A recent case decided by the United States District Court for the District of New Hampshire did not involve an alarm company, but relied on an alarm company decision in granting a motion for summary judgment.

In the case, the plaintiffs arranged a snowmobile license and tour at a resort.  They were asked to sign a two-page document that bore the following heading: 

Snow Machine Tour:

    ACKNOWLEDGEMENT OF RISKS AND HAZARDS

    COVENANT NOT TO SUE

    WAIVER AND RELEASE OF LIABILITY

The plaintiffs signed the document and initialed portions, but not all. After signing the release and obtaining their helmets, the plaintiffs met their instructors. They were given a brief introduction to operation of the snow machines and were told that the tour would never travel faster than 20 miles per hour. But the instructor drove quickly during the tour and far exceeded the 20 mile per hour speed limitation he had announced earlier. In attempting to follow the instructor’s tracks in the snow, the plaintiffs lost control of the snowmobile, left the path and flipped over. The plaintiffs suffered severe physical injuries and brought suit against the property management corporation that owned and operated the resort and the tour guides, asserting claims for negligence, negligent training and supervision, vicarious liability, bystander liability, and loss of consortium. The defendants moved for summary judgment, arguing that the contractual release was both valid and enforceable.

New Hampshire law generally prohibits exculpatory contracts, but there are exceptions. Exculpatory contracts are enforceable if they do not violate public policy; the plaintiffs, or any reasonable person would have understood the import of the agreement; and the plaintiff’s claims fall within the contemplation of the parties when they executed the contract.

The plaintiffs contended here that they did not understand it to encompass claims for negligent instruction, or negligent guidance on the snow machine tour, and a reasonable person in their position would not understand the release to bar such claims. 

The court pointed out that the language in the release was broad in reach, detailed and clear. The court indicated that a reasonable person “would have contemplated that the agreements released the defendants from any negligence, not just from negligence inherent in snowmobiling.”

The plaintiffs further contended that the release was not enforceable because they failed to initial some paragraphs of the release. By signing the release, the plaintiff acknowledged that she had read the entire agreement
and agreed to its terms.

The court then referred to a previous New Hampshire case involving a security company, which the court indicated was directly on point. In that case, the plaintiff entered into a services agreement with a security corporation to provide a 24-hour alarm system. The agreement contained a limitation of liability provision on the same page as the space provided for a party to initial. The plaintiff signed the agreement but failed to initial the line next to the limitation of liability clause. The plaintiff in that case also signed the agreement below a provision “articulating a presumption that the agreement was properly executed.”

The plaintiff was subsequently fatally stabbed in her apartment. Her estate filed suit against the security alarm company, asserting claims for breach of contract, negligence, and breach of warranties based on the alarm company’s failure to properly respond to an alarm. The plaintiff argued that the limitation of liability clause was not effective because the plaintiff did not initial the line provided for that purpose, and, therefore had not objectively manifested her agreement to the waiver provision.

The Court of Appeals in that case found that plaintiff’s failure to initial the line provided did not preclude summary judgment, since the plaintiff had signed “directly below a statement of acceptance of the contract that explicitly incorporates the provisions on the reverse side of the page.”

The court therefore granted the defendants’ motion for summary judgment in the snowmobile case.

I am an alarm dealer who installs residential systems; however, our monitoring is done by a third-party monitoring station. The third-party monitoring station has now asked me to sign an agreement whereby I indemnify them in the event one of my subscribers suffers a loss and the third-party monitoring station is sued. Should I sign the agreement?

To ask Lessing Gold a question, e-mail SDM@bnpmedia.com.

If you have an agreement directly with your subscriber where all of the necessary and proper protection provisions are included in the agreement, then you have good protection from any claim that may be made against you by your subscriber. If, however, your subscriber suffers a loss and then files an action against a monitoring center and the monitoring center then files an action against you for indemnification, you could have significant exposure. There are two ways to alleviate this situation: 1. include a provision in your agreement whereby the third-party monitoring station is included in the protective provisions in your agreement, if any claim is made against you by your subscriber or any third party; or 2. The monitoring station has a direct agreement with your subscriber that includes the protective provisions which you have in your agreement.

With either one of those two protective agreements, your monitoring station should not require a third-party indemnification. With one or both of these provisions, I would not sign an indemnification agreement with your third party monitoring center.