Nirvana International, Inc. v. Adt Security Services, Inc.

Facts

The contract between P and D consists of three double-sided pages. The first page sets forth the service and price terms and the signatures of P's owner (Amit Sharma) and D's sales representative. Above the signature line, the contract warns that 'SECOND AND THIRD PAGES ACCOMPANY THIS PAGE WITH ADDITIONAL TERMS AND CONDITIONS?' The second page itemizes the service and equipment that D agreed to provide. The third page contains a bank authorization for billing signed by Sharma. Page 4 is titled 'IMPORTANT TERMS AND CONDITIONS' and page 5 has the same title, followed by '(continued).' Term 'E,' which appears on page 6, is titled 'LIMITATIONS ON LIABILITY' It provides, in relevant part, that: D IS NOT AN INSURER. THE AMOUNTS D CHARGES CUSTOMERS ARE NOT INSURANCE PREMIUMS. SUCH CHARGES ARE BASED ON THE VALUE OF THE SERVICES, SYSTEM, AND EQUIPMENT ADT PROVIDES AND ARE UNRELATED TO THE VALUE OF CUSTOMER'S PROPERTY. The page goes on to detail that P is required to obtain insurance to cover the value of its property, and required to waive any right it might otherwise have against D. It then says that: IF NOTWITHSTANDING THE PROVISIONS OF THIS SECTION E, D IS FOUND LIABLE FOR LOSS, DAMAGE OR LIABILITY UNDER ANY LEGAL THEORY DUE TO THE FAILURE OF ITS SERVICES, SYSTEM OR EQUIPMENT IN ANY RESPECT, ITS LIABILITY SHALL BE LIMITED TO A SUM EQUAL TO 10% OF THE ANNUAL SERVICE CHARGE OR $1000, WHICHEVER IS GREATER . . . . At the bottom of page 6, there is a signature and date line, under the words 'Customer Acceptance.' Beneath that, in a boxed off area, the following language appears: BY CUSTOMER INITIALING IN THE SPACE PROVIDED BELOW, CUSTOMER ACKNOWLEDGES AND ADMITS THAT CUSTOMER HAS READ THE IMPORTANT TERMS AND CONDITIONS SET FORTH ON PAGES 4 THROUGH 6, INCLUSIVE, OF THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL SUCH TERMS AND CONDITIONS. P read, understood, and agreed to pages 1-3 by signing and initialing each of them. P told D's representative he could not agree to the terms and conditions on the remaining pages until he reviewed them more carefully. P later decided that the terms and conditions on those pages were not acceptable. P did not communicate this to D. D installed its alarm system, without the pages being initialed and P did not alert D that he objected to any of the terms and conditions. P paid the monthly monitoring fee of $44. P was robbed. A hole had been cut in the ceiling to the office, from which a ladder remained hanging. The door to the safe had been completely sawed off - a process the police officer speculated must have taken at least 45 minutes. The safe was empty. Footage from P's own cameras showed that a flashlight was flashed on the sensor D installed. The burglars apparently wanted to see if the alarm had alerted the police because it was not until 11:40 pm that the video shows one of the burglars lowering his head down into the camera frame. The video then shows one of the burglars pulling the cable out of the video recorder, after which the video shuts off. P claimed a loss of $2.4 million. D disclaimed liability for losses of more than $1000, relying on the limitation of liability contained on page 6 of the contract. D produced a 'central storage' copy of the contract that showed Sharma's signature on page 6. P alleges that Sharma never signed 6 and that the signature on D's copy was a forgery. P sued D for breach of contract, negligence, and gross negligence, seeking the full extent of its $2.4 million loss, and for forgery/fraud, seeking to recoup the expenses of retaining the handwriting expert to prove the forgery. D filed an earlier motion to dismiss. P amended its complaint. D re-filed its motion.

Issues

Rule of Law

Holding and Decision

Legal Analysis

© 2007-2024 ABN Study Partner.