Coffey v. Fort Wayne Pools, Inc.

• Citation: 24 F.Supp.2d 671
• Decision Date: 12 January 1998
• Docket Number: No. CA3:CV-1605-BC.,CA3:CV-1605-BC.
• Parties: Greg COFFEY et al., Plaintiffs, v. FORT WAYNE POOLS, INC., Defendant.
• Court: U.S. District Court — Northern District of Texas

24 F.Supp.2d 671

Greg COFFEY et al., Plaintiffs, v. FORT WAYNE POOLS, INC., Defendant.

No. CA3:CV-1605-BC.

United States District Court, N.D. Texas, Dallas Division.

January 12, 1998.

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David Scott McCreary, McCreary & Associates, Dallas, TX, for plaintiffs.

Ronald R. Davis, Womble Carlyle Sandridge & Rice, Winston-Salem, NC, Jon A. Bragalone, Beckman Lawson Sandler Snyder

& Federoff, Ft. Wayne, IN, for Fort Wayne Pools Inc., defendant.

Edward M. Campbell, Coppell, TX, pro se.

Louis J. Weber, Dallas, TX, pro se.

MEMORANDUM OPINION AND ORDER

BOYLE, United States Magistrate Judge.

Before the court is Defendant's Motion for Final Summary Judgment, filed May 30, 1997 and Plaintiffs' Motion for Summary Judgment, filed June 2, 1997. Having reviewed the pertinent pleadings and for the reasons that follow, the undersigned GRANTS Defendant's Motion for Final Summary Judgment and DENIES Plaintiffs' Motion for Summary Judgment.

I. Background¹

Fort Wayne Pools, Inc. ("FWP") manufactures swimming pool components that are used in assembling in-ground swimming pools. FWP sells most of these components to various independent distributors. After the distributors receive the components from FWP, they proceed to package the components, along with components from other manufacturers, to make a complete pool kit. The completed pool kits are then sold to dealers or contractors. The dealers or contractors purchase the kits from the distributor and resell the parts at a profit to customers. The dealers or contractors also install the in-ground swimming pools in their customers' backyards. In addition to selling swimming pool components, FWP also distributes various promotional materials such as videos, brochures, models and banners.

Plaintiffs are all individuals who contracted with Roger Phelps ("Phelps") for the installation of an in-ground swimming pool that would contain FWP components after meeting Phelps at a Home and Garden show. Phelps was a contractor who installed swimming pools that contained FWP components. At the Home and Garden show, Phelps passed out FWP brochures and displayed a model FWP swimming pool. Prior to entering into contracts with Phelps, plaintiffs all received FWP brochures from Phelps. The brochures contained FWP's logo, address and phone number as well as a clause that read "Fort Wayne Pools, Inc. has been a manufacturer of swimming pool components for over 30 years and we are very selective in selling our components through only the best and most reputable dealers and builders." In addition, the brochures contained a provision that provided "[y]our dealer/builder is an independent business person and not an agent or employee of Fort Wayne Pools, Inc. We cannot and do not accept responsibility for any other representations, statements or contracts made by any dealer/contractor beyond the provisions of our warranty."

The plaintiffs subsequently signed contracts with Phelps and paid Phelps a portion of the contract price. The invoices given to the plaintiffs contained the name "Phelps & Sons" and did not mention FWP. The plaintiffs made their checks payable to either "Ken Phelps" or "Phelps & Sons." Some of the plaintiffs contacted various FWP employees to ask about Phelps after they signed contracts with Phelps. After Phelps received payment from the plaintiffs, he proceeded to dig a large hole in each of the plaintiffs' backyards. However, after digging the holes, Phelps failed to complete the installation of the swimming pools. Consequently, the plaintiffs all had large holes in their backyards until another installer could finish the work. All of the plaintiffs (except the Wests and Warrick) filed criminal charges against Phelps and have been receiving restitution payments. The Wests have received payment for their losses from their insurance company.

On April 16, 1996, Greg Coffey, Laurie Coffey, Tim Lanier, Rebecca Lanier, Kevin Mitchell, Robin Mitchell, Glen South, Lori South, Gary West, Carol West, Terry Peters and Evan Warrick, ("plaintiffs"), filed a complaint in state court against Fort Wayne Pools, Inc. ("FWP"). In their petition, plaintiffs alleged FWP was liable for breach of contract, negligence, and violations of the Deceptive Trade Practices-Consumer Protection Act ("DTPA"). On June 7, 1996, defendants removed the action to federal district court. On May 30, 1997, FWP filed the instant motion for summary judgment. In its motion, FWP argues primarily that it is entitled to summary judgment because the plaintiffs' causes of actions are based on the conduct of Phelps and Phelps was not an agent of FWP. On June 2, 1997, the plaintiffs filed a motion for summary judgment seeking a determination that Phelps was an agent of FWP as a matter of law.

