Jung v. 24 Hour Fitness USA, Inc.
Filing
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MEMORANDUM OPINION AND ORDER. It is therefore ORDERED that Defendant's Corrected Motion for Partial Summary Judgment is GRANTED IN PART and DENIED IN PART (Dkt. 24 ). Signed by District Judge Amos L. Mazzant, III on 10/17/2018. (baf, )
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
SUSAN JUNG
v.
24 HOUR FITNESS USA, INC.
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§
§
§
§
Civil Action No. 4:17-CV-787
Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant 24 Hour Fitness USA, Inc.’s Corrected Motion for
Partial Summary Judgment (Dkt. #24). Having considered the motion and the relevant pleadings,
the Court finds that the motion should be granted in part and denied in part (Dkt. #24).
BACKGROUND
Defendant is a corporation that operates gyms (Dkt. #4; Dkt. #5; Dkt. #6). Plaintiff Susan
Jung was a member of Defendant’s gym located in Lewisville, Texas (Dkt. #24-3 at p. 1). Plaintiff
alleges that on May 3, 2017, she arrived at the gym and placed her belongings in a locker (Dkt. #4
¶ 7). In the locker, Plaintiff discovered and removed a set of keys (Dkt. #4 ¶ 7). Plaintiff sealed
her belongings in the locker with a lock and returned the keys to Defendant’s employee—Zach
turner—at the front desk (Dkt. #4 ¶ 7). Plaintiff then exercised in the gym (Dkt. #4 ¶ 7).
During Plaintiff’s workout, another gym member returned to the gym searching for the
keys left inside Plaintiff’s locker (Dkt. #4 ¶ 8). Although Plaintiff returned the keys previously,
Defendant’s employees cut Plaintiff’s lock from the locker to search for the keys (Dkt. #4 ¶ 8).
After failing to find the keys inside the locker, Defendant’s employees left Plaintiff’s cut lock
hanging on the locker:
(Dkt. #4 ¶ 8; Dkt. #24-5 at p. 14).
When Plaintiff returned to her locker and discovered the cut lock, she went to the front
desk to ask why Defendant’s employees cut the lock (Dkt. #4 ¶ 8). After an explanation, Plaintiff
retrieved her belongings from the locker and discovered her wallet—containing her driver’s
license, credit card, and other items—was missing (Dkt. #4 ¶ 9). Plaintiff called the police who
generated a report on the incident (Dkt. #4 ¶ 9).
Plaintiff filed suit against Defendant on October 4, 2017 (Dkt. #4). Plaintiff alleges
invasion of privacy, negligence, and gross negligence claims against Defendant, and Plaintiff seeks
actual, mental anguish, emotional distress, and exemplary damages (Dkt. #4 ¶¶12–13). Defendant
removed the case to this Court on November 3, 2017 (Dkt. #1).
Defendant filed its Corrected Motion for Partial Summary Judgment on April 17, 2018
(Dkt. #24). Plaintiff filed a response to the motion on May 7, 2018 (Dkt. #25). Defendant filed a
reply to the motion on May 16, 2018 (Dkt. #27).
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LEGAL STANDARD
Federal courts sitting in diversity apply state substantive law and federal procedural law. Shady
Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 437 (2010) (citing Gasperini v.
Center for Humanities, Inc., 518 U.S. 415, 427 (1996)). The purpose of summary judgment is to
isolate and dispose of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S.
317, 323–24 (1986). Summary judgment is proper under Rule 56(a) of the Federal Rules of Civil
Procedure “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). A dispute about a
material fact is genuine when “the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). Substantive
law identifies which facts are material. Id. The trial court “must resolve all reasonable doubts in
favor of the party opposing the motion for summary judgment.” Casey Enters., Inc. v. Am.
Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981).
