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Identifying and retrieving your equipment March 15, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Identifying and retrieving your equipment March 15, 2017
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Next webinar March 28, 2017 - see schedule below
TitleAll You Need To Know About Alarm dealer program contracts - getting in and getting out
Register here: https://attendee.gotowebinar.com/register/7359323076355955715
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Identifying and retrieving your equipment
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Ken,
    I don’t think I have seen you address this issue recently.  
    Our company clearly and contractually retains ownership of all of our AES radios. Occasionally over the years, if we lost an AES account to a competitor, and they communicated with us, we would allow them to pull out just the transceiver and send that along with another radio to us. We felt that since this did not force the competitor to install a radio and simply take ours over, as long as they made us whole, we were being more than fair. We do create service tickets to pull our radios on canceled accounts, but sometimes we will leave them in place if there is reason to believe the new owner/tenant will be using our services.
    We recently had an AES customer sell one of his buildings. We did not immediately remove the radio as we thought the new owner would be using us for fire alarm monitoring. When we found out that we had lost the business, we went out to retrieve our radio. We often find them sitting in the fire control room. We found that the competitor had placed the fire system on-line using our radio after just replacing the radio transceiver. I reached out to the company (who we have worked with before) and asked for our transceiver and a radio. They claimed that they had no way of knowing that the customer did not own the radio, so they would only send our transceiver to us, which they did. We have since started labeling our radios “Property of...” but this one was not marked in that manner. I have two questions:
    1)   If we had gone out and pulled our radio out after the fire system was on-line and notified the AHJ that the system was off-line, what exposure do we create for ourselves?
    2)   We have since notified this competitor that we never sell our radios. If this were to happen again is there any recourse to this competitor if they use one of our radios again for interfering with our ownership and recovery of our equipment?
Please withhold name, company, and location
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Response
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    Good question.  Because my alarm law practice started representing alarm companies in New York City this issue came up often.  It wasn't radios then, it was the entire leased system.  The preferred business model then for commercial accounts was to lease the alarm system.  Our Standard Form Agreements still offer "leased" versions for security and fire installations.  Instead of discussion should you sell or lease, pros and cons of each business model, let me address your specific questions and perhaps you can glean a perspective of the leasing business model.
    You do need to identify your equipment as your property.  You can do it a number of ways, from stickers on the panel, notice on your decals, signs near the panel, etc.  Another way is to file a UCC-1 Financing Statement stating that the equipment is owned by you.  This is not the purpose of the UCC-1 [which is used to perfect a security interest in collateral rather than declare ownership] but it may be effective to put a new owner of the premises on notice.  It's not likely to be given any effect for a competitor taking over the system since that competitor would have no reason to do a UCC search.
    "Pulling" your radio or other equipment could prove challenging.  You have no right to access to the premises and you would be trespassing if you don't have permission to enter and remain on the property.  Unless you own the entire system you would be interfering and potentially dismantling a system you don't own.  The subscriber may dispute your ownership.  While leaving your equipment on-site hoping that a new owner will engage you or that your old subscriber will continue paying you and restore the relationship, may be construed as an abandonment of the equipment.  The subscriber is not obligated to store it for you and certainly if you're offered the opportunity to remove the equipment, and don't for whatever reason you may have, the subscriber or new owner may be justified in treating the equipment abandoned.  Engaging in this "self-help" could get you arrested for trespass or theft.  If you really want the equipment back then you should avail yourself of the offer, or demand, by the subscriber to remove the equipment, or you should make the demand promptly for removal and then follow through if permitted.  The Standard Form Lease offers another alternative, your option to deem the equipment sold for the "agreed upon price" which is stated in the lease.  The sale price is usually sufficient incentive for the subscriber to permit removal, or sufficient for you to allow the subscriber to pay for it and retain it.
    If your equipment is properly labeled, or you have effectively put the other alarm company on notice that the system or equipment is leased and your property, you could argue that the competitor has converted your property.  Conversion is a tort action [also criminal, but not likely going to be prosecuted] and you can sue the competitor and the subscriber for conversion.  Your damages are likely to be the value of the equipment at time of conversion.  We have argued in these cases that the value should be the fair market value of the installed and working system, which would be considerable higher than used equipment sitting in a box or available for purchase [see The Alarm Exchange for those opportunities].  Sometimes the lawsuits get settled and everyone is more of less content with the outcome.  Going all the way through trial is likely to be a costly endeavor and not worth the effort or expense unless it's very extensive system.  Another way the Standard Form Agreements deals with this issue is providing that all programming remains the property of the alarm company.  Reprogramming a fire alarm system in large building may be costly enough to encourage the subscriber or new owner to stick with you.
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WEBINARS:  Sign up for any or all of the webinars that interest you.
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FREE Webinar Series "All You Need To Know About" alarm industry issues. 
Register for one or all.  Each presentation scheduled for half hour to hour.  Not recorded.
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TitleAll You Need To Know About Alarm dealer program contracts - getting in and getting out
When: March 28,  2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about honeypots/trappings of dealer program contracts and how difficult they are to get out of. 
Who should attend: Alarm company owners.
Presented by: James Babbitt, Esq. General Counsel, RMR Capital Group jbabbitt@rmr-capital.com; 952 467 8610
Register herehttps://attendee.gotowebinar.com/register/7359323076355955715
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TitleAll You Need To Know About Getting Top Dollar for your  Alarm Business -sale or financing
When: April 11, 2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about how to maximize the value of your alarm business and position yourself for sale or financing
Who should attend: Alarm company owners.
Presented by: Rory Russell, Acquisition Funding Services, www.afssmartfunding.com 888 551 0476
Register here: https://attendee.gotowebinar.com/register/3874048237745402369
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TitleAll You Need to know about Internet security and why is it relevant for the alarm industry 
When: April 25,  2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: Discussion of securing Internet devices.  Attacks by Mirai and other botnets and disruption to Internet services around the world made possible because of the millions of poorly secured cameras, DVRs and other installed network devices. 
Who should attend: Alarm company owners, general and technical managers
Presented by: Securifi, a leading router and smart home hub company, soon to be offering its own comprehensive Total Security Solution (Monitored Security + IoT Security + Parental Controls + Malware Blocking) to the alarm industry.  Rohit Somani     rohit.somani@securifi.com    855 969 7328  
Register here:  https://attendee.gotowebinar.com/register/6899604070803705091
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com
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