781 F. Supp. 2d 636
E.D. Tenn.2011Background
- Plaintiff owns Spring Hill Market in Knoxville and contracted with ADT in Dec 2006 for security equipment and monitoring for a monthly fee.
- A 2006 contract and a 2007 contract did not provide for a cellular back-up; both included an exculpatory clause allocating property-loss risk to Plaintiff’s insurer.
- A Rider added after the Nov 2008 burglary provided a cellular back-up for $10 per month; Plaintiff had alleged prior discussion of cellular back-up before signing.
- On Nov 28, 2008, the Store was burglarized after thieves cut the land-line; the land-line outage prevented ADT from receiving alarm signals.
- A second incident occurred about a week later when a truck damaged the store; damages included structural damage and claimed lost profits; Plaintiff sought damages under multiple theories including fraud and TCPA.
- ADT moved for summary judgment, arguing exculpatory clauses barred negligence and breach claims and that Plaintiff failed to raise genuine issues on fraud and TCPA claims; Plaintiff did not file a timely memorandum in opposition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff raised genuine issues on fraud/tCPA claims | Roopchan alleges intentional misrepresentation, fraudulent concealment, fraudulent inducement, negligent misrepresentation, and TCPA violations. | ADT contends exculpatory clauses and lack of fraud/public-policy violations bar these claims; plaintiff failed to show genuine issues of material fact. | Yes; Plaintiff failed to raise genuine issues; claims dismissed. |
| Whether exculpatory clauses bar negligence and breach claims | Roopchan should not be barred given alleged misrepresentations and concealment. | Exculpatory clauses valid under Tennessee law absent fraud or TCPA violations. | Yes; exculpatory clauses enforceable; negligence and breach claims barred. |
| Whether Plaintiff reasonably relied on misrepresentations | Relied on sales representations about cellular backup and equipment. | Plaintiff had opportunity to read contracts and should have known cellular backup was not included. | No reasonable reliance; dismissal of negligent misrepresentation and related fraud claims. |
| Whether Plaintiff suffered an ascertainable TCPA injury | ADT charged for cellular back-up and its absence caused losses. | No pre-burglary charges; injury arguably avoidable; defendant acted lawfully. | No TCPA injury; claim dismissed. |
Key Cases Cited
- Houghland v. Sec. Alarms & Servs., Inc., 755 S.W.2d 769 (Tenn.1988) (exculpatory clauses generally valid absent fraud or misrepresentation; public policy limits apply)
- Underwood v. Nat'l Alarm Servs., Inc., 2007 WL 1412040 (Tenn.Ct.App. 2007) (upheld exculpatory clause in alarm services where no fraud; cautionary on public policy)
- Burks v. Belz-Wilson Props., 958 S.W.2d 773 (Tenn.Ct.App.1997) (exculpatory clauses not against public policy absent fraud)
- Simmons v. Evans, 206 S.W.2d 295 (Tenn.Ct.App.1947) (duty to disclose material facts generally limited; not always required)
- Solemom v. First Nat'l Bank of Nashville, 774 S.W.2d 935 (Tenn.Ct.App.1989) (read-contract duty to know contents; lack of reading does not always excuse)