GCP Telephone Cards, LLC, d/b/a LaPlacita II and LaPlacita III et al

Filing 30

ORDER AND REASONS denying 15 Motion for Judgment on the Pleadings. Signed by Judge A. J. McNamara on 5/24/2011. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
G.C.P. TELEPHONE CARDS LLC
d/b/a LA PLACITA III AND LA PLACITA III, et al

CIVIL ACTION
NO. 10-4305

VERSUS
SECTION “D” (2)
ADT SECURITY SERVICES, INC.
ORDER AND REASONS
Before the court is a “Motion for Judgment on the Pleadings” (Doc. No. 15) filed by
Defendant ADT Security Services, Inc. A “Memorandum in Opposition” (Doc. No. 21) was
filed by Plaintiffs, G.C.P. Telephone Cards LLC and Aimee Flores. ADT filed supplemental
memoranda with leave of court. (Doc. Nos. 23 and 29). The matter, noticed for submission on
Wednesday, May 18, 2011, is before the court on briefs without oral hearing. For the following
reasons, Defendant’s motion for judgment on the pleadings is denied.
FACTUAL BACKGROUND
On March 12, 2009, Plaintiff GCP Telephone Cards, LLC (GCP) entered in to a contract
with ADT Security Services, Inc. (ADT) to provide various alarm monitoring services to be
performed at La Placita III’s business located at 700 Terry Parkway, Gretna, Louisiana 70056.1
On March 14, 2009, GCP entered in to a contract with ADT to provide various alarm monitoring
services to be performed at La Placita II’s2 business located at 220 Williams Blvd., Kenner,

1

See Petition at ¶ XXI (Doc. No. 1); March 12, 2009 Contract (Δ’s Exh. A/Doc. No. 15-

2).
2

La Placita II is a business whose operations include having large amounts of cash on the
premises.
1

Louisiana 70062.3

Directly above where GCP signed on the first page, the ADT contracts

provide:
Customer Acceptance
In accepting this Proposal, Customer agrees to the terms and conditions contained
herein including those on the reverse side. It is also understood that they shall
prevail over any variation in terms and conditions on any purchase order or other
document that the Customer may issue. Any changes in the system requested by
the Customer after the execution of this Agreement shall be paid for by the
Customer and such changes shall be authorized in writing.
ATTENTION IS DIRECTED TO THE WARRANT, LIMIT OF LIABILITY
AND OTHER CONDITIONS ON REVERSE SIDE.4
The reverse side of each contract also includes the following language in Paragraph B:
THE PURCHASER’s EXCLUSIVE REMEDY WITH RESPECT TO ANY
AND ALL LOSSES OR DAMAGES RESULTING FROM ANY CAUSE
WHATSOEVER, INCLUDING ADT’s NEGLIGENCE, SHALL BE
REPAIR OR REPLACEMENT AS SPECIFIED ABOVE. ADT SHALL IN
NO EVENT BE LIABLE FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES FOR PERSONAL INJURY OR DAMAGES TO PROPERTY,
AND HOWEVER OCCASIONED, WHETHER ALLEGED AS
RESULTING FROM BREACH OF WARRANTY OR CONTRACT BY
ADT OR NEGLIGENCE OF ADT OR OTHERWISE.5
Paragraph E of the contracts’ terms and conditions further provide in relevant part:
IT IS UNDERSTOOD THAT ADT IS NOT AN INSURER. THAT
INSURANCE, IF ANY, SHALL BE OBTAINED BY THE CUSTOMER
AND THAT THE AMOUNTS PAYABLE TO ADT HEREUNDER ARE
BASED UPON THE VALUE OF THE SERVICES AND THE SCOPE OF
LIABILITY AS HEREIN SET FORTH AND ARE UNRELATED TO THE
VALUE OF THE CUSTOMER'S PROPERTY OR PROPERTY OF
OTHERS LOCATED IN THE CUSTOMER'S PREMISES. CUSTOMER
AGREES TO LOOK EXCLUSIVELY TO CUSTOMER'S INSURER TO
3

See Petition at ¶ XXI (Doc. No. 1); March 14, 2009 Contract (Δ’s Exh. B/Doc. No. 15-

3).
4

Doc. No. 15-2 and 15-3 (emphasis in original).

