Security and the Law: Court Upholds Limitation of Liability to $250
In the case at hand, the plaintiff sued the defendant alarm company for negligence, breach of contract and wantonness for not reporting to the police all alarms on a certain evening when the building was burglarized and burned to cover up the theft.
On the night in question, the alarm company received a signal indicating that one of the rear doors of the business or the outside siren had been tampered with. The alarm company notified the business owner. The alarm company also notified the police of the signal.
Sometime later that night, another series of signals were received, and the alarm company dispatcher did not inform the police of the signals. She did not notify police because she had notified them after she received the first signal and believed that the latter signals were caused by the police checking the building.
The police investigated the building after the first alarm, but did not investigate the rear of the building because it was surrounded by a fence.
Later that night, the alarm company received another signal and notified the police. Additionally, the alarm company notified the police of the fire alarm because it also had been activated and was different from the other alarms. The police notified the alarm company that the building was on fire. The alarm company could not contact the business owner, and the building was destroyed by fire.
The business owner sued the alarm company, and the alarm company moved for summary judgment. The trial court denied the motions for summary judgment as to the negligence and breach of contract claims. The case went to trial. Despite the fact that the contract limited the damages to $250, the jury found in favor of the plaintiff and awarded $200,000 in damages.
The alarm company moved for a judgment as a matter of law because of the limitation of liability provision in the contract. The court denied the motion but dismissed the breach of contract claim.
The court on appeal pointed out that the alarm company asserted for the first time on appeal that as a matter of law, it did not owe the business owner a duty, and that even if it did, the contract exculpated the alarm company. The business owner argued that the limitation of liability clause was ambiguous and unconscionable.
The appellate court upheld the judgment of the trial court as to the business ownerâ€™s negligence claim. However, the court held that the contract with the alarm company limited the liability of the alarm company to $250. The court therefore reversed the judgment of the trial court and limited the damages awarded to the amount of the limitation of liability clause.