II. Analysis

A. Summary Judgment Standard

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when the pleadings and record evidence show that no genuine issue of material facts exists and that, as a matter of law, the movant is entitled to judgment. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). "The substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Only disputes about those facts will preclude the granting of summary judgment. Id. In a motion for summary judgment, the burden is on the movant to prove that no genuine issue of material fact exists. Latimer v. Smithkline & French Lab., 919 F.2d 301, 303 (5th Cir.1990). If the non-movant bears the burden of proof at trial, the movant for summary judgment need not support the motion with evidence negating the opponent's case; rather, the movant may satisfy its burden by showing that there is an absence of evidence to support the non-movant's case. Id.; Little, 37 F.3d at 1075.

Once the movant makes this showing, the burden shifts to the non-movant to show that summary judgment is not appropriate. Little, 37 F.3d at 1075 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986)). "This burden is not satisfied with `some metaphysical doubt as to the material facts,' ... by `conclusory allegations,' ... by `unsubstantiated assertions,' or by only a `scintilla' of evidence." Id. (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Lujan v. National Wildlife Fed'n, 497 U.S. 871, 871-73, 110 S.Ct. 3177, 3180, 111 L.Ed.2d 695 (1990); Hopper v. Frank, 16 F.3d 92, 97 (5th Cir.1994); Davis v. Chevron U.S.A., Inc., 14 F.3d 1082, 1086 (5th Cir. 1994)). Rather, the non-moving party must "come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356 (quoting FED.R.CIV.P. 56(e)).

In determining whether a genuine issue for trial exists, the court must view all of the evidence in the light most favorable to the non-movant. Richter v. Merchants Fast Motor Lines, Inc., 83 F.3d 96, 98 (5th Cir.1996) (per curiam); Gremillion v. Gulf Coast Catering Co., 904 F.2d 290, 292 (5th Cir.1990). If the moving party seeks to establish the absence of a material fact through the submission of affidavits, depositions, admissions, or responses to interrogatories, the non-movant may not rely solely on mere allegations or denials. Rather, the non-movant must demonstrate the existence of an issue of material fact necessitating resolution by trial through similar evidentiary materials setting forth specific facts. FED.R.CIV.P. 56(e); Lechuga v. Southern Pac. Transp. Co., 949 F.2d 790, 794 (5th Cir.1992).

It is with these standards in mind that the undersigned reviews the issues raised by defendants in their motion.

B. Plaintiffs' Causes of Action

In this case, the plaintiffs contend they are entitled to relief from FWP for breach of contract, violations of the Deceptive Trade Practices Act ("DTPA"), and negligence. The majority of these claims are based on a vicarious liability theory. Specifically, plaintiffs contend that because Phelps was an agent of FWP, FWP is liable for the actions of Phelps. In addition, plaintiffs assert various claims that are independent of the existence of an agency relationship with Phelps. These claims include violations of the DTPA and a plethora of negligence claims.² In analyzing the merits of the cross-motions for summary judgment, this court will first consider whether FWP can be held vicariously liable for the actions of Phelps under an agency theory.

1. Agency

The plaintiffs contend that FWP is vicariously liable for the actions of Phelps because Phelps was an agent of FWP. "Under Texas law, agency is a mixed question of law and fact." Karl Rove & Co. v. Thornburgh, 39 F.3d 1273, 1295-96 (5th Cir.1994) (citations omitted). However, where the evidence is undisputed, the question of whether an agency relationship exists is a question of law for the court. Campbell v. Hamilton, 632 S.W.2d 633, 634 (Tex.App. — Dallas 1982, writ ref'd n.r.e.) (citation omitted). In this case, because the facts necessary to resolve the agency issue are undisputed, it is proper for this court to determine whether there was an agency relationship between Phelps and FWP as a matter of law.

Plaintiffs argue that FWP is bound by Phelps' actions under three separate theories of agency law. Specifically, plaintiffs argue that FWP is responsible under theories of actual agency, apparent agency, or under the doctrine of ratification. The court will address each of these arguments in turn.

a. Actual Agency

The plaintiffs first argue that FWP is responsible for Phelps' conduct because Phelps was an agent of FWP. Agency is a legal relationship under which the agent is authorized to act for and on behalf of the principal, and subject to the principal's control. Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630 F.2d...