w w w. s e c u r i t y s y s t e m s n e w s . c o m SECURITY SYSTEMS NEWS • APRIL 2007
What the Synnex case means
closely watched New in New Jersey. Synnex wanted up would have enabled ADT to ability provisions in the contract enforcing limitation of liability
Jersey appellate case aris- ADT to install a system at the new conﬁrm that the system remained were not legal under the state’s provisions in security contracts.
ing from a multi-million warehouse and to incorporate the operational during an attempted 1998 alarm licensing law. (Before The trial judge also missed the fact
dollar burglary could dramati- radio back-up from the existing burglary. 1998, New Jersey courts enforced that ADT’s monthly monitoring
cally impact the ability of alarm system at its other warehouse. Synnex also contended that similar clauses in alarm contracts fee was grossly disproportionate
companies in New Jersey, and Synnex also wanted the new sys- ADT was aware burglars exploited limiting the liability of alarm com- to the potential liability it would
possibly elsewhere, to limit claims tem to include cellular back-up. systems that relied solely on panies for negligence.) be undertaking without their
by subscribers. In the ADT installed the new cellular back-up in exactly the The trial judge placed sig- contractual limitations clauses.
case, Synnex v. ADT, a system but the existing way that the burglars had at the niﬁcant importance on a recent Courts in other states, most no-
New Jersey trial judge radio backup was incom- Edison warehouse: breaking in appeals court decision holding tably New York, have recognized
refused to enforce the patible and ultimately, to trigger the alarm, cutting the that home inspectors, licensed this principal in cases that have
alarm company’s con- never incorporated. telephone line, destroying the cel- under a state law passed on the focused on keeping security ser-
tract terms limiting its Nine months after Syn- lular back-up, hiding until police same day as the alarm licensing vices affordable.
liability to its subscrib- nex signed the ADT con- left, then re-entering the premises law, were deemed to be “profes- Based on my review of the
ers, holding that the tract, burglars entered the unimpeded. sionals” under the new state law briefs, there are several valid
state’s alarm licensing Edison facility, tripping Before the case went to trial, and, therefore, could not legally grounds on which the appeals
statute rendered the detectors that transmitted ADT asked the court to enforce limit their liability. The trial judge court can overturn the trial court’s
clauses un- Eric Pritchard signals to ADT’s the indemnity and exculpatory reasoned that alarm contractors, decision. I suspect there will be a
enforceable. central station. clauses in its contract. ADT ar- licensed under the “Alarm Profes- reversal on at least one of these
Following G C
UEST OMMENTARY The burglars cut gued that Synnex should indem- sionals Law,” likewise could not grounds. If not, the allocation
trial, the jury the telephone nify ADT against the claims of its limit their liability. of risk among alarm companies
found the alarm company negli- lines and destroyed the cellular insurer and that ADT’s liability There are dramatic differences and subscribers will change dra-
gent and awarded the subscriber’s back-up, effectively disabling the was limited by the express terms between a residential home in- matically in New Jersey and could
insurer more than $4 million. system. According to Synnex, of the contract. The trial court, spection, where a homeowner signal the beginning of a trend in
ADT appealed the decision ADT alerted police and then con- however, refused to enforce the cannot insure against a botched other states. If so, only the larg-
and the New Jersey appeals court tacted a Synnex employee, telling agreement because ADT’s con- home inspection, and a com- est and most ﬁnancially sound
scheduled oral argument for him that he did not need to go to tract required written approval by mercial alarm subscriber that can providers are likely to survive in
May 1. the facility unless ADT heard back ADT’s authorized representative, and should obtain insurance to the long term.
