 589 (W.D.Va.1992), plaintiffs sought to recover for termite damage after Orkin treatment. Reviewing the terms of the Limited Guarantee, the Harmon court ruled: "the court [has] little choice but to grant the [Orkin] Motion for summary judgment. The clear unambiguous language of the contract precludes the plaintiffs from recovering damages which they seek in the present action. The defendant is entitled to judgment as a matter of law ... so summary judgment will be granted." Id. at 590-91. Similarly, the court in Clarkson v. Orkin Exterminating Co., 761 F.2d 189 (4th Cir.1985) found Orkin liable for breach of contract, but limited damages to the cost of obtaining service from another pest control operator.

I find this logic to be unescapable regarding Defendant's Motion for Summary Judgment on Count I, the breach of contract claim. Indeed, Orkin has not violated the letter of the contract: Orkin has made extensive retreatments, as is mandated under the Limited Guarantee. Because the terms of the contract are clear and unambiguous and because Orkin has complied with those terms, I grant Defendant's Motion for Summary Judgment as to Count I of Plaintiff's Complaint.

I am persuaded, however, by Plaintiff's argument that the terms of the contract do not immunize Orkin from liability in Count II, the breach of implied warranty claim. In adopting this view, I am struck by the manner in which the public policy undergirding other areas of Virginia law dovetail the matter. The VCPA, for instance, prevents firms from making contracts that are deceptive and unconscionable. Va.Code § 59.1-200(A). Similarly, the frustration of essential purpose doctrine, applicable to contracts for goods, provides that an exclusive remedy failing the contract's essential purpose must yield to other cures. See Envirotech Corp. v. Halco Engineering, Inc., 234 Va. 583, 587, 364 S.E.2d 215 (1988). These doctrines provide evidence of the public policy against enforcing contractual provisions that immunize a party...