5

Id.(emphasis in original).
2

RECOVER FOR INJURIES OR DAMAGE IN THE EVENT OF ANY
LOSS OR INJURY AND RELEASES AND WAIVES ALL RIGHT OF
RECOVERY AGAINST ADT ARISING BY WAY OF SUBROGATION.
ADT MAKES NO GUARANTY OR WARRANTY, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS THAT
THE SYSTEM OR SERVICES SUPPLIED WILL AVERT OR PREVENT
OCCURRENCES OR THE CONSEQUENCES THEREFROM, WHICH
THE SYSTEM OR SERVICE IS DESIGNED TO DETECT.6
The contracts provide further language limiting ADT's liability, to wit:
IT IS IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX THE
ACTUAL DAMAGES, IF ANY, WHICH MAY PROXIMATELY RESULT
FROM FAILURE ON THE PART OF ADT TO PERFORM ANY OF ITS
OBLIGATIONS HEREUNDER. THE CUSTOMER DOES NOT DESIRE
THIS CONTRACT TO PROVIDE FOR FULL LIABILITY OF ADT AND
AGREES THAT ADT SHALL BE EXEMPT FROM LIABILITY FOR
LOSS, DAMAGE OR INJURY DUE DIRECTLY OR INDIRECTLY TO
OCCURRENCES, OR CONSEQUENCES THEREFROM, WHICH THE
SERVICE OR SYSTEM IS DESIGNED TO DETECT OR AVERT; THAT
IF ADT SHOULD BE FOUND LIABLE FOR LOSS, DAMAGE OR
INJURY DUE TO A FAILURE OF SERVICE OR EQUIPMENT IN ANY
RESPECT, ITS LIABILITY SHALL BE LIMITED TO A SUM EQUAL TO
10% OF THE ANNUAL SERVICE CHARGE OR $1,000, WHICHEVER IS
GREATER, AS THE AGREED UPON DAMAGES AND NOT AS A
PENALTY, AS THE EXCLUSIVE REMEDY; AND THAT THE
PROVISIONS OF THIS PARAGRAPH SHALL APPLY IF THE LOSS,
DAMAGE OR INJURY, IRRESPECTIVE OR CAUSE OR ORIGIN,
RESULTS DIRECTLY OR INDIRECTLY TO PERSON OR PROPERTY
FROM PERFORMANCE OR NONPERFORMANCE OF OBLIGATIONS
IMPOSED BY THIS CONTRACT OR FROM NEGLIGENCE, ACTIVE
OR OTHERWISE, STRICT LIABILITY, VIOLATION OF ANY
APPLICABLE CONSUMER PROTECTION LAW OR ANY OTHER
ALLEGED FAULT ON THE PART OF ADT, ITS AGENTS OR
EMPLOYEES.7
Plaintiffs allege as their first cause of action that, at approximately 7:45 P.M. on October
16, 2009, two armed perpetrators entered the premises of La Placita III and threatened the two

6

Id. (emphasis in original).

