Houghland v. Security Alarms & Services, Inc.

755 S.W.2d 769, 1988 Tenn. LEXIS 124
CourtTennessee Supreme Court
DecidedJuly 5, 1988
StatusPublished
Cited by23 cases

This text of 755 S.W.2d 769 (Houghland v. Security Alarms & Services, Inc.) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Houghland v. Security Alarms & Services, Inc., 755 S.W.2d 769, 1988 Tenn. LEXIS 124 (Tenn. 1988).

Opinions

OPINION

HARBISON, Chief Justice.

Appellees brought this action against appellant to recover losses suffered in a burglary of their home which occurred on the evening of August 31, 1980. The complaint, as amended, alleged numerous theories of liability, including breach of contract, breach of warranties, negligence, intentional misrepresentation, negligent misrepresentation, and deceptive trade practices under the Tennessee Consumer Protection Act, T.C.A. §§ 47-18-101 through 117.

The trial judge directed a verdict on the Consumer Protection Act claim but submitted the case to the jury as to all of the other claims. The jury returned a general verdict in favor of the plaintiffs in the amount of $100,000. The Court of Appeals held that the evidence was insufficient to support the jury verdict on some of the claims and that limitations in the contract between the parties would govern other claims. It held that there was sufficient evidence of negligent misrepresentation to sustain the verdict for the plaintiffs free of the contractual limitations. Finding error in the admission of evidence with respect to the amount of the award, however, the Court of Appeals reversed for a new trial limited to the question of damages only.

After carefully reviewing the record, we agree with the Court of Appeals that there was insufficient evidence of intentional tort or deliberate fraud, and in our opinion [771]*771there was no basis for the submission of these issues to the jury. Further, in our opinion there is no evidence of any negligent material misrepresentation of a past or existing fact which, if made, would be sufficient to vitiate the contract or to allow a recovery free from its limitations with respect to coverage and damages. In our opinion the only tenable theories upon which sufficient evidence was offered to make a jury issue at trial were those alleging breach of contract or negligence in performance of the contract. These claims, even if resolved in favor of the appellees, would be subject to the exculpatory and limiting provisions of the contract. There is no evidence in the record which would justify a rescission of the agreement between the parties, and none was sought at trial. In our opinion the trial judge correctly directed a verdict on the count alleging violation of the Consumer Protection Act.

There is almost no dispute as to the material facts in the case. In 1977 Mr. and Mrs. Houghland entered into a contract with appellant Security Alarms and Services, Inc. under which the latter agreed to provide security equipment and services for the home of appellees. In addition to alarms installed in the home, the equipment consisted of a “loop” system connecting the home of appellees to a central office, or alarm station, operated by appellant. This service was tied into the local telephone system, and the homes and businesses of a number of other customers were also part of the system. If an alarm were transmitted to the office of appellant from the customers on this “loop”, personnel at the central office were unable to identify the precise source of the alarm. It was necessary for appellant to send a service representative to the premises of each customer to discover the origin of an alarm.

There is no claim that the original system was improperly installed or that there was any misrepresentation made concerning it. The original contract recited that Security Alarms was not in the business of writing burglary or other kinds of insurance. The subscribers expressly and unconditionally released Security Alarms from all hazards which were covered by insurance. The contract also contained a liquidated damages clause which fixed the liability of appellant at a specified sum. This amount was agreed upon as liquidated damages and as the exclusive remedy unless the subscriber desired the appellant to assume greater liability on a graduated scale of increasing rates. No such additional coverage was purchased by the subscribers.

About two years later the property manager for Mr. and Mrs. Houghland contacted a sales representative of appellant and asked the latter to meet him at the Hough-land premises to examine the equipment then installed and to discuss the possibility of additional equipment which would provide further protection from both fire and burglary. On September 19, 1979, the sales representative of appellant wrote to the Houghland agent describing an additional telephone line security device, called a “transceiver”, which would provide further security in that it would “call” appellant’s office immediately if the telephone line should be cut or there should be an attempt to compromise it. In the letter appellant’s employee also stated that it was the policy of Security Alarms and Services, Inc. “to dispatch the appropriate law enforcement department on all burglar alarm signals and the appropriate fire department on fire alarm signals, received at our Central Station.” The letter pointed out that appellant could not and did not assume responsibility for the actions of police or fire department dispatchers to have their representatives respond to alarms.

The letter proposed installation of the security transceiver. The parties also negotiated for additional fire alarm equipment which is not involved here.

On October 2, 1979, a rider to the 1977 agreement was executed, calling for installation of the additional security equipment. The equipment was installed shortly thereafter and apparently operated as represented and without difficulty for more than nine months.

During those nine months three burglar alarm signals were received from the [772]*772Houghland residence at the central office of appellant, these occurring on October 27, 1979, July 2,1980, and August 26,1980, the latter being only five days before the incident out of which this suit arose.

On each of these occasions, as well as on an earlier occasion in September 1979, appellant’s representatives, upon receiving a burglar alarm signal at the central office, notified appropriate police authorities; and police officers were dispatched in each instance. On all four occasions, however, the alarms were false, apparently having been set off accidentally by members of the family; and on three of the occasions, the police officers were recalled by radio before they ever reached the Houghland premises.

It is uncontradicted in the record that it was the firm and established policy of appellant to dispatch the police whenever a burglar alarm signal was received at the central office. As stated previously, the appellant had done so on four occasions prior to the incident in question, three of them occurring after installation of the additional equipment under the 1979 contract rider.

This evidence was uncontradicted and un-impeached. There was no basis in the record for the trial judge to instruct the jury that the plaintiffs might recover upon a theory of negligent misrepresentation in the inducement of the contract or “promissory fraud” — entering into a contract with no intention to perform it.

On the night of August 31,1980, a signal was received in the central office of appellant at about 9:29 p.m. which did not appear to the personnel then on duty to be a burglar alarm. Instead, it appeared to them to be a signal indicating a problem with the telephone lines in the Brentwood area where the property of appellees is situated. The central office equipment of appellant was closely tied to and depended upon the telephone system.

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Bluebook (online)
755 S.W.2d 769, 1988 Tenn. LEXIS 124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/houghland-v-security-alarms-services-inc-tenn-1988.