SAFE Collects on West Virginia Judgment
A dispute which began in February 2004 between Security Alarm Financing Enterprises Inc. (SAFE), San Ramon, Calif., and the former Secure US Inc., Morgantown, W.V., concluded, with all of the former assets of Secure US being sold to satisfy SAFE’s more than $1 million judgment.
The dispute arose around the accusation from SAFE about Secure US improperly using confidential customer information from SAFE and was accused of “poaching” customers.
In May 2004, Secure US challenged the propriety of SAFE’s response by filing a complaint in the Circuit Court of Kanawha County, W.V. SAFE pushed back, removing the action to the U.S. District Court for the Southern District of West Virginia, and filing counterclaims for defamation, tortious interference, and unfair competition.
In November 2010, after a trial which included testimony from both former and retained customers, the Southern District ruled in SAFE’s favor on both Secure US’s claims and SAFE’s counterclaims. In addition to the compensatory damages, the Southern District awarded SAFE significant punitive damages.
To satisfy SAFE’s judgment, the court scheduled a judicial sale of Secure US’s assets. However, the sale brought up several issues, including that Secure US argued the sale of the assets to a friendly creditor served to shield the assets from SAFE’s judicial sale.
SAFE was forced to file a second lawsuit in the U.S. District Court for the Northern District of West Virginia in order to continue its efforts to collect its judgment. “In 2014, four years after obtaining its original judgment, and some 10 years after SAFE’s original counterclaim against Secure US, as a result of favorable rulings by the Northern District, a proper sale of Secure US assets was conducted,” shared Jared Isaacsohn, SAFE corporate counsel. “To clarify, by order of the Northern District, SAFE was permitted to hold a judicial sale of all the former assets of Secure US.
However, a private sale was chosen to be held instead (of a judicial sale), after it was determined by interested parties that this method would yield the highest sales price for the assets.
Select Security, Lancaster, Pa., acquired the assets of Secure US in order to extend its reach into West Virginia. At the time, Steve Firestone, president of Select Security commented to the press: “Our investment in the West Virginia market represents another step in our strategic expansion plans, and continues our mission to provide the communities we serve with superior solutions and reliable service.”
Now with SAFE’s lawsuit put to rest, Paul Sargenti, president and CEO of SAFE, provided the following statement: “I’m gratified that SAFE got the result it was entitled to. While it was a long and expensive process, this case and several others that SAFE has successfully prosecuted in the past, demonstrates that companies or individuals who choose to conduct sustained campaigns to interfere with customers’ contractual relationships with their security provider will pay dearly for those transgressions,” he stated. “This was a case not about one or two customer conversions that happen from time to time, but a targeted effort to poach SAFE’s customers through deceit, misrepresentations, and unlawful conduct to poach as many customers as possible. It is SAFE’s policy to aggressively pursue poachers wherever they may be, and make poaching an unsustainable practice.”
Peter Russ, lead counsel for SAFE at Buchanan, Ingersoll & Rooney, shared: “Not all companies have the desire or fortitude that SAFE displayed in pursuing its rights through several lengthy court proceedings. However, SAFE feels very strongly about its reputation in the industry and did what was necessary, notwithstanding multiple legal road blocks, to both secure and collect its judgment.”
This decade-long dispute may stand as benchmark case in the alarm industry, and provide a blueprint for other alarm companies on how to fight back against those who attempt to poach customer accounts without consequence, Sargenti shared.
Several requests for a comment from Select Security were not returned by press time.