Attorneys for Amicus Curiae
William F. Conour
Ronald S. Todd
Attorneys for Indiana Trial Lawyers Association
Attorney for Appellee
Andrew P. Wirick
Appellant (Plaintiff below ),
TRI-ETCH, INC. d/b/a Sonitrol Security Systems of Muncie, Inc.,
Appellee (Defendant below).
) Supreme Court No.
June 26, 2003
A liquor store employee was abducted and brutally beaten to death by a late-night robber. The employees estate sued the stores alarm service for damages. The stores contract with the alarm service limited the time in which the store could sue the alarm company. We hold this time limit does not apply to the estate because the employee was not a party to the contract.
In addition, there was evidence that Tri-Etch provided an additional service to Muncie
Liquors not described in the contract. If the stores alarm has not
been set within a certain amount of time after the usual closing time
for the store, Tri-Etch would call the store. If no employee answered,
Tri-Etch would notify the stores general manager and then call the p
The stores usual closing time was midnight. In the event the alarm
was not set by this closing time, Tri-Etch customarily notified the Tillotson store
or, if no answer, the general manager, by 12:30 a.m.
On August 12, 1997, Michael Young, an employee at the Tillotson store, worked
the closing shift. At some time after 11:50 p.m. and before Young
could activate the store alarm, Michael Moore robbed the store at gunpoint, kidnapped
Young, drove him to a nearby park, beat him severely, and left him
tied to a tree in the park. The alarm was never set.
Tri-Etch did not call the store or the general manager to notify
Muncie Liquors that the alarm had not been set until approximately 3:15 a.m.
Young was found alive at approximately 6:00 a.m. on August 13, 1997,
but he died later that day as a result of his injuries.
The estate presented some evidence that had Young been found earlier, he might
The estate filed a wrongful death action on August 6, 1999, claiming Tri-Etch
had assumed a duty to notify Muncie Liquors by 12:30 a.m. if the
alarm was not activated. Tri-Etch filed a motion for summary judgment, asserting
that Youngs wrongful death action was barred by the one-year limitations period contained
in the contract between Muncie Liquors and Tri-Etch mentioned supra and set forth
in footnote 1. The trial court found that Youngs claim was governed
by the terms of the contract and that more than one year had
passed between Youngs murder and the filing of the complaint. It granted
summary judgment for Tri-Etch based upon the service contracts one-year limitation on actions.
The Court of Appeals affirmed, finding that the one-year liability limitation applied to
the estates claim and if the limits did not apply greater rights [would
be granted to Young] under the contract than the parties themselves had under
Young v. Tri-Etch, Inc., 767 N.E.2d 1029, 1034 (Ind. Ct.
App. 2002). We granted the estates petition to transfer. 783 N.E.2d
702 (Ind. 2002) (table).
The trial court and Court of Appeals both took the view that any
rights the estate had were derivative of the business relationship between Muncie Liquors
and Tri-Etch and that the one-year limitation period applied. 767 N.E.2d at
The reasoning of both courts was based on their respective readings of a
Court of Appeals case, Orkin Exterminating Co., Inc. v. Walters, 466 N.E.2d 55
(Ind. Ct. App. 1984), trans. denied, disapproved on other grounds, Mitchell v. Mitchell,
695 N.E.2d 920, 922 (Ind. 1998).
In Orkin, the plaintiff asked Orkin Exterminating Co. to inspect her home for
insect infestation. After insects were discovered, plaintiff signed a Subterranean Termite Agreement
which provided for an initial treatment and Orkins Continuous Protection Guarantee for an
annual fee. Upon treatment, plaintiff received the Lifetime Re-treatment Guarantee which guaranteed
additional treatments at no cost if termites reappeared during the guarantee period.
This agreement expressly limited Orkins liability to re-treatment only and expressly waived any
liability for termite damage to the structure or the contents. Plaintiff discovered
continued termite damage and sued Orkin for negligent breach of contract. The
trial court entered judgment for the plaintiff, finding that Orkins breach of duty
constituted tortious malfeasance, and allowed the plaintiff to recover damages in tort.
