Rollins, Inc. v. Heller

• Citation: 454 So.2d 580
• Decision Date: 26 June 1984
• Docket Number: 83-106,Nos. 82-2687,s. 82-2687
• Parties: ROLLINS, INC., et al., Appellants, v. Daniel Neal HELLER and Diane Heller, his wife, Appellees.
• Court: Florida District Court of Appeals

Page 580

454 So.2d 580

ROLLINS, INC., et al., Appellants, v. Daniel Neal HELLER and Diane Heller, his wife, Appellees.

Nos. 82-2687, 83-106.

District Court of Appeal of Florida,

Third District.

June 26, 1984.

Rehearing Denied Sept. 17, 1984.

Capp, Reinstein, Kopelowitz & Atlas and Jan D. Atlas, Palm Beach, and Addison & Paris, Tampa, for appellants.

Daniel Neal Heller, Sams, Gerstein & Ward, Miami, for appellees.

Before BARKDULL, NESBITT and FERGUSON, JJ.

NESBITT, Judge.

Rollins appeals a final judgment finding it liable for gross negligence and deceptive and unfair trade practices in connection with the installation and servicing of a burglar alarm system and granting an award of compensatory and punitive damages totalling $228,487. We reverse as to the award of damages.

The Hellers entered a contract with Rollins Protective Services Company (RPS) to install and maintain a burglar alarm system in their home. RPS is a subsidiary corporation of Rollins, Inc., the defendant below. The Hellers believed themselves to be dealing with Rollins, Inc. and were unaware of the separate corporate identities. The system was installed and then allegedly "serviced" regularly for more than two years, up until the time the Hellers' residence was burglarized. The alarm system did not work at the time of the burglary and property belonging to the Hellers, valued in excess of one million dollars, was stolen. Subsequently, through investigation and paying of ransom monies, about ninety per cent (in dollar value) of the stolen property was recovered.

The Hellers commenced an action claiming negligence, breach of express and implied warranties, fraud and deceit, misleading advertising, gross negligence and deceptive and unfair trade practices on the part of Rollins. The Hellers voluntarily abandoned their claims based upon ordinary negligence and warranties. The trial court found that the Hellers failed to establish their claims based upon fraud and deceit and misleading advertising. The Hellers have not challenged these findings. The court, however, found Rollins liable for gross negligence and deceptive and unfair trade practices under section 501.201 et. seq., Florida Statutes (1981). The court awarded $128,487 in compensatory damages (based upon the value of the unrecovered stolen items) and $100,000 in punitive damages. Rollins thereupon instituted this appeal challenging its liability as found by the trial court and the damages awarded.

Rollins first contends that the Hellers have failed to pierce the corporate veil and that RPS is the only proper defendant. We find, however, that the record supports the trial court's implicit finding that Rollins was itself a direct participant in the dealings with the Hellers. Therefore, there is no need for the Hellers to pierce the corporate veil between RPS and Rollins.

GROSS NEGLIGENCE ¹

The crucial issue concerning Rollins' liability for gross negligence is whether the limitation of damages provision in the contract is applicable. In pertinent part, the contract states:

It is further agreed that Rollins is not an insurer of the Customer's property and that all charges and fees herein provided for are based solely on the cost of installation, service of the System and scope of liability hereinafter set forth and are unrelated to the value of the Customer's property or the property of others located on the Customer's premises.

The parties agree that if loss or damage should result from the failure of performance or operation or from defective performance or operation or from improper installation or servicing of the System, that Rollins' liability, if any, for the loss or damage thus sustained shall be limited to a sum equal to ten (10%) per cent of one year's service charge or $250.00, whichever sum is the greater, and that the provisions of this paragraph shall apply if loss or damage, irrespective of cause or origin, results, directly or indirectly to persons or property from performance or nonperformance of obligations imposed by this Agreement or from negligence, active or otherwise, of Rollins, its agents or employees.

It is well settled that exculpatory and limitation of damages provisions are valid and enforceable in these types of contracts. Mankap Enterprises, Inc. v. Wells Fargo Alarm Services, 427 So.2d 332 (Fla. 3d DCA 1983); Continental Video Corp. v. Honeywell, Inc., 422 So.2d 35 (Fla. 3d DCA 1982); Ace Formal Wear, Inc. v. Baker Protective Service, Inc., 416 So.2d 8 (Fla. 3d DCA 1982); L. Luria & Sons, Inc. v. Alarmtec International Corp., 384 So.2d 947 (Fla. 4th DCA 1980).

