United States District Court, E.D. Louisiana
CHRISTOPHER E. CENAC, JR., ET AL.
ORDER AND REASONS
JAY C. ZAINEY UNITED STATES DISTRICT JUDGE
following dispositive motions are before the Court: Motion for
Summary Judgment Under the Contract (Rec. Doc. 52) filed by
defendant Orkin, LLC; Motion for Partial Summary Judgment on
LUTPA Claims (Rec. Doc. 54) filed by defendant Orkin, LLC;
Motion for Partial Summary Judgment on Bad Faith Penalties
(Rec. Doc. 56) filed by defendant Orkin, LLC; Motion for
Partial Summary Judgment on Claims for Negligence, Gross
Negligence, and Negligent Misrepresentation (Rec. Doc. 58)
filed by defendant Orkin, LLC; Motion for Partial Summary
Judgment on Emotional Distress Damages (Rec. Doc. 60) filed
by defendant Orkin, LLC; Motion for Partial Summary Judgment
on Claims for Unjust Enrichment and Detrimental Reliance
(Rec. Doc. 62) filed by defendant Orkin, LLC; Motion for
Summary Judgment on Contract Transfer (Rec. Doc. 76) filed by
plaintiffs, Drs. Audra and Christopher E. Cenac, Jr.
(referred to at times as “C. Cenac”). All motions
are opposed. The motions, noticed for submission on May 16,
2018, are before the Court on the briefs without oral
spring of 2015 Plaintiffs' home located in Houma,
Louisiana became infested with Formosan termites. At the time
of the infestation, Plaintiffs had their home under contract
with the Orkin pest control company. Orkin treated the property
to kill the destructive pests but the damage to the home was
significant. At first Plaintiffs and Orkin worked
cooperatively to address Plaintiffs' damages. Orkin
agreed to reimburse Plaintiffs for certain relocation
expenses. At one point early on, Mr. Russell Fielder
with Orkin told Dr. C. Cenac that Orkin was willing to repair
the home. (Rec. Doc. 76-9, C. Cenac deposition at 230-31).
Ultimately, negotiations broke down. Plaintiffs' repair
estimates are over one million dollars.
primary issue in this case is whether Orkin is obligated,
contractually or otherwise, to pay for the repairs to the
property that were caused by Formosan termites. In addition
to their contractual claims, Plaintiffs have asserted other
non-contractual claims under Louisiana law.
now moves for summary judgment on all claims. Plaintiffs have
filed their own cross motion pertaining to the contract
trial was scheduled for July 9, 2018. The Court has continued
the trial in light of the large number of pending motions.
judgment is appropriate only if "the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, " when
viewed in the light most favorable to the non-movant,
"show that there is no genuine issue as to any material
fact." TIG Ins. Co. v. Sedgwick James, 276 F.3d
754, 759 (5th Cir. 2002) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A dispute
about a material fact is "genuine" if the evidence
is such that a reasonable jury could return a verdict for the
non-moving party. Id. (citing Anderson, 477
U.S. at 248). The court must draw all justifiable inferences
in favor of the non-moving party. Id. (citing
Anderson, 477 U.S. at 255). Once the moving party has
initially shown "that there is an absence of evidence to
support the non-moving party's cause, " Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986), the
non-movant must come forward with "specific facts"
showing a genuine factual issue for trial. Id.
(citing Fed. R. Civ. P. 56(e); Matsushita Elec.
Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)).
Conclusional allegations and denials, speculation, improbable
inferences, unsubstantiated assertions, and legalistic
argumentation do not adequately substitute for specific facts
showing a genuine issue for trial. Id. (citing
SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993)).
faced with a well-supported motion for summary judgment, Rule
56 places the burden on the non-movant to designate the
specific facts in the record that create genuine issues
precluding summary judgment. Jones .v Sheehan, Young,
& Culp, P.C., 82 F.3d 1334, 1338 (5thCir.
