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Lipp v. Ginger C, L.L.C.

United States District Court, W.D. Missouri, Central Division

January 19, 2017

GINGER C, L.L.C., et al., Defendants.


          NANETTE K. LAUGHREY United States District Judge

         Before the Court is ACC Defendants' Motion for Summary Judgment, [Doc. 357]. For the following reasons, Defendant's Motion is denied.

         I. Background [1]

         Plaintiffs, the surviving parents of Jack Lipp, filed suit alleging negligence against Defendants Ginger C, L.L.C., American Campus Communities (ACC), [2] and Roland Management. The suit stems from Lipp's death, which occurred after he fell off a balcony at 507 South Fourth Street in Columbia, Missouri while attending a party on December 12-13, 2014. Plaintiffs allege Jack Lipp fell because of a defective railing on the balcony.

         A. 507 South Fourth Street

         ACC Defendants build student housing and also operate and lease student housing at major universities across the United States. Defendant Ginger C is a company which leases residential properties, including rental properties for student housing. Ginger C had been assembling properties and/or options to purchase property in Columbia, Missouri to attempt to sell the assemblage to a developer for the construction of a student housing project. On April 13, 2013, Defendant Ginger C entered into a contract to purchase the property located at 507 South Fourth Street from Derrow Properties, LLLP. Derrow sold the property to Ginger C on an “as is basis, ” without providing a seller's disclosure statement.

         The agreement between Ginger C and Derrow Properties had as a special condition that the “contract [is] contingent upon approval of rezoning suitable to buyers” and “contract [is] contingent upon buyer and third party developer signing agreement for project.” On or about May 7, 2013, a broker for Ginger C contacted an Executive Vice President for American Campus Communities about an assemblage of property that Ginger C was putting together on Fourth Street in Columbia.

         On June 8, 2013, ACC and Ginger C entered into a letter of intent for the proposed acquisition by ACC from Ginger C of 3.4 acres of real property. The property acquired for the development was to be redeveloped into a student housing complex; it was not acquired to operate existing rental properties. There were twelve amendments to the Agreement of Sale and Purchase. The Seventh Amendment to the Agreement of Sale and Purchase extended the inspection period to March 31, 2015, increased the purchase price, and amended the closing of the properties to August 1, 2015.[3]

         During the inspection period, as part of its due diligence ACC retained independent contractors to conduct environmental testing, including basic environmental testing, geotechnical (including evaluation of soil) and asbestos containing material survey. The asbestos containing material survey required an entry into 507 South Fourth Street which occurred on July 24, 2013. ACC requested permission from the owners, including Derrow Properties, to make entry on their land to perform the environmental studies. ACC always planned to raze and redevelop the property, so it did not need to understand the condition of the existing structures.

         On December 16, 2013, ACC filed an application with the City of Columbia to rezone the Plan Area, which was made up of 12 tracts of land, to a planned unit development with a maximum density of 55 dwelling units per acre and to seek variances of city codes pertaining to the site and the planned development. 507 South Fourth Street was included in the rezoning application. On February 12, 2014, ACC filed an amended application for rezoning, still including the property at issue. On February 20, 2014, a public hearing was held by the City of Columbia planning and zoning commission to consider the redevelopment request. ACC asked the City Council to table the redevelopment proposal, and the City Council did so on March 17, 2014.

         A draft investment memorandum dated March 20, 2014 was prepared by Charles Carroll at ACC OP Development which discussed a verbal agreement with Ginger C. Mr. Carroll later testified in his deposition that stating there was a verbal agreement was “a poor choice of words.” On March 24, 2014, Charles Carroll wrote to Nakhle Asmar of Ginger C and stated, “Pursuant to our conversation, please move forward with leasing the subject properties for a period of no more than one year and not extending beyond August 1, 2015.” On August 18, 2014, the City Council approved ACC's application for a planned unit development and approved an ordinance approving various contingencies in the development contract and granting variances from the building height and building set-back requirements.

         Ginger C did not have funds to close on the Derrow Properties that made up part of the assemblage, including the 507 S. Fourth Street property. So that the development deal could move forward, ACC loaned $2.16 million to Ginger C so that Ginger C could close on the purchase of the Derrow Properties. The loan closed on October 22, 2014 and Ginger C and ACC OP Development entered into a Note. The loan documents included a Deed of Trust, Assignment of Leases and Rents and Security Agreement. As a condition of the loan, Ginger C had to add ACC OP Development as an additional insured. The assembled properties, including 507 South Fourth Street, closed on August 11, 2015, and titled was conveyed to ACC.

