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REPOSSESSION OF FIRE CONTROL PANEL IN TX
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Ken,
We have a customer that we installed a new fire alarm panel and control devices for and is now refusing to even pay us one cent for it. We have the job approved and accepted with our local AHJ. The payment terms were to be 30 days from day of completion (very generous terms). We tried to get our contract signed when we had approval from the city deeming it a completed system. Since that time the customer has refused to sign our contract, and is trying to make us sign theirs instead. I am wondering if I can legally repossess the fire panel and control equipment. I have already talked to the local AHJ (Dallas Fire Department) and they are ok with us taking our property back, they will put the building on fire watch once we have our panel. My question is, without our contract having been signed, are we still viewed as the legal owner of that equipment? And if so can we legally repossess it without fear of legal repercussion? If we are not viewed as the legal owner is there anything we can do besides a lien?
I keep seeing articles saying that we should be leasing our equipment, and that’s what local attorneys are saying as well; but that is just not the direction the the fire alarm industry has gone. 99% of our customers purchase the fire alarm system outright. They may lease communications equipment, but all the control equipment is bought not leased.
Thank you in advance,
Derrik A
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RESPONSE
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Fine mess you got yourself into. In a restaurant you order, eat and then pay. In the alarm business, you get a contract signed first, then you do the work. You are correct that most fire alarm systems are sold, not leased. Had the equipment been leased you could seek recovery of the equipment as your property. But this equipment was sold and delivered. You haven't filed a UCC-1 to secure your interest in the equipment as collateral for the debt of payment. You may be able to rescind the sale and seek recovery of the equipment, but that requires a lawsuit, not self help going in and removing the equipment. I think your best remedy is breach of contract, either the one you showed the subscriber before you did the work, even though unsigned, or breach of a verbal agreement, which most certainly required payment.
Right now your focus is getting paid for your labor and equipment, but things can get much worse. What if there is a fire loss and you get sued. While a court may recognize that you're entitled to get paid it's unlikely the court will enforce the protective provisions in your alarm contract that were never approved or signed.
So unless Texas has some peculiar self help law that I am not aware of I think you are left with a breach of contract claim for monetary relief, rescission or mechanic's lien. You may still have time to file a mechanic's lien against the real property, not the equipment you installed, and then enforce the lien. Using a rescission theory you could seek to recover the equipment. The Fire All in One gives you the right to file a UCC-1, which gives you a lien on the equipment. Then, instead of an action at law for monetary relief you would be able to sue for replevin of the collateral, the fire alarm equipment you installed.
The building does not have fire alarm monitoring and that may be enough to get the fire marshal to shut down the building or impose a fire watch. The Fire All in One would have also made clear that all programming of the system was your intellectual property, making it hard for another fire alarm company to come in and take over the system. I am tempted to recommend that you remotely access the system and shut it down because you're not done with your installation, but it appears that you are done, the system was inspected and approved and you're sitting around waiting for your payment. It's now the subscriber's system. Sue for breach of contract.
And do not do any work without a contract signed in advance. That includes installation, monitoring and service. If you don't have the Commercial Fire All in One then get it today and use it. It's the premier fire alarm agreement and if you have it there is no way you will do a fire alarm job without having it signed, no matter how hot it gets down there in Texas.
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