ADT installed a burglar and fire alarm system in a NY residence in 2004.  Communication was over telephone line service.   In October 2008 the subscriber noted an "error message" on the key pad, and the subscriber notified ADT.  Between Oct 19 and Feb 22, 2009 ADT did not receive any test signals from the subscriber's premises.  ADT did not inspect, repair or otherwise service the alarm system.  On Feb 22, 2009 there was a fire in the residence and no signal was sent from the alarm system to ADT's monitoring center.  It was determined that telephone service had been disconnected.  Damages were close to $2 million.  Subscriber's home owner's insurer paid and commenced a subrogation action against ADT and the telephone service provider, alleging breach of duty to inspect and repair the system, gross negligence and breach of warranty and breach of contract.  To read the decision click here.


            ADT moved for summary judgment relying upon its contract with the subscriber. That contract contained a waiver of subrogation clause.  The plaintiff [sub's insurance co] conceded that the waiver of subrogation was enforceable against the breach of contract and warranty claims and argued that the waiver did not apply to the tort claims .  The tort claim theories included "a duty of reasonable care" independent of the contract and gross negligence [and further argued that public policy prohibited enforcement of the waiver of subrogation if there was gross negligence.  The Court rejected the arguments and dismissed the complaint against ADT.  Good job.


            There is a very important legal issue presented in this case that is surfacing in other cases around the country.  It's the issue of duty independent from the contract.  The general rule is that failure to perform a contractual duty, or performing it poorly, supports a breach of contract claim, not a tort claim.  If limited to breach of contract then the contract terms govern, and in the alarm industry cases, the protective provisions insulate the alarm company from liability.  Unfortunately [for the alarm industry] there are exceptions to the general rule.  In other words, there are times when alarm companies owe a duty beyond the confines of the contract - extra contractual duties.  Failure to properly perform these extra contractual duties gives rise to a tort claim.  Thus, failure to perform an extra contractual duty is negligence, a tort claim.  One seminal case is Sommer v Federal Signal.  There the alarm company was found to owe an extra contractual duty because it was franchised and regulated by NYC to monitor fire alarm systems, and that the fire department regulations were a comprehensive scheme of fire safety regulations in NYC.  You can read the Sommer case here:  https://www.kirschenbaumesq.com/article/beverly-sommer-et-al-respondents-appellants-v-federal-signal-corporation-et-al-respondents-appellants-and-holmes-protection-inc-appellant-respondent-et-al-defendant

             We were concerned that the Sommer case would open a flood gate of successful litigation against the alarm industry.  The Monitronics case is a good example, where the Court found that the telephone conversation between the central's operator and the subscriber was extra contractual conduct. [I don't agree and hope that decision gets reversed on appeal].  The same court that decided Sommer has expressed that finding an alarm company liable in tort for negligent non performance of extra contractual duties should be found only in rare cases where public interest is implicated.

             In the ADT case the Court decided that ADT did not have any special relationship with a city where it was required to do anything in particular with the fire alarm system, and ADT's obligations regarding the installation, service and monitoring of the alarm system was limited to the contract between ADT and its subscriber.

            One final argument by the Plaintiff against ADT was that the waiver of subrogation was prohibited when gross negligence is found.  The Court noted that while an exculpatory clause is not enforceable if there is gross negligence [willful misconduct] as a matter of public policy, the waiver of subrogation does not seek to exempt a party from liability but require one of the parties to contract to provide insurance for all of the parties.  The waiver of subrogation clause was enforced.

             The ADT case is a great win for the industry.  You can read the ADT case here: https://www.kirschenbaumesq.com/article/pdf/002843-vigilant-insurance-co-v-adt.pdf


                    Speaking Engagements 


October 22 - 25, 2013  Texas Burglar & Fire Alarm Association.  San Luis Resort Spa & Conference Center

Galveston, TX.  registration: http://tbfaa.org/annual-convention/   For more information contact 

Brad Shipp – 877-908-2522 exdirector@tbfaa.org; Debi Ulmer - 281 859-4569  debi@dispatchcenter.net

Classes; trade show; golf; 





December 4, 2013   12 noon EST  Register here: https://attendee.gotowebinar.com/register/4919260455763006721

     Title:  10 Things Residential Security Alarm Companies should consider BEFORE entering the world of Commercial Engineered System Fire Alarms

      Presented by:  Bob Williams, President of Briscoe Protective Systems and his Management Team. 

Briscoe Protective Systems has been in the industry for 35 Years and has made the transition from a Residential Alarm Company in the late 70’s to a Engineered System Fire and Security Company that is an SDM Top 100 Company. Find us on the web at www.BriscoeProtective.com or on LinkedIn under Companies, Facebook and Twitter@BriscoeProSys 

      Description:  There is a big difference between installing Residential Fire Systems and Commercial Engineered Fire Systems and there are “Key Factors” that Security Company’s should consider before attempting to go into this lucrative but challenging market.

      Who should attend:  Alarm company owners and fire techs.