Valenzuela v. ADT Sec. Servs., Inc.
| Decision Date | 04 June 2010 |
| Docket Number | Case No. CV09-2075 DMG (FFMx). |
| Citation | 820 F.Supp.2d 1061 |
| Parties | Roberto VALENZUELA, an individual, and Ruby Valenzuela, an individual, and Pearl of the Orient, Inc., a California corporation doing business as Manila Fine Jewelers, Plaintiffs, v. ADT SECURITY SERVICES, INC., a Delaware corporation; and DOES A through 100, inclusive, Defendants. |
| Court | U.S. District Court — Central District of California |
OPINION TEXT STARTS HERE
Jason D. Carter, Leonard Steiner, Steiner and Libo, Beverly Hills, CA, for Plaintiffs.
Eva M. Weiler, Shook Hardy & Bacon LLP, Irvine, CA, for Defendants.
This matter is before the Court on (1) Plaintiffs' motion for partial summary judgment as to Plaintiffs' first cause of action for gross negligence, second cause of action for breach of contract, and as to Defendants' sixth, tenth, and eleventh affirmative defenses and (2) Defendant's motion for summary judgment. The Court heard oral argument on March 19, 2010, after which the Court took the matter under submission. For the reasons set forth below, Plaintiffs' motion for partial summary judgment is GRANTED in part and DENIED in part and Defendant's motion for summary judgment is GRANTED in part and DENIED in part.1
Plaintiffs filed a complaint in the Los Angeles Superior Court on February 24, 2009, and a first amended complaint in this Court on June 5, 2009. Defendant filed a Notice of Removal on March 25, 2009, removing the action to this Court on the basis of diversity jurisdiction. Plaintiffs allege the following causes of action: (1) gross negligence; (2) breach of contract; and (3) conversion. Plaintiffs seek compensatory damages in the amount of $821,000, punitive damages, and attorneys' fees and costs.
On January 25, 2010, Plaintiffs filed a motion for partial summary judgment (“Plaintiffs' Motion”) and Defendant filed a motion for summary judgment (“Defendant's Motion”). On February 26, 2010, the parties filed their respective opposition briefs and on March 5, 2010, the parties filed their replies.
Plaintiffs, Ruby and Roberto Valenzuela, own and operate Pearl of the Orient, Inc., doing business as Manila Fine Jewelers, a retail jewelry store. (Ruby Valenzuela (“Valenzuela”) Decl. ¶ 2.) Since September 2002, Plaintiffs have protected their premises with an ADT Security Services, Inc. (“ADT”) alarm system and security services, which included a burglar alarm system, alarm monitoring, and signal receipt notification services. (Valenzuela Opp. Decl. ¶ 11, Ex. C.) With signal receipt and notification services in place, ADT was required to immediately call the police, Plaintiffs, and Plaintiffs' local emergency contact person to notify them whenever an alarm occurred. ( Id.)
On September 20, 2008, at approximately 10:00 a.m., while Plaintiffs were driving to work, Mrs. Valenzuela received a call on her cell phone from Ms. Chua (the owner of the dress shop from whom Plaintiffs rented their office space) notifying them that their store had been burglarized. (Valenzuela Opp. Decl. ¶ 25.) When Mr. and Mrs. Valenzuela arrived at the store at approximately 11:00 a.m., the police had already arrived and were conducting an investigation. ( Id.) ADT's event history report, central station number U6843007700, indicates that on September 20, 2008, at 12:44 a.m., ADT received and registered a motion detector burglar alarm in Plaintiffs' back office. (Sims Opp. Decl. ¶ 15, Ex. D; Weiler Decl. 3, Ex. B; Mooney Depo. pp. 120–122.) The alarm signal, however, was not transmitted to ADT's monitoring operators, and neither Plaintiffs, Plaintiffs' local emergency contact, nor the local police were notified of that alarm because ADT had incorrectly listed Plaintiffs' account as “out of service.” (Valenzuela Opp. Decl. ¶¶ 10, 34–35; Steiner Decl. ¶ 12, Ex. E; Mooney Depo. pp. 120–22, 163–64.)
According to Mrs. Valenzuela, had ADT notified Plaintiffs of the burglar alarm at 12:44 a.m. on September 20, 2008, she or her husband could have driven to the store within an hour or less and she could have called the police. (Valenzuela Opp. Decl. ¶ 37.)
On or about July 3, 2008, Plaintiffs signed an agreement (the “Upgrade Agreement”) with ADT, by which ADT agreed to upgrade Plaintiffs' alarm system by including a cellular wireless backup connection to ADT, as parallel (or redundant) protection, and a 360 degree motion detector in their back office above the safe. (Valenzuela Opp. Decl. ¶¶ 13–14, Ex. D) The cellular backup would transmit an alarm signal to ADT even if Plaintiffs' phone lines were cut or otherwise disabled, while leaving the telephone line connection as the primary mode of communication between Plaintiffs' alarm system and ADT. ( Id.)
