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What’s so special about gross negligence
January 22, 2020
What’s so special about gross negligence
            One core provision of a properly written alarm contract is the agreement to exclude liability for negligence on the part of the alarm company or its subcontractors.  The provision is often worded to include breach of contract, failure to perform or negligent performance.  Years ago we added negligence to any degree in the hopes that the courts would enforce the provision despite allegations of gross negligence.
            Gross negligence is defined differently by the courts in different states.  Some definitions are, in my opinion, clearer than others.  Negligence can be viewed as a range along a continuum, starting at departure from reasonable conduct and standards and running all the way to reckless and wanton conduct.  At some point on the continuum the conduct crosses the line from negligence to gross negligence.  Some courts have defined gross negligence as a departure from even slight negligence, and others have, in my opinion been a bit clearer, calling gross negligence wonton, reckless, and willful conduct reasonably expected to injure another.   
            This is important because cases in almost all, if not all, courts hold that the exculpatory clause will not be enforced if there is gross negligence, but will be enforced if there is only ordinary negligence.  It’s rare that a court will deem conduct grossly negligence in the alarm defense case setting.  There are decisions where the court denies summary judgment, finding that the conduct might be deemed grossly negligence, but those cases, for the most part, don’t make to trial because they settle.  A denial of summary judgment does not mean that the alarm company loses, those some defense carriers may cave quickly for various reasons [and some should].  Plaintiffs often realize that they won the battle and survived summary judgment, but winning the war is going to be a much harder fought battle; one not likely to win.  Settlement range often depends on the findings in the judge’s decision denying summary judgment.
            Courts scrutinize the exculpatory clause closely, looking for reasons not to enforce it.  Guess who else has a critical view of the provision?  Correct, the subscribers.  But their objection is usually that you should at least carve out gross negligence from the clause.  In the past I routinely approved that change, and why not, it’s the law anyway.  
            But one of the 2020 Kirschenbaum Contract ™ updates is modification to the exculpatory clause to exclude gross negligence.  There were two reasons for the change.  The first reason may concern you less; its subscriber challenges to the provision.  We may as well give them the change before they ask for it.  The second reason should concern you.  A judge does not have to re-write you contract.  If the judge finds that a provision should not be enforced the judge doesn’t have to, and probably shouldn’t under most circumstances, re-write the provision so it can be enforced, at least in some intended manner.  Some alarm contract actually state that gross negligence is covered by the exculpatory clause, thereby rendering the clause unenforceable, at least as to the gross negligence.  Why give the judge the opportunity to toss the entire provision?  
            Better safe than sorry.  Update your contracts to the 2020 Kirschenbaum Contracts ™ today.  You still have an entire calendar year to get your subscribers signed up on current up to date contracts.  You’ll sleep better and your contracts will be worth more, much more, if this is the year you sell.

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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