Frost v. ADT, LLC

• Decision Date: 17 January 2020
• Docket Number: No. 18-3259,18-3259
• Parties: Julie FROST, co-conservator for M.F., a minor, individually and as heir-at-law of Elizabeth A. Frost, deceased; Sarah Bayless, co-conservator for M.F., a minor, individually and as heir-at-law of Elizabeth A. Frost, deceased; and Charles E. Frost, Jr., as administrator of the estate of Elizabeth Frost, Plaintiffs-Appellants, v. ADT, LLC, formerly known as Protection One, Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

947 F.3d 1261

Julie FROST, co-conservator for M.F., a minor, individually and as heir-at-law of Elizabeth A. Frost, deceased; Sarah Bayless, co-conservator for M.F., a minor, individually and as heir-at-law of Elizabeth A. Frost, deceased; and Charles E. Frost, Jr., as administrator of the estate of Elizabeth Frost, Plaintiffs-Appellants,

v.ADT, LLC, formerly known as Protection One, Inc., Defendant-Appellee.

No. 18-3259

United States Court of Appeals, Tenth Circuit.

FILED January 17, 2020

Randall L. Rhodes (Steven W. Brookreson with him on the briefs), Rouse Frets White Goss Gentile Rhodes, P.C., Leawood, Kansas, for Appellants.

Jason R. Scott (Charles C. Eblen on the brief), Shook, Hardy & Bacon L.L.P., Kansas City, Missouri, for Appellee.

Before TYMKOVICH, Chief Judge, BALDOCK, and HOLMES, Circuit Judges.

TYMKOVICH, Chief Judge.

Elizabeth Frost lost her life when an accidental house fire ignited in her home. At the time, ADT provided security monitoring services to the premises. During the fire, ADT received several alerts through its monitoring system. Although ADT attempted to call Frost and the back up number listed on her account, it did not get through. After several such attempts, ADT cleared the alerts without contacting emergency services.

The administrator of Frost's estate and her minor heir, M.F., (collectively Claimants) brought this action against ADT. The central theme of the complaint is that ADT's failure to notify emergency services contradicted representations on its website that it would do so, and that failure wrongfully caused or contributed to Frost's death.

The district court dismissed the complaint, holding the one-year suit-limitation provision in the contract between ADT and Frost barred the claims and that Claimants failed to state a claim with respect to certain counts. Because we find the contract between Frost and ADT provides an enforceable suit-limitation provision that bars the claims at issue, we AFFIRM.

I. Background

During the early morning hours of August 15, 2016, an accidental house fire ignited in Frost's home, claiming her life. At the time of the fire, Frost's home was equipped with a security system acquired from ADT and its predecessors. ADT provided monitoring services accompanying the security system under a contract entitled "Residential Alarm System and Services Agreement." App. at 73. Under the Contract, ADT provided round-the-clock monitoring of Frost's home security in exchange for payments of $37.99 a month. Although offered, the Contract did not cover "Smoke Detection" or "CO Detection services."

A. Night of the Accident

At 1:30 a.m., ADT received a "sensor tamper" alert for "glass break" in Frost's dining room. App. at 12. At 1:32 a.m., ADT received an alert for "expansion module failure." Id. The expansion module is the key pad and system center located by the front door of Frost's home. At approximately 1:43 a.m., ADT attempted to call Frost twice, but was unable to reach her. At 1:49 a.m., ADT attempted to call Frost's grandmother, who was listed as the next contact number on Frost's account. ADT was also unable to reach Frost's grandmother. Between 2:01 a.m. and 2:04 a.m., ADT again attempted to call Frost's number and her grandmother's number, but was unable to reach either. When calling both Frost and her grandmother, ADT's number appeared as an unlisted number and did not identify ADT as the caller. Around 2:04 a.m., without having made contact with Frost, Frost's grandmother, or any emergency services, ADT "fully cleared" the alarms. Id.

Around 2:52 a.m., City of Topeka Public Works Department employees noticed the house fire and called 911. First responders arrived at the scene at approximately 2:58 a.m. A fire crew conducted a search of the house and found Frost face down, unconscious, in a hallway in her home. She was still alive at the time first responders discovered her. Frost first received medical treatment at 3:07 a.m. and was subsequently transported to Stormont Vail Health Care, where she was pronounced dead. The cause of death was inhalation of smoke and soot from the fire.

B. ADT's Website

Claimants allege that in contracting with ADT for home monitoring services, Frost "reasonably relied" on certain representations on ADT's website, including the following:

• "The ability to remotely learn of possible hazards and to dispatch responders is key to how security monitoring works."

• "24/7 professional monitoring centers will address alarms immediately to ensure that help is on the way."

• "In the event of an emergency, local police or fire assistance will be notified."