7

Id. (emphasis in original).
3

employees with weapons. One of the employees attempted to activate the business ADT panic
alarm but was threatened to stop. Said perpetrators locked the two employees inside of the
bathroom, robbed the business of $10,000 in cash plus other items and destroyed property in the
process. One of the employees used her cell phone to call 911, to which members of the
Jefferson Parish’s Sheriff’s Office responded; however, they were unable to make the
surveillance video equipment work. Additionally, on October 17, 2009, when the ADT
technician came to retrieve the video for the police investigation, he managed to erase the video
making it impossible for any identification of the perpetrators.8
Plaintiffs’ second cause of action concerns the October 24, 2009 robbery of La Placita II
by four armed perpetrators, who threatened store employees with handguns and large bolt
cutters. Aimee Flores, a store employee who was three or four months pregnant attempted to
activate the wireless ADT alarm that was hanging around her neck. The perpetrators removed
same and she managed to use her cellular phone to dial 911 while the perpetrators were still on
the premises. Before leaving, they took money and numerous phone cards and destroyed
property as well.9
Plaintiffs’ allegations of fault in negligence in a number of particulars including failure to
retrieve the robbery video without erasing it, failing to promptly respond to the distress signal,
failure to respond to the wireless alarm distress signal and contacting the police. Plaintiffs seek
to recover for damage to property, financial losses, loss of use and other elements of damages.
Plaintiff Flores, who eventually suffered a miscarriage, seeks to recover from ADT for pain,

8

Plaintiff’s Petition at pp. 1-2 (Doc. No. 1-1)

9

Id. at pp. 2–3.
4

suffering and mental anguish, medical expenses and disability.10
Once served with the Plaintiffs’ Petition for Damages, ADT removed the action to this
court, invoking its subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a). (Doc. No. 1).
ADT admits that it had a contract for security services with GCP and that the contract provided
for the monitoring of alarm equipment at GCP’s place of business, La Placita II. ADT attached a
copy of the contract to its Answer as Exhibit A and asserted a number of affirmative defenses
relating to the language in the contract.11
APPLICABLE LEGAL STANDARD
In the Fifth Circuit, the “standard for dismissal under Rule 12( c)12 is the same as that for
dismissal for failure to state a claim under Rule 12(b)(6).” Ackerson v. Bean Dredging LLC, 589
F.3d 196, 209 (5th Cir. 2009). Judgment on the pleadings is appropriate only if material facts are
not in dispute and questions of law are all that remain. Voest-Alpine Trading USA Corp. v. Bank
of China, 142 F.3d 887, 891 (5th Cir. 1998).
In considering a Rule 12( c) motion, the court “accepts all well-pleaded facts as true,
10

Id. at pp. 4-5.

11

See ADT’s Answer and Counterclaim (Doc. No. 4).

12

Fed. R. Civ. P. 12 provides in pertinent part:
( c) Motion for Judgment on the Pleadings. After the pleadings are
closed--but early enough not to delay trial--a party may move for
judgment on the pleadings.
(d) Result of Presenting Matters Outside the Pleadings. If, on a motion
under Rule 12(b)(6) or 12( c), matters outside the pleadings are presented
to and not excluded by the court, the motion must be treated as one for
summary judgment under Rule 56. All parties must be given a reasonable
opportunity to present all the material that is pertinent to the motion.
Fed. R. Civ. P. 12 ( c)-(d).

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viewing them in the light most favorable to the plaintiff.” Guidry v. Am. Public Life Ins. Co., 512
F.3d 177, 180 (5th Cir. 2007). To survive a motion to dismiss under Rule 12( c), “a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009) (quoting Ashcroft v. Iqbal, 129
S.Ct. 1937, 1949 (2009)). A claim has facial plausibility when the plaintiff pleads factual
content that allows the Court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. Iqbal, 129 S.Ct. at 1949.
As a general rule, “the district court is confined to the pleadings....” Hughes v. Tobacco
Inst. Inc., 278 F.3d 417, 420 (5th Cir. 2001). However, there are several exceptions this rule.
See In re Chinese Manufactured Drywall Products, 2010 WL 5288032495 * 2 (5th Cir. 2007)
(citing In re Katrina Canal Breaches Litig, 495 F.3d 191, 205 (5th Cir. 2007). For example, “the
court may review the documents attached to the motion to dismiss, e.g., the contracts in issue
here, where the complaint refers to the documents and they are central to the claim.” PHI, Inc. v.
Rolls-Royce Corp., 2010 WL 883794 * 2 (W. D. La. Mar. 9, 2010) (quoting Kane Enterprises v.
MacGregor (USA) Inc., 322 F.3d 371, 374 (5th Cir. 2003)). Additionally, a court may consider
matters of which judicial notice may be taken such as items in the record of the case, related
cases and matters of public record. See e.g., Great Plains Trust Co. v. Morgan Stanley Dean
Witter & Co., 313 F.3d 305, 313 (5th Cir. 2002) (citing Hebert Abstract Co. v. Touchstone
Props., Ltd., 914 F.2d 74, 76 (5th Cir. 1990) (per curiam) and Voest-Alpine, 142 F.3d at 891 n.
4.)).
In sum, a plaintiff's “[f]actual allegations must be enough to raise a right to relief above
the speculative level, on the assumption that all the allegations in the complaint are true (even if

