Kimble v. CR Operating Company et al

Filing 61

MEMORANDUM OPINION AND ORDER denying 46 Defendant Apple Creek Estates, LLC's MOTION for Summary Judgment. Signed by Honorable Robin J. Cauthron on 05/03/18. (wh)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
ANDREW KIMBLE,

)
)
Plaintiff,
)
)
v.
)
)
CR OPERATING COMPANY, INC., d/b/a )
APPLE CREEK ESTATES and/or
)
APPLE CREEK APARTMENTS, and
)
APPLE CREEK ESTATES, L.L.C.,
)
)
Defendants.
)

Case Number CIV-17-971-C

MEMORANDUM OPINION AND ORDER
Defendant, Apple Creek Estates, LLC, filed a Motion for Summary Judgment (Dkt.
No. 46). Plaintiff filed a Brief in Opposition (Dkt. No. 56) and Defendant filed a Reply
(Dkt. No. 57). The motion is now at issue.
I. Background
In early 2005, Apple Creek Estates, LLC, became the owner of Apple Creek
Apartments.

On January 5, 2005, Apple Creek Estates, LLC, executed a Property

Management Agreement with CR Operating Company, Inc., d/b/a Apple Creek Estates
and/or Apple Creek Apartments, hereafter referred to as CR Operating Company. On
March 15, 2015, Andrew Kimble leased Unit 237 of Apple Creek Apartments. On January
25, 2016, Andrew Kimble was standing on his balcony. As Kimble leaned against the
balcony railing, the balcony railing gave way and Kimble fell from the second story
balcony and landed on the ground. Kimble suffered various injuries. At the time of
Kimble’s fall, an independent contractor, Armor Siding, LLC, was performing repairs and

