Rassa v. Rollins Protective Services Co.

• Decision Date: 03 December 1998
• Docket Number: No. CIV. S-98-1017.,CIV. S-98-1017.
• Parties: Cornelius RASSA, et al., Plaintiffs, v. ROLLINS PROTECTIVE SERVICES COMPANY, et al., Defendants.
• Court: U.S. District Court — District of Maryland

30 F.Supp.2d 538

Cornelius RASSA, et al., Plaintiffs, v. ROLLINS PROTECTIVE SERVICES COMPANY, et al., Defendants.

No. CIV. S-98-1017.

United States District Court, D. Maryland.

December 3, 1998.

Elaine Rinaldi, Law Office, Adam B. Weinstein, Law Office, Philadelphia, PA, Adam Jason Sevel, Law Office, Baltimore, for Cornelius Rassa, Irene Rassa, plaintiffs.

D. Stephenson Schwinn, Jordan, Coyne & Savits, Susanne Marie Lewis, Jordan Coyne & Savits, Washington, DC, for Rollins Protective Services Company, Delaware Corporation, Rollins, Inc., Delaware Corporation, defendants.

MEMORANDUM OPINION

SMALKIN, District Judge.

The defendants, Rollins Protective Services Company and Rollins, Inc., have filed a motion to dismiss this case under Rule 12(b)(1) of the Federal Rules of Civil Procedure, contending that the plaintiffs, Cornelius and Irene Rassa, cannot recover in excess of the jurisdictional minimum required in a federal diversity action. For the reasons set forth below, the defendants' motion will be granted. The issues have been well and fully briefed, and no oral hearing is necessary. Local Rule 105.6, D. Md.

I. BACKGROUND

The plaintiffs have filed suit to recover compensatory damages resulting from the alleged failure of a fire alarm sold and installed by the defendants. On July 3, 1990, the plaintiffs contracted to upgrade their existing home security service, purchasing a comprehensive system capable of responding to burglaries as well as fire and medical emergencies. Under the terms of the contract, the alarm system was to be connected through telephone lines to a central monitoring station manned by operators who would report emergencies to the fire and police departments.

On December 9, 1996, a fire broke out in the basement of the plaintiffs' house, and the alarm system failed to transmit a signal to the central monitoring station. The plaintiffs assert that the defendants' defective installation and programming of the system led to this failure, allowing the fire to spread undetected for a substantial period of time and causing significant damage to their home. As a result, the plaintiffs seek recovery under four different legal theories: negligence, gross negligence, breach of contract, and breach of warranty.

II. DISCUSSION

The plaintiffs contend that this Court has jurisdiction in this case under 28 U.S.C. § 1332(a). This section provides in pertinent part that "district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between ___ (1) citizens of different States."

Applying this statutory provision, Judge Harvey previously has noted:

A federal court is a court of limited jurisdiction, and it is necessary that the facts of a dispute be closely examined by the court to determine whether federal jurisdiction exists. Jurisdiction has been claimed to exist in this case under 28 U.S.C. § 1332(a), and the first essential inquiry here is whether the jurisdictional requirement of $50,000¹ has been met.

Herlihy v. Ply-Gem Indus., Inc., 752 F.Supp. 1282, 1285 (D.Md.1990). In undertaking this examination, this Court has held that the "[f]ailure to meet the jurisdictional amount need not be apparent from the face of the pleadings." Maryland Nat'l Bank v. Nolan, 666 F.Supp. 797, 798 (D.Md.1987). Even after trial, "`if from the proofs, the court is satisfied to a [legal] certainty that the plaintiff never was entitled to recover that amount,'" the case should be dismissed for want of subject matter jurisdiction. Id. (quoting Saint Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938)).

This Court recently has stated that "`the party seeking to invoke the jurisdiction of the federal courts has the burden of proving its existence by showing that it does not appear to a legal certainty that its claim is for less than the jurisdictional amount.'" Schaefer v. Aetna Life & Cas. Co., 910 F.Supp. 1095, 1097 (D.Md.1996) (quoting 14A Charles Alan Wright et al., Federal Practice and Procedure § 3702, at 19 (1985)). As the discussion below demonstrates, however, the plaintiffs can recover no more than $500 under any of the legal theories advanced, far below what is required by 28 U.S.C. § 1332(a).

