Nahra v. Honeywell, Inc.

• Decision Date: 24 May 1995
• Docket Number: No. 1:93 CV 2216.,1:93 CV 2216.
• Citation: 892 F. Supp. 962
• Parties: Barbara NAHRA, et al., Plaintiffs, v. HONEYWELL, INC., Defendant.
• Court: U.S. District Court — Northern District of Ohio

892 F. Supp. 962

Barbara NAHRA, et al., Plaintiffs, v. HONEYWELL, INC., Defendant.

No. 1:93 CV 2216.

United States District Court, N.D. Ohio, Eastern Division.

May 24, 1995.

COPYRIGHT MATERIAL OMITTED

Robert E. Blackham, Roetzel & Andress, Akron, OH, Patrick McLaughlin, and Eli Manos, Mansour, Gavin, Gerlack & Manos, Cleveland, OH, for plaintiffs.

Mark A. Gamin, Thompson, Hine & Flory, Cleveland, OH, for defendant.

ORDER

(Disposing of Docket ## 31 & 36)

SAM H. BELL, District Judge.

Plaintiffs brought this state-law action against Defendant Honeywell, Inc., ("Honeywell") to recover for property damage suffered by Plaintiffs due in part to the alleged failure of Honeywell's alarm service. Both parties have moved for summary judgment, and those motions are the subject of this order. Docket ## 31 & 36.

STATEMENT OF THE FACTS

Plaintiffs Barbara Nahra and David Nahra, cousins by marriage, formerly owned a warehouse located on East 30th Street in Cleveland, Ohio. Docket # 29, pp. 4-7. From the time they purchased the building in 1976 until November of 1991, Plaintiffs leased the warehouse to Philpott Rubber, a manufacturer of sheet rubber products. Id., pp. 8-9. Philpott moved its operations to Brunswick, Ohio, in November of 1991, leaving the building unoccupied. Id., pp. 9-10, 15.

During its tenancy, Philpott maintained a contract for security alarm services with Honeywell. Id., pp. 13-14. After Philpott vacated the property, the plaintiffs made arrangements to continue the Honeywell service. Daniel Nahra met a Honeywell representative at the building on November 14, 1991 and signed an "Installation and Service Agreement," pursuant to which Plaintiffs agreed to pay a $177 monthly service fee. Id., pp. 12, 14-15; docket # 32, ex. A. Section four of the agreement, titled "Liquidated Damages and Honeywell's Limits of Liability," contains the following pertinent provisions:

It is understood and agreed by the parties hereto that Honeywell is providing a system designed to reduce the risk of loss; that the payments provided herein are based solely on the value of the services as described herein and are unrelated to the value of any property located on Customer's premises; that Honeywell is not liable for losses which may occur in cases of malfunction or nonfunction of the system or of the monitoring, repairing, signaling sic handling or dispatching of the service, even if due to Honeywell's negligence or failure of performance; that Honeywell is not an insurer; and that insurance, if any, covering personal injury and/or property loss or damage on customer's premises shall be obtained and or maintained by Customer. Customer understands that Honeywell offers several levels of protection and services and that the system described in the Schedule of Service and Protection has been chosen by Customer after considering and balancing the levels of protection afforded by various systems and the related costs.

IT IS AGREED THAT IT IS IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX ACTUAL DAMAGES WHICH MAY ARISE IN SITUATIONS WHERE THERE MAY BE A FAILURE OF SERVICES PROVIDED, DUE TO THE UNCERTAIN VALUE OF CUSTOMER'S PROPERTY OR THE PROPERTY OF OTHERS KEPT ON THE PROTECTED PREMISES WHICH MAY BE LOST, STOLEN, DESTROYED, DAMAGED OR OTHERWISE AFFECTED BY OCCURRENCES WHICH THE SYSTEM OR SERVICE IS DESIGNED TO DETECT OR AVERT. INABILITY OF CONTRACTOR TO GUARANTEE POLICE AND FIRE DEPARTMENT RESPONSE TIME, AND ESTABLISHING A CASUAL SIC CONNECTION BETWEEN THE SYSTEM OR SERVICE PROBLEMS AND CUSTOMER'S POSSIBLE LOSS. THEREFORE IF ANY LIABILITY IS IMPOSED ON HONEYWELL, SUCH LIABILITY SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE ANNUAL SERVICE CHARGE OR $10,000, WHICHEVER IS LESS. (IF THERE IS NO ANNUAL SERVICE CHARGE, HONEYWELL'S LIABILITY

SHALL BE LIMITED TO $500.00.) SIC THIS SUM SHALL BE PAID AND RECEIVED EITHER (i) AS LIQUIDATED DAMAGES AND NOT AS A PENALTY, OR (ii) AS A LIMITATION OF LIABILITY APPROVED AND AGREED UPON BY THE PARTIES. THE PAYMENT OF THIS AMOUNT SHALL BE HONEYWELL'S SOLE AND EXCLUSIVE LIABILITY REGARDLESS OF WHETHER LOSS OR DAMAGE IS CAUSED BY THE PERFORMANCE OR NONPERFORMANCE OF OBLIGATIONS UNDER THIS CONTRACT OR BY NEGLIGENCE, ACTIVE OR OTHERWISE, OF HONEYWELL, ITS EMPLOYEES, AGENTS OR REPRESENTATIVES. NO SUIT OR ACTION SHALL BE BROUGHT AGAINST HONEYWELL MORE THAN ONE (1) YEAR AFTER THE ACCRUAL OF THE CAUSE OF ACTION THEREFOR.

