KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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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
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Comment on working in states where you should be licensed, and aren’t
October 3, 2022
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Comment on working in states where you should be licensed, and aren’t from September 19, 2022
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Ken,
Commenting on Bob’s question regarding monitoring in states where he is not licensed. As you know I testify in law suits all over the country, mainly about account values in divorces, partner disputes, etc… In doing so I get to see some interesting cases and Bob’s situation came to mind.
I was asked to testify in a case in which an employee of a business walked out of an open door casing in the second floor of a building and fell to the ground. The insurance carrier, as is their duty, sued everyone. There was question as to whether the contractor had failed to install the door, or if the alarm company had removed it, and failed to replace it. I was retained as an expert to testify that I had reviewed the alarm company’s billing records and they had completed the alarm installation weeks before the job was completed and that they contractor must have removed the door when the accident occurred. It’s important to note here that the Alarm Company owner, and the CEO of the customer, were close friends. They got along great. It wasn’t the customer that was suing the alarm company, it was the employee, and the customer’s insurance carrier. Think about that when you install a system into your friend’s house, but don’t get a monitoring agreement with them.
The case never made it to trial, but I read all of the depositions. Here are some issues that the alarm company created due to lack of procedures:
It was very hard to tell when the install commenced. The Proposal was dated before the accident but it wasn’t signed and dated by the customer so it was just the alarm company’s word
There were contacts in the door casing, but the door itself was missing. The Alarm Company didn’t have a work order for the installation of the contacts so we couldn’t tell if they were installed during the construction (in which case the contractor would have been responsible for ensuring that the door was reinstalled), or if the contacts were installed after the contractor had signed off on the project.
There was no installation agreement with the customer, just a monitoring agreement, signed two months after the accident.
The Alarm Company wasn’t licensed in the state so they used a “subcontractor.” The “subcontractor” was an employee of another company and only had an Employee Registration (pocket card) signifying that he had undergone a background check. The Pocket Card even stated “Alarm Company Employee.” The ‘subcontractor’ was issued a 1099 and had no insurance or company name.
The installation included a fire alarm system. The ‘subcontractor,’ unbeknownst to the Alarm Company, didn’t know how to install a fire alarm so he ‘subcontracted’ the fire alarm install to an employee of yet another company. No plans were pulled or submitted, and no permit was issued. The central station didn’t even identify the account as a fire account, there were just some zones identified as smoke and heat.
There were no written agreements between the Alarm Company and any of the ‘subcontractors.’
The ‘monitoring agreement’ was plagiarized from an old ADT agreement, but it wasn’t well done. It contained several typos, called for venue in another state, got the third party indemnification backward (the Alarm Company was indemnifying the customer), made no mention of a fire system, and had some extra language regarding the Company using its “best efforts” to prevent a burglary, but warning that the “criminal element” is “very skilled at defeating alarm systems.” It was signed by the customer, but not by the Alarm Company.
The address was wrong on the monitoring agreement. It showed that the location was their Corporate Office in another state. This address was also loaded into the central station but, fortunately we weren’t dealing with handling of an alarm signal in this case.
So who cares, what did these things have to do with someone falling out an open door? Well apparently everything. The Plaintiff’s attorney deposed the Alarm Company owner, and both ‘subcontractors’ for hours and pointed out the above and then some. The main issue was licensing. He painted the subs as ignorant hacks who failed to know what they were doing, and the Alarm Company owner, as careless and grossly negligent for not being licensed, subbing the work out to the these guys, and not setting the account up property at the central station. Doing the work that they did without proper licensing was a criminal offense in that state (alright, a misdemeanor, but all that a jury needs to hear is “criminal”), so the attorney made a huge issue out of their “criminal activity.” It didn’t matter that none of these things had anything to do with the loss, his point was that these guys were obviously careless, so they were probably at fault. Keep in mind that a good litigator can tie together the invention of floor wax with the sinking of the Titanic in the eyes of twelve jurors who are just glad to get a free day off of work. The Alarm Company’s insurance carrier was waffling about whether they were covered for the loss due to the licensing issues. I was deposed for about four hours. I thought that the Plaintiff’s attorney would be asking about billing and other records but he kept asking me about my opinion of how the Alarm Company owner ran his business. I didn’t answer the questions and, fortunately, the case settled before I was served with a Motion to Compel me to answer them.
In 1949, Edward Murphy, an aerospace engineer once said: "If there's more than one way to do a job, and one of those ways will result in disaster, then man will do it that way." Run your business so as to prove Mr. Murphy wrong.
Mitch Reitman
817-698-9999 XT 101
Reitman Consulting Group
Fort Worth, TX 76133
http://www.reitman.us
TAX COMPLIANCE | DUE DILIGENCE | VALUATION | BUSINESS ADVISORY SERVICES
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Response
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I’ve found myself saying to clients asking about licensing the following:
“Look at it this way. If you needed a drivers license in each state and told me you had one only in California and intended to drive to New York, maybe you’ll make it all the way without an issue, maybe you won’t. I’m certainly not going to make that call for you.”
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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
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