Elsken v. Network Multi-Family Sec. Corp., MULTI-FAMILY
| Citation | 49 F.3d 1470 |
| Decision Date | 06 March 1995 |
| Docket Number | MULTI-FAMILY,No. 94-5063,94-5063 |
| Parties | Jimmie ELSKEN, Administrator of the Estate of Patricia Ann Elsken, Plaintiff-Appellant, v. NETWORKSECURITY CORPORATION, a foreign corporation, Defendant-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
Renee Williams, Tulsa, OK, for plaintiff-appellant.
John R. Woodard III (Jody R. Nathan, with him on the brief) of Feldman, Hall, Franden, Woodard & Farris, Tulsa, OK, for defendant-appellee.
Before MOORE and BRORBY, Circuit Judges, and ALSOP, * District Judge.
Jimmie Elsken, the administrator of the estate of her daughter Patricia Elsken, filed this diversity action against Network Multi-Family Security Corporation alleging breach of contract, breach of warranties, negligence, and deceptive trade practices. The district court dismissed the case, and the plaintiff appealed. We exercise jurisdiction pursuant to 28 U.S.C. Sec. 1291 and affirm.
Patricia Elsken rented an apartment from the Windsail Apartment Community in an attempt to find a safe place to live. Windsail Apartment Community offered a twenty-four hour alarm system from the Network Multi-Family Security Corporation ("Network"). Along with her rental lease, Patricia Elsken signed a Resident Alarm Services Agreement. The Services Agreement contained an indemnity clause and a limitation of Network's liability. Although Patricia Elsken signed the contract, she did not initial the reverse side of the Services Agreement, and it is alleged that she failed to read the contract.
Patricia Elsken was found dead in her apartment on the morning of April 11, 1988, an apparent murder victim. Earlier that morning, at 10:33 a.m., her intrusion security alarm was activated. In response to the alarm, Network tried unsuccessfully to contact Patricia Elsken by telephone. Unable to reach Patricia Elsken by phone, Network contacted the apartment manager's office and advised the manager of the alarm. The apartment manager did not immediately check Patricia Elsken's apartment, and by the time the apartment personnel went to investigate the apartment, police and emergency vehicles had already arrived.
When Patricia Elsken had failed to report to work as expected that morning, a co-worker called her mother. Jimmie Elsken went to the apartment to check on her daughter. She arrived at the apartment before the apartment personnel came to investigate. She found the apartment in disarray and her daughter lying facedown, dead. Patricia Elsken had been stabbed repeatedly and died from a loss of blood.
Jimmie Elsken, a resident of Paris, Arkansas, acting as administrator of the estate of Patricia Elsken sued Network in federal court in Oklahoma for breach of contract, negligence, and breach of warranties in its failure to respond properly to the alarm. She also claimed Network engaged in deceptive trade practices.
The United States District Court for the Northern District of Oklahoma certified three questions to the Oklahoma Supreme Court. The three questions were (1) whether, under Oklahoma law, a contractual limitation of liability for personal injury is valid and enforceable, (2) whether, under Oklahoma law, the limitation of liability clause contained in the Residential Alarm Services Agreement is valid and enforceable, and (3) whether, under Oklahoma law, the indemnification and hold-harmless clause is valid and enforceable. Elsken v. Network Multi-Family Sec. Corp., 838 P.2d 1007 (Okla.1992). The Oklahoma Supreme Court answered by holding "[a] contractual limitation of liability for personal injury in a burglar alarm service contract may be valid and enforceable ... [i]f the Residential Alarm Services Agreement submitted was properly executed by both parties, and if the parties dealt at arms length." Id. at 1008. The Oklahoma Supreme Court also held "where the intention to indemnify is unequivocally clear from an examination of the contract, such agreement is enforceable," and therefore, the indemnification and hold-harmless clause of the Services Agreement was valid and enforceable. Id. at 1011.
On the basis of the answers to these certified questions, the federal district court granted Network's motion to dismiss the claims and denied Jimmie Elsken's motion to reconsider. Ms. Elsken appeals, alleging error in the district court's conclusions that the Services Agreement was properly executed and that the parties made the agreement at arms length. Ms. Elsken also claims the district court erred in applying the limitation of liability provision to causes of action based upon theories other than negligence. Finally, Ms. Elsken challenges the district court's denial of her motion to reconsider.
