COUNSEL: Floyd, Pearson,
Stewart, Richman, Greer & Weil and Bruce A. Christensen and Charles E.
Buker, III and Larry S. Stewart, for appellant.
Preddy, Kutner & Hardy and G. William Bissett, for appellee.
JUDGES: Before BARKDULL,
SCHWARTZ and JORGENSON, JJ.
OPINIONBY: BARKDULL
OPINION: [*36]
BARKDULL, Judge.
Continental Video Corp. entered into a
contract with Honeywell,
Inc., for installation of a Central Station Burglar
Alarm for a
total cost of $815. The
contract contained the following
exculpatory clause,
"It is understood and agreed by the parties hereto that Contractor is
not an insurer and that insurance, if any, covering personal injury and
property loss or damage on Subscriber's premises shall be obtained by
the Subscriber; that the Contractor is being paid for the installation
and maintenance of a system designed to reduce certain risks of loss and
that the amounts being charged by the Contractor are not sufficient to
guarantee that no loss will occur; that the Contractor is not assuming
responsibility for any losses which may occur even if due to
Contractor's negligent performance or failure to perform
[**2]
any bligation under this Agreement. THE CONTRACTOR DOES NOT MAKE ANY
REPRESENTATION OR WARRANTY, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS, THAT THE SYSTEM OR SERVICE SUPPLIED MAY NOT
BE COMPROMISED, OR THAT THE SYSTEM OR SERVICES WILL IN ALL CASES PROVIDE
THE PROTECTION FOR WHICH IT IS INTENDED. Since it is impractical and
extremely difficult to fix actual damages which may arise due to the
faulty operation of the system or failure of services provided, if,
notwithstanding the above provisions, there should arise any liability
on the part of the Contractor, such liability shall be limited to an
amount equal to one-half the annual service charge provided herein or
$250. whichever is greater. This sum shall be complete and exclusive and
shall be paid and received as liquidated damages and not as a penalty.
In the event that the Subscriber wishes to increase the maximum amount
of such liquidated damages, Subscriber may, as a matter of right, obtain
from Contractor higher limits of liquidated damages. Subscriber agrees
to and shall indemnify and save harmless the Contractor, its employees
and agents, for and against all third party claims, lawsuits, and losses
[**3]
alleged to be caused by the improper operation of the system, whether
due to defects in the system or acts or omissions of the Contractor in
receiving and responding to
alarm signals." (Emphasis added).
[*37]
A monitoring service was available for a modest charge, plus a telephone
charge, billed directly to the customer. n[1] Continental elected to
have this service from Honeywell. Upon activation of the
alarm a
signal was to be sent to one of Honeywell's central monitoring stations
and that upon receipt of the
alarm Honeywell was to transmit the
alarm to the police and notify Continental Video's representative
by phone. Burglars broke into Continental's store and tripped the
alarm. Honeywell allegedly did not notify the police or
Continental's agent upon receipt of the
alarm. As a result of the
loss incurred Continental filed the instant complaint alleging breach of
contract; negligence; and gross negligence on the part of
Honeywell. The complaint also attacked the exculpatory clause of the
contract as being invalid, void and unenforceable because it was a
contract of adhesion due to the inequality of bargaining powers
of the parties and that the
contract is against
[**4]
public policy. Honeywell moved to dismiss the complaint on the grounds
that: (1) it fails to state a cause of action; (2) the exculpatory
clause in the
contract relieves Honeywell of any and all
liability; and (3) any liability incurred by Honeywell is limited by the
liquidation of damages clause.
The trial court entered an order dismissing the cause with prejudice
finding that both the exculpatory and liquidated damage clauses were
valid and enforceable.
n[1] Continental was free to have the
alarm monitored by anyone
it selected by the payment of the telephone charge.