6

doubtful in fact).” Guidry, 512 F.3d at 180 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)). “The issue is not whether the plaintiff will ultimately prevail, but whether he is entitled
to offer evidence to support his claim. Thus, the court should not dismiss the claim unless the
plaintiff would not be entitled to relief under any set of facts or any possible theory that he could
prove consistent with the allegations in the complaint.” Jones v. Greninger, 188 F.3d 322, 324
(5th Cir. 1999) (citations omitted).
III. CONTENTIONS OF THE PARTIES
ADT argues that even if the factual allegations of Plaintiffs’ petition are accepted as true,
it is not liable to them for the torts on which they seeks relief. ADT contends that the duties it
owes to Plaintiffs are solely dependent on ADT's contractual relationship with Plaintiffs and that
there are no non-contractual bases for a duty to either GCP or Flores. Furthermore, ADT
contends that Plaintiffs’ claims are barred by clear and unambiguous limitations of liability
provided in the contracts. To resolve the motion for judgment on the pleadings, the court must
determine if there is an enforceable contract between the parties and, if so, whether that contract
precludes Plaintiffs from prosecuting tort claims against ADT.
Plaintiffs counter that Defendant’s motion should be denied as there exist material issues
of fact with respect to the alleged gross negligence of ADT – i.e., systematic and repeated
failures on behalf of ADT to carry out obligations under the contract such that it cannot escape
liability via waivers not so clearly set forth in the contracts.
ANALYSIS
Both parties agree that Louisiana law is applicable to this case, which invokes the
diversity jurisdiction of the court. Because this is a contract dispute, Article 3537 directs the

7

court to also consider the place of the negotiation and the place of the delivery of the contract, as
well as the type of contract involved. La. Civ. Code Art. 3537 (West 1994). Applying these
Articles to the instant matter, the court finds that Louisiana law governs the substantive issues of
this case. Plaintiffs are all Louisiana domiciliaries, which is also the state of negotiation and
delivery of the contract in question, as well as the place where the incidents allegedly causing
injury and damages occurred.
Plaintiffs clearly allege that ADT installed and ineptly maintained, operated and serviced
the alarm system described in the contracts . The parties agree that the contracts set forth
exculpatory clauses purporting to exempt ADT from liability whether for any negligence or
otherwise and further limit plaintiffs’ recover for any damages to the amount stipulated in the
contracts.
In Robin v. Towing Corp. v. Honeywell, Inc.,13 the district court considered a contract for
the installation of a residential fire alarm system. Property damage resulted when a fire started
and the alarm system did not work properly. Honeywell sought to limit its liability for the loss
to $250.00 based on the contract between the parties. The district court sided with Honeywell
against the homeowner and granted summary judgment. Affirming in part, the Fifth Circuit
noted that: “Robin provide[d] no evidence that Honeywell ‘failed to respond to an emergency in
spite of a clear and obvious need to react,’ for it [was] undisputed that Honeywell’s monitoring

