941 F.3d 182
5th Cir.2019Background
- In 1991 Orkin entered a Subterranean Termite Agreement with Eschete containing an "OR Guarantee" to retreat and repair new damage caused by native subterranean termites and expressly stating it "DOES NOT PROTECT AGAINST FORMOSAN TERMITES."
- The Cenacs bought the house in 2004; the district court (not appealed) found the 1991 Agreement transferred to them and they paid renewals.
- In 2007 the Cenacs paid for supplemental treatment and signed two forms: a CPP (which disclaimed any repair obligation and released claims) and a short SSA (one-time treatment; 30‑day guarantee).
- Orkin inspected the house annually; in 2013 it noted excessive moisture and recommended (and approved) the Cenacs install a vapor/moisture barrier under the house.
- By 2015 Formosan termites were discovered with extensive damage; Orkin retreated and paid the Cenacs $222,168 (which the Cenacs say is far short of estimated repair costs).
- The district court granted summary judgment dismissing all claims; the Fifth Circuit affirmed all dismissals except it vacated and remanded the negligence/gross‑negligence claim based on Orkin’s recommendation/approval of the vapor barrier.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Orkin contractually must pay to repair Formosan termite damage | Cenac: 2007 payments, handwritten notes, employee promises and inspection reports extended the 1991 OR Guarantee to cover Formosan damage | Orkin: 1991 Agreement expressly excludes Formosan termites; CPP and SSA either disclaim repair liability or are single‑treatment; integration clauses bar oral modification | Held: No contractual repair obligation for Formosan damage; summary judgment for Orkin affirmed |
| Whether 2007 CPP/SSA and oral statements create ambiguity or modify the original contract | Cenac: CPP/SSA, handwritten notes, and employee statements created ambiguity and extended repair guarantee | Orkin: CPP expressly disclaims repair liability and includes integration clause; 1991 Agreement’s integration clause requires corporate‑level written amendment | Held: Contracts are clear and integrated; parol evidence cannot alter them; no ambiguity for Formosan repair obligation |
| Whether Cenacs stated a LUTPA claim based on deceptive practices | Cenac: Form agreements and employee statements were confusing/deceptive and caused reliance and loss | Orkin: Conduct did not reach LUTPA’s narrow, egregious‑conduct standard; contracts are clear and signed | Held: LUTPA claim fails as a matter of law; summary judgment for Orkin affirmed |
| Whether Orkin can be liable in tort for negligently recommending/approving the vapor barrier | Cenac: Orkin voluntarily undertook to recommend/approve installation and negligently directed the barrier’s installation, causing or contributing to infestation/damage | Orkin: All duties arise from contract; tort claims are precluded by contractual relationship | Held: Tort claim survives at least as to the vapor barrier recommendation/approval—Orkin voluntarily assumed that task and owed a duty to perform it reasonably; district court’s dismissal vacated and remanded on that claim |
Key Cases Cited
- Am. Elec. Power Co. v. Affiliated FM Ins. Co., 556 F.3d 282 (5th Cir. 2009) (two‑step approach to contract interpretation; resort to parol evidence only if text is ambiguous)
- Amoco Prod. Co. v. Tex. Meridian Res. Expl. Inc., 180 F.3d 664 (5th Cir. 1999) (interpretation of unambiguous contracts is a question of law)
- Crane v. Exxon Corp., U.S.A., 613 So.2d 214 (La. App. 1st Cir. 1992) (party that voluntarily assumes a safety/monitoring task owes a duty to perform it reasonably and may be liable in tort for negligent breach)
- Bethea v. St. Paul Guardian Ins. Co., 376 F.3d 399 (5th Cir. 2004) (reliance on informal representations is unreasonable as a matter of law when inconsistent with an unambiguous integrated contract)
- Cheramie Servs., Inc. v. Shell Deepwater Prod., Inc., 35 So.3d 1053 (La. 2010) (LUTPA reaches only egregious conduct involving fraud, misrepresentation, or other unethical behavior)