According to Plaintiffs, Defendant did not do as promised. (Valenzuela Opp. Decl. ¶ 15.) Plaintiffs contend that when ADT installed the cellular backup, Defendant effectively deactivated Plaintiffs' alarm system and monitoring and notification systems. ( Id.) On July 10, 2008, ADT's technician performed at least three tests to determine if Plaintiffs' alarm system was still communicating with ADT. (Steiner Decl. ¶ 11, 14, Exs. D, G; Wright Depo. pp. 51, 53, 62–65.) The last test entry in ADT's central station log notes “had to change u acct to prim lost all sigs,” which means that there was no telephone signal and that the cellular backup was changed to the primary connection. ( Id.) Defendant concedes that when the cellular backup was installed into Plaintiffs' alarm system, the primary telephone line connection was lost and the cellular account became the primary and only connection. (Steiner Opp. Decl. ¶¶ 12, Ex. E; Mooney Depo. pp. 145–54.)
On July 19, 2008, August 19, 2008, and September 19, 2008, the ADT alarm system automatically conducted transmission tests of Plaintiffs' alarm system and the cellular backup communication system. (Steiner Opp. Decl. ¶¶ 12, 15, 21, 25, Exs. E, H; Mooney Depo. pp. 107–109.) Each test, which was received by Defendant and logged in ADT's event history report for Plaintiffs' cellular monitoring account, registered a comment that Plaintiffs' cellular monitoring account and alarm system were “out of service.” (Steiner Opp. Decl. ¶¶ 12, 15, 21, 25, Exs. E, H; Mooney Depo. pp. 95, 107–110.) As a result of the monitoring account being coded “out of service,” the burglar alarm received by ADT on September 20, 2008 at 12:44 a.m. was never transmitted to an operator to act upon the signal. (Steiner Opp. Decl. ¶¶ 12, Ex. E; Mooney Depo. pp. 163–64.)
At no time did ADT ever inform Plaintiffs that their new ADT account was in an “out of service” status.2 (Valenzuela Opp. Decl. ¶¶ 20–23.) When the ADT technician finished the installation, he did not tell Plaintiffs that there were any problems with the system, but rather, told them that everything was working and departed. (Valenzuela Opp. Decl. ¶ 17.) Within a few days of the installation, ADT told Plaintiffs that they had a new customer billing account and that their old billing account would be closed. (Valenzuela Decl. ¶ 18.) On August 4, 2008, Plaintiffs received notice from ADT that their old billing account, account number 01200116930207, would be cancelled within 30 days. (Valenzuela Opp. Decl. ¶ 19, Ex. K.)
Plaintiffs continued to be billed by ADT and to pay for alarm, monitoring, and notification services and parallel protection of a telephone primary connection with cellular backup. (Valenzuela Opp. Decl. ¶ 20.) At the time of the burglary, Plaintiffs' account was current, paid in full and should have been active. (Valenzuela Opp. Decl. ¶ 35.)
Sometime in early July, a few days after meeting with the ADT sales representative to discuss the upgrade to Plaintiffs' security system, ADT technicians came to Plaintiffs' premises, ostensibly to install the cellular backup. (Valenzuela Opp. Decl. ¶ 16; Roberto Valenzuela Decl. ¶ 4.) Both men looked around inside the bridal shop, at the exteriors of Plaintiffs' premises, and inside Plaintiffs' back office; they did no work, however, to install the cellular backup or upgrades. ( Id.)
According to Plaintiffs, there were a number of unscheduled visits from what appeared to be ADT representatives. In early to mid September 2008, Roberto Valenzuela saw someone in an ADT uniform in the bridal shop checking out the suite and the exterior walls of Plaintiffs' shop. (Roberto Valenzuela Decl. ¶ 6.) Neither Plaintiffs, nor Ms. Chua, had asked ADT for services at that time, nor were Plaintiffs or Ms. Chua informed by ADT that it was sending out a technician. (Roberto Valenzuela Decl. ¶ 6; Steiner Opp. Decl. ¶ 43, Ex. I; Chua Depo. pp. 33–35.) Ms. Chua testified that sometime in 2008 before the burglary, a person she identified as an ADT representative walked into the suite and started looking around. (Steiner Opp. Decl. ¶ 45, Ex. I; Chua Depo. pp. 33–35.) A bridal shop employee, Maria Consuelo Zetter, also testified that a person in an ADT uniform came into the store before the burglary and was looking around the area of the dressing room adjacent to Plaintiffs' back office. (Steiner Opp. Decl. ¶ 44, Ex. J; Zetter Depo. 11–12.)
According to Plaintiffs' expert witness, Douglas Sims, the burglars were familiar with the layouts of both Plaintiffs' back office and the neighboring dress shop, as well as both alarm and security systems, and Plaintiffs' security cameras and safe. (Sims Opp. Decl. ¶ 23.) As a general practice, however, Plaintiffs never allowed anyone in their back office. (Valenzuela Opp. Decl. ¶ 9.) The exceptions to this were the ADT technicians, installers and sales representatives who made periodic visits to check, repair and...
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