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Carr v. Haralson Termite & Pest Control Inc.

United States District Court, N.D. Alabama, Southern Division

October 18, 2018

DANIEL CARR, et al., Plaintiffs,


          John E. Ott Chief United States Magistrate Judge

         On April 6, 2018, Plaintiffs Daniel Carr, Christiana Carr and Patricia A. Cooper filed a complaint in the Circuit Court of Jefferson County, Alabama, against Defendants Haralson Termite & Pest Control, Inc. (“Haralson”) and Joel Mike Clark.[1] (Doc. 1-20). The complaint contains claims for (1) fraudulent misrepresentation/suppression, including promissory fraud, (2) negligence, recklessness and negligence per se, (3) negligent hiring, training, supervision and retention, and (4) breach of contract.[2] (Id. ¶¶ 50-81). The complaint also purports to state a claim for “equitable relief pursuant to the ‘made whole' doctrine.” (Id. ¶ 82-90).

         On August 27, 2018, Defendants properly removed the complaint to this court[3] based on diversity jurisdiction.[4] (Doc. 1). Upon examination of the removal documents, the court determined Defendants had filed in state court a partial motion to dismiss contained within their answer and it had not been decided. (Doc. 1-21). That motion is now before the court, is fully briefed, (docs. 6, 7, 11), and is ripe for decision. For the reasons that follow, the motion is due to be granted, but the court will allow Plaintiffs the opportunity to amend their fraud claim.


         The Federal Rules of Civil Procedure require that a complaint provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, the complaint must include enough facts “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Pleadings that contain nothing more than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards, nor do pleadings suffice that are based merely upon “labels and conclusions” or “naked assertion[s]” without supporting factual allegations. Id. at 555, 557. In deciding a Rule 12(b)(6) motion to dismiss, courts view the allegations in the complaint in the light most favorable to the non-moving party. Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007).

         To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although “[t]he plausibility standard is not akin to a ‘probability requirement, '” the complaint must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Id. A plausible claim for relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” to support the claim. Twombly, 550 U.S. at 556.

         In considering a motion to dismiss, a court should “1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'” Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 Fed.Appx. 136, 138 (11th Cir. 2011) (quoting Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)). That task is context specific and, to survive the motion, the allegations must permit the court based on its “judicial experience and common sense . . . to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679. If the court determines that all of the well-pleaded facts, accepted as true, do not state a claim that is plausible, the claims are due to be dismissed. Twombly, 550 U.S. at 570.

         The statute of limitations is an affirmative defense, and the burden of proving an affirmative defense is on the defendant. Tello v. Dean Witter Reynolds, Inc., 410 F.3d 1275, 1292 (11th Cir. 2005). A plaintiff is not required to anticipate and negate an affirmative defense in the complaint. La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). A Rule 12(b)(6) motion to dismiss on statute of limitations grounds may be granted, however, if it is apparent from the face of the complaint that the claim is time-barred. Id. at 845-46. Nonetheless, a motion to dismiss on statute of limitations grounds should not be granted where resolution depends either on facts not yet in evidence or on construing factual ambiguities in the complaint in defendants' favor. Omar ex rel. Cannon v. Lindsey, 334 F.3d 1246, 1252 (11th Cir. 2003).


         On or about June 3, 2012, Haralson issued a pre-sale inspection report on a property located in Trussville, Alabama. (Doc. 1-20 ¶ 10). The report stated that there were signs of previous subterranean termites, but did not disclose the full existence of the prior infestation or presence of termites. (Id.). The report also did not disclose the presence of wood decaying fungi, wood rot and the presence of wood to ground contacts conducive to termite infestation. (Id.).

         On July 13, 2012, Haralson performed a “defined zone treatment” on the property, but the treatment was deficient. (Id. ¶ 11). Additionally, Haralson issued a “Wood Destroying Organism Control Service Agreement” on the property (“termite bond”). (Id.). Defendants represented the home was free from any evidence of previous or active infestations of wood destroying organisms including subterranean termites and fungus and that the “defined treatment zone” was performed in accordance with the regulations and the label. (Id. ¶ 26). Both the treatment and termite bond fell below standards because of the failure to note the termite and wood decaying fungi problems. (Id.).

         On December 19, 2012, Plaintiffs purchased the property, in reliance on the pre-sale inspection report performed by Defendants. (Id. ¶¶ 10, 12). At the closing, Plaintiffs called Haralson and Clark, who told Plaintiffs the home did not have any visible termite damage or activity. (Id. ¶ 12). Plaintiffs discovered the damage “shortly after moving into the home.” (Id. ¶ 18). Although Defendants had a duty to inspect the home on at least an annual basis for new signs of subterranean termite infestation, Defendants failed to inspect and identify deficiencies before the expiration of the termite bond. (Id. ¶ 38).

         Plaintiffs allege a “consistent and repeated pattern and practice[] of the Defendants to fail to make complete, proper and adequate inspections and to fail to apply immunizations from termites by following proper service protocol for termite prevention. . . .” (Id. ¶ 43). They further allege concealment of “facts in connection with [Haralson's] inspections and treatments from Plaintiffs and other similarly situated customers in the face of a duty to do so based on Defendants' special knowledge and the ongoing nature of the processional services at issue.” (Id.). Plaintiffs contend “Defendants have created a scheme/system which has encouraged and led to widespread negligence, recklessness, wantonness, fraud and deception in the rendition of structural pest control services.” (Id. ¶ 46). “Until less than two (2) years ago, ” Plaintiffs state they were “unaware of the Defendants' patterns and practices of wrongdoing, and the schemes mentioned above.” (Id. ¶¶ 48, 92).


         Defendants argue Plaintiffs' fraud and negligence[6] claims are due to be dismissed pursuant to the statute of limitations. (Doc. 6 at 4-9). Additionally, Defendants argue Plaintiffs have failed to state a claim sufficient to invoke equity jurisdiction. (Id. at 9-10). As such, Defendants contend all claims except Plaintiffs' claim for breach of contract are due to be dismissed. (Id.). Plaintiffs argue the statute of limitations should be tolled on their negligence and fraud claims, and that any decision regarding the “made whole” equitable claim is not ripe. (Doc. 7 at 3-9). The court first addresses Plaintiffs' negligence and fraud claims and then moves to their claim for equitable relief.

         A. Dismissal of negligence and fraud claims under the applicable ...

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