We find no merit in the argument of the inequity of bargaining. First
Financial Insurance Co. v. Purolator Security, Inc., 69 Ill.App 3d 413,
388 N.E.2d 17, 26 Ill. Dec. 393 (1979); Lazybug Shops, Inc., v. American
District Telegraph Co., 374 So.2d 183 (La.Ct.App. 1979); Abel Holding
Co., Inc., v. American District Telegraph Company, 138 N.J. Super. 137,
350 A.2d 292 (1975). We do not find that the
contract was against
public policy. Central
Alarm of Tucson v. Ganem, 116 Ariz. 74,
567 P.2D 1203 (1977); First Financial Insurance Co., v. Purolator
Security, Inc., supra; Pick Fisheries,
[**5]
Inc., v. Burns Electronic Security Services, Inc., 35 Ill.App. 3d 467,
342 N.E.2d 105 (1976); Abel Holding Co., Inc., v. American District
Telegraph Company, supra.
We affirm based upon the reasoning found in Ace Formal Wear, Inc. v.
Baker, 416 So.2d 8 (Fla. 3d DCA 1982); citing with approval L. Luria &
Son, Inc. v.
Alarm Tec International Corporation, 384 So.2d 947
(Fla. 4th DCA 1980) relied on by the trial court in its order of
dismissal.
Affirmed.
CONCURBY: SCHWARTZ
CONCUR: SCHWARTZ, Judge
(specially concurring).
In setting forth my separate views concerning this case, I think it
important to supplement the majority's discussion of the operative
facts. In addition to receiving the initial charge for installing the
burglar
alarm system, Honeywell specifically and unconditionally
agreed--in return for a monthly fee paid by Continental Video--
... [to] make every reasonable effort to transmit the
alarm
promptly to the headquarters of the police; and [Honeywell] shall make a
reasonable effort to notify [Continental Video] or his designated
representative by telephone....
The plaintiff doubtlessly alleged a direct violation of this
undertaking. The amended
[**6]
complaint states that although, upon entering the premises, the burglars
tripped the
alarm, it continued to ring in Honeywell's monitoring
room and was blithely ignored by its employees for the several hours
required to complete the crime; in fact, the
alarm was still
sounding unheeded when the police discovered the break-in the next
morning and informed both Continental and Honeywell themselves.
Were the issue an open one in this court, I would not hold, as I take it
the court does, n1 that the exculpatory clause bars the
[*38]
action as a matter of law. I believe, in accordance with the directly
conflicting holdings in Ivey Plants, Inc. v. FMC Corp., 282 So.2d 205
(Fla. 4th DCA 1973), cert. denied, 289 So.2d 731 (Fla. 1974) and Sniffen
v. Century National Bank of Broward, 375 So.2d 892 (Fla. 4th DCA 1979)
that such a clause is unenforceable when, as here, the breath of a
specific contractual obligation is involved; to hold otherwise is to
render the agreement itself nugatory and meaningless. Only because,
however, this court has very recently held to the complete opposite in
the indistinguishable case of Ace Formal Wear, Inc. v. Baker, 416 So.2d
8 (Fla. 3d DCA 1982), I
[**7]
concur without enthusiasm in the decision to affirm. n2
n1 There is no question that the validity of the limitation of damages
provision could not properly have been resolved on a motion to dismiss
the complaint. Nicholas v. Miami Burglar
Alarm Co., 266 So.2d 64
(Fla. 3d DCA 1972); see, Nicholas v. Miami Burglar
Alarm Co., 339
So.2d 175 (Fla. 1976).
n2 I have taken similar positions in specially concurring opinions in
Diners Club, Inc. v. Brachvogel, 370 So.2d 443 (Fla. 3d DCA 1979), cert.
discharged, 395 So.2d 1156 (Fla. 1980); Valenstein v. Doctors Hospital,
372 So.2d 1169 (Fla. 3d DCA 1979); Norton v. South Miami Hospital
Foundation, Inc., 375 So.2d 42 (Fla. 3d DCA 1979); and Schoenbrod v.
O'Neill, 375 So.2d 42 (Fla. 3d DCA 1979), cert. denied, 383 So.2d 1201
(Fla. 1980).