Riley v. Champion Intern. Corp.

• Decision Date: 17 July 1997
• Docket Number: No. 1:95-CV-790.,1:95-CV-790.
• Citation: 973 F.Supp. 634
• Parties: Charles RILEY and wife, Helen Riley, Plaintiffs, v. CHAMPION INTERNATIONAL CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of Texas

973 F.Supp. 634

Charles RILEY and wife, Helen Riley, Plaintiffs, v. CHAMPION INTERNATIONAL CORPORATION, Defendant.

No. 1:95-CV-790.

United States District Court, E.D. Texas, Beaumont Division

July 17, 1997.

COPYRIGHT MATERIAL OMITTED

Paul Gertz, Lawrence Germer, Lawrence Simmons, Germer & Gertz, Beaumont, for plaintiffs.

Ronald Secrest, Linda McCloud, Beck, Redden & Secrest, Houston, for defendant.

ORDER ADOPTING IN PART AND OVERRULING IN PART MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

SCHELL, Chief Judge.

This matter is before the court on the Report and Recommendation of the United States Magistrate Judge Re: Defendant's August 22, 1996 Motion for Summary Judgment that was filed on May 23, 1997. Defendant filed objections on June 5, 1997. Plaintiffs filed objections on June 9, 1997. Upon consideration of the report and recommendation, the parties' objections, and the applicable law, the court is of the opinion that the Magistrate Judge's Report and Recommendation should be ADOPTED IN PART and OVERRULED IN PART.

Adopted Portions

The court adopts the analysis and conclusions of the report and recommendation as to the following issues: (1) the denial of Defendant's Motion for Summary Judgment with regard to Plaintiffs' breach of contract claim;¹ (2) the granting of Defendant's Motion for Summary Judgment with regard to Plaintiffs' claim of negligence under a premises liability theory;² and (3) the granting of Defendant's Motion for Summary Judgment with regard to Plaintiffs' claim of negligent misrepresentation.

Overruled Portions

The court disagrees with portions of the Restatement (Second) of Torts § 323 analysis contained in the report and recommendation.³ Section 323 provides:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other's person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if (a) his failure to exercise such care increases the risk of such harm, or (b) the harm is suffered because of the other's reliance upon the undertaking.

Specifically, the court disagrees with the report's conclusion that Plaintiffs have failed to create a genuine issue of material fact as to the "increased risk of harm" alternative of § 323.⁴ For purposes of the § 323 analysis, the court agrees with Plaintiffs' contention that it is the Lyme disease itself, not the actual tick bite, that constitutes the real harm here. Upon review of the relevant excerpts of Riley's deposition, the court finds that Plaintiffs have created a genuine issue of material fact as to whether Defendant's failure to provide Riley with safety information related to Lyme disease increased the risk or likelihood, not that he would necessarily contract the disease, but rather, of his developing a disabling, chronic Lyme infection.⁵

Because the court finds that a genuine issue of material fact exists as to whether Defendant negligently performed the undertaking to provide safety information,⁶ Plaintiffs' claims for gross negligence, loss of consortium, loss of household services, and punitive damages are revived.

Accordingly, the court GRANTS Defendant's Motion for Summary Judgment as to Plaintiffs' negligence claims based on premises liability and misrepresentation and DENIES Defendant's Motion for Summary Judgment as to Plaintiffs' claims of breach of contract, negligent performance, gross negligence, loss of consortium, and loss of household services and Plaintiffs' claim for punitive damages.

REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE RE: DEFENDANT'S AUGUST 22, 1996 MOTION FOR SUMMARY JUDGMENT

HINES, United States Magistrate Judge.

This case involves the novel assertion that a forest owner is liable for not warning an independently contracting, 30-year-veteran logger that he might get bitten by a tick in the woods and thereafter contract Lyme disease. As is often the case with novel claims, plaintiffs take a scatter-gun approach to pleading their cause of action. The complaint alleges several variants of ordinary negligence, gross negligence, negligent misrepresentation, breach of a written "cut and haul" contract, loss of consortium and loss of services.

As one might anticipate, defendant vigorously asserts that all plaintiffs' efforts are in vain. This report addresses defendant's motion for summary judgment.¹ The analysis concludes that the motion should be denied as to the breach of contract claim because the contract does not preclude plaintiff's contention as a matter of law, and defendant fails to show absence of a genuine issue of material fact as to whether the parties intended to impose on defendant the obligation to warn as claimed by plaintiffs.