The party seeking summary judgment bears the initial burden of informing the court of its
motion and identifying “depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the motion only), admissions,
interrogatory answers, or other materials” that demonstrate the absence of a genuine issue of
material fact. FED. R. CIV. P. 56(c)(1)(A); Celotex, 477 U.S. at 323. If the movant bears the burden
of proof on a claim or defense for which it is moving for summary judgment, it must come forward
with evidence that establishes “beyond peradventure all of the essential elements of the claim or
defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Where the nonmovant
bears the burden of proof, the movant may discharge the burden by showing that there is an absence
of evidence to support the nonmovant’s case. Celotex, 477 U.S. at 325; Byers v. Dall. Morning
News, Inc., 209 F.3d 419, 424 (5th Cir. 2000). Once the movant has carried its burden, the
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nonmovant must “respond to the motion for summary judgment by setting forth particular facts
indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at
248–49). A nonmovant must present affirmative evidence to defeat a properly supported motion
for summary judgment. Anderson, 477 U.S. at 257. Mere denials of material facts, unsworn
allegations, or arguments and assertions in briefs or legal memoranda will not suffice to carry this
burden. Rather, the Court requires “significant probative evidence” from the nonmovant to dismiss
a request for summary judgment. In re Mun. Bond Reporting Antitrust Litig., 672 F.2d 436, 440
(5th Cir. 1982) (quoting Ferguson v. Nat’l Broad. Co., 584 F.2d 111, 114 (5th Cir. 1978)). The
Court must consider all of the evidence but “refrain from making any credibility determinations or
weighing the evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir.
2007).
ANALYSIS
Defendant moves for partial summary judgment arguing: (1) a release-of-liability provision
in Plaintiff’s membership agreement (“Agreement”) bars Plaintiff’s negligence claim; (2) Plaintiff
cannot maintain a claim for mental anguish and emotional distress damages under her negligence
and gross negligence claims; (3) summary judgment is warranted on Plaintiff’s gross negligence
claim because Texas law prohibits claims for exemplary damages in cases involving third-partycriminal acts; (4) summary judgment is warranted on Plaintiff’s gross negligence claim because
there is no evidence of gross negligence; and (5) Plaintiff cannot recover exemplary damages
related to her invasion of privacy claim (Dkt. #24 at pp. 4–10). The Court considers each argument
in turn.
Before turning to Defendant’s arguments, the Court addresses a separate issue. Plaintiff
contends Defendant’s motion is premature because the parties have not completed discovery or
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resolved certain discovery disputes (Dkt. #25 at pp. 1–2). The discovery deadline in this case
expired on May 25, 2018—eighteen days after Plaintiff filed her response (Dkt. #19; Dkt. #25).
During the five months between the filing of the motion and the issuance of this Order, the parties
did not bring any discovery disputes to the Court’s attention or supplement the motion, response,
or reply with newly discovered evidence. Accordingly, the Court assumes the parties resolved the
discovery disputes and any newly discovered information was not relevant to the motion at issue.
As a result, the Court finds Defendant’s motion is ripe for consideration.
I.
Plaintiff’s Negligence Claim
Defendant first argues that a release-of-liability provision in Section 10 of Plaintiff’s
Agreement bars Plaintiff’s negligence claim (Dkt. #24 at pp. 4–6).1 Plaintiff responds that Section
10’s release applies only to physical injuries and does not satisfy the fair notice requirements under
Texas law (Dkt. #25 at p. 4). Plaintiff also claims she never received the page of the Agreement
containing Section 10 (Dkt. #25 at p. 3).
Under Texas law, contractual release is an affirmative defense. TEX. R. CIV. P. 94. By
definition, “[a] release . . . is an agreement by one party to surrender its own cause of action against
the other party.” M.T.D. Envtl., L.L.P. v. City of Midland, 315 S.W.3d 606, 609 (Tex. App.—
Eastland 2010, pet. denied) (citing Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505,
508 (Tex. 1993)). A valid release “operates to extinguish the claim or cause of action as effectively
as would a prior judgment between the parties and is an absolute bar to any right of action on the
released matter.” Dresser, 853 S.W.2d at 508 (citing Hart v. Traders & General Ins. Co., 189
1. Defendant originally argued that Sections 5(c) and 10 of the Agreement barred Plaintiff’s negligence claim
(Dkt. #24 at pp. 4–6). In its reply, Defendant withdrew its argument concerning Section 5(c) of the Agreement
(Dkt. #27 at p. 2 n.2)
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S.W.2d 493, 494 (Tex. 1945)); Blockbuster, Inc. v. C-Span Entm’t, Inc., 276 S.W.3d 482, 489
(Tex. App.—Dallas 2008, pet. granted).