1996). The district court has no duty to survey the entire
record in search of evidence to support a non-movant's
position. Id. (citing Forsyth v. Barr, 19
F.3d 1527, 1537 (5th Cir. 1992); Nissho-Iwai
Am. Corp. v. Kline, 845 F.2d 1300, 1307 (5th
issue at the heart of the contract claim is whether Orkin is
contractually obligated to pay for the significant repairs to
Plaintiffs' property that were caused by Formosan
termites. Plaintiffs' position is that an ownership
repair guarantee that was issued in favor of a former owner
was transferred to them when they purchased the property in
2003. Then in 2007 they upgraded this guarantee to include
coverage for Formosan termites. Thus, according to
Plaintiffs, Orkin is contractually obligated to pay for the
Formosan-related repair costs to their home.
positon is that the clear and express terms of the governing
agreements exclude any liability on the part of Orkin to pay
for the cost of repairing the Formosan termite damage that
forms the basis of this lawsuit.
contract claim originates with a Subterranean Termite
Agreement (Rec. Doc. 76-3, Exh. A) issued in 1991 to Mr.
Allen Eschete, a former owner of the property. According to the
agreement, Mr. Eschete paid $1, 230.00 to have Orkin provide
an initial treatment of the property for subterranean
termites. The agreement unequivocally excludes protection
against Formosan termites. As part of the agreement, Mr. Eschete
also obtained a Full Renewable Subterranean Termite Home
Ownership Repair Guarantee (“OR”). Pursuant to
the OR Guarantee, Orkin agreed, for as long as Mr. Eshete
owned the premises and paid the annual renewal fee, to
re-treat when required and to repair any new damage to the
building or its contents caused by Subterranean termites.
(Rec. Doc. 76-3). Importantly, the OR Guarantee did not cover
damage from Formosan termites, and it includes the following
pertinent restriction: “This Guarantee is not
transferrable after one year from the original treatment
date.” (Id.) (emphasis added). Presumably the
original treatment date occurred in February 1991, which is
when the Agreement was executed. Therefore, unless the
non-transferability limitation is invalid under Louisiana
law, the OR Guarantee could not have been transferred to any
subsequent owner of the property (including the Cenacs) after
February 1992, without Orkin's consent.
purchased the property in 2003. As is common with residential
purchases, the existing termite contract was transferred to
Plaintiffs as the new owners of the property. Dr. Christopher
Cenac was adamant that he was assured at the closing that he
was obtaining a full termite repair guarantee. It is
undisputed, however, that those assurances-while they might
have been made by realtors or bankers or other persons-were
not made by anyone with Orkin. (Rec. Doc. 76-9, C. Cenac
deposition at 53, 86). It is also clear from Dr. C.
Cenac's deposition that he relied on those other
persons' oral assurances as to what the Orkin agreement
provided without having actually read the agreement
itself.Moreover, Dr. C. Cenac's erroneous assumptions
about the nature of the termite agreement that was
transferred at the closing cannot be attributed to any
ambiguities in the document. The 1991 agreement is not
ambiguous and even if it were, Dr. C. Cenac did not read
2007, Plaintiffs received an undated letter to “Dear
Customer” from Orkin salesman Jerry L. Aucoin. (Rec.
Doc. 80-3, Exh. B). It is apparent from the letter that
Aucoin was soliciting sales of treatment specific to Formosan
termites from existing Orkin customers who did not already
have Formosan termite coverage. The letter states in part:
Orkin Pest Control is offering a special offer to our current
customers who do not have Formosan Termite coverage. The
Supplemental Treatment will not affect your current coverage
in any way at all. This treatment allows Orkin to retreat
your home with the new termiticides designed to stop and kill
Formosan and Native Subterranean termites.
(Rec. Doc. 80-3, Exh. B).
opted to buy the additional treatment for Formosan termites.
