Wife signs alarm company's sale/installation and monitoring contract which states that the monitoring services will be performed by ADT.  Homeowner is told that the dealer will continue to perform the needed service to the system.  Contract is assigned to ADT by its dealer after the installation.  Homeowner calls dealer for service and several scheduled appointments are missed.  Homeowner is then told to call ADT for service, a service call is scheduled, and 5 hours before the designated time for the call the home is burglarized.  These are the facts as alleged by the homeowners which were not contested for purposes of ADT's motion for summary judgment.

    This case deals with several issues of interest to the alarm industry, and it's worth reading in its entirety.  You can read the case at http://www.kirschenbaumesq.com/casesbystate.htm under New York cases.

    The homeowners sued the dealer [who had filed bankruptcy before the case was filed], ADT and Honeywell for negligence, gross negligence, breach of contract, and breach of warranty.  The lawsuit was started more than one year after the incident.  The contract had a provision shortening the statute of limitation for any type of claim to one year.

    ADT moved for summary judgment to dismiss the complaint.

    First the Court dealt with the statute of limitation issue and found that contractual provisions shortening the statutory period will be enforced if reasonable, even if contained in "contracts of adhesion" [defined in this case as one where the consumer had no ability to negotiate the terms].  The Court found that New York courts have enforced shortened statute of limitation provsions when it is reasonable and agreed by contract.  New York courts have consistenly held that one year is reasonable.  Furthermore, the provision is enforced for breach of contract claims, negligence claims and even gross negligence claims.  The Court also noted that New York courts enforce alarm contracts containing limitation of liability provisions as further support for enforcing the abbreviated statute of limitiation provision.  All in all this was a solid endorsement for enforcing the alarm contracts.

    The decision deals with the issue of assignment.  The Court states the law in New York [and elsewhere] that contracts are freely assignable absent a contractual provision to the contrary.  In this case since the alarm company who sold the system was an ADT dealer, using an ADT contract, ADT was mentioned in the contract in numerous places.  The Court had little trouble finding that the contract had been assigned to ADT and that ADT had the right to rely upon and enforce the contract provisions.

    Another interesting issue addressed by the Court was whether the husband, who had not signed the contract, was bound by its terms.  Here the Court found that he was an intended third party beneficiary [despite the contract provisions that provide that there are not third party beneficiaries], and as a third party beneficiary he was bound by the contract terms.  It makes sense that one claiming to be a beneficiary of a contract would be bound by its provisions. 

    The Court held:

    "The plaintiffs contend that Mr. Corbett is not bound by the terms of the Alarm Services Agreement because he is not a signatory to the contract. The plaintiffs argue that Mr. Corbett's claims are therefore not barred by the shortened limitations period.

    However, Mr. Corbett was present at the signing of the contract and benefited from it while he lived with Ms. Corbett in their home. Under New York law, Mr. Corbett is therefore a third party beneficiary of the contract Ms. Corbett signed, and is subject to the terms of the Alarm Services Agreement. See Schietinger v. Tauscher Cronacher Professional Engineers, P.C., 40 A.D.3d 954, 956, 838 N.Y.S.2d 95 (2d Dep't 2007) (holding husband to be third party beneficiary, and subject to the terms, of a contract signed by husband's wife for home inspection services, when husband also benefited from the services); Rector v. Calamus Group, Inc., 17 A.D.3d 960, 962, 794 N.Y.S.2d 470 (3d Dep't 2005) (same, except husband signed contract and wife was third party beneficiary). The Court therefore finds that Mr. Corbett is bound by the Alarm Services Agreement, and that his claims against ADT are also barred by the contractual period of limitations. Accordingly, the Court grants ADT's motion for summary judgment dismissing the complaint with respect to all of Mr. Corbett's claims against it."

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