Due to the extraordinary shifting of risk created by pre-injury releases, Texas law imposes
fair notice requirements on such agreements. Tamez v. Sw. Motor Transp., Inc., 155 S.W.3d 564,
569 (Tex. App.—San Antonio 2004, no pet.) (citing Dresser, 853 S.W.2d at 508). To provide fair
notice, the release must satisfy the express negligence doctrine and be conspicuous. Id. (citing
Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004)). “[T]he express negligence
doctrine[ ] requires that ‘the intent of the parties must be specifically stated in the four corners of
the contract.’” Reyes, 134 S.W.3d at 192 (quoting Ethyl Corp. v. Daniel Const. Co., 725 S.W.2d
705, 708 (Tex. 1987)). “Language that specifically refers to ‘any negligent act of [the released
party]’ may be sufficient to define the parties’ intent.” Quintana v. CrossFit Dall., L.L.C., 347
S.W.3d 445, 450 (Tex. App.—Dallas 2011, no pet.) (quoting Atl. Richfield Co. v. Petroleum Pers.,
Inc., 768 S.W.2d 724, 726 (Tex. 1989)). The conspicuousness requirement “mandates ‘that
something must appear on the face of the [contract] to attract the attention of a reasonable person
when he [or she] looks at it.’” Id. (quoting Dresser, 853 S.W.2d at 508). “Language may satisfy
the conspicuousness requirement by appearing in larger type, contrasting colors, or otherwise
calling attention to itself.” Id. (citing Littlefield v. Schaefer, 955 S.W.2d 272, 274–75 (Tex. 1997)).
“A [release] which fails to satisfy either of the fair notice requirements . . . is unenforceable as a
matter of law.” Id. (citing Dresser, 853 S.W.2d at 509–10; U.S. Rentals, Inc. v. Mundy Serv. Corp.,
901 S.W.2d 789, 792 (Tex. App.—Houston [14th Dist.] 1995, writ denied)). Whether a provision
provides fair notice is a question of law. Quintana, 347 S.W.3d at 450 (citing Dresser, 853 S.W.2d
at 509).
Section 10 of Plaintiff’s Agreement reads:
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10. RELEASE OF LIABILITY, ASSUMPTION OF RISK,
AND INDEMNIFICATION
Using the 24 Hour Fitness USA, Inc. (24 Hour) facilities involves
the risk of injury to you or your guest, whether you or someone other
than you causes it. Specific risks vary from one activity to another
and the risks range from minor injuries to major injuries, such as
catastrophic injuries including death. In consideration of your
participation in the activities and use of the facilities offered by
24 Hour, you understand and voluntarily accept this risk and
agree that 24 Hour . . . will not be liable for any injury, including,
without limitation, personal, bodily, or mental injury, economic
loss or any damage to you . . . resulting from the negligence of
24 Hour or anyone on 24 Hour’s behalf or anyone using the
facilities whether related to exercise or not.
(Dkt. #24-3 at p. 6) (formatted in original).
Plaintiff sued Defendant for negligence resulting from “cutting Plaintiff’s lock, searching
her locker, and then leaving her property vulnerable without providing additional security for that
property” and Plaintiff seeks “actual damages, as well as mental anguish and emotional damages.”
(Dkt. #4 ¶ 13). The Court applies the fair notice requirements to determine whether Plaintiff
released her negligence claim against Defendant.
Express Negligence Doctrine
“[T]he express negligence doctrine[ ] requires that ‘the intent of the parties must be
specifically stated in the four corners of the contract.’” Reyes, 134 S.W.3d at 192 (quoting Ethyl
Corp., 725 S.W.2d at 708). Defendant argues Section 10 plainly bars Plaintiff’s negligence claim
(Dkt. #27 at p. 2). Plaintiff contends Section 10 “is broadly written, but clearly was intended to
apply to physical injury.” (Dkt. #25 at p. 4).
As cited above, Section 10 is tilted, “RELEASE OF LIABILITY, ASSUMPTION OF
RISK, AND INDEMNIFICATION” and provides, “you understand and voluntarily accept
this risk and agree that 24 Hour . . . will not be liable for any injury, including, without
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limitation, personal, bodily, or mental injury, economic loss or any damage to you . . .
resulting from the negligence of 24 Hour or anyone on 24 Hour’s behalf or anyone using the
facilities whether related to exercise or not.” (Dkt. #24-3 at p. 6).
