In a case decided in July 2015 in the United States District Court of the District of New Jersey [Berman v. ADT LLC Civil No. 12-7705 (RBK/JS)] ADT was sued after there was a home invasion in one of its subscriber’s homes and the subscriber was bound, beaten, and forced to open his safe for the intruders.
ADT had installed the burglar alarm in the subscriber’s jewelry store and three months later in his home, promising to install the “same system”. The system installed in the jewelry store was different in the sense that it included a sound discriminator and five panic buttons. Even though the salesmen said the "same system" would be installed in the home it is unlikely the parties did in fact intend for the systems to be the same considering the subscriber contracted for greater protection at his store than at his home by entering into an additional radio back-up monitoring agreement with a different company and ADT itemized the equipment and services to be provided in both contracts and the residential contract was clear in that it did not include a sound discrimnator or panic buttons.
After the home invasion the subscriber sued ADT for misrepresenting that it was installing the "same system" in his home. For ADT to be liable the subscriber had to show that the salesman's statement was material and that it was the basis for the subscriber’s decision to have ADT install the burglar alarm in his home. The court referenced another ADT case when discussing whether the statement was material. In that case, an ADT salesmen claimed he would be installing “state of the art” equipment. Because the comment was an opinion rather than a factual statement, the court ruled for ADT since it would not have been reasonable for the subscriber to have relied on the salesman's mere opinion of the quality of the equipment.
This case is different because saying that the “same system” will be installed is a factual statement and it would be reasonable for a subscriber to rely on such a statement in expecting that the same system be installed at his jewelry store. However, the subscriber still had to show that the misrepresentation influenced his decision to have ADT install a burglar alarm system in his home. Because the subscriber had reviewed the contract thoroughly, at least enough to negotiate additional equipment and costs, and the residential contract clearly did not include a sound discriminator or panic buttons, the court held that the subscriber could not have reasonably expected the “same system” in his home and therefore ADT was not liable for misrepresentation.
This case demonstrates why it is important to train your salesmen to sign up new subscribers without going too far and exposing you to a misrepresentation lawsuit. Even more important is using properly drafted contracts, such as our Residential All in One Agreement, that clearly itemize and identify the equipment and services you will provide and which include provisions necessary to protect you from other potential claims a subscriber may bring. For assistance contact our Contract Administrator Eileen Wagda at (516) 747-6700 ext. 312 or email@example.com. You can read the case in its entirety on our website under New Jersey leading cases https://www.kirschenbaumesq.com/page/alarm-law-issues.