A. Negligence and Gross Negligence Claims

The plaintiffs have alleged that the defendants' actions in installing and programming the alarm system constituted both negligence and gross negligence. To prove either count, the plaintiffs must show that the defendants owed some duty of care to the plaintiffs under Maryland law.² The Court of Appeals of Maryland has recently emphasized that there can be no claim for negligence "`where there is no duty that is due for negligence is the breach of some duty that one person owes to another. It is consequently relative and can have no existence apart from some duty expressly or impliedly imposed.'" Bobo v. State, 346 Md. 706, 714, 697 A.2d 1371 (1997) (quoting West Virginia Cent. & P.Ry. v. State ex rel. Fuller, 96 Md. 652, 666, 54 A. 669 (1903)). Likewise, the Court of Appeals has defined gross negligence as "`an intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another ....'" Liscombe v. Potomac Edison Co., 303 Md. 619, 635, 495 A.2d 838 (1985) (quoting Romanesk v. Rose, 248 Md. 420, 423, 237 A.2d 12 (1968)) (emphasis added).

In bringing their tort claims, however, the plaintiffs have "failed to point to any statute or common law rule which would support a finding that Defendants owed a duty of care to [them]." Tolson v. Primerica Corp., No. HAR-89-3557, 1991 WL 83136, at *5 (D.Md. May 20, 1991). The contractual relationship between an alarm company and a customer does not, ipso facto, give rise to a tort duty, as would the relationship between a doctor and a patient, a lawyer and a client, or a common carrier and a passenger. In the absence of a tort duty "independent of that arising out of the contract itself," Heckrotte v. Riddle, 224 Md. 591, 595, 168 A.2d 879 (1961), the plaintiffs are without a cognizable claim for either negligence or gross negligence under Maryland law.

In their seminal treatise, Professors Prosser and Keeton provide a helpful framework for distinguishing tort and contract claims as between parties to a contract; their analysis further supports the preclusion of the plaintiffs' negligence and gross negligence counts in this case. They note:

Tort obligations are in general obligations that are imposed by law on policy considerations to avoid some kind of loss to others. They are obligations imposed apart from and independent of promises made and therefore apart from any manifested intention of parties to a contract or other bargaining transaction. Therefore, if the alleged obligation to do or not to do something that was breached could not have existed but for a manifested intent, then contract law should be the only theory upon which liability would be imposed.

W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 92, at 656 (5th ed.1984) (emphasis in the original). Applying this reasoning to the instant case, the defendants' obligation to install, program, and monitor the plaintiffs' alarm system arose exclusively from the agreement between the parties and not from any separate, state-imposed tort duty. Thus, under well-settled Maryland law, an action on the contract provides the plaintiffs with their sole avenue for recovery.³

A careful review of the complaint plainly reveals that the plaintiffs have asserted these tort claims for purely economic losses stemming from the defendants' failure to perform the agreed-upon contract. "In that the essence of the relationship was contractual, and the essence of the claimed dereliction by defendant was failure to perform the contract, only contract damages are recoverable." Nixon Uniform Serv., Inc. v. American Directory Serv. Agency, Inc., 693 F.Supp. 367, 368 (D.Md.1988) (applying Maryland law).⁴ Preclusion of the plaintiffs' tort claims in this case is wholly consistent with the maintenance of the "proper distinction between tort and contract law" espoused by Maryland courts. Flow Indus., Inc. v. Fields Constr. Co., 683 F.Supp. 527, 530 (D.Md.1988).

B. Breach of Warranty Claims

In addressing the plaintiffs' Uniform Commercial Code (U.C.C.) warranty claims, the Court noted, in a prior order, the potential applicability of Md. Com. Law I Code Ann. § 2-316.1 (1997) to the facts of this case. Under that statute, "[a]ny ... written language used by a seller of consumer goods and services, which attempts to exclude or modify any implied warranties of merchantability and fitness for a particular purpose or to exclude or modify the consumer's remedies for breach of those warranties, is unenforceable." § 2-316.1(2) (emphasis added).

The contract at the heart of this dispute involves the sale of both consumer goods (an alarm system) and services (the installation, programming, and monitoring of the alarm system). The Court of Appeals of Maryland has described such an agreement as "a mixed or hybrid transaction." Anthony Pools v. Sheehan, 295 Md. 285, 290, 455 A.2d 434 (1983). It appears that the predominant purpose of this hybrid contract was for the installation, programming, and monitoring of the alarm system, while the sale of the alarm parts was incidental to the services provided by Rollins. See id. at 293, 455 A.2d 434 (considering the sale and construction of an in-ground swimming pool, the court noted that "[t]he predominant factor, the thrust, the purpose of the contract was the furnishing of labor and service by Anthony, while the sale of the diving board was incidental to the construction of the pool itself").

However, even where the sale of services constitutes the predominant purpose of such a contract, the protections against modifying a...