renovations to the Apple Creek Apartment buildings. As a result of the fall and subsequent
injuries, Kimble brought suit and the instant action commenced.
Defendant’s Motion argues that Apple Creek Estates, LLC, does not owe a duty to
Plaintiff and, as a result, is not liable to Plaintiff for the injuries he sustained. Plaintiff
argues that the Property Management Agreement does not lease the subject premises to CR
Operating Company and therefore Apple Creek Estates, LLC, owes a duty to Plaintiff.
II. Summary Judgment Standard
A key policy goal and primary principle of Fed. R. Civ. P. 56 is “to isolate and
dispose of factually unsupported claims or defenses.” Celotex Corp. v. Catrett, 477 U.S.
317, 323-24 (1986). Fed. R. Civ. P. 56 sets the standard for summary judgment:
A party may move for summary judgment, identifying each claim or
defense—or the part of each claim or defense—on which summary judgment
is sought. The court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.
Fed. R. Civ. P. 56(a).
Summary judgment is appropriate “after adequate time for discovery and upon
motion, against a party who fails to make a showing sufficient to establish the existence of
an element essential to that party’s case, and on which that party will bear the burden of
proof at trial.” Celotex Corp., 477 U.S. at 322. “[T]his standard provides that the mere
existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the requirement is that there be no
genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48
(1986). It is also well established that the “party seeking summary judgment always bears
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the initial responsibility of informing the district court of the basis for its motion . . . which
it believes demonstrate[s] the absence of a genuine issue of material fact.” Celotex Corp.,
477 U.S. at 322. (“As to materiality, the substantive law will identify which facts are
material. Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment.” Anderson, 477
U.S. at 248.) “When the moving party has carried its burden under Rule 56(c), its opponent
must do more than simply show that there is some metaphysical doubt as to the material
facts. . . . Where the record taken as a whole could not lead a rational trier of fact to find
for the non-moving party, there is no ‘genuine issue for trial.’” Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (footnote omitted). “In its
review, the Court construes the record in the light most favorable to the party opposing
summary judgment.” Garratt v. Walker, 164 F.3d 1249, 1251 (10th Cir. 1998).
III. Analysis
In order for a negligence claim to progress, the following elements must be
established:
(1) existence of a duty on the part of the defendant to protect plaintiff from
injury; (2) defendant’s breach of the duty; and (3) injury to plaintiff
proximately resulting therefrom. The threshold requirement in any case
based on negligence is to establish the existence of a duty, for there can be
no negligence in the absence of a defendant’s duty to the plaintiff.
Accordingly, the question of whether a duty exists to a particular plaintiff on
the part of an alleged tortfeasor is properly a question of law for the court.
Scott v. Archon Group, L.P., 2008 OK 45, ¶ 17, 191 P.3d 1207, 1211. In the premises
liability law arena, “the duty of care which an owner or occupier of land has toward one
who comes upon his or her land and is injured because of the condition of the premises,
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varies with the status occupied by the entrant.” Id. at ¶ 18, 1211. This Court’s analysis
will make a “determination of the entrant’s status-based classification under traditional
common law terms—trespasser, licensee or invitee—[which] is therefore essential in
resolving the issue of the existence of a duty. Id. (citing McKinney v. Harrington, 1993
OK 88, 885 P.2d 602).
The first premise of Defendant’s argument is that Apple Creek Estates, LLC,
possessed no control over the apartment property and it builds its entire argument on the
argument that the Property Management Agreement is a lease which relieves Defendant
Apple Creek Estates, LLC, of a duty to Plaintiff. Defendant asserts a multitude of legal
precedents that state when a party leases premises, and relinquishes control of the premises,
that party is not liable to a third party. (Def.’s Mot. for Summ. J., Dkt. No. 46, p. 11.)
Defendant treats the Property Management Agreement as a lease and argues it is an
undisputed material fact that “Apple Creek relinquished control of the subject premises to
CR Operating on January 5, 2005, by way of a Property Management Agreement.” (Def’s.
Mot. for Summ. J., Dkt. No. 46, p. 2.)
In his deposition, Dr. Vinod Gupta, a shareholder of CR Operating Company, Inc.,
and owner of Apple Creek Estates, LLC, stated that “it was advice of attorneys, consultants,
that each real estate should be an LLC. Then you should have a management company
that should have the contract with the LLC to manage and operate that building.” (Def.’s
Mot. for Summ. J., Dkt. No. 46-1, p. 30:17-20.) Defendant also proffers an affidavit sworn
by Dr. Gupta that states, “Apple Creek Estates, L.L.C., relinquished complete control of
the Apple Creek Apartments to CR Operating Co., Inc.” (Def.’s Mot. for Summ. J., Dkt.
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No. 46-4, p. 2.) Defendant argues it is undisputed that “CR Operating has leased the
premises from Apple Creek and has undertaken all management and maintenance
responsibilities in accordance with the terms of the parties’ Property Management
Agreement.” (Def.’s Mot. for Summ. J., Dkt. No. 46, p. 2.) The Property Management
Agreement refers to Apple Creek Estates, LLC, as the “Owner,” and CR Operating
Company as the “Manager.” (Pl.’s Br. in Opp’n, Dkt. No. 56-1, p. 1.) The Property
Management Agreement never states the relationship, in title or in substance, between the
two parties as Lessee and Lessor. Even so, Defendant relies on the Property Management
Agreement to argue Apple Creek Estates, LLC, leased its interest and relinquished all
control to CR Operating Company. Defendant offers no support that the agreement is a
lease.
A thorough analysis of the Property Management Agreement shows that it is not a
lease, but simply an agreement for CR Operating Company to manage the day-to-day tasks
of running an apartment complex. These tasks included collecting all rents, hiring and
firing personnel, and the authority to “institute, settle, or compromise, in the Owner’s
name, any legal action and make use of such methods of legal process against a delinquent
tenant or a delinquent tenant’s property as may be necessary.” (Pl.’s Br. in Opp’n, Dkt.
No. 56-1, p. 2.) There is no distinction in the control between Dr. Gupta, owner of Apple
Creek Estates, LLC, and Dr. and Mrs. Chanresh Gupta, shareholders of CR Operating
Company, Inc.:
Q: Okay. And that’s what I’ve been trying to understand. You have two companies
and you’re the principal of both of them?
A. Yes.
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Q. So, when anything is done in relation to Apple Creek Apartments or Apple Creek
Estates, and you’re involved in it, you’re acting through both companies?
A. Yes.
(Def.’s Mot., Dkt. No. 46-1, pp. 29-30, ll. 20-5.)
Q. And who are the owners of CR Operating Company?
A. It’s a corporation and the shares are being held by me and my wife.
(Def.’s Mot., Dkt. No. 46-1, p. 12, ll. 3-5.) This Court concludes that the Property
Management Agreement is not a lease and was simply a management agreement; Apple
Creek Estates, LLC, did not lease its interest in the subject property and retained control
over the subject premises.
Next, this Court finds it is necessary to analyze the nature of duty, if any, Apple
Creek Estates, LLC, owes to Plaintiff. The parties do not dispute that Plaintiff is an invitee.
Oklahoma law “imposes a general duty of care upon landlords to maintain the leased
premises, including areas under the tenant’s exclusive control or use, in a reasonably safe
condition.” Miller v. David Grace, Inc., 2009 OK 49, ¶ 24, 212 P.3d 1223, 1230. Further,
“[a] business owner owes a duty to exercise ordinary care to keep its premises in a
reasonably safe condition for use of its invitees and a duty to warn invitees of dangerous
conditions upon premises that are either known or should reasonably be known by the
owner. Phelps v. Hotel Mgmt., Inc., 1996 OK 114, ¶ 6, 925 P.2d 891, 893. The business
owner’s duty is non-delegable. Hodge v. Morris, 1997 OK CIV APP 53, ¶ 7, 945 P.2d
1047, 1049. The Oklahoma Supreme Court has held that a landlord is also liable where
there are negligently made repairs or improvements. See Buck v. Miller, 1947 OK 172,
¶ 21, 181 P.2d 264, 267; Crane Co. v. Sears, 1934 OK 375, 35 P.2d 916, 920. The
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Oklahoma Supreme Court also summarized the independent contractor exception in a wellestablished rule:
We think that while the rule is well settled that one, who does work through
the instrumentality of an independent contractor, is not liable for damages,
caused by the negligent performance of such work by the independent
contractor, to third persons, except where the work is inherently dangerous
or unlawful, it is equally well settled that, where a person either by contract
or by law owes an obligation to another, he cannot escape liability for
negligence in the performance of such obligation by delegating the duty to
an independent contractor.
Minnetonka Oil Co. v. Haviland, 1916 OK 103, ¶ 1, 155 P. 217, 219. In this instance there
is no genuine issue of material fact regarding the Property Management Agreement. Apple
Creek Estates, LLC, the business owner, has an established duty to the invitee, Plaintiff
Kimble. Apple Creek Estates, LLC, cannot relieve itself of that duty by saying it leased
the premises to CR Operating Company. This Court finds as a matter of law that Apple
Creek Estates, LLC, owed a duty and can be held liable to Plaintiff Kimble.
CONCLUSION
As a result of this analysis, Defendant, Apple Creek Estates, LLC’s, Motion for
Summary Judgment (Dkt. No. 46) is DENIED.
IT IS SO ORDERED this 3rd day of May.

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