Section 10 explicitly states that Defendant is not liable for any injury—including mental
or economic injuries—resulting from Defendant’s negligence, relating to exercise or not.
Therefore, the parties’ intent to release Defendant from liability for its negligence causing mental
or economic injuries is specifically stated in the four corners of the Agreement. See Quintana, 347
S.W.3d at 450 (quoting Atl. Richfield Co., 768 S.W.2d at 726) (“Language that specifically refers
to ‘any negligent act of [the released party]’ may be sufficient to define the parties’ intent.”). As
a result, the Agreement satisfies the express negligence doctrine.
Conspicuousness
The conspicuousness requirement “mandates ‘that something must appear on the face of
the [contract] to attract the attention of a reasonable person when he [or she] looks at it.’” Reyes,
134 S.W.3d at 192 (quoting Dresser, 853 S.W.2d at 508).
“Language may satisfy the
conspicuousness requirement by appearing in larger type, contrasting colors, or otherwise calling
attention to itself.” Id. (citing Littlefield, 955 S.W.2d at 274–75).
Plaintiff argues Section 10 is not conspicuous because it appears on the final page of the
six-page Agreement and its typeface is small (Dkt. #25 at p. 4). Plaintiff correctly notes that
Section 10 appears on the final page of the Agreement (Dkt. #24-3 at p. 6). However, Plaintiff
does not acknowledge that the first page of the Agreement contains the following warning:
THIS AGREEMENT INCLUDES A RELEASE OF
LIABILITY AND ASSUMPTION OF RISK PROVISION IN
SECTION 10.
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(Dkt. #24-3 at p. 1) (formatted in original). The text of this warning is bolded and capitalized to
draw a reader’s attention.
The release appears in a box that separates it from other sections of the Agreement and is
titled,
“RELEASE
OF
LIABILITY,
ASSUMPTION
OF
RISK,
AND
INDEMNIFICATION.” (Dkt. #24-3 at p. 6). As cited, the title of the release is underlined,
bolded, and capitalized (Dkt. #24-3 at p. 6). No other title in the Agreement is formatted like the
title of the release. Below the title, the text of the release is bolded (Dkt. #24-3 at p. 6). Although
the font size of the release is not large, it is not the smallest font size found in the Agreement (Dkt.
#24-3). Considering these factors, the Court finds that the release is conspicuous because it would
attract the attention of a reasonable person when he or she viewed the Agreement. See Reyes, 134
S.W.3d at 192.
Consequently, the release contained in Section 10 meets the fair notice
requirements and is enforceable under Texas law as it satisfies the express negligence doctrine and
is conspicuous. See Tamez, 155 S.W.3d at 569.
The Court’s finding is not novel. At least two other courts in this Circuit have reached
similar conclusions concerning releases found in Defendant’s membership agreements.
In
Ramirez, Ramirez suffered an injury at one of Defendant’s Texas facilities and sued Defendant
asserting negligence claims. Ramirez v. 24 Hour Fitness USA, Inc., CIV.A. H-12-1922, 2013 WL
2152113, at *1 (S.D. Tex. May 16, 2013), aff’d, 549 F. App’x. 262 (5th Cir. 2013). Defendant
moved for summary judgment arguing the release contained in Ramirez’s membership agreement
barred her negligence claims. Id. The release in Ramirez’s membership agreement contained
nearly identical language and formatting to Section 10:
In consideration of your participation in the activities offered by
24 Hour, you understand and voluntarily accept this risk and
agree that 24 Hour . . . will not be liable for any injury, including,
without limitation, personal, bodily, or mental injury, economic
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loss or any damage to you . . . resulting from the negligence of
24 Hour or anyone on 24 Hour’s behalf or anyone using the
facilities whether related to exercise or not.
Id. (formatted in original exhibit). Applying the express negligence doctrine, the court concluded,
“the intent of the parties to bar actions such as those brought by Ramirez is ‘specifically stated in
the four corners of the contract.’” Id. at *4 (quoting Reyes, 134 S.W.3d at 192). The Court also
found the release conspicuous. Id. at *5. As the release satisfied the fair notice requirements, the
court found the release enforceable and granted summary judgment on Ramirez’s negligence
claims. Id. at *6.