         B. December 12 - 13, 2014

         The property at 507 South Fourth Street was leased to four tenants in October 2014, and Derrow assigned its lease with the tenants to Ginger C. There was a balcony on the second floor of the property. The only way to access the second story balcony from the interior of the property was through the door in one of the bedrooms. Christopher Strzalka, the tenant whose bedroom could access the balcony, testified that he kicked the balcony railing off of the balcony prior to September 2014. One of Derrow's maintenance employees made a temporary repair to the balcony railing with two inch by four inch boards in September 2014 after Strzalka had kicked it off. Defendant Ginger C was made aware of the balcony condition and the temporary repair.

         Two of the tenants of 507 South Fourth Street, Michael Novak and Christopher Strzalka, were members of the Pi Kappa Phi fraternity at the University of Missouri in the fall of 2014. Lucas Reichert, who did not live at the property, served as the “rush chairman” for PKP Fraternity that semester. Novak and his roommates agreed to host a party on Friday, December 12, 2014 and gave Reichert permission to invite potential new members of the fraternity to attend. Reichert informed current and potential new members-“rushees”-about the party. The record reflects that PKP was actively recruiting new members on December 12, 2014, and encouraged potential new members to attend the party. Novak and the other tenants invited other non-fraternity friends to attend as well. There is differing testimony as to how many people attended the party, anywhere from “50-60” to “200, probably less.” Attendees were not asked to show identification upon entering the party, and none of the tenants asked any guest to leave.

         The only way to access the second story balcony from the interior of the property was through the door of Strzalka's bedroom, which he left open for “people he knew” to place their coats and purses. No key was needed to access the balcony, but it did have a deadbolt that could be locked or unlocked from the inside. Novak testified that he had a conversation with the other tenants and with Lucas Reichert about locking the balcony door. Strzalka testified that he locked the balcony door the night of the party. Even so, Columbia Police believe party attendees had been urinating off the deck throughout the night due to long bathroom lines inside the house.

         None of the tenants of 507 South Fourth Street personally invited Jack Lipp to the party, nor did Lucas Reichert. Molly Yrigoyen, whose brother Peter was a member of the PKP Fraternity, invited Jack Lipp to the party around 11:00 p.m. and he arrived sometime thereafter. Around 1:00 or 1:30, student Scott Campbell walked out of Strzalka's bedroom and saw Jack Lipp walk into the bedroom. No more than 15 minutes later, Campbell exited the party and saw Lipp lying on the driveway directly below the second story balcony. He was unconscious and bleeding from his head. On December 25, 2014, Lipp died from his injuries.

         II. Discussion

         In Count I of Plaintiffs' Fourth Amended Complaint, Plaintiffs allege ACC Defendants negligently caused the death of Jack Lipp by failing to maintain the balcony railing, failing to warn of the condition, and failing to inspect or repair that condition. [Doc. 184, pp. 11-19]. ACC Defendants move for Summary Judgment on Count I, asserting that no ACC entity owed a duty to Jack Lipp because: (1) it had no ownership, possession, or control over 507 South Fourth Street; and (2) no ACC entity was engaged in a joint venture, partnership, or agency relationship with Defendants Ginger C or Roland Management. ACC Defendants also move for Summary Judgment on the issue of whether or the ACC Defendants are alter egos of one another. In the event that the Court denies the Motion for Summary Judgment on Count I, ACC also moves for partial summary judgment that there is no support for a claim of aggravating circumstances.

         A motion for summary judgment “is appropriate when the evidence, viewed in a light most favorable to the nonmoving party, shows no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.” Wierman v. Casey's Gen. Stores, 638 F.3d 984, 999 (8th Cir. 2011) (citation omitted). The moving party bears the burden of establishing a lack of genuine issue of fact. Brunsting v. Lutsen Mountains Corp., 601 F.3d 813');">601 F.3d 813, 820 (8th Cir. 2010). “A judge's function at summary judgment is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Hudson v. Tyson Fresh Meats, Inc., 61');">787 F.3d 861, 868 (8th Cir. 2015) (citation omitted). “Summary judgment is to be granted only where the evidence is such that no reasonable jury could return a verdict for the non-moving party.” Smith v. Basin Park Hotel, Inc., 350 F.3d 810, 813 (8th Cir. 2003) (citation omitted).

         A. Emails as Evidence

         Plaintiffs dispute most of ACC Defendants' Material Facts that related to any alleged ownership, control, or possession of 507 South Fourth Street with citations to emails sent or received by various ACC Defendant employees or executive. Defendants deny the majority of Plaintiffs' “Statement of Uncontroverted Facts” relating to the same because “the cited material lacks foundation, and is therefore, inadmissible pursuant to Fed.R.Civ.P. 56(c)(2).” See [Doc. 439');">439, pp. 1-36]. The overwhelming majority of documents that ACC Defendants' object to as lacking foundation are the emails. See Id. at ¶¶ 3, 7, 8, 16, 17, 18, 21-27, 31-39, 42, 43, 50, 51, 68, 73, 74, 76, 81, 82, 84, 85, 87-92, 98-100, 105, 108, 109.

