Travelers Ins. v. Priority Business Forms

• Citation: 11 F.Supp.2d 194
• Decision Date: 15 July 1998
• Docket Number: No. CIV. A. 96-558L.,CIV. A. 96-558L.
• Parties: The TRAVELERS INSURANCE CO. as subrogee of Carol Pearl, Inc., Plaintiff, v. PRIORITY BUSINESS FORMS, INC., Defendant.
• Court: U.S. District Court — District of Rhode Island

11 F.Supp.2d 194

The TRAVELERS INSURANCE CO. as subrogee of Carol Pearl, Inc., Plaintiff, v. PRIORITY BUSINESS FORMS, INC., Defendant.

No. CIV. A. 96-558L.

United States District Court, D. Rhode Island.

July 15, 1998.

Douglas B. Lang, Mark E. Opalisky, Cozen & O'Connor, Philadelphia, PA, Anthony F. Cottone, Providence, RI, for Plaintiff.

Richard L. Patz, Hines and Patz, Inc., Providence, RI, for Defendant.

OPINION AND ORDER

LAGUEUX, Chief Judge.

This matter is before the Court on the motion of defendant Priority Business Forms, Inc. ("Priority") for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The case arises out of a burglary and arson committed at property owned by Carol Pearl, Inc. ("Carol Pearl"), insured by plaintiff The Travelers Insurance Co. ("Travelers"), and leased to Priority. Travelers, as subrogee of Carol Pearl, blames Priority for the damage to the property, and seeks to recover from Priority the amounts paid to Carol Pearl under the applicable insurance policy.

For the reasons that follow, this Court concludes that Travelers' claims against Priority are without merit. As a result, Priority's motion for summary judgment is granted.

I. Background

Unless otherwise noted, the following facts are undisputed. Priority is in the printing business. In 1982, Priority began leasing a building (the "Premises") located at Four Industrial Lane, in Johnston, Rhode Island, in which to operate its business. At that time, the Premises were owned by Eugene Pannullo ("Pannullo"). In or around 1983, Carol Pearl purchased the Premises from Pannullo, and assumed the existing lease with Priority. Subsequently, Priority and Carol Pearl negotiated additional leases, which did not differ materially from the original lease assumed by Carol Pearl when it purchased the Premises from Pannullo. Priority was the sole tenant of the Premises at all material times.

The lease in effect when the present dispute arose (the "Lease") contained the following relevant provisions:

Seventh: ... c) Tenant shall, on or before the last day of the term hereby granted or of any extended term, or upon the sooner termination of this lease, peaceably and quietly leave, surrender, and yield up unto the Landlord the leased premises ... broom clean and in good order and condition except for reasonable wear and tear thereof, damage by the elements, fire, acts of God, insurrection, riot, invasion, commotion or acts of military power.

. . . . .

Eighth: The Tenant shall keep the interior of the leased premises ... in good order and repair, ordinary wear and use and damage by fire or other unavoidable casualty excepted.

. . . . .

Fourteenth: ... b) This lease contains all of the agreements and conditions made between the parties hereto and may not be modified orally or in any other manner than by an agreement in writing, signed by all the parties hereto or their respective successors in interest.

When Priority first began leasing the Premises from Pannullo in 1982, a burglar alarm system (the "Alarm") was already in place. The Alarm had been installed by Sonitrol, Inc., a central station alarm and monitoring company. Shortly after Carol Pearl purchased the Premises from Pannullo, the latter informed Ronald Spagnole, a principal of Carol Pearl, that the alarm system was in place and operational. On January 21, 1991, Priority discontinued the alarm system due to recurring false alarms and budgetary constraints. Priority did not inform Carol Pearl of this action.

On October 2, 1995, an unknown person or persons gained access to, and set fire to, the Premises. The Premises were severely damaged by the blaze, and the arsonists were never apprehended. Carol Pearl was insured by Travelers at all relevant times; Travelers thus paid Carol Pearl $569,000 for the damage and destruction to the Premises.

On October 6, 1996, Travelers filed a complaint (the "Complaint") in this Court. Travelers alleges that it was subrogated, to the extent of its payment to Carol Pearl, to Carol Pearl's right of recovery against Priority. Count I of the Complaint alleges negligence; Count II alleges breach of lease; and Count III alleges detrimental reliance.¹ While the precise nature of each claim is set forth supra, the jugular vein of Travelers' gripe with Priority is that Priority discontinued the Alarm, and failed to notify Carol Pearl of that fact. Travelers complains that this allowed the arsonists to act undetected, giving them time to do their dirty work unbothered by public authorities, which would have swiftly reported to the scene had the Alarm been operational. Travelers also argues that Priority's improper storage of certain chemicals on the Premises allowed the arsonists to literally add fuel to the fire, and created a dangerous condition of which Priority was obligated to warn Carol Pearl.