In Potter, Potter suffered an injury at one of Defendant’s Texas facilities and subsequently
died. Potter v. 24 Hour Fitness USA Inc., 3:12-CV-453-P, 2014 WL 11633691, at *1 (N.D. Tex.
June 6, 2014), aff’d, 597 F. App’x. 796 (5th Cir. 2015). Members of Potter’s family sued
Defendant asserting a negligence claim. Id. at *1, 5. The release in Potter’s membership
agreement also contained similar language and formatting to Section 10:
you . . . agree that 24 Hour . . . will not be liable for any injury,
including, without limitation, personal, bodily, or mental injury,
economic loss or any damage to you . . . resulting from any
negligence of 24 Hour or 24 Hour’s behalf or anyone using the
facilities whether related to exercise or not.
Id. at *6 (formatted in original exhibit). Although the court did not address the fair notice
requirements, it did find the release barred Potter’s negligence claim as a matter of law. Id. at *7.
Renewal Agreement and Lack of Knowledge
Plaintiff argues two additional points to avoid the release: (1) the release appears in a
renewal agreement, not her original contract; and (2) Plaintiff never received the pages of the
Agreement containing the release (Dkt. #25 at p. 3). Concerning her first point, Plaintiff explains
that the Agreement containing the release is a renewal agreement, not her original contract with
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Defendant (Dkt. #25 at p. 3). Plaintiff does not explain why her original contact is relevant. The
Agreement contains a merger clause which replaced any prior agreements between the parties
(Dkt. #24-3 at p. 4, ¶ 5(d)); City of Oak Ridge N. v. Mendes, 339 S.W.3d 222, 232 (Tex. App.—
Beaumont 2011, no pet.) (quoting Smith v. Smith, 794 S.W.2d 823, 827–28 (Tex. App.—Dallas
1990, no writ)) (“‘Merger, with respect to the law of contracts, refers to the extinguishment of one
contract by its absorption into another contract and is largely a matter of the intention of the
parties.’”). Plaintiff does not challenge the merger clause. Therefore, the Agreement governed
the parties’ relationship regardless of the original contract’s terms.
Addressing her second point, Plaintiff testifies in an attached affidavit that she did not
receive any portion of the Agreement beyond the first two pages:
4. I never saw the release-of-liability provision in my 24 Hour
Fitness Membership Agreement, nor was it brought to my attention.
I was asked to sign only the first two pages. To the best of my
knowledge, the pages after the first two pages bearing my signature
were not attached to the contract I signed.
5. I did not see any pages to my contract other than the first two
pages that I signed.
(Dkt. #25-2 ¶¶ 4–5). Plaintiff admits she viewed and signed the first two pages of the Agreement.
As discussed previously, the first page of the Agreement contains the following warning and
additional text:
THIS AGREEMENT INCLUDES A RELEASE OF
LIABILITY AND ASSUMPTION OF RISK PROVISION IN
SECTION 10. By signing below,
1. You acknowledge and agree that you have read this agreement
and you agree to all the terms on all pages of this agreement and
acknowledge that you have received a copy of it and the membership
policies.
2. You consent to the use of an electronic signature to record your
commitment to the terms of this Agreement.
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NOTICE TO PURCHASER: DO NOT SIGN THIS
CONTRACT UNTIL YOU READ IT OR IF IT CONTAINS
BLANK SPACES.
(Dkt. #24-3 at p. 1) (formatted in original). The first page of the Agreement instructed Plaintiff
that Section 10 contained a release, and Plaintiff should not sign the Agreement until she read all
of its pages. Plaintiff cannot now escape the release by arguing she did not read or receive Section
10 when she viewed and signed a page notifying her to read Section 10 before signing the
Agreement. In Estate of Sheshtawy, 478 S.W.3d 82, 87 (Tex. App.—Houston [14th Dist.] 2015,
no pet.) (citing In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005)) (“Absent allegations of fraud,
misrepresentation, or deceit, a party is bound by the terms of the contract she signed, regardless of
whether she read it or believed it had different terms.”). Accordingly, Plaintiff’s additional
arguments do not inhibit the enforcement of the release.
