Court Opinion

ID: 44845
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:29:08+00
Date Added: 2024-06-11T17:17:19.530815
License: Public Domain

[DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT                   FILED
                                                         U.S. COURT OF APPEALS
                                                           ELEVENTH CIRCUIT
                         ________________________              NOV 24, 2006
                                                            THOMAS K. KAHN
                                No. 05-15788                     CLERK
                           Non-Argument Calendar
                         ________________________
                     D. C. Docket No. 04-20532-CV-UUB

HARTFORD INSURANCE COMPANY
as Subrogee of Frangrance’s Mart, Inc.,

                                                             Plaintiff-Appellant,

                                    versus

BELLSOUTH TELECOMMUNICATIONS, INC.,

                                                             Defendant-Third
                                                             P a r t y- P l a i n t i f f -
                                                             Appellee,
                                    versus

HORIZON SECURITY SYSTEMS,

                                                             Third-Party-
                                                             Defendant-Appellee.

                         ________________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                        _________________________

                             (November 24, 2006)
Before ANDERSON, BLACK and BARKETT, Circuit Judges.

PER CURIAM:

      The Hartford Insurance Company (“Hartford”), as subrogee of Fragrance’s

Mart, Inc., appeals the district court’s order granting judgment as a matter of law to

BellSouth Telecommunications, Inc. (“BellSouth”) in this diversity negligence action.

Fragrance’s Mart, a wholesaler of perfumes and other fragrances, bought a burglar

alarm for its merchandise warehouse from Continental Technology, Inc.

(“Continental”). Included in the burglar alarm package was a monitoring service

provided by Horizon Electronics, Inc. (“Horizon”). If the burglar alarm detected an

unauthorized entry, it was supposed to notify Horizon, which would then call the

police.

      The effectiveness of the monitoring service depended directly on the integrity

of the telephone line connecting the alarm and Horizon. To prevent burglars from

cutting the line and circumventing the monitoring service, the alarm system also

included the WatchAlert service. A WatchAlert transmitter at the warehouse sent a

signal every twenty-six seconds over the telephone line to BellSouth. If BellSouth

missed a signal, it would presume the line had been cut and notify Horizon, who

would treat it as a positive alert and dispatch the police.

      Over the Thanksgiving holiday weekend in 2001, the Fragrance’s Mart

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warehouse was burglarized. Hartford compensated its insured Fragrance’s Mart for

its losses under a general liability policy. Hartford then filed suit against BellSouth,

alleging that BellSouth’s negligent operation of the WatchAlert system allowed the

burglars to enter undetected. After Hartford presented its case to a jury, the district

court granted judgment as a matter of law to BellSouth under Fed. R. Civ. P. 50(a)(1).

The court found that a limitation of liability clause in the contract between

Fragrance’s Mart and Continental applied to BellSouth and capped its liability at

$250. BellSouth then stipulated to the entry of a final judgment in the amount of

$250.

        On appeal, Hartford argues that the limitation of liability clause does not apply

to BellSouth, and that on remand, judgment must be entered against BellSouth

because it admitted liability. We conclude that the plain language of the limitation

of liability clause applied to BellSouth, and thus need not address the effect of

BellSouth’s admission of liability.

        We review grants of judgment as a matter of law de novo. Abel v. Dubberly,

210 F.3d 1334, 1337 (11th Cir. 2000). Judgment as a matter of law is proper if,

viewing the evidence in the light most favorable to the non-moving party, and

drawing all reasonable inferences in favor of the non-moving party, no reasonable

jury could arrive at a contrary verdict. Combs v. Plantation Patterns, Meadowcraft,

                                            3
Inc., 106 F.3d 1519, 1525 (11th Cir. 1997).

      The district court granted judgment as a matter of law on the basis of a

limitation of liability clause in the Electronic Alarm Agreement (“EAA”) between

Fragrance’s Mart and Continental. The agreement provides, “Any company which

renders monitoring or other services in connection with this alarm agreement may

invoke the provisions herein against the Customer and against any claims made by

the Customer, and Customer agrees to be bound by the provisions of the Agreement.”

The limitation of liability clause, also in the EAA, states,

      Since it is impractical and extremely difficult to fix actual damages
      which may arise from the failure on the part of the Company to perform
      any of its obligations hereunder, or the failure of the system to operate
      properly, if not, withstanding [sic] the above provisions, there should
      arise any liability on the part of the Company, such liability shall be
      limited, to an amount equal to six (6) times the monthly service charge
      shown herein, or the sum of Two Hundred Fifty Dollars ($250.00)
      whichever is less. . . . The Company is not liable for the gross
      negligence or the ordinary negligence of its employees, agents and
      assigns.

The district court found that BellSouth was a company that rendered services in

connection with the alarm agreement, and accordingly was protected by the

agreement’s limitation of liability clause.

      We agree that the clause unambiguously applies to limit BellSouth’s liability.

We first note that Florida enforces limitation of liability clauses in burglar alarm

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service contracts. Ace Formal Wear v. Baker Protective Serv., Inc., 416 So.2d 8, 9

(Fla. 3d Dist. Ct. App. 1982). Such clauses are valid to limit liability for negligence.

Cont’l Video Corp. v. Honeywell, Inc., 422 So.2d 35, 36 (Fla. 3d Dist. Ct. App.

