Rorick v. Service Experts Heating & Air Conditioning LLC et al
Filing
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MEMORANDUM OPINION & ORDER: (1) Service Experts, LLCs 14 MOTION to Dismiss is GRANTED. (2) Lennox Industries, Inc.'s 12 Motion to Dismiss is GRANTED. (3) Service Experts Heating & Air Conditioning LLC's 13 Motion to Dismiss is GRANTED IN PART as to Causes of Action 1, 2, 3, 4, 6, 8, 9, 10, and 11 and DENIED IN PART as to Causes of Action 5, 7, and 12. Signed by Judge Joseph M. Hood on 3/30/2018.(SCD)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
KIMBERLY S. RORICK,
Plaintiff,
v.
SERVICE EXPERTS HEATING
& AIR CONDITIONING LLC,
d/b/a KNOCHELMANN PLUMBING,
HEATING & AIR CONDITIONING
d/b/a KNOCKELMANN SERVICE
EXPERTS,
SERVICE EXPERTS, LLC,
LENNOX INDUSTRIES, INC., and
FREIJE TREATMENT SYSTEMS,
INC.,
Defendants.
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) Action No. 5:17-cv-132-JMH
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) MEMORANDUM OPINION AND ORDER
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This matter is before the Court on Defendant Service Experts
Heating & Air Conditioning LLC (SEHAC), Service Experts, LLC (SE),
Lennox Industries, Inc.’s various motions to dismiss Plaintiff’s
Complaint.
Defendant Frieje Treatment Systems (“Frieje”) has not
been served with process.
The motions are fully briefed and ready
to be ruled upon. For the reasons stated herein, the motions will
be granted in part and denied in part.
I)
Facts
This case arises from the installation of a water filtration
system at the home of Plaintiff, which she alleges resulted in
1
personal
injury,
property
damage,
damage
to
real
property,
emotion/mental injury, and monetary losses.
The following facts are set forth in Plaintiff’s Complaint
and assumed to be true for the purposes of these motions only:
Plaintiff alleges, “upon information and belief,” that Lennox
is “the parent corporation for Defendant Service Experts Heating
and Air Conditioning (“SEHAC”),” and “was transacting business in
the Commonwealth of Kentucky through SEHAC.”
On December 7, 2011,
SEHAC made a service call to Plaintiff’s home to repair an AquaPure backwash filter system, but informed Plaintiff that SEHAC
would not be able to repair the unit because it did not service
Aqua-Pure equipment.
On December 12, 2011, SEHAC returned to
Plaintiff's home and sold Plaintiff two new water system units.
The first was a TS+ 2000 Easy Water Toxin Shield Backwash Water
Filter manufactured by Defendant Freije for the entire home, and
the second was a Revita water system for the kitchen.
SEHAC
installed the whole house Easy Water Toxin Shield System and Revita
water system the same day and Plaintiff paid Defendant SEHAC in
full for both systems on the same day.
On December 19, 2011, Plaintiff informed SEHAC of problems
with both new water systems.
On December 20, 2011, an employee
and/or agent of SEHAC came to Plaintiff’s home to inspect the
systems, repair the water systems, and take a water sample to
assure Plaintiff that the water was safe to drink and use.
2
The
employee and/or agent of SEHAC then announced that the water
filtration system was working perfectly, and advised Plaintiff
that they were taking a water sample for testing.
On December 30,
2011, another employee and/or agent of Defendant SEHAC made a
second service call to Plaintiff’s home and advised Plaintiff,
“Your water tested fine,” and then, and on other occasions, assured
Plaintiff that the water was safe for consumption.
Eventually, Plaintiff asked for the Easy Water Toxin Shield
system to be removed and asked that the original system be reinstalled.
SEHAC informed Plaintiff that it would submit claims
for the systems, but never returned to service its system, remove
its system, or return or re-install Plaintiff’s original system
despite repeated assurances that they would return the Aqua-Pure
filter system or compensate Plaintiff for the loss.
On January
24, 2013, SEHAC denied any knowledge of the claim for taking and
failing to return the Aqua-Pure filter system prior to January 23,
2013. (¶ 27).
Plaintiff's original filter system has not been
returned and Plaintiff has not received monetary compensation for
it.
On March 22, 2013, Plaintiff (and her spouse, who was also
acting has her attorney) filed suit in for breach of contract,
breach of warranty, fraud, damages, defamation, unjust enrichment,
and malice, oppression, or fraud in a Kentucky state court.
Defendants removed the case to the United States District Court,
3
Eastern District of Kentucky, at Covington.
