Alarm companies use the term “central station” to mean their monitoring station….but it has a VERY specific meaning. It means it is UL Listed or FM Approved.
The alarm industry’s attorney outlined a lawsuit in his daily email that involved a home burning that was NOT protected by a central station. His email of the summarization of the case is provided below.
Use a company that is UL Listed and FM Approved!
Guard Tronic
Proven Property Protection Since 1959
(800) 542-7866
info@guardtronic.com
From Ken Kirschenbaum (red font is mine)-
Homeowners in Jackson, Wyoming had homeowners insurance covering loss by fire and other casualty. While on vacation the house burned down. The homeowner carrier paid at least $2.5 million and, exercising its subrogation rights, sued a company providing natural gas to the residence claiming that the gas distribution system in the house was defective, allowing gas to leak into the house and explode.
The gas company, defendant, claimed the insurance company plaintiff failed to mitigate its damages because, at time of binding the insurance and prior to the fire loss, the carrier had an inspection of the house. The inspector found and recommended, among other things:
“It was noted that the insured is not currently fully protected by a central station alarm system. For the protection of the home, it is recommended that a full central station alarm system be installed. The burglar alarm should include at a minimum, contacts on all exterior doors and interior motion detectors in the main hallways on each level.
The fire alarm should include smoke detectors covering all living areas. There are no heat sensing devices located in the areas that contain heat sources including the mechanical room, garage and kitchen area. This is a high value residence and the responding fire department would need immediate notification to effectively deal with an emergency at this home. It is recommended that the current alarm system be upgraded to include heat detectors in the above mentioned areas. This would greatly increase the effectiveness of the current alarm system.”
The carrier never provided this inspection report to the home owners and never insisted or even recommended the suggestions regarding the fire and burglar alarm. The gas company defendant contended that this constituted a failure to mitigate its damages and raised the issue as an affirmative defense in its Answer to the Complaint. The Plaintiff carrier moved for summary judgment to strike the affirmative defense.
Defendant’s position was crystalized by the Judge as:
“Defendant should be allowed to argue that AEIC failed to mitigate the damages at the Property by failing to take any action on the information it received from the Castle [home inspection] Report. Whether, and to what extent, AEIC failed to mitigate is a question for the jury.”
The Judge however followed the law, noting:
The “[d]octrine of ‘mitigation of damages,’ sometimes called doctrine of avoidable consequences, imposes on [an] injured party duty to exercise reasonable diligence and ordinary care in attempting to minimize his damages after injury has been inflicted …”
The key phrase is “after the injury has been inflicted”. Another way to put it is that the duty to mitigate damages does not arise until the loss has been incurred, not after. The judge struck the affirmative defense so the issue of failure to mitigate based on the inspection report won’t be part of the case.
But the case is not over because the home owners decided, after the fire loss, to complete their vacation, leave the damages home exposed to the elements. This could be viewed to constitute failure to mitigation their damages and the acts of the home owners, in this context the Subrogee, are attributed to the subrogating Subrogor, the plaintiff carrier.
Plaintiff in this action was represented by a well known law firm who represents carriers subrogating claims. I’ve had many cases with them suing alarm companies [haven’t lost any as I recall, BTW]. There is no mention of the alarm company who designed and installed the alarm system. Wonder why or how the lawyers missed that one.