Automated Summary
Key Facts
Wilvan M. Miller and Laine B. Miller built their home in Alexandria, Louisiana beginning in 1994 and hired Morrison Environmental Services, Inc. (d/b/a Adams Pest Control of Alexandria) to pre-treat for subterranean termites under an undated pre-construction contract containing liability limitations. Adams sent a 2013 renewal bill indicating it was a 'Retreatment Agreement only,' but the Millers continued annual renewals until Adams refused to renew in 2019. When extensive termite damage was discovered, the Millers filed suit against Adams for negligence and tort. The trial court granted partial summary judgment to Adams, finding the pre-construction contract applied and limiting liability to repair costs under LA RS 3:3367(C)(1) at one hundred thousand dollars. The Court of Appeal reversed the trial court's grant of summary judgment.
Transaction Type
Pest control service contract for termite treatment
Issues
- The plaintiffs argue the trial court erred to the extent its failure to construe the parties' contract against Adams was based on a finding that the contract was a document created in a highly regulated industry with contracts created by that industry, when there was no summary judgment evidence offered in support of that position and the court relied solely on the argument of Adams' counsel over objection.
- The plaintiffs argue the trial court erred by rewriting the parties' contract to supply an exculpatory provision in favor of the party who furnished its text, challenging the reformation of the pest control contract due to alleged mutual error under Louisiana Civil Code Article 1949.
Holdings
The appellate court reversed the trial court's grant of summary judgment in favor of Morrison Environmental Services, Inc. (d/b/a Adams Pest Control of Alexandria) and its insurer, Gemini Insurance Company. The court found that Adams failed to provide clear and convincing evidence of mutual error necessary to support reformation of the pre-construction contract, which remains the applicable agreement between the parties.
Remedies
The appellate court reversed the trial court's grant of summary judgment in favor of Morrison Environmental Services, Inc., d/b/a Adams Pest Control of Alexandria, and its insurer, Gemini Insurance Company. All costs of the appeal are taxed to defendant/appellee, Morrison Environmental Services, Inc., d/b/a Adams Pest Control of Alexandria.
Legal Principles
- The court examined whether a new retreatment contract was formed between the Millers and Adams. The trial court ruled that the 2013 invoice indicating 'Retreatment Agreement only' did not constitute an offer to enter into a new contract, and the Millers did not consent to a new contract. The pre-construction contract provided for annual renewal, reinforcing that no new contract was formed.
- The court determined that the applicable contract to the matter was the pre-construction contract, which was a document created in a highly regulated industry with specific limitations. The court found that the parties did not formulate a retreatment agreement and that the original contract terms, including liability limitations, remained binding on both parties.
- The court considered whether standard-form contracts should be construed against the party that supplied the language. The Millers argued that section 3(e) of the pre-construction contract limiting liability should not be enforced because it was a standard-form contract created by Adams. The court ultimately found the contract was clear and specific, and the applicable contract was the pre-construction contract which contained specific limitations on liability.
Precedent Name
- Cenac v. Orkin, LLC
- Hines v. Garrett
- Menard v. Orkin, LLC
- Peironnet v. Matador Res. Co.
Key Disputed Contract Clauses
- The Performing the Work section states the Company will not be responsible for damage caused by work performed except resulting from gross negligence. This limitation was part of the contract provisions upheld by the trial court.
- Section 3(e) of the pre-construction contract limits the Company's liability for property damages to the cost of repairs (labor and materials only) and in no event exceeds the limits of insurance required under LA RS 3:3367(C)(2). The Millers argued this should be interpreted as LA RS 3:3367(C)(1) which contains no limits of insurance, while the trial court found liability limited to $100,000 in property damages.
- Section 3(b) of the contract provides that dismantling of parts of the structure is at the customer's cost. The trial court found this provision was part of the pre-construction contract's specific limitations on recovery.
Cited Statute
- Louisiana Revised Statutes 3:3367
- Louisiana Civil Code Article 2046
- Louisiana Code of Civil Procedure Article 966
- Louisiana Civil Code Article 1949
- Louisiana Civil Code Article 2045
Judge Name
- Jonathan W. Perry
- Shannon J. Gremillion
- Charles G. Fitzgerald
Passage Text
- Accordingly, the judgment of the trial court granting summary judgment in favor of Morrison Environmental Services, Inc., d/b/a Adams Pest Control of Alexandria, and its insurer, Gemini Insurance Company is reversed. All costs of this appeal are taxed to defendant/appellee, Morrison Environmental Services, Inc., d/b/a Adams Pest Control of Alexandria.
- The Court finds that the applicable contract to this matter is the pre-construction contract. The parties did not formulate a retreatment agreement. The pre-construction contract is a document created in a highly regulated industry with contracts created by that industry to contain specific limitations: recovery is limited to the cost of repairs (labor and materials) with the limit of one hundred thousand dollars in property damage as specified in LA RS 3:3367 (C)(1); dismantling is at the cost of the customer and damages to items within the home due to treatment is not covered.
- Other than convincing the court that an error exists in the contract, Adams failed to offer proof of a clear and convincing nature regarding any of the other elements necessary to support reformation of the contract.