KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** Bank safety deposit burglary case dismissed against installer and monitoring company / ISC meetings October 28, 2024 ************************* Time is running out. We will soon be closing the meeting time opportunities. Schedule your free private meeting with KK at ISC East No "last minute" meetings will be scheduled. *************************** If you're interested in a private [yes, it's free] meeting at ISC East [we will be meeting just outside the exhibit hall] please contact Stacy Spector,Esq at 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com. Concierge Clients will have priority. ************************** Bank safety deposit burglary case dismissed against installer and monitoring ************************** Bank safety deposit vault was breached through the roof. Floor above the vault was vacant and burglars cut through concrete and steel to get to vault. One of the boxes apparently contained $410,000 in cash and about $9 million in diamonds. Lawsuit was brought in 2015 and a Federal Magistrate Judge just issued a 40 page decision finding that the case should be dismissed based on the federal District Court having no Subject Matter jurisdiction. This bizarre case will likely end up a movie. Because of the length of the decision, most of which is fairly legal technicalities, I won’t post it here, but you can read it on the K&K website under Alarm law issues / Leading Cases / NY/ BAT LLC, Plaintiff, v. TD BANK, N.A., HALIFAX SECURITY, INC., d/b/a NORTH AMERICAN VIDEO, HALIFAX SECURITY, INC., LYDIA SECURITY MONITORING, INC., d/b/a COPS MONITORING and INTEGRATED SECURITY SYSTEMS, Defendants. United States District Court, E.D. New York. The twisted facts aren’t that hard to follow, and here’s the movie script part. Mr. B gets a call for Mrs. S to do her a favor and take out a safe deposit box in the bank where she currently has one; he agrees and tells his kid to get the vault; she does. Mrs S. winds up in Rikers Island [for you non-New Yorkers it’s not a place you want to visit] where she eventually dies from cancer. She leaves behind a few million and way more in debt. Apparently no one lets the Surrogate Court know about the box with its contents, and Mr. B starts to think it belongs to him. Then the burglary. Turns out that Mr B and a few others form a separate entity and assign the right to sue everyone for the burglary for breach of contract, breach of bailment, negligence and gross negligence. The lawsuit lingers for 9 years; loads of discovery; loads and loads of lawyer time and probably client time as well, though the claim was within the central station’s insurance coverage so that shouldn’t have caused loss of sleep, except for the “loss run” costs which will likely lead to increase in premium. By the way, the alarm system was disabled by the burglars and of course the roof probably wasn’t protected. There is mention of “alarm law” in this part of the decision: “VII. Integrated's Motion for Sanctions *36 On December 2, 2022, defendant Integrated filed a motion seeking sanctions against BAT and its counsel, pursuant to Rule 11(c) of the Federal Rules of Civil Procedure,65 arguing that there has never been any factual or legal basis to support the claims asserted against Integrated in the Fourth Amended Complaint. (Int. Rule 11 Mem.66 at 1). Integrated notes that when the initial complaint in this matter was filed in state court on August 3, 2015 – three days prior to the expiration of the statute of limitations – Integrated was not named as a defendant and did not become a defendant until the filing of the Fourth Amended Complaint on September 16, 2016. (Id. at 2). Integrated argues that now that discovery has closed, it is clear that the contract between TD Bank and Integrated, which was provided as part of Integrated's Rule 26 disclosures, specifically provided that COPS would provide monitoring services at the Avenue U Branch; Integrated had no contractual duty to and did not provide monitoring services at the Bank; and there was an explicit provision precluding third-party beneficiary liability. (Id. (citing Ex. 1). Moreover, the Bank admitted that Integrated conducted no monitoring activity at the Bank. (Id. at 2-3 (citing Ex. 2)). Integrated contends that sanctions under Rule 11(b)(2) and 11(b)(3) are warranted here because the contractual exclusion for third-party beneficiaries is determinative and binding of any breach of contract claims against Integrated and there are no facts on the record to demonstrate a claim of gross negligence against Integrated. (Id. at 9 (citing Abacus Fed. Sav. Bank v. ADT Sec. Servs., Inc., 77 A.D.3d 431, 908 N.Y.S.2d 654, 656 (2010) (holding that New York law precludes a finding of gross negligence when an alarm company fails to properly install or monitor an alarm system))).” The Magistrate Judge should have confined her decision to federal standing issues, which of course was the focus of the decision and the ultimate basis for dismissal. The findings in Abacus were misconstrued and the parenthetical [that’s the blurb describing the holding in the case] wrong. Abacus actually held as follows, and I have highlighted in red the specific sentence the Magistrate Judge refers to in her parenthetical: “The agreements contained provisions that effectively exonerated these defendants from liability for their own negligence or limited the damages recoverable therefrom to nominal sums. Such contractual provisions are generally enforceable under New York law, although as a matter of public policy, a party may not contractually insulate itself from liability caused by its own grossly negligent conduct (see Colnaghi, U.S.A. v Jewelers Protection Servs., 81 NY2d 821, 823 [1993]). Gross negligence, when invoked to pierce a contractual limitation of liability, must smack of intentional wrongdoing (Kalisch-Jarcho, Inc. v City of New York, 58 NY2d 377, 385 [1983]) by evincing a reckless indifference to the rights of others (see Sommer v Federal Signal Corp., 79 NY2d 540, 554 [1992]). This Court has consistently held that an alarm company's delayed or inadequate response to an alarm signal, without more, is not gross negligence (see e.g. Hartford Ins. Co. v Holmes Protection Group, 250 AD2d 526, 528 [1998]; Consumers Distrib. Co. v Baker Protective Servs., 202 AD2d 327 [1994], lv denied 84 NY2d 811 [1994]). Similarly, plaintiff's allegations that these defendants provided an inadequate security system, which they also failed to inspect, amount to nothing more than claims of ordinary negligence as opposed to gross negligence (see e.g. David Gutter Furs v Jewelers Protection Servs., 79 NY2d 1027 [1992]).” The case does make for interesting reading if you’re looking for a short story. Also, it has little precedential value because a Magistrate Judge makes a decision which then goes to the District Court Judge who then issues an opinion, often adopting the Magistrate’s decision, which then becomes the official decision. This case really turned on legal standing laws but is of interest to the alarm industry because of the underlying burglary. One other thing, the lack of standing was because Mr B claimed he didn’t own the contents of the box, so ultimately he couldn’t assign the box contents or the right to sue, but that’s just my quick take on condensing 30 pages of the decision. *************************** K&K Holiday Party - Save the date: December 12, 2024 ******************** STANDARD FORMS Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com