[Rorick v. Service
Experts Heating and Air Conditioning, et al., Case No. 2:13-cv00081-WOB-CJS)] (referred to herein as the “prior Rorick action”).
Plaintiff voluntarily dismissed her case on May 21, 2013.
She
refiled her case in this court on March 21, 2017, with many of the
same claims as in the prior Rorick action, as well as new claims
for personal injury and injury to property and conversion.1
II)
Legal Standard
In ruling on Defendants’ Rule 12(b)(6) motion, the Court must
“construe
the
complaint
in
the
light
most
favorable
to
the
plaintiff, accept its allegations as true, and draw all reasonable
inferences in favor of the plaintiff.” Jones v. City of Cincinnati,
521 F2d 555, 559 (6th Cir. 2008).
The Court is not bound to accept
as true “recitals of the elements of a cause of action, supported
by mere conclusory statements[.]” Ashcroft v. Iqbal, 556 U.S. 662,
678. “To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Iqbal, 556 U.S. at 678
(quoting
Twombly,
550
U.S.
at
570).
“A
claim
has
facial
plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is
1
Plaintiff’s spouse filed a lawsuit with substantially similar claims on the
same day Plaintiff filed this action. That case is styled Peter Newberry v.
Service Experts Heating and Air Conditioning, et al., Case No. 5:17-cv-13JMH.
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liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S.
at 556).
III) Analysis
a. Lennox and SE
Plaintiff argues Defendants Lennox and SE should be held
liable for the actions of their “agent” SEHAC “pursuant to the
doctrines
of
agency,
[Complaint, ¶¶ 8-9].
respondeat
superior
and/or
estoppel.”
This is the only allegation Plaintiff makes
regarding any agency relationship between Lennox, SE and SEHAC.
Although the Court must accept all well-pled factual allegations,
the existence of an agency relationship is a legal determination
that is not entitled to the same presumption.
See Papasan v.
Allain, 478 U.S. 265, 286 (1986) (“Although for the purposes of
this motion to dismiss we must take all the factual allegations in
the complaint as true, we are not bound to accept as true a legal
conclusion couched as a factual allegation.”).
“When attempting
to plead liability through agency, a claimant must plead facts
that would support a finding that the alleged agents had actual or
apparent authority to act on behalf of another.”
Pixler v. Huff,
2012 WL 3109492, at *9 (W.D.Ky. July 31, 2012)(internal quotation
marks and citation omitted).
Plaintiff asserts nothing more than
a parent-subsidiary relationship between these defendants.
This
is insufficient to justify the finding of an agency relationship.
5
See Moore v. Lowe’s Companies, Inc., 2013 WL 1907488 at n. 4
(W.D.Ky. May 7, 2013).
Because the Court has no basis to find SE
or Lennox vicariously liable for the actions of SEHAC, the claims
against these defendants as agents will be dismissed.
b. First Cause of Action2
The
first
cause
of
action
does
not
relate
to
or
make
allegations against Lennox, SEHAC, or SE; therefore the Court will
not
address
it
herein.
Plaintiff
alleges
manufactured the water system at issue.
only
that
Frieje
To the extent the first
cause of action is brought against Lennox, SEHAC, or SE, this claim
will be dismissed.
c. Second through Fourth Causes of Action
Plaintiff’s tort claims (causes of action 2 through 4) are
time-barred. In these causes of action, Plaintiff alleges “serious
harm to the property, health and well-being of consumers, including
Plaintiff.”
[Complaint, ¶¶ 56, 59, 62-64]
Under Kentucky law, an
action for personal injury must commence within one year of its
accrual,
KRS
413.140(1)(a),
actions
for
injury
to
personal
property must be commenced within two years of accrual, KRS
413.125, and actions for trespass against real property must be
2
The parties use several terms to describe the counts against Defendants. The
Court will use the term “Causes of Action” herein to mirror the verbiage in the
Complaint.
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commenced within five years of accrual, KRS 413.120(4).
The
discovery rule provides that a cause of action does not accrue
until a plaintiff discovers or, in the exercise of ordinary
diligence, should have discovered that he has been injured and
that the injury may have been caused by defendant’s conduct. Fluke
Corp. v. LeMaster, 306 S.W.3d 55, 60 (Ky. 2010).
The statute of
limitations begins to run on the date the injury is inflicted “even
where the injury is slight initially and its full extent is not
known until years later.” Asher v. Unarco Material Handling, Inc.,
596 F.3d 313, 322 (6th Cir. 2010).
“Generally, at the motion to dismiss stage, a federal court
may consider only the plaintiff’s complaint.”
In re Omnicare,
Inc. Securities Litigation, 769 F.3d 455, 466 (6th Cir. 2014).
