I've been asked many times if I know of a case where there was liability for using
dummy cameras. Here you go:
The entire case, from an Appellate Court in Vermont, is posted on my web site at
http://www.kirschenbaumesq.com/vermont1.htm.
Here are facts taken directly from the Court's decision.
"Two separate dealers of jewelry and coins appeal from summary judgment in favor of a company from which they leased display booths in the Antiques Mall at Quechee Gorge Village (the Mall). Following losses from theft, plaintiffs, Timothy Puro and Steven Yoken, alleged negligence on the part of the landlord and that they were fraudulently induced to lease the display booths by the Mall owner's misrepresentation of the Mall's security system and practices. Based on the same facts, plaintiffs also alleged negligent misrepresentation and a violation of the Consumer Fraud Act."
"In reply, defendant argued that an exculpatory clause in its agreement with plaintiffs precluded any recovery. The superior court granted defendant summary judgment on that basis. Since we find that defendant is not entitled to summary judgment on the fraud and negligent misrepresentation counts based on the exculpatory
clause, we reverse and remand."
"The Mall contains about 450 booths. Plaintiff Puro leased a display booth in 2005 to sell coins and currency. Plaintiff Yoken leased a display booth in 2002 to sell high-end custom jewelry. After hours on September 7, 2005, a thief or thieves broke into the Mall through the rear door and quickly stole jewelry and coins from plaintiffs' display booths. The alarm sounded and the security company notified the police. By the time police arrived, the thieves had fled."
"The Mall contains security cameras, some of which were attached to video recorders, but the images of the thieves were not recorded because the cameras were not operating at the time. The stolen merchandise was never recovered. Plaintiff Puro lost goods valued at $ 25,293; plaintiff Yoken lost goods valued at $ 31,698."
"Central to this case are defendant's representations to plaintiffs about the presence of security at the Mall. Both plaintiffs received information about the Mall's security system from at least three sources on which they might have relied, in addition to any observations they may have made themselves. First,
each spoke with the Mall's general manager, who was in charge of security. Second, each signed an agreement including the exculpatory clause. Third, each received a handbook with information on the Mall's security practices at the time each signed the agreement."
"Before signing the agreement, each plaintiff discussed the Mall generally
and its security system specifically with the Mall's general manager. The
manager allegedly stated to plaintiff Yoken that the Mall had "video cameras everywhere" and that he lived "within minutes of [the Mall], and if anything ever happened [he] would be there first." In a similar conversation with plaintiff Puro, the manager allegedly stated that the Mall had an alarm system, infrared sensors, and cameras covering every booth at all times. He also described the alarm system as "state-of-the-art." "
"These alleged statements by the general manager are taken from depositions by plaintiffs and are somewhat more extensive than those in the trial court's decision. The deposition of the general manager suggests that these statements could be in keeping with information he typically provided, although he stated that he could not remember the specific statements he made to plaintiffs, given the number of conversations he had with potential dealers."
The Exculpatory Clause - in the lease [not alarm contract]
"Each plaintiff signed the "Quechee Gorge Village Dealer Contract." The agreements were identical and included exculpatory language stating in relevant part that defendant's:shareholders, directors, officers, agents, employees, and staff shall not be held liable for any damages to or loss of property from any cause whatsoever, including but not limited to fire or theft, it being understood that to the extent desired and at [the dealer's] option, that this property shall be insured by the undersigned dealer/licensee. "At the time of signing, each plaintiff received a copy of the "Quechee Gor Village Dealer Handbook." In a section headed "Security," the handbook stated that:
The Antique Mall is equipped with cameras and customer service personnel who watch over your merchandise. In addition, all dealers while stocking their booths, are asked to report any suspicious activity to the manager. The building is secured by an alarm system with a direct link to the central office. All doors are alarmed as well as infrared motion detectors in strategic areas. The entire building is covered by a sprinkler system in case of fire. All keys for locks are accounted for on a daily basis. They are signed out and in each business day."
"The Mall did, in fact, have security cameras and an alarm system, although plaintiffs argue that important information about the Mall's security was either misrepresented or omitted. Three black and white cameras on the ground floor recorded onto a VCR, but during business hours only. The video footage was retained for seven days, but not routinely reviewed. As they were available, mall staff monitored a rotation of live images from these cameras at the checkout-counter. They additionally monitored unrecorded images from sixteen other cameras that were displayed at the checkout-counter on a screen divided to show views from four cameras at once. The Mall also used non-functioning dummy cameras as a theft deterrent. The Mall's exterior was not monitored by cameras."
"Along with the cameras, the Mall had an alarm system administered by a security company with infrared motion sensors and sensors on all of the doors. When triggered, the alarm alerted the security company directly, which contacted defendant's security manager and then the police. A loud on-site siren would also sound. There was no signage to indicate the existence of this alarm."
The court upheld the exculpatory clause for the negligence claim, finding that:
"We note additionally that exculpatory clauses relating to
security services are routine in business agreements and are virtually
unanimously upheld by the courts"; but the court went on to hold:
"We agree with plaintiffs, however, that the exculpatory clause does not bar the fraud, negligent misrepresentation, or consumer fraud counts."
The case goes on to discuss holdings in various other states on the issue of fraud, misrepresentation and violation of consumer protection acts. Read the decision at http://www.kirschenbaumesq.com/vermont1.htm. Keep in mind that the defendant in this action is the landlord, not the alarm company or monitoring company. Though not discussed the quoted exculpatory clause would not be sufficient in an alarm contract. You need to be careful how you word the exculpatory clause and the limitation of liability clause. Get proper contracts at www.alarmcontracts.com. Read leading cases from all states at http://www.kirschenbaumesq.com/casesbystate.htm