         The authenticity of emails is governed by Fed.R.Evid. 901(a) which provides, “To satisfy the requirement of authenticating or identifying an item of evidence, the proponent must produce evidence sufficient to support a finding that the item is what the proponent claims it is.” Emails are generally authenticated under FRE 901(b)(4), one of the examples of evidence that satisfies the Rule: “Distinctive Characteristics and the Like. The appearance, contents, substance, internal patterns, or other distinctive characteristics of the item, taken together with all the circumstances.” Factors that courts have concluded support authenticity of an email under all the circumstances include the use of the “@” symbol in the email address; that a party's name is included in the email address; that the names of senders and receivers in the headers and body of the email; the nature of the information contained in the email; and that the content of the email shows the sender is familiar with underlying facts of the case. See, e.g., Devbrow v. Gallegos, 735 F.3d 584, 586-87 (7th Cir. 2013); U.S. v. Siddiqui, 235 F.3d 1318, 1322-23 (11th Cir. 2000); and U.S. v. Safavian, 6');">435 F.Supp.2d 36, 38-42 (D.D.C. 2006).

         The emails proffered by Plaintiffs contain distinctive characteristics supporting the conclusion that they are what they purport to be: emails sent or received by individual employees and executives of ACC Defendants. The email contains email addresses using the “@” symbol, and the employees' name and the name of his or her business; the employees name is reflected in the text; and the nature and the content of the emails relate to the underlying issues in this case.

         However, the emails are proffered, in many instances, as evidence of the relationship between Ginger C and ACC or as evidence of ownership, possession, or control over the property at 507 South Fourth Street. Defendants thus argue for their exclusion under the parole evidence rule. While the parol evidence rule does not prevent the admission of relevant evidence, it prohibits the use of such evidence to contradict, vary, or alter the terms of an integrated written contract. See Missouri Department of Transportation ex rel. PR Developers, Inc. v. Safeco Insurance Company of America, 97 S.W.3d 21, 32 (Mo.Ct.App. 2002).

         “When the language is unambiguous, the intent of the parties is reflected within the language of the contract and the court will determine the parties' intent from the four corners of the document itself.” J.H. Berra Const. Co., Inc. v. Missouri Highway & Transp. Comm'n, 14 S.W.3d 276, 279 (Mo.Ct.App. 2000). ACC Defendants urge the Court not to consider the emails, because “the express agreements defined the business relationships between the parties, including the parties' intent, [so] the use of parol evidence to alter those relationships would be improper.” [Doc. 439');">439, pp. 40 - 41]. See Rosenfeld, 895 S.W.2d at 135 (court will not look at parol evidence when contract is unambiguous on its face).

         Two formal written agreements were executed between Ginger C and ACC: (1) the Agreement for Sale and Purchase of an assemblage of properties, [Doc. 358');">358-6]; and (2) a loan agreement [Docs. 358');">358-34, 358');">358-36-358');">358-38]. “Parol evidence may not be used to create ambiguity in an otherwise unambiguous contract or to show that an obligation is other than that expressed in the written instrument.” Craig v. Jo B. Gardner, Inc., 6 S.W.2d 316');">586 S.W.2d 316, 324 (Mo. 1979). Having reviewed the agreements between Ginger C and ACC, the Court agrees that the documents are unambiguous on their face, and the parol evidence rule prohibits the Court from considering contradictory emails in its analysis of whether or not Ginger C and ACC were involved in a joint venture, agency, or partnership business relationship. The Agreement for Sale and Purchase clearly states:

This Agreement and the exhibits attached hereto contain the entire agreement between the parties, and no promise, representation, warranty, or covenant not included in this Agreement or any such referenced agreements has been or is relied upon by either party . . . No modification or amendment of this Agreement shall be of any force or effect unless made in writing and executed by both Purchaser and Seller.

[Doc. 358');">358-6, p. 29]. Thus, the business relationship set out by the parties-buyer and seller-is a relationship the Court must recognize. The emails Plaintiffs submit to contradict that relationship must be excluded. See Craig, 586 S.W.2d at 324 (“While collateral facts and circumstances may be introduced to ascertain the subject matter of the contract and to aid in interpreting it, such facts cannot cause the court to read into the contract something which it does not say.”).

         Likewise, the loan documents created a business relationship of lender and borrower, and ...

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