The facts of the Synnex case are from police. The burglars made who failed to sign the contract. protect against loss. There is also a
complicated. Here’s a thumbnail off with more than $7 million in Although the parties executed big difference between consumer Eric Pritchard is a lawyer at Klein-
sketch from my review of some equipment from the facility. riders for additional services and transactions and transactions bard Bell & Brecker LLP in Phila-
of the appellate briefs ﬁled by the Synnex’s insurers covered the equipment, which expressly af- between sophisticated, multi-na- delphia where he chairs the ﬁrm’s
parties: company’s loss and then insti- ﬁrmed the terms of the original tional companies. But what was electronic security practice. He can
Synnex, a multi-billion dollar tuted a lawsuit against ADT. Syn- contract and which were signed most surprising about the judge’s be reached at epritchard@kleinbard.
information technology provider, nex claimed that radio back-up by Synnex and ADT’s authorized decision was that he ignored com. Pritchard did not participate in
contracted with ADT to provide would have enabled the system representative, the court refused well-settled New Jersey case law the Synnex v. ADT litigation.
security at a new warehouse in to transmit signals even if the tele- to enforce the contract.
Edison, N.J., where Synnex stored phone lines and cellular back-up The trial court also held that, CORRECTION
equipment. ADT serviced a sys- had been breached. In addition, even if the ADT contract were In our Central Station sourcebook, published in February,
tem at another Synnex warehouse Synnex claimed, a radio back- enforceable, the limitation of li- we printed some incorrect information. Alarm Central LLC
can be contacted at 877-532-1500, has a range of monthly
Be a nosy neighbor
introduction of new Ethernet monitoring fees from $4 to $6, and should have been listed
based products, they realize that at as being 5-Diamond certiﬁed, with UUFX, billing services, a
any time they may be called upon dealer program, and ﬁnancing options. The Security Center
Continued from previous page is the regulatory body respon- to add new network products can be contacted at 800-437-4635.
The more complex the system, sible for managing unlicensed while maintaining the current Also in our February issue, in the story “UL SQ 561 Con-
the more important it will be to spectrum (ISM bands). The hard systems already in place. fuses in Canada,” David Currie was mistakenly identiﬁed as
have real-time access to a wire- truth is that if your neighbor has For example, installing a high- David Curry.
less network expert with the right installed an FCC-approved radio powered frequency-hopping prod-
tools and training for the job. For transceiver that is transmitting uct can consume the entire ISM current DSL and Cable offerings. the current state of the art, and in
example, mesh networks, while RF energy into your property and band at your property; thereby However, these technologies are order to improve upon this, design
powerful and flexible can be interfering with your wireless de- preventing you from installing a in licensed bands, have limited engineers will have to devise new
more of a challenge to maintain vices, there is very little recourse new wireless product down the upload speeds, required monthly technologies not yet conceived to
than simple hub-and-spoke mul- available to you. However, if road. Manage your spectrum subscriptions, and so are not squeeze more data through a ﬁxed
tipoint or point-to-point backhaul they have installed illegal power wisely now, and you will be able to easily applicable to the require- amount of spectrum.
systems. ampliﬁers, and you can measure install next-generation products ments of wireless security devices. Until this happens, our unli-
Finally, include in the project and document this overpowered without rendering your current Therefore, it appears that for the censed ISM bands will become
budget a few spares of critical signal, you do have the right to investment obsolete. foreseeable future most wireless increasingly crowded. Therefore,
components to have on hand in ﬁle a petition with the FCC to security and surveillance products like any ﬁnite resource on our
the event of an outage. Be sure have these disconnected and the New wireless networking are very likely to be limited to the planet, we must all be disciplined
to also include items such as offender ﬁned. technologies, but will these unlicensed ISM bands. and only design and implement
lightning arrestors, cabling and help? In the past several years, Shannon’s Theorem deﬁnes the systems that are efﬁcient in their
connectors that might become Protecting your investment/ tremendous advances have been maximal amount of data that can use of this limited spectrum and
damaged during storms or power future-proofing your network made in the field of wireless be carried by a given RF channel. hence play well with others.
surges. The most sophisticated wireless wide area networking. For ex- For example, a 1MHz-wide slice
network designers today very ample, WiMAX and 4G cellular of spectrum (say between 900- Ray Shilling is the vice president
Defending the RF spectrum at carefully manage the unlicensed networks will provide homes, 901 MHz) can be modulated to of sales and marketing at AvaLAN
your location As discussed in Part spectrum in their domain. Be- businesses and mobile users with transmit approximately 800,000 Wireless. He can be reached at
I, in the United States the FCC cause of the rapid growth in the a broadband alternative to the bits of data per second. This is email@example.com.