Lechmere, Inc. v. Sentry Protective Systems Corp.
SUPERIOR COURT OF MASSACHUSETTS, AT MIDDLESEX
4 Mass. L. Rep. 650; 1995 Mass. Super. LEXIS 97
December 28, 1995, Decided
December 29, 1995, Filed

DISPOSITION:Defendant's motion for partial summary judgment of dismissal
ALLOWED of so much of the plaintiff's Complaint and Amended Complaint as
seeks damages in excess of $ 250.00.

CASE SUMMARY
PROCEDURAL POSTURE: Defendant security company filed a motion for partial
summary judgment to limit damages to $ 250.00 in an action brought by
plaintiff retail store for damages resulting from a burglary.

OVERVIEW: The parties entered into a service and monitoring agreement for
burglary protection at the retail store. A provision of the contract stated
that the security company's liability for losses resulting from its failure
to perform the contractual duties was limited to $ 250. The contract also
contained an integration clause allowing the retail store to obtain a higher
limit of liability by paying an additional amount. The retail store did not
exercise this option. After a burglary at the store, an action was
instituted against the security company for negligence and breach of
contract, in which damages of $ 25,519.81 were sought. The security company
filed a motion for partial summary judgment to limit the damages to $ 250.
The court found for the security company and held that the contractual
provision precluded damages beyond the specified amount. The court noted
that the contract explicitly disclaimed damage resulting from the security
company's negligence as well as the failure to perform duties in the
contract. The court concluded that the boldface provision was sufficiently
conspicuous and that the store was a sophisticated business entity and not
an inexperienced consumer.

OUTCOME: The court allowed the security company's motion for partial summary
judgment limiting recoverable damages by the retail store to $ 250.00.
JUDGES: Smith.

OPINIONBY: SMITH

OPINION: Memorandum of Decision and Order on Defendant's Motion for Partial
Summary Judgment

Lechmere, Inc. ("plaintiff") brought this action for damages against Sentry
Protective Systems Corporation ("defendant"), with whom it had entered a
contract for security services. Defendant now moves for partial summary
judgment to limit damages to $ 250.00. For the reasons discussed below,
defendant's motion is ALLOWED.

The undisputed facts are as follows: The parties entered a Service and
Monitoring Agreement ("the contract") on September 1, 1993, for burglary
protection services at the Lechmere retail store in Danvers, Massachusetts.
A provision of the contract states that defendant's liability for loss
resulting from failure to perform its contractual duties is limited to $
250.00. n1 The contract also contains an integration clause and a provision
allowing the plaintiff to obtain a higher limit of liability "by paying an
additional amount." n2 Plaintiff did not exercise this option to raise [*2]
the liability limit.

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n1 Section 5 of the contract provides. "The subscriber understands and
agrees that if the Alarm Company or Others should be found liable for
personal injury or property loss due from a failure of the Alarm Company or
others to perform any of the obligations herein, including but not limited
to installation, repair service, monitoring or service or the failure of the
System or equipment in any respect whatsoever, the Alarm Company or Other's
liability shall be limited to a sum equal to the total of six monthly
payments or $ 250.00, whichever is greater, and this liability shall be
exclusive; and that the provision of this section shall apply if loss or
damage, irrespective of cause or origin, results directly or indirectly to
persons or property, from performance or nonperformance of the obligations
imposed by this contract, or from negligence, active or otherwise, of the
Alarm Company or Others."


n2 "In the event that the subscriber wishes the Alarm Company or Others to
assume greater liability, the subscriber may, as a matter of right, obtain
from the Alarm Company a higher limit by paying an additional amount
proportioned to the increase in damages . . ."


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On January 15, 1994, a burglary occurred at the plaintiff's store. Plaintiff
sued defendant for negligence and breach of contract, alleging that it would
not have sustained the loss had defendant properly notified the police of
the break-in. Plaintiff seeks damages of $ 25,519.81, while defendant seeks
to limit damages to the $ 250.00 specified in the contract.

Summary judgment is allowed where there are no genuine issues of material
fact and where the summary judgment record entitles the moving party to
judgment as a matter of law. Cassesso v. Commissioner of Correction, 390
Mass. 419, 422, 456 N.E.2d 1123 (1983); Community Nat'l Bank v. Dawes, 369
Mass. 550, 553, 340 N.E.2d 877 (1976); Mass.R.Civ.P. 56(c). The moving party
bears the burden of affirmatively demonstrating the absence of a triable
issue, and that the summary judgment record entitles the moving party to
judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17,
532 N.E.2d 1211 (1989).

In New England Watch Corp. v. Honeywell, Inc., 11 Mass. App. Ct. 948, 416
N.E.2d 1010 (1981), the court upheld summary judgment for a defendant
burglar protection company, on the basis that a [*4] contractual provision
disclaimed liability. The provision disclaimed liability "for any losses . .
. even if due to contractor's negligent performance or failure to perform
any obligation under the agreement." Id. The court held that the plaintiff's
claims for breach of contract and negligence failed as a matter of law
because "the defendant is relieved of liability by its disclaimer language,
which is conspicuously printed on the agreement entered by the parties." Id.

The contractual provision in the case at bar also precludes damages beyond
the specified amount. It explicitly disclaims damage resulting from
defendant's negligence as well as failure to perform duties in the contract.
The reference to failure to "monitor" is broad enough to cover defendant's
alleged failure to properly notify police of the break-in. The provision is
also sufficiently conspicuous, as it is printed in boldface.

Moreover, plaintiff is a sophisticated business entity, not an inexperienced
consumer. See Lynch v. Andrew, 20 Mass. App. Ct. 623, 627, 481 N.E.2d 1383
(1985) (in considering whether to enforce liquidated damages provision,
court noted which party had the "advantage in experience [*5] or
sophistication"). There is no evidence that the contract negotiations were
unbalanced or unfair. See Graves Equipment, Inc. v. M. DeMatteo Construction
Co., 397 Mass. 110, 489 N.E.2d 1010 (1986) (court enforced liquidated
damages provision because, in part, "there is nothing to indicate that the
disputed provision was not negotiated on an arms-length basis between two
substantial business firms").

Finally, the court finds plaintiff's use of decisional law dangerously
careless. The quotation n3 that plaintiff attributes to the Segall court
exists nowhere in the reported decision and is misleading. See A-Z
Servicenter, Inc. v. Segall, 334 Mass. 672, 676, 138 N.E.2d 266 (1956). n4

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n3 The plaintiff wrote the following in its memorandum:

And, in any event, as set forth in See A-Z Servicenter, Inc. v. Segall, 334
Mass. 672, 675, 138 N.E.2d 266 (1956), "where the liquidated damages clause
constitutes an unenforceable penalty depends on the circumstances of each
case, and customarily presents a question of fact for a trial court." (sic)

The Segall court held that "Whether a provision of a contract for the
payment of a sum upon a breach is rendered unenforceable by reason of its
being a penalty depends upon the circumstances of each case." A-Z
Servicenter, Inc. v. Segall, 334 Mass. 672, 675, 138 N.E.2d 266 (1956). [*6]



n4 Plaintiff's quoted phrase "customarily presents a question of fact for a
trial court" does not exist in the Segall decision and is misleading. There
is no language in the Segall decision which even remotely suggests that a
trial court should not decide such issues at the summary judgment stage of
litigation where appropriate.


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ORDER

For the foregoing reasons, it is therefore ORDERED that defendant's motion
for partial summary judgment of dismissal be ALLOWED of so much of the
plaintiff's Complaint and Amended Complaint as seeks damages in excess of $
250.00.