However, “if a plaintiff references or quotes certain documents,
or if public records refute a plaintiff’s claim, a defendant may
attach those documents to its motion to dismiss, and a court can
then consider them in resolving the Rule 12(b)(6) motion without
converting the motion into a Rule 56 motion for summary judgment.”
Id.
Thus,
the
Court
may
consider
the
prior
Rorick
action
referenced in Plaintiff’s complaint at ¶ 30-33 and in the public
record at Rorick v. Service Experts Heating & Air Conditioning,
LLC, 2:13-cv-81-WOB.
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On October 9, 2013, in a hearing before Judge William O.
Bertelsman,
Plaintiff’s
spouse,
acting
as
her
attorney,
represented that the plaintiff had suffered personal injuries as
a result of water filtration system:
THE COURT: Are you suing for more than the 75?
MR. NEWBERRY: For more than the 75?
THE COURT: More than the $75,000 in damages.
MR. NEWBERRY:
Yes, Your Honor.
There are
physical injuries also. Again, we don’t know
what was deposited into the drinking water -THE COURT:
Personal injuries to the people?
MR. NEWBERRY: Yes, Your Honor.
. . .
MR. NEWBERRY: There are four dogs that drink
water from the house watering system. They’ve
all developed tumors since this. One cat has
died.
And the plaintiff has been diagnosed
with blood clots. We have video of material
and then brown material from these tanks going
into our water system.
[DE 12, Ex. 8; also found at Rorick v. Service Experts Heating &
Air Conditioning, LLC, 2:13-cv-81-WOB, DE 17].
Based on this
transcript, it is clear that Plaintiff and her husband, acting as
her attorney, knew about the alleged personal injury to Plaintiff
on October 9, 2013, more than one year prior to the filing of this
lawsuit on March 16, 2017.
Plaintiff was also aware of the damage
to her personal property—her cats and dogs—on October 9, 2013,
based on these statements.
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Plaintiff now makes claims in this case which are inconsistent
with those her attorney made on the record before Judge Bertlesman.
In her response to the motion to dismiss, Plaintiff inexplicably
claims “[t]here was no reason to suspect a connection between these
injuries and any of the defendants until a household water sample
was
submitted
for
testing
in
February
contamination of the water in March 2016.”
2016
and
[DE 15 at 6].
revealed
However,
Plaintiff’s prior complaint, filed on Mach 22, 2013, alleges:
34.
As a result of Defendant SEHAC’s
fraudulent misrepresentations, Plaintiff now
has defective water systems which have caused
multiple
problems
in
Plaintiff’s
home
including, but not limited to, contamination
of water, contamination of plumbing system of
home, leakage, loss of water pressure, clogged
drains, colored water, and adverse health
problems.
35.
As a result of Defendant SEHAC’s
fraudulent misrepresentations, Plaintiff has
suffered health problems after living in a
home with dirty and questionable water
declared safe by Defendant SEHAC.
[DE 12, Ex. 8; also found at Rorick v. Service Experts Heating
& Air Conditioning, LLC, 2:13-cv-81-WOB, DE 1].
To the extent Plaintiff’s second through fourth causes of
action allege a claim for damage (trespass) to real property or a
water source, the five-year statute of limitations set forth in
KRS 413.120(4) applies.
Plaintiff’s complaint alleges she knew in
December 2011 that the water filtration system leaked and caused
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blackish brown water to flow through her home’s water lines and
clog up her drains.
Accordingly, the second, third, and fourth causes of action
will be dismissed as untimely.
d. Fifth, Seventh, and Twelfth Causes of Action
Plaintiff’s
fifth
and
twelfth
causes
of
action
allege
fraudulent misrepresentations by “Defendants and their attorney.”
[Complaint, ¶¶ 66, 112-113].
Plaintiff admits that these two
causes of action “rely on essentially the same set of facts,”
namely, that “that Defendant SEHAC either failed to conduct the
water test(s) that they claim to have conducted, or that SEHAC
misrepresented either the nature of the tests or the test results.”
[DE 16 at 12-13].
The seventh cause of action avers that Defendant SEHAC,
through
its
officers,
agents,
and
employees,
made
fraudulent
representations to induce Plaintiff to purchase the whole house
and
kitchen
water
filtration
systems,
and
continued
to
make
fraudulent representations about their intent to service those
systems and replace them with the prior Aqua-Pure system at
Plaintiff’s request. Plaintiff further alleges SEHAC fraudulently
misrepresented the status of a claim to its insurer for the AquaPure system SEHAC apparently disposed of.
