In a recent case in Indiana, a plaintiff filed a lawsuit against the alarm company in essence claiming that his exposure to the sound of the alarm caused permanent damage to his ability to hear.

The lawsuit consisted of four causes of action: Count I asserted a claim of common law negligence, and Counts II-IV asserted claims under the Indiana Products Liability Act (IPLA).

The defendant alarm company filed a motion to dismiss the complaint claiming that the plaintiff did not bring the claim within one year of the incident as required by the contract; that the defendant did not owe plaintiff a common law duty, and disclaimed all implied warranties related to the services and products provided by the defendant pursuant to the contract. The defendant further argued that the plaintiff's recoverable damages were limited by the contract to $500.

The plaintiff moved to strike the alarm company’s copy of the contract, attached to the memorandum in support of the defendant’s motion to dismiss, claiming that a comparison of the contract in his possession, attached to his motion to strike, revealed several important discrepancies between his version and the alarm company’s version, alleging that the plaintiff’s version was not signed by the plaintiff, nor an authorized representative of the defendant.

With respect to the plaintiff’s motion to strike, the court pointed out that the plaintiff had been a customer of the defendant for over two years and therefore by accepting the services of the alarm company for over two years, he assented to the terms of the contract whether he signed it or not.

The plaintiff argued that his claims were not based on the parties’ contract; instead, they were based on the defendant’s negligent advice and defective alarm, both of which caused him personal injury.

With reference to the claim that the action was barred, the court pointed out that the contract stated, “You agree to file any lawsuit . . .you may have against us…within one year from the date of the event that resulted in the loss, injury, damage or liability or the shortest duration permitted under applicable law if such period is greater than one year.”

The court pointed out that the defendant’s contention failed because the defendant failed to account for the second circumstance, i.e., “or the shortest duration permitted under applicable law if such period is greater than one year.” The shortest duration permitted under Indiana law for plaintiff’s negligence and product liability claims was two years, so the plaintiff's negligence and IPLA claims were timely.

With reference to the claim for common law duty, the court pointed out that the plaintiff alleged that the acts of the alarm company in advising plaintiff to expose himself to the sounding alarm was negligence and proximately caused injuries and damages to plaintiff. The court also pointed out that even though the plaintiff attempted to couch the claim as a products liability claim, it was in fact a simple breach of contract claim premised on the alarm company’s allegedly faulty device. Therefore the defendant alarm company’s motion to dismiss the first count of the plaintiff’s amended complaint was granted.

With reference to the limitation of liability defense, this is something that all alarm companies should pay particular attention to. The alarm company argued that the plaintiff disclaimed all implied warranties and to the extent his claims survived, his damages were limited by the limitation of liability provision in the contract to $500. The court pointed out that although the disclaimers were printed in capital letters, they were not “conspicuous” as required by Indiana law.

In addition, the court indicated that there was no allegation from which the court could infer that the parties engaged in a “true negotiation” of the terms of the contract. Viewing the allegations of the amended complaint in a light most favorable to plaintiff, the court found that the standard form disclaimers in paragraphs six and 16 of the contract did not bar or limit the liability of the alarm company with respect to the plaintiff’s IPLA claims. Therefore the alarm company’s motion to dismiss count IV, or in the alternative to limit plaintiff’s damage to $500 was denied.

A good question to think on: Would the court’s decision have been different, if right above the signature line of the contract, in bold print, the following were inserted? “Paragraphs six and 16 limit our liability. Read them.”

Answer:

 The question at the outset is, ‘did you or should you have known that your employee was undocumented?’ As the person doing the hiring, you have to check the proper papers to learn whether or not your employee has a green card or other citizenship documents.  If, in fact, you did not make a proper check, then, of course, there are laws which hold you responsible. I would contact your lawyer. If you have knowingly hired an undocumented worker, there could be significant consequences.  

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