On July 23, 1997, Priority filed a Motion for Summary Judgment, with an attendant Statement of Undisputed Facts as required by Local Rule 12.1. Travelers responded on August 25, 1997, and Priority then filed a "Response to Plaintiff's Objection to Summary Judgment Motion" on September 4, 1997.

On September 15, 1997, this Court held a hearing on Priority's motion for summary judgment. Following oral arguments, the Court took the matter under advisement. The Court has considered all the materials submitted and the arguments of the parties, and the matter is now in order for decision.

II. Standard for Decision

Fed.R.Civ.P. 56(c) sets forth the standard for ruling on summary judgment motions:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Therefore, the critical inquiry is whether a genuine issue of material fact exists. "Material facts are those `that might affect the outcome of the suit under the governing law.'" Morrissey v. Boston Five Cents Sav. Bank, 54 F.3d 27, 31 (1st Cir.1995) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). "A dispute as to a material fact is genuine `if the evidence is such that a reasonable jury could return a verdict for the non moving party.'" Id.

On a motion for summary judgment, the Court must view all evidence and related inferences in the light most favorable to the nonmoving party. Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d 370, 373 (1st Cir.1991). At the summary judgment stage, there is "no room for credibility determinations, no room for the measured weighing of conflicting evidence such as the trial process entails, no room for the judge to superimpose his own ideas of probability and likelihood." Greenburg v. Puerto Rico Maritime Shipping Auth., 835 F.2d 932, 936 (1st Cir.1987). Similarly, "[s]ummary judgment is not appropriate merely because the facts offered by the moving party seem most plausible, or because the opponent is unlikely to prevail at trial." Gannon v. Narragansett Elec. Co., 777 F.Supp. 167, 169 (D.R.I.1991).

III. Applicable Law

It is undisputed that, as a federal court exercising diversity jurisdiction over state-law claims, this Court, sitting in Rhode Island, is to apply Rhode Island law. See Commissioner of Internal Revenue v. Estate of Bosch, 387 U.S. 456, 464-65, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967); Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Moores v. Greenberg, 834 F.2d 1105, 1107 (1st Cir.1987). In so doing, the Court must attempt to determine how the Rhode Island Supreme Court would resolve this case. To that end, the Court "seek[s] guidance in analogous state court decisions, persuasive adjudications by courts of sister states, learned treatises, and public policy considerations identified in state decisional law." Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1151 (1st Cir.1996).

IV. Count I: Negligence

As noted, the core of Travelers' negligence claim is that Priority improperly discontinued the existing burglar alarm, and failed to notify Carol Pearl of that fact. Travelers contends that the lack of a functioning burglar alarm allowed the arsonists to enter the Premises undetected, and allowed them to act unmolested by public authorities, which would have rapidly responded had the Alarm been functional. In addition, Travelers asserts that Priority improperly failed to secure "highly flammable" chemicals on the Premises, thus allowing the arsonists access to such materials for use in their illegal endeavor. Finally, Travelers contends that the presence alone of such chemicals on the Premises, together with the bulk storage of paper, created a hazardous condition of which Priority was at least obligated to warn Carol Pearl.

In order to prevail on a claim of negligence in Rhode Island, a plaintiff must prove that: (1) the defendant owed the plaintiff a legal duty to refrain from negligent activities; (2) the defendant breached that duty; (3) the breach proximately caused harm to the plaintiff; and (4) there was actual loss or damage resulting. Splendorio v. Bilray Demolition Co., Inc., 682 A.2d 461, 466 (R.I.1996).

Clearly, Priority owed no duty to Carol Pearl to maintain either the existing Sonitrol burglar alarm or any other such system. No such duty can be found in the Lease, and none exists at common law.

Undoubtedly realizing this, Travelers instead suggests that the aforementioned specific acts and omissions by Priority were simply the breaches of a broader duty: the "obligation to act reasonably to protect the Premises". Travelers submits three bases for this duty: (1) the relationship between Priority and Carol Pearl and the terms of the Lease; (2) "the fact that Priority was in exclusive possession of certain knowledge which should have prompted it to maintain central station monitoring of...