If Customer wishes Honeywell to increase the amount of the liquidated damages as provided above, Customer may obtain from Honeywell and additional amount of liquidated damages by paying an additional monthly service charge to Honeywell.

Docket # 32, ex. A, sec. 4 (emphasis in the original).

The Honeywell service included a twenty-four hour electronic alarm system that was programmed to send an alarm signal to a Honeywell monitor whenever anyone entered the building. Upon receipt of an alarm signal, Honeywell was to make reasonable efforts to contact law enforcement officials, as well as the owner of the building. Docket # 36, ex. 3, pp. 85-89. Normally, authorized persons wishing to enter the building without activating the alarm signal were required to notify Honeywell in advance. Id., pp. 89-90. Because Philpott regularly had employees coming into the building at the beginning of the workday, the system was programmed not to send an alarm signal for entries made between the hours of 7:30 a.m. and 9:30 a.m. on weekdays. Id., pp. 85-89. This two-hour "open window" remained in effect after Philpott had quit the premises and continued after Plaintiffs had executed their own contract with Honeywell. Id.

Honeywell technician Mark Keith investigated a power failure at Plaintiffs' property in early November of 1992. Docket # 36, ex. 4, p. 5. Inside the building, Keith noticed boxes filled with brass fixtures; he also detected damage to the electrical panel. Id. Keith asserts that he contacted Honeywell's dispatcher and asked that the plaintiffs be informed of a suspected break-in. Id. Virginia Irons, Honeywell's assigned dispatcher on November 12, 1992, has stated in an affidavit that she recalls Keith's report and that she personally contacted Judge Joseph Nahra, Barbara Nahra's husband, to inform him of the suspected entry. Docket # 42, ex. A. Judge Nahra insists that Honeywell contacted neither the police nor him. Docket # 30, p. 23.

On or about Sunday, November 22, 1992, Honeywell received an alarm signal from the plaintiffs' property. A Honeywell employee telephoned Judge Nahra's office and left a message on the answering machine, informing the judge of a suspected break-in. Docket # 30, pp. 28-29; docket # 36, ex. 3, pp. 105-106. Judge Nahra heard the message when he arrived at work on the following Monday; he visited the property and found it stripped of many structural components. Docket # 30, pp. 18, 29. Plaintiffs estimate their loss at $89,938.38. Docket # 1, ex. A, ¶ 6. Plaintiffs filed a claim with their insurer under their vandalism policy; that claim was settled for $27,000.00. Docket # 30, pp. 6-8.

STATEMENT OF THE CASE

Plaintiffs initiated this suit in the Cuyahoga County Common Pleas Court in September of 1993. Honeywell removed the suit from the state court based on this Court's diversity jurisdiction. Docket # 1. Plaintiffs' complaint contains three counts. Count one alleges breach of contract. Count two asserts a claim for negligence. Count three states a claim for breach of express and implied warranties relative to the burglar alarm system.

In its motion for summary judgment, Honeywell asserts that counts one through three are barred, or, alternatively, limited, by the limitation of liability provisions in the contract. Additionally, it argues that Plaintiffs' claim sounds solely in contract, not in tort, and therefore count two must be dismissed. In their motion, Plaintiffs ask the Court to grant judgment in their favor on the issue of liability or, at the least, to find the limitation provisions in the contract invalid under Ohio law.

STANDARD OF REVIEW

The Court of Appeals for the Sixth Circuit has summarized the standard of review governing motions for summary judgment under Federal Rule of Civil Procedure 56 as follows:

Summary judgment is appropriate where "there is no genuine issue of material fact ... and the moving party is entitled to judgment as a matter of law" .... The court must view all facts and inferences drawn therefrom in the light most favorable to the non-moving party.

The moving party has the burden of conclusively showing that no genuine issue of material fact exists. Nevertheless, in the face of a summary judgment motion, the nonmoving party cannot rest on its pleadings but must come forward with some probative evidence to support its claim.

"By its very terms, this standard provides that the existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." The dispute must be genuine and the facts must be such that if they were proven at trial, a reasonable jury could return a verdict in favor for the nonmoving party. If the disputed evidence "is merely colorable or is not significantly probative, summary judgment may be granted."

LaPointe v. United Autoworkers-Local 600, 8 F.3d 376, 378 (6th Cir.1993) (citations omitted).

Summary judgment is the appropriate vehicle for resolving contractual disputes in those instances in which the terms of a written contract are clear and unambiguous. See, e.g., Cincinnati Gas & Elec. Co. v. Westinghouse Elec. Corp., 465 F.2d 1064 (6th Cir.1972).

With these standards in mind, the Court shall analyze the parties' present motions.

LAW AND ANALYSIS

Honeywell bases its motion for summary judgment on the assertion that the terms of its service contract with Plaintiffs relieve, or, alternatively, limit, Honeywell's liability for the losses suffered by the...