Although styled as a motion to dismiss, the motion was evaluated on materials outside of the pleadings and therefore was treated as a motion for summary judgment in accordance with Fed.R.Civ.P. 12(b) and 56. We review the grant of summary judgment de novo, applying the same legal standard used by the district court under Fed.R.Civ.P. 56. Applied Genetics Int'l, Inc., v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990).
The Resident Alarm Services Agreement between Patricia Elsken and Network contained a limitation of liability provision. The contract referred to Patricia Elsken as "Resident," the apartment complex as "Client," and Network as "Network." Specifically the agreement stated
3.0 LIMITATION OF LIABILITY
3.1 It is understood and agreed that NEITHER CLIENT NOR NETWORK ARE INSURERS AND THAT INSURANCE, IF ANY, FOR ANY TYPE OF LOSS, SHALL BE OBTAINED BY RESIDENT....
....
3.4 Resident understands and agrees that if either Client or Network should be found liable for loss or damage due to the failure of the System in any respect whatsoever, including, but not limited to monitoring, Client's and Network's collective liability shall not exceed a sum equal to Two Hundred and Fifty Dollars ($250.00) and this liability shall be exclusive. CLIENT AND NETWORK ARE NOT INSURERS AND RESIDENT ASSUMES ALL RESPONSIBILITY FOR OBTAINING INSURANCE TO COVER LOSSES OF ALL TYPES. The provisions of this section shall apply if death, loss or damage, irrespective of cause or origin, results directly or indirectly, to persons or property, from performance or nonperformance of the obligations imposed by this Agreement, or from negligence, active or otherwise, of Client, Network, their agents, employees, legal representatives or assigns.
(Emphasis in original.) Ms. Elsken asserts the district court erred in dismissing the case when there existed factual questions as to whether the Services Agreement was properly executed and whether the parties were in unequal bargaining positions.
Ms. Elsken argues the contract was not properly executed because the limitation of liability was on the reverse side of the Services Agreement and Patricia Elsken did not initial the bottom of the reverse side where there was a space for initials. Ms. Elsken also submitted, from the apartment complex manager, an affidavit stating Patricia Elsken did not even read the Services Agreement. This affidavit was submitted with Ms. Elsken's motion to reconsider. Jimmie Elsken relies on this allegation to support her claim that the document was not properly executed.
The district court noted Patricia Elsken signed the first page of the Services Agreement below a provision articulating a presumption that the agreement was properly executed, a fact Ms. Elsken does not contest. This provision stated:
RESIDENT ACKNOWLEDGES THAT RESIDENT HAS READ AND UNDERSTANDS ALL OF THIS RESIDENT AGREEMENT INCLUDING THE TERMS AND CONDITIONS ON THIS SIDE AND THE REVERSE SIDE, PARTICULARLY PARAGRAPH 3.0 LIMITATION OF LIABILITY AND AGREES TO THE AMOUNTS SET FORTH THEREIN.
(Emphasis in original.) Ms. Elsken contends the district court erred because the trier of fact should decide whether or not Patricia Elsken read the Services Agreement and whether or not it was, in fact, properly executed. She avers it was inappropriate for the court to resolve the question of the effect, if any, of the absence of evidence to rebut the textual presumption.
It is undisputed that Patricia Elsken signed the front page of the Services Agreement. On the back of the page, there was a limitation of liability clause. Although the side of the paper displaying the limitation of liability clause contained a space for initials Patricia Elsken did not initial that page. Ms. Elsken argues that, due to this omission, the limitation of liability clause was not in effect because Patricia Elsken did not agree to the provision. However, Ms. Elsken has cited no law to support her contention that the failure to initial a provision renders it void and ineffective when the front of the document was signed.
Based upon a plain reading of the contract, Patricia Elsken agreed to the contract in its entirety as written. She signed directly below a statement in conspicuous, bold capital letters declaring the signing party was agreeing to the entire Services Contract. This statement further emphasized the limitation of liability clause on the back of the page. Under Oklahoma law, "[t]he language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity." Okla.Stat.Ann.tit. 15, Sec. 154 (West 1993).
The district court found the language of the Services Agreement was clear and explicit: "Resident acknowledges that resident has read and understands all of this resident agreement including the terms and conditions on this side and the reverse side, particularly paragraph 3.0 limitation of liability." (Emphasis omitted.) Ms. Elsken cannot avoid the application of the limitation of liability when her daughter signed directly below a statement of acceptance of the...
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