• "A trained employee immediately attempts to call you to notify you of the disturbance in case it is a false alarm. If you confirm a false alarm, the employee will see if there is anything else you need before letting you hang up. If the employee is unable to contact you, or if you confirm that the alarm is genuine, the authorities will be notified. A dispatch will then send police officers to your residence to evaluate the situation."

App. at 22.

C. The Contract

The Contract between ADT and Frost does not contain these representations. Instead, on the first page, under the heading "IMPORTANT PROVISIONS — YOUR RESPONSIBILITY TO READ TERMS OF THIS AGREEMENT " the Contract states: "SECTION 6, 7, and 8: WE ARE NOT AN INSURER, Limitation of Liability, Hold Harmless which, among other things, significantly limits [ADT's] liability to you under this Contract ." App. at 73 (emphasis in original).

Section 6 clarifies that ADT is not an insurer and that ADT's "fees" are not based on "the value of your premises or its contents, or the likelihood or potential extent or severity of injury (including death) to you or others." App. at 75. Section 7 limits ADT's liability to "the lesser of (i) $300.00; or (ii) Six (6) times the monthly service fee [$227.99 in this case]." Id. at 76.

Section 9 establishes a one-year suit-limitation period:

Legal Actions. NO CLAIM OR LEGAL ACTION EITHER OF US MAY HAVE ARISING OUT OF THIS CONTRACT, YOUR SYSTEM OR OUR SERVICES (WHETHER BASED ON CONTRACT, NEGLIGENCE, OR OTHERWISE) MAY BE BROUGHT MORE THAN ONE YEAR AFTER THE DATE THE CAUSE OF ACTION FOR SUCH CLAIM ACCRUED.

App. at 76 (emphasis in original).

Section 10 outlines the monitoring services to be provided:

... When the Center receives an actionable alarm signal from your system (an "Alarm Event"), we will make reasonable efforts, consistent with local laws and our response policies, to make the appropriate notifications. These notifications may include the local emergency response provider ..., the person designated on your Monitoring Information Schedule or the monitored premises. ...

App. at 76.

Section 22 sets out an integration clause:

This Contract is the entire agreement between you and us, supersedes all previous contracts between you and us regarding alarm monitoring or similar services at [Frost's home]. You agree that we are not bound by and you have not relied on any representation, promise, condition, inducement, or warranty, express or implied, not included in this Contract. ...

App. at 83.

D. Proceedings Below

Claimants filed a lawsuit against ADT on July 11, 2018, more than one but less than two years after Frost's death on August 15, 2016. The complaint seeks recovery on a number of theories, including wrongful death, negligence, fraud, contract, and violations of the Kansas Consumer Protection Act. ADT moved to dismiss the complaint arguing, among other things, that the complaint was time-barred by the Contract's one-year suit-limitation provision. The district court granted ADT's motion.

II. Analysis

The central issue is whether Section 9's one-year suit-limitation provision of the Contract is enforceable and applies to the claims presented in the complaint.¹

The district court held that the one-year suit-limitation provision in Section 9 bars the present action. To rebut this, Claimants present a series of arguments regarding the enforceability and applicability of this provision. None of these are persuasive. To the contrary, the Contract, including Section 9, is enforceable and applicable. As a result, the complaint is time-barred.

A. ADT's Affirmative Defenses

As a threshold matter, Claimants argue the district court should not have entertained ADT's motion to dismiss because it was "predicated on issues that are affirmative defenses." Aplt. Br. at 12. Since this argument is raised for the first time on appeal, we review for plain error.² To show plain error, Claimants must establish (1) an error, (2) that is plain, (3) which affects substantial rights, and (4) seriously affects the fairness, integrity, or public reputation of judicial proceedings. See Richison v. Ernest Grp., Inc. , 634 F.3d 1123, 1128 (10th Cir. 2011).

Because the district court did not err, the first prong of plain error review is dispositive here. Claimants rely on Fernandez v. Clean House, LLC , 883 F.3d 1296, 1297 (10th Cir. 2018), for the proposition that ADT's affirmative defense regarding the timeliness of this suit was not properly before the district court.³ In Fernandez , we reversed the dismissal of Fair Labor Standards Act claims as barred under the FLSA's limitations period. Under the FLSA, plaintiffs may bring claims within two years of ordinary violations and within three years of "willful" violations. Although plaintiffs in Fernandez had alleged willfulness, the district court dismissed their claims because it found they had not presented sufficient supporting allegations to make the "willful" violations plausible. This court reversed, holding that in such circumstances plaintiffs did not bear the burden of supporting the willfulness allegation at the pleadings stage because willfulness was an element of defendants' limitations-based affirmative defense. See id. at 1298–99.

Fernandez does not stand for the broader proposition that Claimants seek to read into it. Nothing in that case restricts district courts from...