Continental Video Corp. v. Honeywell, Inc.

• Decision Date: 12 October 1982
• Docket Number: No. 81-1978,81-1978
• Citation: 422 So.2d 35
• Parties: CONTINENTAL VIDEO CORPORATION, a Florida corporation, Appellant, v. HONEYWELL, INC., a foreign corporation, d/b/a Honeywell Protection Services, Appellee.
• Court: Florida District Court of Appeals

Page 35

422 So.2d 35

CONTINENTAL VIDEO CORPORATION, a Florida corporation, Appellant, v. HONEYWELL, INC., a foreign corporation, d/b/a Honeywell Protection Services, Appellee.

No. 81-1978.

District Court of Appeal of Florida Third District.

Oct. 12, 1982.

Rehearing Denied Dec. 8, 1982.

Floyd, Pearson, Stewart, Richman, Greer & Weil and Bruce A. Christensen and Charles E. Buker, III and Larry S. Stewart, Miami, for appellant.

Preddy, Kutner & Hardy and G. William Bissett, Miami, for appellee.

Before BARKDULL, SCHWARTZ and JORGENSON, JJ.

BARKDULL, Judge.

Continental Video Corp. entered into a contract with Honeywell, Inc., for installation of a Central Station Burglar Alarm for a total cost of $815. The contract contained the following exculpatory clause,

"It is understood and agreed by the parties hereto that Contractor is not an insurer and that insurance, if any, covering personal injury and property loss or damage on Subscriber's premises shall be obtained by the Subscriber; that the Contractor is being paid for the installation and maintenance of a system designed to reduce certain risks of loss and that the amounts being charged by the Contractor are not sufficient to guarantee that no loss will occur; that the Contractor is not assuming responsibility for any losses which may occur even if due to Contractor's negligent performance or failure to perform any obligation under this Agreement. THE CONTRACTOR DOES NOT MAKE ANY REPRESENTATION OR WARRANTY, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS, THAT THE SYSTEM OR SERVICE SUPPLIED MAY NOT BE COMPROMISED, OR THAT THE SYSTEM OR SERVICES WILL IN ALL CASES PROVIDE THE PROTECTION FOR WHICH IT IS INTENDED. Since it is impractical and extremely difficult to fix actual damages which may arise due to the faulty operation of the system or failure of services provided, if, notwithstanding the above provisions, there should arise any liability on the part of the Contractor, such liability shall be limited to an amount equal to one-half the annual service charge provided herein or $250. whichever is greater. This sum shall be complete and exclusive and shall be paid and received as liquidated damages and not as a penalty. In the event that the Subscriber wishes to increase the maximum amount of such liquidated damages, Subscriber may, as a matter of right, obtain from Contractor higher limits of liquidated damages. Subscriber agrees to and shall indemnify and save harmless the Contractor, its employees and agents, for and against all third party claims, lawsuits, and losses alleged to be caused by the improper operation of the system, whether due to defects in the system or acts or omissions of the Contractor in receiving and responding to alarm signals." (Emphasis added).

A monitoring service was available for a modest charge, plus a telephone charge, billed directly to the customer. ¹ Continental elected to have this service from Honeywell. Upon activation of the alarm a signal was to be sent to one of Honeywell's central monitoring stations and that upon receipt of the alarm Honeywell was to transmit the alarm to the police and notify Continental Video's representative by phone. Burglars broke into Continental's store and tripped the alarm. Honeywell allegedly did not notify the police or Continental's agent upon receipt of the alarm. As a result of the loss incurred Continental filed the instant complaint alleging breach of contract; negligence; and gross negligence on the part of Honeywell. The complaint also attacked the exculpatory clause of the contract as being invalid, void and unenforceable because it was a contract of adhesion due to the inequality of bargaining powers of the parties and that the contract is against public policy. Honeywell moved to dismiss the complaint on the grounds that: (1) it fails to state a cause of action; (2) the exculpatory clause in the contract relieves Honeywell of any and all liability; and (3) any liability incurred by Honeywell is limited by the liquidation of damages clause.

The trial court entered an order dismissing the cause with prejudice finding that both the exculpatory and liquidated damage clauses were valid and enforceable.

We find no merit in the argument of the inequity of bargaining. First Financial Insurance Co. v. Purolator Security, Inc., 69 Ill.App.3d 413, 26 Ill.Dec. 393, 388 N.E.2d 17 (1979); Lazy Bug Shops, Inc., v. American District Telegraph Co., 374 So.2d 183 (La.Ct.App.1979); Abel Holding Co., Inc. v. American District Telegraph Company, 138 N.J.Super. 137, 350 A.2d 292 (1975). We do not find that the contract was against public policy. Central Alarm of Tucson v. Ganem, 116 Ariz. 74, 567 P.2d 1203 (1977); First Financial Insurance Co., v. Purolator Security, Inc., supra; Pick Fisheries, Inc. v. Burns Electronic Security Services, Inc., 35 Ill.App.3d 467, ...