Hill v. Sonitrol of Southwestern Ohio, Inc.

• Decision Date: 06 April 1988
• Docket Number: No. 86-2088,86-2088
• Citation: 521 N.E.2d 780,36 Ohio St.3d 36
• Parties: , 75 A.L.R.4th 825 HILL et al., Appellants, v. SONITROL OF SOUTHWESTERN OHIO, INC. et al., Appellees.
• Court: Ohio Supreme Court

Page 36

36 Ohio St.3d 36

521 N.E.2d 780, 75 A.L.R.4th 825

HILL et al., Appellants, v. SONITROL OF SOUTHWESTERN OHIO, INC. et al., Appellees.

No. 86-2088.

Supreme Court of Ohio.

April 6, 1988.

Syllabus by the Court

1. Where a security alarm system company contracts to provide security services for the protection of a commercial establishment upon notification by an employee that the commercial establishment is closed for the day and after the alarm system has been activated, the security company cannot reasonably anticipate or contemplate that it has a duty to protect an employee of the commercial establishment and therefore owes no duty of protection to the employee.

2. Under a contract for the protection of a commercial establishment by a security alarm system company after the commercial establishment is closed for the day, an employee of the commercial establishment is merely an incidental beneficiary of the contract.

Billie Hill was employed as a sales clerk and cashier at the Today's Adult Entertainment Center, an adult bookstore in Dayton. The bookstore was equipped with a security system installed, serviced, and monitored by Sonitrol of Southwestern Ohio, Inc. ("Sonitrol"). Plaintiffs alleged that the system was designed and manufactured by Sonitrol Corporation.

The system installed at the bookstore included an alarm system which had connections on the doors, a panic button underneath the cash register, and a sound monitoring device. An alarm was to sound at Sonitrol's office when a break-in occurred. However, the alarm system was not used or activated when the store was open. Rather, a store employee would activate the system when she was ready to close the store. She would then telephone Sonitrol to inform the operator that she was about to close, and to confirm that the system was working. After the telephone call, the employee was to leave immediately.

At approximately 11:15 p.m. on December 1, 1983, Mrs. Hill telephoned Sonitrol's office to inform Sonitrol that she was leaving. She then left the building, but was accosted by a stranger, who forced her at knife point to return inside the store. Once inside, the assailant produced a gun. Shortly thereafter, Mrs. Hill's husband, Michael, arrived to drive Mrs. Hill home. At the assailant's demand, Mrs. Hill called her husband into the store.

For nearly an hour, the Hills were held at gunpoint, while Mrs. Hill was raped by the assailant. During this period, another employee called about five times to inquire as to the reason for Mrs. Hill's delay in delivering the evening's receipts to him at another store. However, Mrs. Hill was unable to communicate her peril to him. At about 12:20, the Sonitrol operator called, and Mrs. Hill was able to alert the operator that there was a problem. Sonitrol called the police, who arrived at the bookstore within minutes, and the Hills escaped.

The Hills, plaintiffs-appellants, filed suit against the defendants-appellees, Sonitrol and Sonitrol Corporation, for physical and emotional injuries. The Hills alleged that the defendants-appellees were negligent in their design of the security system, in failing to provide proper training for their personnel who monitored the system, in failing to provide proper procedures to be followed by their employees and servants, and in failing to properly design, install, inspect and monitor their equipment. They further alleged that the burglar alarm system was not fit for its intended purpose and that, therefore, the defendants-appellees had breached the warranty. Finally, the plaintiffs-appellants claimed that the alarm system was defective in design and manufacture, a strict products liability theory.

Sonitrol filed a motion for summary judgment which the trial court granted on the grounds that Mrs. Hill was only an incidental beneficiary to the contract between the defendants-appellees and her employer and therefore lacked privity of contract. The trial court also concluded that the assailant was the sole proximate cause of Mrs. Hill's injuries. Sonitrol Corporation also filed a motion for summary judgment which was granted by the court. On appeal, the court of appeals affirmed. The court of appeals held that the trial court erred on the proximate cause issue, but found this error to be harmless based on its conclusion that neither Sonitrol nor Sonitrol Corporation owed any duty to the Hills.

The cause is now before this court upon the allowance of a motion to certify the record.

Jablinski, Folino, Roberts, Schultz & Martin Co., L.P.A., Ronald E. Schultz and David S. Jablinski, Dayton, for appellants.

Freund, Freeze & Arnold, Neil F. Freund and Shauna K. McSherry, Dayton, for appellee Sonitrol of Southwestern Ohio, Inc.

Porter, Wright, Morris & Arthur, Thomas H. Pyper and Michael E. Solimine, Dayton, for appellee Sonitrol Corp.

MOYER, Chief Justice.

Appellants present the following three issues for our determination: whether a security alarm system company owes a duty of protection to the employee of a commercial establishment under a contract between the commercial establishment and the security alarm system company for the protection of the commercial establishment after it is closed for the day; whether the employee is a third-party intended beneficiary or an incidental beneficiary of the contract; and whether one who undertakes, gratuitously or for consideration, to render services to another which affect a third person is liable to the third person for physical harm resulting from his failure to protect his undertaking. For the following reasons, we affirm the judgment of the court of appeals.

