The Legal Side: Case of the Missing Alarm Contract Signature

In a case I wrote about back for SIW in December, we looked at the concerns within the ADT vs. Synnex case, which saw a commercial subscriber in New Jersey hit by a burglary worth $8 million. The insurance provider for Synnex followed up by suing ADT under subrogation rights. ADT's initial request for summary judgment was denied.

At issue was the fact that the paperwork on the contract was not fully signed by ADT officials (one signature was missing), and it was argued that the waiver of subrogration in the contract was therefore not enforceable. ADT was hit for half of the insurance value, roughly $4 million. ADT subsequently appealed, arguing that one signature missing (from one of its own people) should not make a contract void.

The Appellate Court found that even though ADT did not have its home office representative sign the contract as one of the three required ADT signatures, ADT clearly approved the contract by its performance of the contract. Thus the court went on to discuss the enforcement of the exculpatory clause in the alarm contract (the initial judge had questioned the exculpatory clause in New Jersey).

The Appellate Court flatly rejected the rational of the lower court that held that New Jersey alarm companies, now required to be licensed, should not be able to rely upon an exculpatory clause. The Appellate Court found the provision consistent with waiver of subrogation provisions, describing the provision as one that required the alarm subscriber to provide for its own insurance to cover its property.

I predicted this result and I congratulate ADT's counsel for the successful appeal.

You can read my commentary about this case in a previous "Legal Side" column on SIW, titled The N.J. Case - A Problem for the Alarm Industry?

In addition, you can read the entire opinion on this case, posted on my website.

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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