In Mankap, this court held that such provisions will not limit one's liability for fraud, an intentional tort. 427 So.2d at 333-34. The trial court in the present case, however, specifically found that the Hellers failed to establish fraud and deceit on the part of Rollins. Instead, the court found the provisions did not apply because Rollins was guilty of gross negligence amounting to a willful, wanton and reckless indifference to the rights of the Hellers. Without unnecessarily lengthening this opinion, we simply hold that the record supports the finding of gross negligence. See Maddalena v. Southern Bell Telephone & Telegraph Co., 382 So.2d 1246 (Fla. 4th DCA 1980) (compounding effect of successive acts can amount to gross negligence). This, however, does not put the case within Mankap's fraud exception to the application of the provisions.

In L. Luria, the plaintiffs sought compensatory damages for breach of contract and warranties and for negligence, and also sought punitive damages for "gross, wanton and willful negligence" on the part of a burglar alarm company. The contract between the parties stated that the company was not liable for any loss or damage resulting from their services under the contract. The contract also contained a limitation of damages provision. ² The court Although the contract in the present case does not contain an exculpatory clause which would immunize Rollins from all liability, it does contain a limitation of damages provision. On the authority of the above cases, therefore, any damages awarded pursuant to Rollins' gross negligence should have been limited according to the contract, and it was error for the trial court to find the provision did not apply in the face of gross negligence. ³ Accordingly, the aggregate of compensatory and punitive damages recoverable by the Hellers for Rollins' gross negligence is limited to ten per cent of one year's service charge or $250, whichever is greater.

                found that the exculpatory clause totally excluded liability on the company's part for losses due to burglary and affirmed the trial court's dismissal of the action.  The court further found that the limitation of damages provision was enforceable and in a proper case would limit damages according to its terms.  384 So.2d at 947-48.   Accord Mankap;  Continental Video; Ace Formal Wear
                

THE FDUTPA VIOLATION

We now turn to the trial court's finding that Rollins violated the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). § 501.201 et. seq., Fla.Stat. (1981). The applicable provision makes unlawful "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." § 501.204(1). Although the trial court found no fraud on Rollins' part, such a finding is not necessary to sustain a violation under the FDUTPA. The legislature specifically provided that great weight was to be given to the federal courts' interpretations of the Federal Trade Commission Act. § 501.204(2). In D.D.D. Corp. v. Federal Trade Commission, 125 F.2d 679, 682 (7th Cir.1942), the court held "that the false, unfair or deceptive acts defined in the Federal Trade Commission Act need not be such as would constitute fraud." Reviewing the record, we find that there was competent substantial evidence presented to support the court's finding that Rollins violated the FDUTPA. See Deltona Corp. v. Jannotti, 392 So.2d 976 (Fla. 1st DCA 1981).

Having upheld the trial court's finding on the FDUTPA violation, we now must determine what damages are allowed by the Act. The Act specifically provides that an "individual may recover actual damages, plus attorney's fees and court costs." § 501.211(2). The Act, however only allows recovery of damages related to the property which was the subject of the consumer transaction. § 501.212(3). We find that the subject of the consumer transaction in the present case was the installation of the burglar alarm system and the services performed thereon, rather than the items stolen from the Hellers' house. A company which installs and services burglar While the FDUTPA does not define "actual damages," courts of other jurisdictions have had occasion to define the term within similar statutes. In interpreting Texas' Deceptive Trade Practices Act, Tex.Bus. & Com. Code Ann. § 17.41, et. seq. (Vernon 1979), the Texas supreme court held that actual damages are those damages recoverable at common law. Brown v. American Transfer and Storage Co., 601 S.W.2d 931 (Tex.), cert. denied, 449 U.S. 1015, 101 S.Ct. 575, 66 L.Ed.2d 474 (1980). See also Lubbock Mortgage & Investment Co. v. Thomas, 626 S.W.2d 611 (Tex.App.1981); United Postage Corp. v. Kammeyer, 581 S.W.2d 716 (Tex.App.1979). In determining the measure of actual damages, the court in Raye v. Fred Oakley Motors, Inc., 646 S.W.2d 288, 290 (Tex.App.1983), held:

                alarms does not assume the responsibility of insuring all the items intended to be protected by the system. 4  Central Alarm of Tucson v. Ganem, 116 Ariz. 74, 567 P.2d 1203 (Ct.App.1977).  This immunity was made clear in the present case by the provision in the contract stating that "Rollins is not an insurer of the Customer's property."   Therefore, the damages awarded pursuant to the violation of the FDUTPA must be limited to the actual damages related to the system and services Rollins contracted to

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