Treiber & Straub Inc. v. Stanley Convergent Sec. Solutions Inc.

• Decision Date: 16 November 2021
• Docket Number: Case No. 17-cv-0386-bhl
• Citation: 572 F.Supp.3d 633
• Parties: TREIBER & STRAUB INCORPORATED, Jewelers Mutual Insurance Company, Plaintiffs, v. STANLEY CONVERGENT SECURITY SOLUTIONS INC., Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

572 F.Supp.3d 633

TREIBER & STRAUB INCORPORATED, Jewelers Mutual Insurance Company, Plaintiffs,

v.STANLEY CONVERGENT SECURITY SOLUTIONS INC., Defendant.

Case No. 17-cv-0386-bhl

United States District Court, E.D. Wisconsin.

Signed November 16, 2021

Kevin P. Caraher, Phillip J. Carroll, Cozen O'Connor, Chicago, IL, for Plaintiffs.

Bradford T. Smith, Jaime M. DeWees, Robert N. LeMay, Kane Russell Coleman & Logan PC, Dallas, TX, Duffy Dillon, Dillon & Grube LLC, Janesville, WI, for Defendant.

ORDER GRANTING SUMMARY JUDGMENT

BRETT H. LUDWIG, United States District Judge

In July 2016, burglars broke into Treiber & Straub Jewelers (Treiber) and absconded with approximately $4,738,000 in watches, jewelry, and other inventory. Treiber made a claim on its insurance policy and recovered most of the loss from its insurer, Jewelers Mutual Insurance Company (Jewelers Mutual), subject to a deductible. Thereafter, Treiber and its insurer brought this lawsuit, seeking to shift the financial cost of the heist onto Stanley Convergent Security Solutions (Stanley), the company with whom Treiber has, for years, contracted to provide security services on its premises. Plaintiffs’ complaint alleges that Stanley's negligence allowed the multi-million-dollar theft to happen.

Stanley now seeks summary judgment, arguing that a clause in its contracts with Treiber expressly disclaims any liability based on negligence. In response, Plaintiffs acknowledge the contractual disclaimer but insist Stanley cannot enforce the clause because it was not a party to the original contract, which Treiber signed with Stanley's predecessor, Honeywell Inc., Home and Building Control (Honeywell). Plaintiffs also contend that the doctrine of successor liability bars Stanley from using the disclaimer as a defense.

Plaintiffs are wrong on both theories. The record establishes that Stanley is the proper assignee of the agreement. Indeed, the parties have long performed in accordance with the contracts’ terms and Stanley is therefore entitled to enforce the contractual limitation on liability to which Treiber agreed. Stanley's motion for summary judgment will be granted.

FACTUAL BACKGROUND¹

Treiber is a high-end watch repair and jewelry store owned by Michael and Gayle Straub. (ECF No. 57 at 3.) Sometime in 2000, the store moved from Wauwatosa to Brookfield, Wisconsin. (ECF No. 58, Ex. 1 at 10.) In order to obtain security services for the new location, Treiber entered into two "Installation and Service Agreements" with Honeywell. (ECF No. 57 at 4.)

Per Installation and Service Agreement No. 718-01-99585 (Agreement 85), Honeywell sold Treiber an "Intrusion/Holdup/Sprinkler Supervisory" system to be maintained on a time and materials basis by Honeywell for a term of 60 months and for consecutive terms of one year, unless either party gave written notice of termination 60 days prior to the end of a term of the contract. (Id. ) Per Installation and Service Agreement No. 718-01-99586 (Agreement 86), Honeywell sold Treiber an "RF UL Grade AA Communication Transmission" system to be monitored by Honeywell for $128 per month for a term of 60 months and for consecutive terms of one year, unless either party gave written notice of termination 60 days prior to the end of a term of the contract. (Id. ) Neither party ever provided notice of termination for either agreement. (Id. )

Both Agreement 85 and Agreement 86 contained, in part, the following provisions:

4. Liquidated Damages and Honeywell's limits of liability.

A. It is understood and agreed by the parties hereto that ... Honeywell is not liable for losses which may occur in cases of malfunction or nonfunction of any system provided by Honeywell, that Honeywell is not liable for losses which may occur in the monitoring, repairing, signal handling or dispatching aspects of the service, even if due to Honeywell's negligence or failure of performance; that Honeywell is not liable for losses resulting from failure to warn or inadequate training; that Honeywell is not an insurer; and that insurance covering personal injury, property loss, damage to and on Customer's premises must be obtained and/or maintained by Customer.

...

8. Obligations of Honeywell; Limitations.

A. Honeywell shall not be held responsible or liable for delay in Installation of the system or Interruption of service, due to strikes, lockouts, riots, floods, fires, lightning, acts of God or any cause beyond the control of Honeywell, including interruptions in telephone service. Honeywell will not be required to perform installation or supply service to Customer while any such cause shall continue.