1982). Further, in Florida, third-party beneficiaries may enforce limitation of liability

clauses. Florida Power & Light Co. v. Mid-Valley, Inc., 763 F.2d 1316, 1321 (11th

Cir. 1985). Thus, if the clause applies to BellSouth, its liability is capped under

Florida law.

      The interpretation of a contract is a question of law to be decided by the court.

Barone v. Rogers, 930 So.2d 761, 764 (Fla. 4th Dist. Ct. App. 2006). The clause in

the EAA applies to “any company which renders monitoring or other services in

connection with this alarm agreement.” BellSouth was clearly such a company. The

EAA itself provided for the WatchAlert service. On the face of the EAA, a box

beside “telephone line security” is checked. Then, in the “payment” section, the term

“WatchAlert” is written beside a payment term of “$250.00,” which was the cost of

installing the WatchAlert transmitter. Further, the same day Fragrance’s Mart signed

the EAA, it also signed the “WatchAlert Service Letter of Authorization,” which

authorized BellSouth to perform the WatchAlert service. It was thus clear from the

very day that Fragrance’s Mart signed the EAA that the alarm system included the

WatchAlert service and that BellSouth was going to provide it. The parties clearly

                                           5
contemplated that BellSouth would render services in connection with the EAA.

       But even if the EAA and Letter of Authorization had not mentioned

WatchAlert or BellSouth, the service was still rendered “in connection with” the EAA

because it was a crucial component of the alarm system that the EAA provided.

Hartford acknowledges in its brief that “[t]he WatchAlert service is an important

enhancement to a burglar alarm system because the signal transmitted by a burglar

alarm system is conducted over telephone lines.” The success of the alarm system in

the EAA depended directly on the WatchAlert system, which ensured the integrity of

the telephone connection between the alarm and Horizon. Further, the WatchAlert

system depended on BellSouth’s involvement. BellSouth was responsible for

monitoring the transmission that occurred every twenty-six seconds and notifying

Horizon if that transmission was interrupted. BellSouth thus obviously provided

services “in connection with” the EAA and may take advantage of the limitation of

liability clause.

       Hartford’s attempts to evade the clear language of the limitation of liability

clause are unsuccessful. First, Hartford argues that WatchAlert was not a monitoring

service. But whether it was a monitoring service or not is irrelevant, because the

clause also covered “other services,” which includes BellSouth’s services. Second,

Hartford argues that “in connection with” only refers to services explicitly mentioned

                                          6
in the EAA. Hartford notes that BellSouth’s portion of the services was provided in

a different contract and was billed separately, and contends that the references to

WatchAlert in the EAA meant only the installation of the physical transmitter, not the

services BellSouth would provide. Hartford’s argument, however, runs up against

two difficulties. First, the EAA did mention the WatchAlert service. Second, the

clear language of the clause applies to “any company” that renders services in

connection with the EAA, not just to those companies mentioned explicitly in the

EAA. BellSouth was clearly such a company.

      Next, Hartford argues that BellSouth’s negligence was not covered by the

limitation of liability clause. This claim is belied by the language of the limitation of

liability clause, which provides that BellSouth “is not liable for the gross negligence

or the ordinary negligence of its employees, agents and assigns.” This can only mean

that BellSouth is not liable for negligence it committed in the course of operating or

failing to operate the WatchAlert system.

      Finally, Hartford argues at great length that the district court necessarily found

the clause to be ambiguous, and that it erred by admitting extrinsic evidence to

construe the ambiguity. The district court, however, explicitly found that the clause

is not ambiguous. We agree with the district court that“any company which renders

monitoring or other services in connection with this alarm agreement” is

                                           7
unambiguous. As Florida courts have repeatedly found, “any” is a word of broad

significance meaning “every” or “all.” See, e.g., Dows v. Nike, Inc., 846 So.2d 595,

601 (Fla. 4th Dist. Ct. App. 2003); Acceleration Nat’l Service Corp. v. Brickell

Financial Services Motor Club, Inc., 541 So.2d 738, 739 (Fla. 3d Dist. Ct. App.

1989). Here, “any” includes every company rendering services in connection with

the alarm agreement, including those not named in the agreement. The phrase “in

connection with” is also unambiguous. It restricts the clause’s application to those

companies whose services have some relationship to the EAA. BellSouth’s services

had a strong relationship to the EAA and thus fell within the meaning of the clause.

      Upon determining that this language was not ambiguous, it was proper for the

district court to apply it to BellSouth. Whether a contract is ambiguous is a question

of law in Florida. Escobar v. United Auto Ins. Co., 898 So.2d 952, 954 (Fla. 3d Dist.

Ct. App. 2005). “Where the language of a contract is unambiguous and not subject

to conflicting inferences, construction of the contract is a question of law for the

court, not a question of fact for the jury.” Weingart v. Allen & O’Hara, Inc., 654 F.2d

1096, 1103 (5th Cir. Sept. 1981). The district court properly determined, as a matter

of law, that the language of the contract was unambiguous and that it applied to

BellSouth’s services. The doctrines relating to interpretation of ambiguities are

irrelevant, because the clause here unambiguously covered BellSouth.

                                          8
      The district court correctly held that the limitation of liability clause applies to

BellSouth, and its judgment is therefore

AFFIRMED.

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