The analysis further concludes that the motion should be granted as to each negligence-based tort claim asserted by plaintiff, Charles Riley ("Riley"). Defendant, Champion International Corporation ("Champion"), as premises owner, owed to its invitees no duty of care regarding tick bites under the ferae naturae exception. Second, Riley cannot prevail on the bases of negligent performance of a contract or negligent performance of a voluntarily assumed duty because he cannot show that he either relied on Champion's alleged duty to warn him of Lyme-carrying ticks or that Champion alleged failure to provide such a warning increased the risk of harm. Fourth, Riley fails to show a genuine issue of material fact as to whether he relied on Champion's alleged misrepresentations, thus dooming his cause of action based on misrepresentation.

Champion's motion should also be granted as to plaintiff Helen Riley's loss of consortium and loss of services claim. First, as her claim is derivative to Charles Riley's claims of tortious conduct by Champion, it should be dismissed along with those claims. Second, Texas law does not permit a spouse to attach a derivative claim for loss of consortium or loss of services to a simple contract cause of action. Further, she is precluded from pursuing punitive damages because her injury is indirect and derivative.

I. FACTUAL BACKGROUND; NATURE OF SUIT

Plaintiff Charles Riley operated a logging contractor business as sole proprietor in forests of east Texas for over 30 years. Pls.' Original Compl. at 2. Beginning in 1989, he worked exclusively for Champion as an independent contractor. Id. Between 1989 and 1994, Riley entered into numerous written "cut and haul" contracts with Champion. Riley agreed to enter onto land owned or controlled by defendant and cut, haul, load and deliver timber. Id.

Riley entered into a "cut and haul" contract in November 1993, covering the period from December 3, 1993 to October 31, 1994. Def.'s Ex. 2 to Riley Dep. Supp. Summ. J. Riley alleges that while harvesting timber from Champion-owned property under this contract he acquired Lyme disease² as a result of being bitten by two infected deer ticks. Pls.' Original Compl. at 3, 5.

On August 30, 1995, plaintiffs filed suit invoking the court's diversity jurisdiction under 28 U.S.C. § 1332. They alleged several state-law claims for relief claiming that his injury was a result of defendant's (1) negligence and (2) gross negligence in failing to warn him of the risk of Lyme disease; (3) misrepresentation and omission of information pertaining to hazards on its premises and of safety information; and (4) breach of a contractual agreement to identify safety hazards and provide safety information. The suit also includes Helen Riley's claim of loss of consortium and loss of household services.

The crux of plaintiffs' allegations is that defendant knew of the dangers of Lyme disease and took extensive precautionary measures to warn its own employees, hunters and recreational users of its properties. However, it failed to provide any similar information to its contractors, whose number included plaintiff Charles Riley. Plaintiff asserts that the defendant corporation had a common-law and contractual duty to share this information with him and that its failure to do so ultimately resulted in his infection with that disease.

II. THE MOTION FOR SUMMARY JUDGMENT & RESPONSE

Defendant seeks summary judgment on all of plaintiffs' claims. First, defendant asserts that plaintiff's negligence claim is barred because the corporation owed no duty to plaintiff as related to Lyme disease. Specifically, defendant reasons that it owed no duty to Riley for several alternate reasons, which include (1) because he was an independent contractor; (2) because plaintiff contracted to accept the premises "as is" and to inspect the premises for any defects; (3) because it had no duty to warn of a danger that is common knowledge, i.e., the presence of infected deer ticks in East Texas forests; and (4) because it had no duty to warn or guard plaintiff from deer ticks, which are indigenous wild animals. Defendant concludes that plaintiff cannot prove an element of his negligence claim because there was no duty to warn him of the risks of Lyme disease. In the alternative, defendant argues that plaintiff contractually released and indemnified it from liability for negligence. Second, it reasons that, as the release prohibits plaintiff's negligence claim, the gross negligence claim cannot survive summary judgment. Third, defendant argues that it is entitled to summary judgment on plaintiffs' misrepresentation claim because (1) it made no false representations to Riley, (2) it provided him with safety information, (3) plaintiff contractually acknowledged the corporation's warning of potentially dangerous and/or hazardous conditions upon its premises, which serves as a disavowal of reliance and also prevents him from alleging that defendant omitted information pertaining to hazards on the property, (4) plaintiff cannot prove reliance as he had an independent duty to keep himself...