B. For those premises where Customer Service Center monitoring is provided, Honeywell, upon receipt of an alarm signal from Customer's premises, shall (unless previously instructed otherwise by Customer), make a reasonable effort to transmit the alarm promptly to the police, fire department, medical agency or customer designated agency having jurisdiction or responsibility. Honeywell shall also make a reasonable effort to notify Customer's designated representative by telephone of every genuine alarm received unless instructed to do otherwise by Customer.

C. Customer understands that if the system installed under this agreement is monitored, due to the nature of the method used for communicating alarm signals to the Customer Service Center, there may be times when the communication method is not able to transmit signals and Honeywell will not receive alarm signals.... Customer understands that Honeywell offers several levels of communication methods of alarm signals to the Customer Service Center and that the Services described on the front page of this agreement and on the Schedule of Service and Protection have been chosen by Customer after considering and balancing the levels of protection afforded by various communication methods and related costs. Customer acknowledges and agrees that Customer is solely responsible for the selection of the type of communication method and whether the utilization of more than one communication method is required.

11. Assignment.

This agreement may be assigned by the Customer or Honeywell provided that the other party receives thirty (30) days advance written notice within which time the assignment may be accepted or the agreement may be cancelled.

12. No Subrogation.

Customer does hereby for itself and other parties claiming under it, release and discharge Honeywell from and against all claims arising from hazards covered by Customer's insurance, it being expressly agreed and understood that no insurance company or insurer will have any right of subrogation against Honeywell.

(Id. at 5-8.)

In 2004, Honeywell sold its "Security Monitoring Business" to SecurityCo, Inc. (SecurityCo) through an Asset Purchase Agreement. (Id. at 8.) The sale included the "business of marketing and providing installation, maintenance and monitoring services for stand-alone and integrated electronic security systems to commercial and residential customers," defined as the "Business." (ECF No. 68 at 8.) The assets sold included "all contracts [and] agreements" relating to the Business "except those related to Excluded Assets." (Id. ) Honeywell's contract with Treiber was not related to the "Excluded Assets." (Id. )

On January 24, 2005, SecurityCo contracted with Treiber to sell additional transmitters, detectors, and related equipment in a rider to Agreement 86 titled "Honeywell Security Monitoring Contract Rider." (ECF No. 57 at 9.) This document specifically referred to Agreement 86 by contract number and stated in pertinent part: "This Rider shall be attached to and made a part thereof the existing valid contract between (Contractor) SecurityCo, Inc., Successor to Honeywell Security Monitoring and Treiber & Straub." (Id. )

On August 12, 2005, SecurityCo changed its name to HSM Electronic Protection Services, Inc. (HSM). (Id. ) On January 11, 2008, HSM changed its name to Stanley Convergent Security Solutions, Inc. (Id. at 9-10.)

On August 13, 2010, Treiber and Stanley supplemented and amended their prior agreement through a "Contract Rider," which stated that "any additional service and equipment provided pursuant to this Rider shall be governed by the provisions of the Agreement, including without limitation the provision of Section 4 (Liquidated Damages and SCSS Limits of Liability)." (Id. at 10.) Stanley issued Treiber regular invoices bearing the original agreement number of Agreement 86. (Id. at 12.) Treiber always paid. (Id. )

While at the Brookfield location, Treiber frequently experienced internet connectivity issues. (Id. ) Neither its internet service provider, Time Warner Cable, nor Stanley managed to resolve these issues. (Id. at 13.) Due to the routine and trivial nature of the connectivity problems, Mr. Straub sent a written instruction to Stanley stating, "Effective July 24, 2015 we are now requesting that if there is an internet failure, we do not want to be called." (Id. ) Stanley responded and informed Mr. Straub it would "not take any action on" an internet communication failure sign. (Id. at 14.) Mr. Straub later confirmed that he did not want Stanley to take any action upon receiving an internet communication failure signal, including calling the police. (Id. )

This directive proved inopportune on July 11, 2016, when burglars severed the store's telephone line and internet cable connections and raided the main vault. (ECF No. 34 at 2-3.) Consistent with Mr. Straub's express instructions, despite receiving the internet failure communication signal, no one at Stanley alerted anyone at Treiber. (ECF No. 63 at 17.) Treiber subsequently filed an insurance claim with its provider, Jewelers Mutual. (ECF No. 57 at 3.) Jewelers Mutual brought this subrogation action to recover the proceeds paid on Treiber's insurance claim.² (ECF No. 34.)

SUMMARY JUDGMENT STANDARD

"Summary judgment is appropriate where the admissible evidence reveals no genuine issue of...