Multimillion-dollar verdict against Monitronics upheld

The company was found negligent in a lawsuit filed by a customer assaulted in her home; the case potentially carries implications for the industry as a whole
Wednesday, July 24, 2013

ATLANTA—An appeals court in Georgia upheld a trial court’s $8.6 million verdict against Monitronics, affirming the lower court’s decision that a customer raped in a home invasion suffered harm as a result of the company’s negligence.

Monitronics had a contract with the customer that carried a $250 limitation-of-liability clause. However, at issue in the lawsuit was whether a Monitronics dispatcher acted outside the provisions of the contract after a series of alarms went off at Velma Veasley’s home on a spring day seven years ago.

If the decision stands, it could have ramifications for the industry, Ken Kirschenbaum, an industry attorney, told Security Systems News.

“It’s a further erosion in the enforcement of the protective provisions in the contract,” he said. “It potentially exposes alarm companies to liability for duties that go beyond those imposed by the contract.”

Monitronics did not respond to a call for comment by SSN’s deadline. The company could appeal the decision to Georgia’s highest court.

Some background: The origins of the case date back to October 1998, when Veasley purchased a security system from Tel-Star Alarms for her home in Stone Mountain, Ga. A month later, the Tel-Star monitoring system was reassigned to Monitronics, which then assumed responsibility for the account, according to the July 16 appellate court decision.

Then, on March 29, 2006, Veasley left her home at 4 a.m. to work her shift at a Target store. At 10:27 a.m., the alarm for Veasley’s security system sounded after a motion sensor was triggered, court records say. At that time, a Monitronics representative called Veasley’s home and dispatched police when the home phone was not answered. A Monitronics representative tried to reach her at work, but was unsuccessful.

Meanwhile, the internal motion sensor was triggered a total of five times in the course of the day, but Monitronics was unable to get hold of Veasley or speak directly to her emergency contact, her sister. Police told Monitronics that they would stop responding to dispatches to the home unless a key-holder was there to meet them.

When Veasley returned home at 7:25 p.m., having returned from her second job at a daycare center, the alarm sounded again as she entered an internal door to her home. A Monitronics representative called again, and this is where the trial court jury found evidence that the company undertook—and breached—its “extra-contractual duty of care” to Veasley.

From the appellate court decision:

“Veasley told the representative that she was fine but that she did not understand why the alarm had triggered. And despite the fact that the representative had access to the information indicating that Veasley’s security system had alerted multiple times throughout the day, the representative told Veasley that the alarm most likely sounded because the door she entered did not have a delay timer. Veasley did not believe that the representative was correct about the delay timer, but she nevertheless accepted her explanation and remained in her home.”

In her home, Veasley noticed a few things amiss. She saw a tequila bottle and a cellphone that wasn’t hers. Her bed sheets looked disturbed.

About 20 minutes later, she was grabbed by a stranger brandishing a knife, court records say. The next several hours were the stuff of a nightmare: The assailant, Stephen Okrah, demanded that Veasley give him money and later raped her. Okrah, who was eventually arrested without further incident, is now incarcerated, the court decision noted.

Veasley filed suit against Monitronics for breach of contract, negligence and fraudulent misrepresentation, and the trial jury ruled in her favor, originally awarding her $9 million before reducing the damages to $8.6 million after the jury found that Monitronics was not grossly negligent.

This month, the appellate court agreed with the trial court that the $250 limitation-of-liability clause in the contract was unenforceable on the grounds that the Monitronics representative, who called before Veasley was confronted by the intruder, acted outside the provisions of the contract, thus waiving any right to exculpatory protections.

“Monitronics is charged with this operator going off track, going beyond what the monitoring duty required,” said Kirschenbaum, of Kirschenbaum & Kirschenbaum, based in Garden City, N.Y. “That’s why it got tagged.”

He added, “What was made to look wrong was that the Monitronics operator had a final conversation with the subscriber when she entered through her garage, and in that conversation, the operator made certain statements that were construed by the judges and the jury to mislead the subscriber regarding the current situation at her house.”

The case also underscores the potential repercussions of ambiguous contract language, according to Kirschenbaum: “They did not have a contract that was sufficiently clear and worded properly to cover them for this incident,” he said.

To minimize this risk, Kirschenbaum advises against monitoring company representatives ever attempting to explain contracts to subscribers. He says representatives should tell customers to consult their own legal counsel to aid in the interpretation.

Protective provisions are also notoriously difficult to enforce, owing to certain features of the courtroom, Kirschenbaum said. “You have to go into every one of these cases with certain preconceived notions, and one of them is that you have to presume the court does not want to enforce an exculpatory and limited liability clause,” he said, adding that inexperienced or ill-prepared defense counsels often supply judges with information that help judges avoid enforcing certain contract provisions. That was not necessarily the case in the Veasley proceedings, he said.

Opinion among the seven appellate judges was anything but uniform, underscoring the interpretive challenges of the case. One judge wrote the majority opinion and two agreed with the decision; two other judges concurred but upheld the award for different reasons; another concurred but upheld the decision for yet other reasons.

One dissenting judge voted to enforce the limitation-of-liability clause of $250. Kirschenbaum said the dissenting opinion stood out for its less tortuous reasoning.

“The dissenter’s opinion, you’ll notice, said it was enforceable, end of story,” he said. “He was sure about his opinion.”

The appellate court decision does not mean the case is a done deal. Kirschenbaum said it could go to the Georgia Supreme Court.

“Monitronics has a real uphill battle,” he said. “But going to the Georgia Supreme Court to get this reversed is the only step.”