A very comprehensive case was decided by the United States District Court for the Central District of California involving the liability of an alarm company. 

In that case, the plaintiffs contracted with the defendant alarm company for security services for their home. The parties executed a residential services contract and a patrol services agreement. Under the terms of the agreement, the alarm company agreed to notify plaintiffs of any alarm activation at the home and if the plaintiffs could not be reached, the alarm company would immediately dispatch the patrol.

The alarm company received notification that an alarm had been triggered in plaintiffs’ home. An hour later, the alarm company dispatched a patrol officer to investigate. The officer reported that there was no problem, even though the alarm notification indicated that the alarm was triggered inside plaintiffs’ master bedroom and the patrol officer only conducted a perimeter check. The alarm company did not contact the police and failed to notify the plaintiffs by cell phone of the alarm activation.

The plaintiffs filed an action against the alarm company alleging a number of counts, only a few of which will be discussed. In response, the defendant alarm company filed a motion for judgment on the pleadings.

With reference to the claim for willful misconduct, the court pointed out that a cause of action for willful misconduct was not a separate tort, but simply an aggravated form of negligence different in quality rather than degree from ordinary lack of care. The court pointed out that the plaintiffs’ willful misconduct claim was premised on the same acts and omissions described in plaintiffs’ negligence cause of action. Even assuming their truth, these allegations did not plausibly give rise to an inference that defendant consciously failed to honor its contractual duties. The mere fact that defendant failed to respond in a timely manner or adequately investigate did not, in and of itself, reasonably suggest that the failure was intentional or reckless. Therefore, plaintiffs failed to state a claim for willful misconduct. 

With reference to the claim of unfair competition, the plaintiffs alleged that defendant falsely advertised services, claiming that it was the number 1 security company, that it would help plaintiffs protect their home and family 24 hours a day, 7 days a week, that it was the undisputed leader, etc. The court found that these statements constituted nonactionable puffery, since “statements that amount to mere puffery are not actionable because no reasonable consumer relies on puffery.”

With reference to the claim for breach of contract, the defendant contended that if the plaintiffs stated a claim for breach of contract, the limitation-of-damages provision in the parties’ agreement worked to limit plaintiffs’ potential recovery to the contractual agreed-upon amount. 

The plaintiffs argued that these provisions were inapplicable because California law clearly rejected contractual provisions disclaiming liability for gross negligence, willful misconduct or other violations of law.

The court pointed out, however, that the plaintiffs failed to state a claim for negligence, willful misconduct or for violation of California’s unfair competition law. Furthermore, the court pointed out that courts throughout the country had concluded that permitting an alarm company to limit its liability was not contrary to public policy. California courts had in other burglar alarm cases overwhelmingly upheld and enforced risk allocation provisions.

The court further pointed out that in a California case, the court held that most persons especially operators of business establishments, carry insurance for loss due to various types of crime. No reasonable person could expect that the provider of an alarm service would, for a fee unrelated to the value of the property, undertake to provide an identical type coverage, should the alarm fail to prevent a crime.

Therefore, the court found the risk allocation provisions of the parties’ agreement did not contravene public policy and were valid and enforceable against the plaintiffs. Therefore, the defendant’s motion for judgment on the pleadings was granted, except for the cause of action for breach of contract and that plaintiffs’ potential recovery was limited by the risk allocation provision as set forth in the parties’ agreement.

Answer: 

Answer:  An audible beep tone repeated at regular intervals during the course of the call (not only once) is an accepted form of notification for telephone recording by telephone companies under the FCC rules. The FCC expressly notes that it “currently has no rules regarding recording of telephone conversations by individuals but federal and many state laws may prohibit this practice.”

As to individuals, California Penal Code Section 632 provides that “[e]very person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, eavesdrop upon or records the confidential communication. . . shall be punished by a  fine not exceeding two $2,500, or imprisonment in the county jail not exceeding 1 year, or in the state prison, or by both. 

So, in California the party recording the call has to advise and obtain consent from the party being recorded to the taping; the beeping sound will not suffice. To ask Les Gold a question, e-mail sdm@bnpmedia.com.

Readers Ask

In California, can a telephone conversation be recorded with a beep or does the party recording the call have to advise the party being recorded that they are being recorded?

To read the answer, go to SDMmag.com. Click the Columns tab and select Security and the Law.

 To ask Les Gold a question, e-mail sdm@bnpmedia.com.