Synnex Corporation v. Adt Security Services, Inc.

928 A.2d 37 (2007)

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Nature of the Case

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Facts

P asked D to design and install a burglar alarm system for its warehouse building. After the parties reached an agreement concerning the burglar alarm system and purchase price, D's sales representative submitted a form contract to P, which they both signed on July 11, 2001. The agreed purchase price was $7,154 plus an annual service charge of $1,142 for a five-year term. The form contract contained a clause: 'This Agreement is not binding unless approved in writing by an authorized Representative of ADT.' It was never signed by an 'authorized Representative of ADT.' Two subsequent riders to the contract were executed by a person designated as an 'authorized Representative of ADT.' The form contract also contains a very broad exculpatory clause wherein P was to rely solely on its insurance for any loss from theft. P got robbed of a substantial quantity of computers and computer equipment. The intruders disabled or destroyed parts of the alarm system, including the cellular backup. After the break-in, P installed additional security features, including a two-way radio and more motion detectors in both the warehouse and control room. Mitsui Sumitomo Insurance Group paid P $7.1 million and then brought this subrogation action against D. The complaint alleged that D had been negligent both in designing the burglar alarm system and in communicating with P after it received alarm signals on the night of the burglary. P asserted claims for breach of express and implied warranties, strict liability, wanton and wilful misconduct, negligent misrepresentation, and violations of the Consumer Fraud Act. D moved for summary judgment quoting the exculpatory clause. The court ruled that the absence of the signature of an 'authorized Representative of ADT' on the original contract precluded D from relying upon the exculpatory clause. It also ruled that such a clause was contrary to public policy. The jury returned a verdict finding P and D each 50% negligent and the court and entered a judgment for $3,822,740 in P's favor. The court denied D's motion for judgment, notwithstanding the verdict. Everyone appealed.