The Legal Side: A dangerous precedent for alarm co. liability

Are alarm companies now going to be held liable for the commission of clearly criminally acts of third parties? That issues seems central in a recent case in Federal District Court in Minnesota.

Before we get into the specifics of this case, I want to note that one common legal defense the alarm industry has relied upon, at least in the cases I have handled, is that the alarm company should not be liable for damages caused by criminal acts of others. This defense concept has at least two supporting bases -- the foreseeability and superseding acts of the third party causing the event, and the contract terms which define the alarm company's undertaking or duty.

In this particular case against ADT, however, the court finds otherwise and imposes a responsibility on ADT for having not prevented the criminal act. The logic of the court moves from that premise to finding that having failed to prevent the criminal act because of at least some negligence, now ADT stands liable for 100 percent of the monetary loss since it will be jointly and severally liable together with a penniless murderer.

This case could be great example of the legal caveat that "bad facts make for bad law". Defense cases need to be handled in a careful manner and we need to be mindful that a bad decision sets precedent that the entire industry needs to live with and subsequently needs to deal with.

The Case Itself

ADT brought suit in Federal District Court in Minnesota seeking declaratory and other relief in connection with a case where ADT installed an intrusion system in a residence. A former boyfriend broke into the house and killed the former girlfriend and her current boyfriend. Four children were in the house at the time. The entire court decision is posted at www.kirschenbaumesq.com. It's a complicated decision that does not resolve the case but deals with specific legal issues narrowing the remaining issues for trial. The ADT motion was brought challenging the sufficiency of the pleadings -- the claims by claimants. Thus, allegations against ADT were generally assumed to be true for purposes of the motion and the issue before the court was legal sufficiency, not the merits of the claims.

Let's take this case in a nutshell. First the legal items: ADT claimed that it could not be sued for negligence per se, which means negligence arising out of the violation of a statute. The court agreed that claimants had not specified a statute violated and therefore dismissed that claim [claimants raised claims in counterclaims in the action brought by ADT, and I don't know why ADT took that initiative]. ADT moved to dismiss injunctive relief sought by claimants preventing ADT from engaging in certain sales tactics; that part of the motion was granted.

Other relief requested by ADT was denied. Claimants sought refund of all money paid to ADT for the alarm system and monitoring. That claim survives. ADT sought to dismiss claims by the children; that was denied and the claims survive for trial.

ADT also sought declaratory judgment regarding its exposure in the case for damages. ADT claimed that it should be potentially liable only for its share of the damages, its comparative share. Reasoning that the ex- boyfriend murdered the two claimants [who are now represented by their estates and heirs], it was the murderer who should be saddled with the lion's share of the potential damages. ADT claimed its share should be the $500 in the contract. Claimants on the other hand contended that ADT was "jointly and severally" liable for the negligence damages. What that means is that if the jury -- or trier of fact -- found ADT even just 1 percent negligent, then ADT would still be on the hook for the entire negligence damages. Since recovery from the murderer is not likely, it's ADT with the deep pocket.

The court cited its authority as follows: "A person who is liable to another based on a failure to protect the other from the specific risk of an intentional tort is jointly and severally liable for the share of the comparative responsibility assigned to the intentional tortfeasor in addition to the share of comparative responsibility assigned to the person."

In other words, ADT would be on the hook for the entire damage award if found liable at all for negligence.

The decision notes that after the motion was made ADT withdrew the part of the motion which sought dismissal of the negligence cause of actions. We don't get to see the motion in the decision so I don't know if ADT tried to enforce its exculpatory clause or limitation of liability clauses, to the extent those clauses exist in the ADT contract. Apparently ADT decided to leave that issue for the trial or later motion. Good luck.

Facts of the Case

The case has some interesting facts and for those who don't want to read through the actual decision, here are a few.

