Q&A - Is there liability selecting the wrong central station?

Ken:

Here is my hypothetical situation and question:

There are several central stations in a particular area and some, but not

all of them, have generator back-ups. A dealer, being aware of the lack of

back-up, still chooses to use a central station that does not have a

generator back-up. There is a loss of power to the central station, and

the central station does not receive an alarm from a subscriber's residence

due to this loss of power. There is a loss that may have been reduced if

the authorities had been dispatched sooner, a fact that would have happened

had the central station received the alarm.

Is the dealer liable for this loss because he chose to go with the central

station that had no generator back-up when he could have chosen to use a

central station with generator back-up thus avoiding a situation, at least

partially due to the loss of power?

Thanks for your consideration.

Terry Ryan

+++++++++++++++++++++++++

Answer:

The real question is, what liability does the dealer have for selecting

a particular central station?

There are far more considerations when selecting a central station than

whether it has a generator to back up power. Some central stations are UL

certified; others have additional governmental license or recognition; some

may have a good reputation and others not so good.

I am tempted to give a quick answer, which would be that if you use

proper contracts with your subscriber you should have little or no exposure

for the central station's negligence. However, I can see an issue if we

stay with the above fact pattern, because another why to ask the liability

question is "what is your exposure if you select a central station which

you don't think is suitable?". I think you may have exposure if that can

be established.

Now keep in mind I am not suggesting that a central without a generator

is not suitable. We can discuss what a good central station should have in

another discussion. For this analysis, the question raised makes clear

that the dealer knew that the selected central didn't have a generator, and

[most importantly] that dealer believed that a generator was necessary for

a proper central station. Therefore, the dealer intentionally and

knowingly chose an unsuitable central station. That dealer will be hard

pressed to explain why he chose the central once it is established that he

believed it unsuitable.

The dealer's contract with the subscriber will provide that the dealer

has no liability for the negligence of the central station, and dealers are

not liable for the negligence of independent contractors. But negligence

in the selection of a central station may be a separate theory of

liability, and if the plaintiff can establish that the dealer didn't think

the central station was suitable, or using experts can establish that no

knowledgeable alarm company could possibly accept that central station,

liability may follow.

Ken:

Here is my hypothetical situation and question:

There are several central stations in a particular area and some, but notall of them, have generator back-ups. A dealer, being aware of the lack ofback-up, still chooses to use a central station that does not have agenerator back-up. There is a loss of power to the central station, andthe central station does not receive an alarm from a subscriber's residencedue to this loss of power. There is a loss that may have been reduced ifthe authorities had been dispatched sooner, a fact that would have happenedhad the central station received the alarm.

Is the dealer liable for this loss because he chose to go with the centralstation that had no generator back-up when he could have chosen to use acentral station with generator back-up thus avoiding a situation, at leastpartially due to the loss of power?

Thanks for your consideration.

Terry Ryan
+++++++++++++++++++++++++

Answer:

The real question is, what liability does the dealer have for selectinga particular central station?There are far more considerations when selecting a central station thanwhether it has a generator to back up power. Some central stations are ULcertified; others have additional governmental license or recognition; somemay have a good reputation and others not so good.I am tempted to give a quick answer, which would be that if you useproper contracts with your subscriber you should have little or no exposurefor the central station's negligence. However, I can see an issue if westay with the above fact pattern, because another why to ask the liabilityquestion is "what is your exposure if you select a central station whichyou don't think is suitable?". I think you may have exposure if that canbe established.Now keep in mind I am not suggesting that a central without a generatoris not suitable. We can discuss what a good central station should have inanother discussion. For this analysis, the question raised makes clearthat the dealer knew that the selected central didn't have a generator, and[most importantly] that dealer believed that a generator was necessary fora proper central station. Therefore, the dealer intentionally andknowingly chose an unsuitable central station. That dealer will be hardpressed to explain why he chose the central once it is established that hebelieved it unsuitable.The dealer's contract with the subscriber will provide that the dealerhas no liability for the negligence of the central station, and dealers arenot liable for the negligence of independent contractors. But negligencein the selection of a central station may be a separate theory ofliability, and if the plaintiff can establish that the dealer didn't thinkthe central station was suitable, or using experts can establish that noknowledgeable alarm company could possibly accept that central station,liability may follow.