13

Robin v. Towing Corp. v. Honeywell, Inc.,1987 WL 12124 (E. D. La. 1987), aff’d in
part, rev’d in part, 859 F.2d 1218 (5th Cir. 1988) (affirming as to all but Robin’s claim for
negligence in rendering services under oral agreements subsequent to the written contracts and
remanding for further proceedings on that issue).
8

center received no alarm indicating an emergency.”14
Even the district court in Robin observed that:
Haspel typifies the Louisiana rule which has emerged that a company installing
the alarm system may contractually limit its liability for damages caused by
negligence. If, however, the conduct of the company installing the alarm
results in more than negligence, and reaches the level of willful or wanton
disregard for its duties, the clause is deemed void as contrary to public
policy. Compare Haspel at 532 with Carriage Meat Co. v. Honeywell, Inc., 442
So.2d 796, 798 (La. App. 1983).15
In Mt. Hawley Ins. Co. v. ADT Sec. Systems, Inc., 831 So.2d 480 (La. App. 5th Cir. 2002)
the court explained:
Turning to plaintiff's assertion that the trial court erred in granting the
partial summary judgment without considering its gross negligence claims, we
note that La. Civ. Code art.2004 provides in pertinent part that, “Any clause is
null that, in advance, excludes or limits the liability of one party for intentional or
gross fault that causes damage to the other party.” Louisiana courts have
frequently addressed the concept of gross negligence. It has been defined by our
supreme court as “the want of even slight care and diligence.” Lenard v. Dilley,
01-1522 (La.1/15/02), 805 So.2d 175. It is the want of that diligence which even
careless men are accustomed to exercise. Id. Gross negligence, therefore, has a
well-defined legal meaning distinctly separate, and different, from ordinary
negligence. Ambrose v. New Orleans Police Dept. Ambulance Service, 93-3099
(La.7/5/94), 639 So.2d 216. In our opinion, a finding of gross negligence requires
a factual inquiry which is improper on summary judgment.16
14

Robin, 859 F.2d at 1222.

15

Robin v. Towing Corp. v. Honeywell, Inc.,1987 WL 12124 at *1 (bolding emphasis

added).
16

Mt. Hawley Ins. Co. v. ADT Sec. Systems, Inc., 831 So.2d 480, 484 (La. App. 5th Cir.
2002) (reversing the trial court’s summary judgment and remanding for further proceedings).
See also Fraiche v. Sonitrol of Baton Rouge, 2011 WL 576868 * 3 (M. D. La. Feb. 9, 2011)
(finding that Defendant had not established entitlement to judgment as a matter of law, noting
genuine issues of fact with respect to gross negligence, inter alia, including the circumstances
surrounding the deletion of the video of Defendant’s monitoring station and further holding that
plaintiff’s allegations regarding failure to notify and failure to train and/or supervise require a
detailed factual inquiry and consideration of a multitude of factors); Martco Ltd. Partnership v.
Wellons, Inc., 2006 WL 845597 * 3 (W. D. La. Mar. 29, 2006) (Little, J.) (citing Mt. Hawley,
9

This court agrees with Plaintiffs that Louisiana law supports their contention that
judgment as a matter of law at the pleading stage is inappropriate because plaintiffs’ claim is
essentially that the multiple failures to act on the part of ADT with respect to multiple venues
amounts to no less than “gross negligence,” which is typically an issue addressed to the district
judge on a more complete record or the trier of fact on the merits.17
As to pleading requirements, the court here notes that the difference between gross
negligence and negligence in Louisiana is more one of degree than of kind.18 Federal Rule of
Civil Procedure 8 only requires a short plain statement showing that the pleader is entitled to
relief. Indeed, no talismanic language – such as “gross” negligence as Defendant suggests19 – is
required, so long as the allegations suggest some degree of culpability greater than simple
supra, and holding that material issues of fact sufficiently exist that preclude granting partial
summary judgment with respect to whether Wellons’ conduct rises to the level of gross
negligence so as to vitiate the provision of the contract limiting its liability); Rosenblath’s, Inc. v.
Baker Industries, Inc., 634 So.2d 969, 973 (La. App. 2nd Cir. 1994) (finding no error in the trial
court’s factual and legal determination that the conduct of Wells Fargo’s employee constitutes
gross negligence, that the limitation of liability clause of the contract does not apply under the
circumstances and therefore Wells Fargo’s liability is not limited to the amount stated in the
liquidated damages clause).
17

