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

ADT case in federal court could potentially establish precedent despite clear criminal act from a third party


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."

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