Release
Plaintiff sued Defendant for negligence resulting from “cutting Plaintiff’s lock, searching
her locker, and then leaving her property vulnerable without providing additional security for that
property” and Plaintiff seeks “actual damages, as well as mental anguish and emotional damages.”
(Dkt. #4 ¶ 13). Pursuant to the release, Plaintiff agreed that Defendant would not be liable for any
injury—including mental or economic loss injuries—resulting from Defendant’s negligence
(Dkt. #24-3 at p. 6). The release is valid and enforceable under Texas law because it satisfies the
fair notice requirements and, therefore, Plaintiff’s negligence claim is barred by the release.
Accordingly, the Court GRANTS summary judgment against Plaintiff on her negligence claim.
II.
Plaintiff’s Gross Negligence Claim
The dismissal of Plaintiff’s negligence claim does not necessarily warrant the dismissal of
her gross negligence claim. See Van Voris v. Team Chop Shop, LLC, 402 S.W.3d 915, 924 (Tex.
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App.—Dallas 2013, no pet.) (“There certainly are circumstances when negligence and gross
negligence claims cannot be separated legally. Those circumstances are not presented in the
context of a pre-injury, general negligence release.”). As a result, the Court now considers
Defendant’s summary judgment arguments concerning Plaintiff’s gross negligence claim.
Defendant moves for summary judgment on Plaintiff’s gross negligence claim arguing: (1)
Plaintiff cannot maintain a claim for mental anguish and emotional distress damages under her
gross negligence claim; (2) summary judgment is warranted on Plaintiff’s gross negligence claim
because Texas law prohibits claims for exemplary damages in cases involving third-party-criminal
acts; and (3) summary judgment is warranted on Plaintiff’s gross negligence claim because there
is no evidence of gross negligence (Dkt. #24 at pp. 4–10).
The Court will not grant summary judgment pursuant to Defendant’s first and third
arguments. After a careful review of the record, the Court is convinced a genuine issue of material
fact exists on Plaintiff’s gross negligence claim. The Court is also convinced that a genuine issue
of material fact exists on Plaintiff’s ability to seek mental anguish and emotional distress damages
under her gross negligence claim as a reasonable jury could find ill-will, animus, or a design to
harm Plaintiff personally from the evidence presented. Seminole Pipeline Co. v. Broad Leaf
Partners, Inc., 979 S.W.2d 730, 757 (Tex. App.—Houston [14th Dist.] 1998, no pet.) (“[W]here a
claim of mental anguish is based solely upon property damage resulting from gross negligence,
recovery is contingent upon evidence of some ill-will, animus, or design to harm the plaintiff
personally.”).
Concerning Defendant’s second argument, the Texas Civil Practice and Remedies Code
provides, “In an action arising from harm resulting from an assault, theft, or other criminal act, a
court may not award exemplary damages against a defendant because of the criminal act of
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another.” Tex. Civ. Prac. & Rem. Code § 41.005(a). The statute provides one relevant exception
to the exemption, “The exemption provided by Subsection (a) does not apply if . . . the criminal
act was committed by an employee of the defendant.” Tex. Civ. Prac. & Rem. Code § 41.005(b).
This exception applies if:
(1) the principal authorized the doing and the manner of the act;
(2) the agent was unfit and the principal acted with malice in
employing or retaining him;
(3) the agent was employed in a managerial capacity and was acting
in the scope of employment; or
(4) the employer or a manager of the employer ratified or approved
the act.
Tex. Civ. Prac. & Rem. Code § 41.005(c).
The Court will not grant summary judgment on Plaintiff’s gross negligence claim pursuant
to Section 41.005 for two reasons. First, neither party offers evidence concerning whether a thirdparty or one of Defendant’s employees stole Plaintiff’s wallet (Dkt. #24 at pp. 7–8; Dkt. # 25 at
p. 8). Consequently, the Court cannot determine whether the exemption or exception of Section
41.005 applies. Second, “a finding of gross negligence is relevant only to an assessment of
exemplary damages, and recovery of actual damages is a prerequisite to receipt of exemplary
damages under Texas law.” Potharaju v. Jaising Mar., Ltd., 193 F. Supp. 2d 913, 920 (E.D. Tex.
