Travelers Insurance to continue with lawsuit against Securitylink

Jan. 14, 2009
Insurance company claims alarm company failed to protect client's warehouse

The Florida District Court of Appeal reversed the dismissal of a subrogated insurer's action against a security company, finding that the insurer properly stated a cause of action against the security company and the issue of whether the security company fully performed its contractual duty could not be resolved on a motion to dismiss.

Travelers Insurance Co. (the insurer), as subrogee of Original Worldwide Ltd. (the warehouse owner), contracted with Securitylink from Ameritech Inc. (the alarm company) to install and monitor an alarm at Original's warehouse. The alarm company, in turn, employed Vanguard Security Inc. (the security company) to respond to alarm calls at the warehouse. According to the established procedure, when the alarm sounded, the alarm company contacted the security company to send a guard to inspect the premises. The security company guard then went to the warehouse, inspected the premises for any signs of forced entry or other suspicious activity, and reported back to the alarm company.

One weekend, the alarm company received four alarm signals from the warehouse. Each time, the alarm company called the security company to dispatch a guard to inspect the premises. On the first three alarms, the guard inspected the premises and reported no evidence of forced entry or suspicious activity. On the fourth alarm, the alarm company called the warehouse owner requesting it send someone to the warehouse. Upon entering the warehouse, they discovered a ladder descending from a broken skylight and determined merchandise was missing.

Subsequently, the insurer paid a claim on the stolen merchandise and brought a subrogation action to recover the monies paid on the claim. After several amendments, the insurer's complaint alleged negligence, gross negligence and breach of contract against both the alarm company and the security company. The trial court dismissed the claims against the security company, and the insurer appealed.

The district court of appeal reversed the trial court's judgment and remanded the case. The security company contended that the trial court properly dismissed the claims because either it owed no legal duty to the warehouse owner, or even if there was a duty, the security company fully performed.

The district court of appeal determined the insurer's allegations were sufficient to state a claim against the security company since the security company undertook, upon request, to respond to and inspect the property for forced entry or suspicious activity. Although the security company contracted to provide this service at the request of the alarm company, the alarm company customers, including the warehouse owner, were the direct beneficiaries of the contracted services. Moreover, the issue of whether the security company fully performed its contractual duty to the alarm company could not be resolved on a motion to dismiss.

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