United States Fire Insurance Co. v. ADT Security Services, Inc.
134 So. 3d 477
| Fla. Dist. Ct. App. | 2013Background
- USFI, subrogee of M.A. Federal, sued ADT for negligence after a burglary where the wireless backup system failed following the analog-to-digital transition.
- ADT knew the transition date and that analog signals would cease, yet did not notify M.A. Federal that its wireless backup would no longer transmit.
- The security system’s hard wire was disabled during the burglary, and non-transmitting wireless backup prevented monitoring.
- The contract between ADT and M.A. Federal contained waiver of subrogation and a liability-limitation clause, which ADT relied on in its answer and defenses.
- The trial court granted judgment on the pleadings solely on the contract-based defenses, dismissing USFI’s claim with prejudice.
- USFI argued the complaint pleaded an independent tort (negligent misrepresentation/formation-of-contract misrepresentation) not grounded in breach of contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did USFI allege an independent tort despite contract terms? | USFI alleged independent torts (negligent misrepresentation) arising from pre-contract disclosures. | ADT contends the claim is purely contractual and barred by waiver/limitation provisions. | Yes; independent tort pleaded, not barred by contract. |
| Do waiver of subrogation and liability-limitation clauses bar USFI’s negligence claim? | Waiver and cap provisions do not extinguish a tort independent of contract. | Contractual provisions shield ADT from tort liability and limit damages. | No; provisions do not bar the independent tort claim. |
| Is negligent misrepresentation at the contract-formation stage sufficient to support tort liability? | Misrepresentation about transition impacts formed the contract and caused justifiable reliance. | Any misrepresentation is contractual and cannot support independent tort liability. | Yes; negligent misrepresentation formed at contract formation supports an independent tort. |
Key Cases Cited
- Floyd v. Video Barn, Inc., 538 So.2d 1322 (Fla. 1st DCA 1989) (independent tort may arise from misrepresentation in contract formation)
- HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So.2d 1238 (Fla. 1st DCA 1996) (independent torts arising in formation of contract)
- Cowley v. Nero, 693 So.2d 120 (Fla. 2d DCA 1997) (negligent misrepresentation in contract formation)
- Ray v. Elks Lodge # 1870 of Stuart, 649 So.2d 292 (Fla. 4th DCA 1995) (liquidated damages provision does not bar fraud in inducement)
- Ladner v. AmSouth Bank, 32 So.3d 99 (Fla. 2d DCA 2009) (material omission can support negligent misrepresentation)
- Baggett v. Electricians Local 915 Credit Union, 620 So.2d 784 (Fla. 2d DCA 1993) (elements of negligent misrepresentation)
- Costner v. Ziemer, 113 So.2d 263 (Fla. 2d DCA 1959) (test for judgment on the pleadings comparable to motion to dismiss)
- Reinhard v. Bliss, 85 So.2d 131 (Fla. 1956) (historical basis for contract-related tort distinctions)
- Veal v. Voyager Prop. & Cas. Ins., 51 So.3d 1246 (Fla. 2d DCA 2011) (references on reliance and pleadings in contract/ tort mix)