Defendant SEHAC argues these claims are not pled with the
particularity required by Fed. R. Civ. P. 9(b). Rule 9(b) requires
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a plaintiff to “allege the time, place, and content of the alleged
misrepresentations on which he or she relied; the fraudulent
scheme; the fraudulent intent of the defendants; and the injury
resulting from the fraud.” Sanderson v. HCA-The Healthcare Co.,
447 F.3d 873, 877 (6th Cir. 2006).
“Rule 9(b)'s particularity
requirement does not, however, mute the general principles set out
in Rule 8 calling for simple, concise, and direct allegations;
rather, the two rules must be read in harmony.”
Resource Title
Agency, Inc. v. Morreale Real Estate Services, Inc., 314 F.Supp.2d
763, 775 (N.D.Ohio 2004)(citing Michaels Bldg. Co. v. Ameritrust
Co., N.A., 848 F.2d 674, 679 (6th Cir.1988).
“The pleading
requirements of Rule 9(b) may be relaxed where information is only
within the opposing party's knowledge.”
Id.
Plaintiff alleges fraudulent representations were made by
employees
of
Defendant
SEHAC
and
their
attorney.
Although
Plaintiff did not state the specific names of these individuals,
this information is within SEHAC’s knowledge and sufficiently
specific to allow SEHAC to identify these individuals.
Plaintiff
further alleges certain dates on which the claimed fraudulent
statements were made [Complaint, ¶¶ 17, 19, 22, 23] and general
time
frames
during
which
she
claims
other
fraudulent
misrepresentations were made [Complaint, ¶¶ 23, 26, 27, 86].
Plaintiff avers SEHAC and its attorney and agents/employees made
these statements knowingly and with the intent that Plaintiff
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should rely on them.
These fraudulent statements, according to
Plaintiff, resulted in physical, emotional, mental, and financial
injury to her.
Accordingly the Court finds that Plaintiff has pled fraud in
the fifth, seventh, and twelfth causes of action with sufficient
particularity against SEHAC.
The motion to dismiss will be denied
as to these claims against SEHAC.
e. Sixth Cause of Action
Plaintiff’s sixth cause of action alleges breach of warranty.
It is premised on an “agreement between the Plaintiff and Defendant
SEHAC as well as KRS Sec. 355.2-315[.]”
[Complaint, ¶ 75]. An
action for breach of warranty, however, “must be commenced within
four (4) years after the cause of action has accrued.”
725(1).
KRS 355.2-
“A cause of action accrues when the breach occurs,
regardless of the aggrieved party’s lack of knowledge of the
breach,” and a “breach of warranty occurs when tender of delivery
is made, except that where a warranty explicitly extends to future
performance of the goods and discovery of the breach must await
the time of such performance the cause of action accrues when the
breach is or should have been discovered.” KRS 355.2-725(2).
The
complaint alleges the delivery of the water filtration system
occurred on December 12, 2011.
Plaintiff,
problem,
argues
in
recognition
that
the
of
Court
12
her
statute
should
toll
of
the
limitations
statute
of
limitations based on the doctrine of equitable estoppel. Plaintiff
claims that Defendant’s statements during the pendency of the prior
Rorick
action
as
misrepresentations
to
upon
pursuant this matter.
the
which
water’s
she
safety
relied
in
were
material
deciding
not
to
Plaintiff further claims it was Defendant’s
“stonewalling” in the prior Rorick action which caused the delay
and not through any fault of her own.
This is nonsense because
Plaintiff brought a breach of warranty claim in the prior Rorick
action within the statute of limitations.
She could have pursued
the claim in that lawsuit, but instead chose to dismiss her lawsuit
in 2013 and not test her water until 2016. It is not the defendants
who have caused delay in pursuing this claim.
The Court will
dismiss this cause of action because the statute of limitations
has passed.
f. Eighth and Ninth Causes of Action
Plaintiff’s eighth cause of action alleges breach of contract
against
SEHAC
enrichment.
and
her
ninth
cause
of
action
alleges
unjust
To the extent these claims are alleged against SE or
Lennox, they will be dismissed for failure to state a claim upon
which relief can be granted as to those defendants because no
allegations are made against them.
Plaintiff’s response to the
motion to dismiss states there was an oral contract between herself
and “Lennox/SEHAC,” but this is not actually pled in the complaint.
13
Plaintiff does not allege the existence of a written contract
between herself and any defendant, but she does allege an oral
contract between herself and SEHAC.
In Kentucky, the statute of limitations for “an action upon
a contract not in writing, express or implied” is five years.
413.120(1).