Orkin, 466 N.E.2d at 58. The Court of Appeals reversed the trial
court, noting that a suit based in tort does not change the fact
that Orkins duty to [the plaintiff] is based on the contract. Id.
In addition, bringing a suit in tort does not allow [the plaintiff]
to avoid the limitation of liability clause in the contract. Id.
Contrary to the Court of Appeals and trial courts findings, Orkin does not
control in this case. Orkin involved a tort lawsuit between the two
parties to a contract, under which both parties agreed to the liability limitation
provision. The present case, however, involves a tort lawsuit between one of
the original parties to a contract that contains a liability limitation provision and
a nonparty who never agreed to the terms of the contract.
Guidance is more readily available from other jurisdictions than from Indiana precedent.
Both Scott & Fetzer Co. v. Montgomery Ward & Co., 493 N.E.2d 1022
(Ill. 1986), and Lovell v. Sonitrol of Chattanooga, Inc., 674 S.W.2d 728 (Tenn.
Ct. App. 1983), addressed the feasibility of tort claims against installers of security
In Scott & Fetzer Co., a fire started in the portion of a
large warehouse that was rented by Montgomery Ward & Co., Inc. (Ward).
Ward had an agreement with Burns Electronic Security Services, Inc. (Burns), for the
installation and maintenance of fire-warning systems in Wards rental space. This contract
contained an exculpatory provision that limited Burnss liability in actions brought by Ward
or some party who had property stored in Ward[s] portion of the warehouse.
Scott & Fetzer Co., 493 N.E.2d at 1030. The detection equipment
allegedly malfunctioned and the fire spread throughout the warehouse, causing extensive damage to
Wards property as well as property belonging to adjacent tenants. The adjacent
tenants filed suits seeking recovery based on Burnss alleged negligence. The court
found that dismissal was not proper on the grounds that the contract between
Burns and Ward contained an exculpatory clause. Rather, the court found that
the clear and explicit language of the contract [did] not require that it
be construed as barring or limiting the rights of the adjacent tenants, nor
[was] such intention expressed in unequivocal terms. Id. at 1027. Thus,
the exculpatory clause found in the contract [did] not affect Burns[s] duty to
the adjacent tenants. Id.
Likewise, in Lovell¸ the Lovells owned property that was leased by Dust-Tex Rental
Services, Inc. Dust-Tex had a contract with Sonitrol of Chattanooga for the
installation of smoke detection equipment, within which was a provision that limited damages
due to a failure of services to $250. Lovell, 674 S.W.2d at
729. A fire occurred on the rental property. It was alleged
that the fire was incurred because the warning system failed to timely detect
and warn of the presence of the fire. The appellate court found
that in light of testimony regarding the intent of the contract coverage, summary
judgment was not proper. Id. at 732. In reaching this determination,
the court noted that even if the exculpatory clause was intended to include
the smoke alarm service, it would not be binding as to Mr. and
Mrs. Lovell, who were not parties to the agreement. Id.
The written contract between Muncie Liquors and Tri-Etch, as outlined above, is expressly
limited to the monitoring of the premises during the hours when the store
is closed and the alarm is activated. Since Young was not a
party to the contract, and thus never consented to the terms of the
contract, the contract simply does not impose any obligations or limitations on him.
Given that the plaintiff did not agree to the contract, the express terms
of the contract do not serve to limit the estates recovery opportunities.
Rather, the contracts provisions do not apply to the estate under these facts.
Consequently, summary judgment for Tri-Etch based on the contracts requirement that all
actions on it be brought within one year of occu
rrence was not appropriate.
More importantly, because the trial court was of the view that Young had
no tort claim against Tri-Etch, the trial court did not rule on whether
Tri-Etch had a duty to Young as a matter of tort law.
Because the courts below have not addressed the question of Tri-Etchs duty, if
any, to Young as a matter of tort law, that issue is not