On the day of the incident, Plaintiff had gone to her employment at Target early in the morning. At mid-morning, alarms began tripping at her house. The alarm company notified the police and Plaintiff’s sister and attempted to call Plaintiff at Target, but when the Monitronics call was answered by an automated message directing the caller to dial an extension number or press 1 to speak with an operator, the representative – despite having Plaintiff’s extension number – terminated the call. When Plaintiff returned home in the evening, she noticed that several things in her apartment were amiss. Also, she received a telephone call from a Monitronics representative who told Plaintiff that the alarm had been triggered most likely because the door she entered did not have a delay timer. Plaintiff did not believe that the representative was correct about the delay timer, but she nevertheless accepted their explanation and remained in the home. Later that evening, Plaintiff was attacked. The case proceeded to trial and a jury entered an award of $9,000,000 in damages which was reduced by 4% for the amount of fault attributed to Plaintiff.
Monitronics had argued to the trial judge, Hon. Alvin Wong of the State Court of Dekalb County, that the limitation-of-liability clause in the home security system purchase contract which Plaintiff had signed with a predecessor company, Tel-Star, limited Monitronics’ liability to $250.00.
The relevant section of the home security system purchase contract, which was printed on the back of the one-page document along with the rest of the terms, read as follows:
“Subscriber therefore agrees that if Tel-Star should be found liable for loss or damages caused by failure of Tel-Star to perform any of its obligations under this agreement . . . Tel-Star’s total liability shall be limited to $250.00.”
Judge Wong denied Monitronics’ Motion for Summary Judgment and found that the limitation-of-liability clause was unconscionable and void as against public policy and reaffirmed this ruling in his denial of Monitronics’ Motion for Judgment Not Withstanding the Verdict. The Court of Appeals did not find specifically that the clause was unconscionable or void as against public policy, but agreed that the clause was unenforceable.
Exculpatory clauses, in which a business seeks to relieve itself of its own negligence, are valid and binding in Georgia and are not generally void as against public policy unless they purport to relieve liability for acts of gross negligence or willful or wanton conduct. However, these clauses require a meeting of the minds and must be explicit, prominent, clear and unambiguous. Here, the limitation-of-liability clause on the back of the one-page, two-sided contract was not highlighted and was not setoff in any meaningful way. Therefore, the clause was not “prominent” and was unenforceable.
Interestingly, there were several separate opinions written by various judges. Judge Boggs agreed that the limitation-of-liability clause in the contract was unenforceable but only because the clause can be interpreted to apply only to property damage or loss and not personal injury and was therefore ambiguous. Judge McMillian disagreed that the clause should be unenforceable just because it was not capitalized or bolded. Judge McMillian wrote that the limitation-of-liability clause was enforceable, but only with regards to potential breach of contract claims and not for claims of general negligence against Monitronics. Judge Andrews dissented and found that the clause was enforceable and should have limited any award against Monitronics to $250.00.
Based upon the various differences of opinion in the Court of Appeals as to if and why this limitation-of-liability clause should have been unenforceable, I would expect that there is a good chance that this case will be appealed by Monitronics to the Supreme Court which may consider it. If not, it provides very little guidance to businesses seeking to limit their liability through such clauses, except that the clauses should be printed in bold, highlighted, and make clear what claims to which they would or would not apply.
The opinion was Monitronics International, Inc. v. Veasley, decided July 16, 2013. Please let me know if you would like a copy.
Michael
