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owning the phone lines / new personnel wants to renegotiate / tortious interference June 12, 2018

KEN KIRSCHENBAUM, ESQ 
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE 
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owning the phone lines / new personnel wants to renegotiate / tortious interference
June 12, 2018 
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owning the phone lines
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Ken
               In a world of rapidly disintegrating telephone POTS lines, doesn't phone line ownership advantage become a liability?  Since alarm panels are not manufactured to reliably use any other telephone systems but POTS lines, should we be rather speaking in terms of retaining ownership of GSM and IP communicators?
Bob Sanders
Norse Alarm & Electric Corp
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Response
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               Owning the phone lines is somewhat dated I suppose.  What a dealer needs to own or control are the communication pathways, whether they are phone numbers, lines, radio networks, radio transmitters, cellular numbers, IP addresses --- and now I am getting too technical for my own good.  The essential thing is that the dealer needs to be able to move its accounts from one central station to another with as quickly and easily as possible.
               Why is this important?  Well, a dealer may have reason to move from one central station to another for many reasons.  But upon a sale of the accounts a new buyer may want to be in a particular central station. If you don't have control over the communication pathways it's going to cost you around 5 times multiple on the purchase price because that the cost of reprogramming the accounts; something that should have been unnecessary if you owned your lines.
               By the way, owning your lines is only half the battle.  You also have to negotiate with your central station be make sure that if or when you leave the central station will provide all subscriber data electronically.  That will save the input time for the new central station, who is presumably charging you for the set-up, one way or another.
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new personnel wants to renegotiate
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Ken
               We have a commercial location (we do multiple locations for this particular company) who has a new person in charge from the original person who signed the contract and he basically freaked out on us saying the contractand the deal is ridiculous and he wants to re-negotiate. What are your thoughts on that?
Respectfully,
Megan
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Response
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               Tough call.  Legally you have no obligation to renegotiate.  But like death and taxes, the termination date of the contract will eventually arrive.  Unless you have a leased system or own and control the programming codes [which you do if you use the Standard All in One Agreement - which I know you do] you may find that the subscriber throws you out at the end of the contract.  This sort of reminds me of tough lease negotiations between a landlord and tenant.  Eventually the lease is going to expire and the good will of the landlord is going to be very important if the tenant wants to stay beyond the expiration of the lease.
               You don't want to jeopardize your relationship with the customer, unless you don't care.  I have plenty of clients who would never buckle under to a subscriber like this and would hold their ground insisting on full performance from the subscriber.  I suppose it's possible that this new person in charge could be gone by the time the contract is coming up for renewal or may change his position over time.  Unless this is a customer that you can't afford to lose I would insist on sticking to the contract terms. Once you open the door to negotiations you don't know where it's going to end up.  By the way, if you do decide to entertain negotiations, make it very clear that negotiations are just that, and that the contracts are remaining in place unless an agreement to change them is reached, in writing.
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tortious interference
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Ken
               This is the situation as described to me:
               An alarm company is monitoring in NYC a fire alarm system with an active contract in place to do so.   All of a sudden one day the 24 hour test timer signals stop.   Upon investigation it is determined that the fire alarm service company that does the fire alarm inspections has taken over the central station system monitoring by reprogramming the built in customer owned transmitter.   So the question here has to do with the recourse(s) to be taken by the original firm that provided the monitoring against the firm that took over the monitoring as to interfering with an active in place contractual agreement.   
               The original alarm monitoring company does not want to pursue and sue the customer because they provide monitoring for other building owned by that customer.   As far as the details as to how, who and why this turn of events happened in the first place, it is not known, as well as who is the new central station monitoring company is.   The customer denies any knowledge or permission for this to have taken place.   So would the best direction here be to sue or threaten to, the firm that interfered with the agreement (which would not respond when contacted) if they did not restore things as they were before within as reasonable set amount of days?   In addition, if they sue the new firm to also sue and name the central station as well so as to put pressure on the alarm company to act accordingly because they would have to defend the central station company in such a case?   That way the central station can put pressure on them too in order to set things right.
Yours truly,
F. Lee Bailey Wannabe  
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Response
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               As I read the questions I kept thinking, spit it out already.  This is a tortious breach of contract question. Original company does not want to sue the customer because there are other contracts in place.  That, by the way, is my usual advice in this kind of situation.
               Suing another alarm company of tortious interference is a very difficult case to prove, and probably not worth the litigation.  The better course would be to sue the customer on the breached contract.  This is a pragmatic answer though, and it may be necessary for one company to sue another when the tortious interference reaches an intolerable level where the expense of the litigation is justified.  
               The way you pose the question raises curious issues.  You state that the customer didn't know anything about the switch over in monitoring.   That seems difficult to believe.  But if it's true then you may have some wrongdoing on the new company who may have engaged in deceptive practices to switch over the account.  That would be actionable, but you're still going to have to involve the customer because the customer is going to have to testify.
               I don't see any cause of action against the new central station, who didn't engage in any deceptive activities or have contact with the customer directly. In other words, the new central station did not induce a breach and did not engage in tortious interference of the contract.
 
 
 
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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