In Haspel v. Rollins, 490 So.2d 530 (La. App. 4th Cir. 1986), the appellate court noted
that “discovery has been extensive” and held on the basis of the summary judgment record that
“Appellants do not allege successive acts of negligence,” “Rollins’s actions [were not] willful or
wanton negligence contemplated by the court in Honeywell and, “[f]urthermore, there is nothing
to indicate that Rollins failed to respond to an emergency in spite a clear and obvious need to
react.” Id. at 533.
18

See Solow v. Heard McElroy & Vestal, LLP, 7 So.3d 1269, 1277 (La. App. 2nd Cir.)
(explaining that “[o]rdinary negligence and gross negligence are distinguished by the degree of
lack of care on the part of the tortfeasor” and, “[t]hough gross negligence and ordinary
negligence have distinct meanings, they are both forms or different degrees of negligence.”), writ
denied, 17 So.3d 961 (La. 2009).
19

See Defendant’s Reply Brief at pp. 1-2 (noting that “the word ‘gross’ appears nowhere
in [plaintiffs’] original and amended Complaints”)
10

negligence. Moreover, “gross negligence” – having been defined under Louisiana law as
something greater than simple negligence but less than fraud20 – need not be pled with Federal
Rule of Civil Procedure 9(b) particularity. Finally, it appears based upon the Plaintiffs’
pleadings and the applicable law, the allegations of the petition may require a detailed factual
inquiry and consideration of a multitude of factors.21
CONCLUSION
In summary, it is not apparent from the face of the pleadings that Plaintiffs cannot
recover the amount claimed. Moreover, it would make little sense to now issue judgment on the
pleadings limiting any recovery to the amount stipulated ($1,000.00) as set forth in the contract
attached to Plaintiffs’ petition, when, less than four months ago, this court ruled that it is facially
apparent from the same pleadings that Plaintiffs’ claims exceed $75,000.00.22 Nothing herein
should be construed so as to preclude either party from prosecuting a motion for summary
judgment at a later juncture of the proceedings, once there has been an opportunity for discovery
with respect to the allegations set forth in plaintiffs’ complaint.
Accordingly and for the reasons set forth above,

20

See FDIC v. Mijalis, 15 F.3d 1314, 1320 (5th Cir. 1994) (observing that gradations of
non-intentional fault were almost unknown in Louisiana jurisprudence until recently and further
reiterating the standard noted in its prior decision in Louisiana World Exposition v. Federal Ins.
Co., 864 F.2d 1147, 1150 (5th Cir.1989) – “as lying ‘somewhere between simple negligence and
willful misconduct or fraud with intent to deceive.’”).
21

See Fraiche v. Sonitrol of Baton Rouge, 2011 WL 576868 at * 3; compare Plaintiffs’
Petition (re erasure of the surveillance video tape of the robbery by ADT’s video tech on a
service call after the La Placita III robbery but before the robbery of La Placita II’s location)
(Doc. No. 1-1).
22

See Order signed January 26, 2011 (denying Plaintiffs’ Motion to Remand) (Doc. No.

11).
11

IT IS ORDERED that Defendant’s Motion for Judgment on the Pleadings (Doc. No. 15)
is DENIED.
New Orleans, Louisiana, this 24th day of May, 2011.

_________________________________
A. J. McNAMARA
UNITED STATES DISTRICT JUDGE

12