"On July 29, 2006, Van Keuren, Lee's ex-boyfriend, assaulted Lee in her home in Lake Elmo, Minnesota. On August 3, 2006, after Van Keuren had been arrested, charged, and released on bond, Lee and her current boyfriend, Hawkinson, purchased an ADT security system to protect Lee's home. Defendants allege that Lee and Hawkinson informed ADT's sales representative that they were purchasing the security system in order to protect against any additional attacks by Van Keuren. Hawkinson, who often stayed at Lee's home, told the sales agent that he had a license to carry a handgun, and that his primary concern was having enough notice to prepare to use it." (Trustee Am. Answer, Docket No. 56, P 49.)

On the day of the sale, the sales agent performed a walk-through [*3] at Lee's home. The agent agreed that exposed outside phone lines and sliding glass doors leading outside from Lee's basement were vulnerabilities that could be exploited by an intruder. (Id., PP 64, 68.) The agent allegedly indicated that with an ADT security system, if someone cut the exterior phone lines, an alarm would sound. (Id., PP 73-74.) The agent also allegedly recommended a sensor that would sound an alarm if the sliding glass door was broken. (Id., P 65.) Finally, the sales representative recommended motion detectors that would sound an alarm if an intruder entered Lee's basement. (Id., P 67.) Defendants contend that Lee and Hawkinson accepted all of the agent's recommendations, without indicating they were limited to a specific budget or that they otherwise wished to forego any relevant enhancements to their security system. (Id., P 70.)

The security system was installed in Lee's home on August 7, 2006. Defendants allege that ADT's installer did not enable a feature in her security system that would have monitored the integrity of her telephone lines. (Id., PP 103-04.) Defendants also allege that when the installer realized there were not enough glass-break detectors designated [*4] for Lee's basement, he used the available detectors for windows, and did not install a glass-break detector over the sliding glass doors. (Id., at P 123.) Finally, defendants allege that Lee and Hawkinson were not informed of additional motion-sensor options that would have made it possible to arm the sensors in the basement, but disarm the sensors on the floor of the home where they were sleeping. (Id., P 133.)

On September 22, 2006, Van Keuren broke into Lee's home again and shot and killed both Lee and Hawkinson. Van Keuren allegedly carried out the murders after cutting the phone lines to the home, breaking the sliding glass door in the basement, and walking past several basement motion detectors. The alarm system allegedly failed to go off until two of Lee's children fled through the front door. All four of Lee's children were in the house at the time of the attack, and three of the children allegedly witnessed their mother's murder."

"The Court adds that the facts of this case underscore the relevance and fairness of this approach. The core of defendants' claims against ADT is that ADT promised to provide a security system that would provide certain protections against intruders, and failed to do so. Defendants allege that as a direct consequence of these failures, Lee was left vulnerable to Van Keuren's attack. In those circumstances, allowing ADT to invoke comparative fault may well be to allow ADT to shirk the precise duty that it assumed, and possibly escape liability altogether, as many juries asked to determine who was comparatively more responsible for Lee's death -- an allegedly negligent security company or the person who actually pulled the trigger -- would likely lean overwhelmingly toward Van Keuren. Cf. Veazey, 650 So.2d at 719. In those circumstances, the Court concludes that it is likely that Minnesota would adopt the view advanced in the Restatement, and would prevent ADT from limiting its exposure to liability to the extent of its fault. Accordingly, ADT's motion for summary judgment [*31] as to the comparative fault of Van Keuren is denied.

"Defendants add in their pleadings that Hawkinson had a license to carry a handgun, and had one within arm's reach at the time of the murders. In other words, it is not inconceivable that the sounding of an alarm could have changed the tragic results of Van Keuren's attack."

About the author: Ken Kirschenbaum, Esq., is a New York-licensed lawyer practicing with Kirschenbaum & Kirschenbaum PC, a Long Island legal firm with a rich history of assisting clients in security and alarm related matters. Ken can be contacted via email at ken@kirschenbaumesq.com. His website, www.kirschenbaumesq.com, features a great supply of legal information and court rulings relevant to the security industry. You can also sign up for Ken's discussion list from his homepage.

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