KRS
Plaintiff alleges the contract was entered into on
December 12, 2011, and that the contract was to install the new
system and, if Plaintiff was unsatisfied, repair or replace it
with the prior system within one year upon Plaintiff’s request.
[DE 16 at 9 and Complaint, ¶ 22, 25-27].
Plaintiff argues the
breach occurred on January 23, 2013. [Complaint, ¶ 27; DE 16 at
9].
However, January 23, 2013 is after the expiration of the
claimed oral contract, and, therefore, an event on that date could
not have constituted a breach of the contract.
See Int’l Bhd. of
Teamsters, Chauffeurs, Warehousemen & Helpers of Am., Local Union
1199 v. Pepsi-Cola Gen. Bottlers, Inc., 958 F.2d 1331, 1334 (6th
Cir. 1992) (“[A] dispute arises out of an expired agreement only
where
it
involves
facts
and
occurrences
that
arose
before
expiration, where an action taken after expiration infringes a
right that accrued or vested under the agreement, or where, under
normal
principles
of
contract
interpretation,
the
disputed
contractual right survives expiration of the remainder of the
agreement.”).
Thus, the breach had must have occurred no later
14
than December 12, 2012 (and no earlier than March 16, 2012 to be
within the statute of limitations).
The prior Rorick action was filed on March 22, 2013.
At that
time, the latest date Plaintiff alleged SEHAC took action which
could constitute breach of contract or unjust enrichment was
January 6, 2012.
Thus, as of March 22, 2013, Plaintiff admitted
these causes of action had accrued by January 6, 2012.
Plaintiff
cannot now claim that events which occurred in late 2012 or early
2013 were the true dates on which the accrual occurred, when
Plaintiff clearly believed Defendant to be in breach and unjustly
enriched on January 6, 2012.
[DE 12, Ex. 8; also found at Rorick
v. Service Experts Heating & Air Conditioning, LLC, 2:13-cv-81WOB, DE 1 at ¶13].
Subsequent actions by Defendants may be
relevant to the issue of damages, but they do not extend the
accrual date or craft a new one.
Accordingly, the Court holds
that the breach of contract and unjust enrichment claims accrued
more than five years prior to the filing of this action, and the
motion to dismiss will be granted as to these causes of action.
g. Tenth Cause of Action
Plaintiff’s tenth cause of action is a claim for conversion.
Plaintiff alleges SEHAC removed the existing water purification
system from their property and never returned it.
Under KRS
413.125, “[a]n action for the taking, detaining or injuring of
personal property, including an action for specific recovery shall
15
be commenced within two (2) years from the time the cause of action
accrued.” This two year statute of limitations applies to claims
of conversion.
Madison Capital Co., LLC v. S & S Salvage, LLC,
507 Fed. Appx. 528 (6th Cir. 2012)(holding that the statute of
limitations in Kentucky for a conversion claim is two years from
the time the goods are wrongfully taken and that the discovery
rule does not apply to a conversion claim).
Plaintiff argues in
her response that her conversion cause of action accrued on January
24, 2013, more than two years prior to the filing of this action.
[DE 15 at 8].
The Court would find an even earlier date pursuant
to the teachings in Madison Capital, but that is not necessary
because by Plaintiff’s own admission the statute of limitations
has expired on this claim.
h. Eleventh Cause of Action
Plaintiff’s eleventh cause of action is one for “malice,
oppression, and/or fraud.”
Kentucky law.
This is not a cause of action under
KRS 411.184 sets forth the legal standard for a
plaintiff to recover punitive damages, requiring Plaintiff to
prove defendant “acted toward the plaintiff with oppression, fraud
or malice.”
KRS 411.184(2).
To the extent this is a claim for
punitive damages, “these claims are not . . . separate cause[s] of
action, but . . . remed[ies] potentially available for another
cause of action.”
Lopreato v. Select Special Hosp. Northern Ky.,
640 Fed. Appx. 438, 444-45 (6th Cir. 2016)(internal quotation marks
16
and citations omitted)(alternation in original).
Accordingly,
this cause of action will be dismissed.
IV)
Conclusion
For the reasons stated herein, IT IS ORDERED that:
(1)
Service Experts, LLC’s the Motion to Dismiss [DE 14] is
GRANTED;
(2)
Lennox Industries, Inc.’s Motion to Dismiss [DE 12] is
GRANTED;,
(3)
Service Experts Heating & Air Conditioning LLC’s Motion
to Dismiss [DE 13] is GRANTED IN PART as to Causes of
Action 1, 2, 3, 4, 6, 8, 9, 10, and 11 and DENIED IN
PART as to Causes of Action 5, 7, and 12.
This the 30th day of March, 2018.
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