December 29, 2011
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Question
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Ken
As reported in the NY Post on Dec 2, 2011, a Manhattan jewelry store has sued ADT for a burglary loss in excess of 2 million dollars. The store owner claims that the ADT contract, with limited liability clause of $1000, was forged.
There are two interesting factors here. The first is ADT limitation of liability being $1,000.00 dollars instead of $250.00 dollars and second, the claim of a forged signature. Maybe it is time for an additional signature on the contract for a 'Witness' to avoid a claim of forgery that is now seeming to become more prevalent with regards to these matters of limitation of liability. A forgery claim can hold up a lawsuit and make it very expensive to defend. What do you think?
Stu Gilbert
Superior Protection Services
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Answer
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There are often many issues to deal with in an alarm defense case, and a forged contract certainly adds to the mix complicating the defense. Many issues raised in an alarm defense case are legal issues dealing with the enforcement of contract provisions. This is an issue for the Judge and can be addressed in motions [the famous motion for summary judgment]. If there is an issue of whether the subscriber signed the contract then obviously any legal issues regarding the enforcement of the contract terms are going to have to wait. Since a forgery issue is an "issue of fact" [not law] it will have to be decided by the trier of fact [a jury or a judge sitting without a jury] and that can happen only after a trial. Most likely a judge isn't going to permit a limited trial on the issue of forgery only, so that issue will have to wait for the full trial. Not being able to dispose of a case early in the proceeding by motion for summary judgment not only increases defense costs significantly but increases the risk of losing the case, at least on the trial court level.
Because my office has a large alarm collection and defense practice we've seen cases with all kinds of defenses and issues. Forgery claims are not uncommon. You may ask, well the equipment was installed; or invoices were sent and paid. Doesn't that prove that the alarm contract was signed? No, not necessarily. The subscriber [or its management or home office] could be unaware of any written contract and assumed the system was installed without contract and that there is no contract for the continued service.
Your suggestion that the subscriber signature be "witnessed" is a good one, although not always practical. There isn't always a witness around. Also, adding a "witness" signature line may cause lots of confusion. Both alarm companies and subscribers may think that a witness is required, and witnesses may be reluctant to sign because they think it exposes them to liability, like a guarantee [which it doesn't].
Requiring a notary public acknowledgment is another way [the best way] to ensure the authenticity of the signature on the contract. But notaries aren't usually around when you need them.
One relatively easy fix is for you to get a photo copy of a driver's license of the person signing. For corporate signers ask for a business card and a driver's license.