A recent case, filed in the United States District Court for the Eastern District of Wisconsin, involved an emergency medical response service. The deceased had purchased an alarm company service and entered into a Home Health Security Services Contract with the defendant. The package included a medical alert system installed in the home. The customer could press the alarm button whenever she was in need of medical assistance and the company would attempt to contact her through a two-way voice system or by calling the customer’s telephone number. If the alarm company could not confirm that she was in need of assistance, trained employees would reach out to her emergency contacts or paramedics.
When the customer triggered her alarm, the emergency medical dispatcher (EMD) attempted to contact her on the two-way intercom system, not receiving any response, and called the telephone, which rang numerous times before she answered. The defendant indicated that the woman told the operator on four occasions that “she was fine.” The plaintiffs, however, allege that her “speech was slowed” and her responses indicated she was disoriented. The EMD did not call any emergency contact nor the paramedics.
Sometime later, the woman’s daughter called her and immediately suspected a possible stroke. She was taken to the hospital where the doctors discovered that she likely had suffered a stroke and that she was outside the three-hour window of time advocated for early stroke treatment. She died approximately five days later.
The plaintiffs filed a complaint against the defendant alleging four claims over which the court took jurisdiction: Breach of contract, negligence, negligent hiring and fraudulent misrepresentation.
The defendant filed a motion to dismiss, arguing that it fulfilled its contractual obligation to the deceased: It did not contract to diagnose her over the telephone, only to contact her if the alarm was activated; and further asserted that even if it did fail to fulfill its contractual obligations, she contractually stipulated to $250 in damages.
The court denied the defendant’s motion to dismiss the breach of contract claim as the plaintiffs alleged that there was a valid contract, that the defendant breached its duty under the contract and that the deceased suffered damages as a result.
The court did grant the defendant’s motion to dismiss the negligence complaint, however, determining that whatever duty the defendant and the EMD owed to the deceased existed only because she entered into a contract with the defendant. Therefore the plaintiffs do not have an independent claim for negligence. The same concept also applied to the common law complaint for negligent hiring, training or supervision, and that complaint was also dismissed.
With reference to the plaintiffs’ final claim for fraudulent misrepresentation, they alleged that the defendant represented to the public that it employed trained professionals as EMDs who “will deliver a fast and appropriate response to an alarm, including notifying emergency medical personnel and/or contacting emergency contacts.” The defendant argued that “trained professionals” was a common advertising term capable of different interpretations and that because “trained professionals” is a subjective term, the plaintiffs cannot prove that it was false.
The court suggested that the question of whether the EMDs were “trained” and whether they were “professionals” are questions of fact to be determined by a fact-finder. At the pleadings stage, it is not the court’s role to determine whether the phrase “trained professionals” meets the definition of “puffery” under Wisconsin law.
But the court added that at this point, the plaintiffs have sufficiently alleged that the defendant made a factual representation, intended to induce people to use its services, and that the representation was untrue or misleading and resulted in damages.
We own an alarm company and we are negotiating a fairly substantial commercial agreement with a potential subscriber. The subscriber has now advised me that its insurance company is requiring my company to sign an indemnification in favor of the subscriber in the event there is any loss. Should I sign the indemnification?
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No, you are better off letting this account go elsewhere. In your contract with your subscriber you have contract provisions protecting you if there is a loss and particularly if the loss is caused by the negligence of your company. In addition, you probably have a provision whereby your subscriber indemnifies you in the event any third party makes a claim against you, the provider of alarm services. By signing an indemnification in favor of your subscriber you are completely emasculating the protection provisions you have in your contract.
Your subscriber should have liability insurance covering the subscriber for any potential loss that they may sustain as a result of a fire, burglary, etc. Their insurance carrier is seeking to have you indemnify the subscriber, which effectively indemnifies the insurance company for losses they are obligated to pay under their policy. The subscriber’s premium is based on the amount of insurance protection they are receiving.
Keep in mind you are not an insurer. You are charging your subscriber based on the value of the service you provide and not on the value of the premises or its contents. If you indemnify your subscriber for any loss, I believe there is a strong probability that your insurance company may deny coverage.
Do not sign the indemnification.