Guthrie v. American Protection Industries
| Decision Date | 11 October 1984 |
| Parties | Barbara J. GUTHRIE, doing business as Wehrman's Jewelry, Plaintiff and Appellant, v. AMERICAN PROTECTION INDUSTRIES, et al., etc. Defendants and Respondents. Civ. 67701. |
| Court | California Court of Appeals Court of Appeals |
Simon, McKinsey, Miller, Zommick, Sander & Alban, Long Beach, Gayle R. Posner, Los Alamitos, for plaintiff and appellant.
Steven M. O'Neal, Bonelli, Heib, Fuchs & O'Neal, Encino, for defendants and respondents.
Plaintiff Barbara J. Guthrie, doing business as Wehrman's Jewelry, appeals from the judgment of the trial court, sitting without a jury, awarding her $250 in damages for losses by theft which occurred at a time when a burglar alarm system, installed and operated by defendant American Protection Industries (API), failed to function as represented. We affirm.
The essential facts are not in dispute and may be briefly summarized as follows. On March 8, 1973, Harvey Wehrman, plaintiff's predecessor, entered into an agreement with API to install and maintain a burglary alarm system at his jewelry store in Long Beach, California. Some five years later, Mr. Wehrman died and plaintiff purchased his interest in the business from his estate. Both before and after the change of ownership, the contract with API remained in effect.
On October 24, 1979, plaintiff noticed an inappropriate clicking sound in the alarm system and notified API of a possible malfunction. The following day, service representatives from API visited the store and worked on the system for approximately thirty minutes. They advised plaintiff that the alarm had been repaired and that the system was now in good working order.
On Saturday, November 3, 1979, plaintiff closed the store at 4:30 p.m., and, as usual, activated the alarm. The following Monday, November 5, 1979, plaintiff entered the premises and discovered that the store had been burglarized by persons unknown. The burglars apparently had broken through a wall from an adjacent store in order to enter the premises and had destroyed a number of display cases while removing various pieces of jewelry. Either of these activities should have caused the alarm system to be activated, but did not. A subsequent engineering analysis found the system to be defective.
Plaintiff brought suit against API, claiming a loss of $103,461 in stolen merchandise. In substance, the complaint alleged that API had negligently performed under its contract and had breached its expressed and implied warranties that the alarm system installed would detect a burglary.
At trial, API stipulated to breach of the contract and negligence in failing to keep the system operable. After taking testimony on the issue of damages, the trial court found that paragraph 14 of the agreement executed between the parties was a valid liquidated damage provision under the holding of Better Food Mkts. v. Amer. Dist. Teleg. Co. (1953) 40 Cal.2d 179, 253 P.2d 10. The trial court therefore concluded that plaintiff's damages were contractually limited to $250. 1
In Better Food Markets, supra, the Supreme Court upheld the validity of a similar liquidated damage provision limiting an alarm company's liability to $50. 2
At that time and at the time of the execution of the contract in this case, Civil Code section 1671 permitted liquidated damage clauses "when from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage."
The court in Better Food Markets, supra, observed that there was at the time of the execution of the contract no reasonable basis upon which to predict the nature and extent of any loss, or how much of that loss the defendant's failure of performance might account for, hence in an alarm service contract case, "the impracticability or extreme difficulty in fixing actual damages" appeared as a matter of law. (Id. at p. 187, 253 P.2d 10.)
The usual alarm system is designed to act as a deterrent in the first instance and to permit prompt detection and apprehension of the undeterred intruder. The success of such a system depends on many variables and intangibles such as the intestinal fortitude, agility, mental state, speed and skill of the burglar as well as the response time of the police, all of which are beyond the control of the installer of the system.
As we recently observed in 7735 Hollywood Blvd. Venture v. Superior Court (1981) 116 Cal.App.3d 901, 905, 172 Cal.Rptr. 528: ...
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