KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Lawsuit against ADT for low temp water damage survives motion to dismiss / what happens when you can't find contract
March 28, 2022
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Lawsuit against ADT for low temp water damage survives motion to dismiss / what happens when you can't find contract
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Homeowners insurance carrier sued ADT for $700,000 for water damage to home caused by freezing pipes. According to the Complaint ADT agreed to install and monitor low temperature in the home. It's alleged that ADT failed to notify anyone of the low temperature. As I read this the tale of three blind mice kept coming to mind, but the Judge eventually got around to an acceptable decision, though this case is likely to come back to haunt the alarm industry for a long time to come. Thanks ADT, and yes, it's your fault. Why? Three reasons, at least.
First, ADT either didn't have a written contract [unusual for ADT] or ADT lost it. ADT claimed it couldn't find the contract and tried an end run, unconvincingly apparently. But the failings of the Plaintiff subrogation counsel saved ADT, somewhat, because the Complaint did not separate the allegations supporting the Complaint's three causes of action: breach of contract, negligence and gross negligence.
Second, ADT moved the case from an upstate New York State court case to a New York upstate Federal Court. Why the ADT attorneys thought they would do better in Federal Court is beyond me. For one thing, appeals in Federal Court are limited while the case is making its way to final judgment. Also, a Federal Judge will look to what the state's highest court has ruled on the issues, but it's a Federal Judge, not state court judge, trying to interpret what the state court has previously ruled. In this case the Federal Judge decided to discuss a state court ruling dealing with a large monetary NYC fire loss where New York's highest court ruled that there are times that even a breach of contract can support an independent tort claim [for negligence]. So far that NYC case hasn't had much traction adverse to the alarm industry and that is very likely to change as a result of this new federal court decision. Thanks ADT [that thank you is on behalf of subrogation lawyers and their insurance carrier clients as well as alarm customers]. If this was a state court decision there would be chance of appeal, but not in this federal case.
Third, and finally, ADT's lawyers decided to make a motion attacking the pleadings, something I just wrote about in the March 23, 2022 article, [Medical alert lawsuit survives motion to dismiss in death case in GA]. As I mentioned in that article, a pre-Answer motion to dismiss based on failure to properly plead a cause of action rarely works. What it does do is generate lots of money for the lawyers and often leads to bad decisions [bad in the sense of being prejudicial to the litigants and also making bad law, which it might in this ADT case]. If ADT didn't have a contract it could find it probably should have considered a different defense strategy that didn't include a pre-Answer motion to dismiss.
This case certainly drives home the necessity of using, getting signed and retaining proper Alarm Contracts with your customers. Do not work without a proper contract, the Standard Form Agreements, and you won't find yourself in this situation, no way, no how, as long as K&K is handling the defense.
Anyway, of course my opinions expressed in this article are my own, for what they are worth. We all wish ADT well in the case, which you can read in full on K&K's website at Alarm Law Issues / Leading cases State by State / New York / Great Northern Insurance Company A/S/O Shira White v ADT
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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
www.KirschenbaumEsq.com
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