2002) (citing Riley v. Champion Int’l Corp., 973 F. Supp. 634, 641 (E.D. Tex. 1997)); see also
Bear Ranch, L.L.C. v. Heartbrand Beef, Inc., 885 F.3d 794, 804 (5th Cir. 2018) (quoting Twin City
Fire Ins. Co. v. Davis, 904 S.W.2d 663, 665 (Tex. 1995)). “Moreover, ‘[r]ecovery of exemplary
damages requires a finding of an independent tort with accompanying actual damages.’”
Potharaju, 193 F. Supp. 2d at 920 (quoting Riley, 973 F. Supp. at 642); see also Davis, 904 S.W.2d
at 665 (citations omitted). Therefore, the Court believes Defendant’s argument concerning Section
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41.005 is premature because the decision is only relevant if Plaintiff establishes actual damages
under her invasion of privacy claim. As a result, the Court will not grant summary judgment on
Plaintiff’s gross negligence claim at this time.
III.
Exemplary Damages under Plaintiff’s Invasion of Privacy Claim
Defendant contends Plaintiff cannot recover exemplary damages related to her invasion of
privacy claim (Dkt. #24 at p. 10). Specifically, Defendant argues Plaintiff does not allege malice
in her complaint and, even if she did, “the act of opening Plaintiff’s locker was not directed because
of any malicious intent towards Plaintiff . . . .” (Dkt. #24 at p. 10). Plaintiff responds, “Malice is
not a requirement but an alternative method to justify exemplary damages.” (Dkt. #25 at p. 11).
An action for invasion of privacy may be brought to recover both actual and punitive
damages. 59 Tex. Jur. 3d Privacy § 6 (citing Billings v. Atkinson, 489 S.W.2d 858 (Tex. 1973)).
A finding of malice supports an award of exemplary damages under an invasion of privacy claim.
Nat’l Bonding Agency v. Demeson, 648 S.W.2d 748, 751 (Tex. App.—Dallas 1983, no writ),
abrogated on other grounds, Cain v. Hearst Corp., 878 S.W.2d 577 (Tex. 1994); K-Mart Corp.
Store No. 7441 v. Trotti, 677 S.W.2d 632, 639 (Tex. App.—Houston [1st Dist.] 1984), writ ref’d
n.r.e. sub nom., Trotti v. K-Mart Corp. No. 7441, 686 S.W.2d 593 (Tex. 1985). “‘Malice’ means
a specific intent by the defendant to cause substantial injury or harm to the claimant.” Tex. Civ.
Prac. & Rem. Code § 41.001(7).
Defendant correctly notes that Plaintiff does not plead “malice” in her Complaint.
(Dkt. #4). However, Plaintiff specifically pleads that she seeks exemplary damages under her
invasion of privacy claim and alleges, “Defendant’s employees[’] . . . invasion was highly
offensive and would realistically cause a sense of outrage to a person of normal sensibilities.”
(Dkt. #4 at pp. 3–4). The Court believes Plaintiff’s Complaint provides Defendant fair notice of
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her claim, and Plaintiff’s failure to specifically state “malice” is not dispositive of her ability to
seek exemplary damages under her invasion of privacy claim. See Ashcroft v. Iqbal, 556 U.S. 662,
698–99 (2009).
Further, as previously noted, a reasonable jury could find evidence that
Defendant’s employees acted with ill-will, animus, or a design to harm Plaintiff personally based
upon the evidence before the Court. Examining the same evidence, a reasonable jury could find
that Defendant’s employees acted with malice when they cut Plaintiff’s lock and left the lock
hanging from the locker, with Plaintiff’s valuables inside. Consequently, the Court finds a genuine
issue of material fact exists on Plaintiff’s ability to recover exemplary damages under her invasion
of privacy claim.
CONCLUSION
It is therefore ORDERED that Defendant’s Corrected Motion for Partial Summary
Judgment is GRANTED IN PART and DENIED IN PART (Dkt. #24). Specifically, the Court
.
GRANTS summary judgment on Plaintiff’s negligence claim pursuant to the release found in
Section 10 of Plaintiff’s membership agreement. The Court DENIES summary judgment on
Plaintiff’s gross negligence claim and Plaintiff’s ability to seek exemplary damages under her
invasion of privacy claim.
SIGNED this 17th day of October, 2018.
___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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