Dr. Audra Cenac signed the Orkin Continuous Protection Plan
on June 21, 2007 (Rec. Doc. 52-4). Dr. C. Cenac testified
that it was his understanding, based on his discussion with
Aucoin, that he was just adding Formosan termite coverage to
his existing Orkin contract, which to Dr. C. Cenac's
understanding provided him with the full OR Guarantee for
home repairs. In other words, Dr. C. Cenac's
understanding was that since home repairs were already part
of his existing termite contract, and since the Formosan
coverage was just being added on to his existing contract, he
would be covered for home repairs necessitated by Formosan
termite damage. But the 2007 Orkin Continuous Protection Plan
states in the first paragraph: “This Service does not
cover any damage to the structure or contents.”
(Id.). Later in the same paragraph, in all uppercase
letters for emphasis, the following statement appears:
“CUSTOMER EXPRESSLY RELEASES ORKIN FROM ANY CLAIMS FOR
TERMITE DAMAGE OR REPAIR.” (Id.). Dr. C. Cenac
did not read this language. (Rec. Doc. 76-9, C. Cenac
deposition at 92).
searching for an affirmative contractual obligation by Orkin
to repair Formosan termite property damage, Plaintiffs rely
on the original 1991 Eschete agreement-which while it
included a repair guarantee expressly excluded damage from
Formosan termites-joined with the 2007 Orkin Continuous
Protection Plan-which while it included coverage for Formosan
termites expressly excluded property repairs. Plaintiffs move
for summary judgment on the issue of contract transfer,
pressing their contention that the OR Guarantee from the 1991
Eschete agreement was transferred to them along with the
termite agreement as a whole, even though the OR Guarantee
contained an express provision barring transfer after one
year from the original treatment date. Alternatively,
Plaintiffs argue that Orkin's actions throughout the
years manifested an intent to transfer the OR Guarantee to
moves for summary judgment on Plaintiffs' contract claims
contending that the clear and express terms of the original
1991 Eschete agreement and the 2007 Orkin Continuous
Protection Plan exclude any liability on the part of Orkin to
pay for the cost of repairing the Formosan termite damage
that forms the basis of this lawsuit.
support of their motion for summary judgment, Plaintiffs
argue that La. R.S. § 3:3370 renders the
non-transferability limitation in the OR Guarantee invalid
under Louisiana law. The statute reads in relevant part:
Any currently effective standard contract and all terms and
conditions contained therein shall be transferable to a
subsequent owner of the property covered by such contract.
La. R.S. § 3:3370(A)(2).
argue that if the statute is construed to allow Orkin to
limit transfer of the OR Guarantee, then the statute would be
meaningless and accomplish nothing.
parties cite no decisions related to this statutory provision
and the Court's own research has likewise revealed none.
The Court notes, however, that La. R.S. § 3:3370 was
amended in 2001 to include the provision quoted above. 2001
La. Acts 551, § 1. Thus, by the time that La. R.S.
§ 3:3370(A)(2) was enacted, the OR Guarantee had been
rendered non-transferable for nearly 10 years, i.e.,
one-year after the original 1991 termite treatment, which
would have been in or about February 1992. By 2003 when the
contract was transferred to Plaintiffs, the absence of the OR
Guarantee was simply one of the agreement's “terms
and conditions.” Regardless of what § 3370(A)(2)
was intended to accomplish prospectively, it could not as a
matter of law render the OR Guarantee transferrable once it
had validly (in the absence of a statutory prohibition)
become non-transferrable pursuant to the express terms of the
La. R.S. § 3:3370(A)(2) did not void the OR
Guarantee's transfer limitation, Plaintiffs argue that
Orkin's actions throughout the years manifested an intent
to transfer the OR Guarantee to them. Plaintiffs point out
that Orkin's yearly service reports continued to indicate
“OR” in the blank for Guarantee Type after they
assumed the contract from Mr. Eschete. (Rec. Doc. 76-6 Exh.
D, Termite Service Reports 6/8/02-6/5/15). Orkin's own
internal database indicated the Guarantee Type as
“OR.” (Rec. Doc. 76-7 Exh. E). Plaintiffs point
out that they made and Orkin accepted the annual payments,
which increased annually, that Mr. Eschete had been making to
maintain the OR ...