I

Appellants' first contention is that because Sonitrol knew that Mrs. Hill was still inside the store when the alarm rang at its headquarters, it was foreseeable that harm would result to her and that therefore Sonitrol had a duty to promptly investigate. In Gelbman v. Second Natl. Bank of Warren (1984), 9 Ohio St.3d 77, 78, 9 OBR 280, 281, 458 N.E.2d 1262, 1263, the court noted that "[i]n Ohio it is well-settled that liability in negligence will not lie in the absence of a special duty owed by the defendant."

To determine whether any duty existed, we must look to the contract between Sonitrol and Mrs. Hill's employer. The contract stated in part:

"3. Sonitrol agrees to monitor the premises of Client described above from the time that an authorized closing call is received by Sonitrol at its monitoring station and the Client activates the system, if the Client is provided with this capability, until the time an authorized opening call is received by Sonitrol at said monitoring station. Upon receipt of an audio signal indicating an unauthorized entry of Client's premises, the Sonitrol operator will make every reasonable effort to identify the sound and when warranted, will transmit notice of said signal to the local police authority, and to a designated agent of the Client. * * *

" * * *

"10.a. IT IS UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT SONITROL IS NOT AN INSURER AND THAT INSURANCE, IF ANY, COVERING PERSONAL INJURY AND PROPERTY LOSS OR DAMAGE ON CLIENT'S PREMISES SHALL BE OBTAINED BY CLIENT; THAT THE PAYMENTS PROVIDED FOR HEREIN ARE BASED SOLELY ON THE VALUE OF THE SERVICE AS SET FORTH HEREIN AND ARE UNRELATED TO THE VALUE OF CLIENT'S PROPERTY OR THE PROPERTY OF OTHERS LOCATED ON CLIENT'S PREMISES; THAT SONITROL MAKES NO GUARANTEE OR WARRANTY INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS THAT THE SYSTEM OR SERVICE SUPPLIED WILL AVERT OR PREVENT OCCURRENCES OR THE CONSEQUENCES THEREFROM WHICH THE SYSTEM OR SERVICE IS INTENDED TO DETECT OR AVERT; EXCEPT FOR THE PROVISIONS OF THE 'SONITROL SECURITY SYSTEM WARRANTY' AS IT MAY APPLY TO ANY LOSS OCCURRING WHILE THIS AGREEMENT IS IN FORCE AND IF SUCH WARRANTY IS IN EFFECT IN CONJUNCTION WITH THIS AGREEMENT.

" * * *

"d. IN THE EVENT THAT THE CLIENT WISHES SONITROL TO ASSUME GREATER LIABILITY, CLIENT MAY, AS A MATTER OF RIGHT, OBTAIN FROM SONITROL A HIGHER LIMIT BY PAYING AN ADDITIONAL AMOUNT TO SONITROL, AND A RIDER SHALL BE ATTACHED HERETO SETTING FORTH SUCH HIGHER LIMIT AND ADDITIONAL AMOUNT, BUT THIS ADDITIONAL OBLIGATION SHALL IN NO WAY BE INTERPRETED TO HOLD SONITROL AS AN INSURER.

"e. WHEN CLIENT IN THE ORDINARY COURSE OF BUSINESS HAS THE PROPERTY OF OTHERS IN HIS CUSTODY, OR THE ALARM SYSTEM EXTENDS TO PROTECT THE PROPERTY OF OTHERS, CLIENT AGREES TO AND SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS SONITROL, ITS EMPLOYEES AND AGENTS FOR AND AGAINST ALL CLAIMS BROUGHT BY PARTIES OTHER THAN THE PARTIES TO THIS AGREEMENT. THIS PROVISION SHALL APPLY TO ALL CLAIMS REGARDLESS OF CAUSE INCLUDING SONITROL'S PERFORMANCE OR FAILURE TO PERFORM AND INCLUDING DEFECTS

IN PRODUCTS, DESIGN, INSTALLATION, MAINTENANCE, OPERATION OR NON-OPERATION OF THE SYSTEM WHETHER BASED UPON NEGLIGENCE, ACTIVE OR PASSIVE, WARRANTY, OR STRICT OR PRODUCT LIABILITY ON THE PART OF SONITROL, ITS EMPLOYEES OR AGENTS, BUT THIS PROVISION SHALL NOT APPLY TO CLAIMS FOR LOSS OR DAMAGE SOLELY AND DIRECTLY CAUSED BY AN EMPLOYEE OF SONITROL WHILE ON CLIENT'S PREMISES." (Emphasis added.)

"The existence of a duty depends on the foreseeability of the injury." Menifee v. Ohio Welding Products, Inc. (1984), 15 Ohio St.3d 75, 77, 15 OBR 179, 180, 472 N.E.2d 707, 710, citing Ford Motor Co. v. Tomlinson (C.A.6, 1956), 229 F.2d 873, 59 O.O. 345; Gedeon v. East Ohio Gas Co. (1934), 128 Ohio St. 335, 190 N.E. 924. The court in Menifee employed the following test for foreseeability: "whether a reasonably prudent person would have anticipated that an injury was likely to result from the performance or nonperformance of an act." Menifee, supra, at 77, 15 OBR at 180, 472 N.E.2d at 710, citing Freeman v. United States (C.A.6, 1975), 509 F.2d 626; Thompson v. Ohio Fuel Gas Co. (1967), 9 Ohio St.2d 116, 38 O.O.2d 294, 224 N.E.2d 131; Mudrich v. Standard Oil Co. (1950), 153 Ohio St. 31, 41 O.O. 117, 90 N.E.2d 859.

Under this test of...