In a recent New York casean insurance company sued the alarm company, seeking recovery of the monies it paid to its insured, alleging negligence, gross negligence, and breach of contract. The insurer claimed the damage caused by a frozen burst pipe was a result of the alarm company’s failure to notify the subscriber of low temperatures at her property.=

The plaintiff’s insured hired the defendant to install a home security system at her property, including sensors and monitors for heat or lack thereof.

The defendant alarm company moved to dismiss the complaint for failure to state a claim. The defendant’s motion was granted in part and denied in part.

The alarm company did receive a low temperature alarm concerning the property, but failed to notify the subscriber, thus preventing her from addressing a freezing condition which directly led to the damage at her property.

The alarm company submitted an affidavit asserting that it had been unable to locate the original contract due to the age of the account, but attached an exemplar contract, which the alarm company maintained was consistent with the terms and conditions under which the subscriber provided services to the subscriber. The court did not consider the exemplar contract and the alarm company’s motion to dismiss the complaint based on the terms of the exemplar contract was denied.

Regarding the plaintiff’s claim that there was a duty, the defendant alarm company claimed that because its alleged duty to notify the subscriber of lack of heat rose solely from the contract, the plaintiff’s negligence and gross negligence claims failed, as there was no independent tort duty. The court found that the plaintiff failed to provide any case law in response to those arguments. The court went on to say that under New York law, it is well established that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract has been validated.

The court went on to say that because it did not have the contract between the subscriber and the alarm company, the insurance company’s allegations regarding its terms are sparse, referring only to certain “agreements” between the subscriber and the alarm company. The court was therefore limited in its ability to determine whether the alarm company’s duty to properly inform the subscriber of any lack of heat at her property is duplicative of its contractual duties.

The court further indicated that there is no allegation that the relationship between the subscriber and the alarm company was professional or fiduciary, nor is there an allegation that the subscriber relied on the alarm company to provide a specialized service, primarily for safety or to remedy an ongoing problem. The alarm company was not security consultants, and they were contracted to render a discrete service. Even though the pipe bursting at the subscriber’s property was arguably sudden, that alone would be insufficient to create an independent legal duty. The court stated: “The presence here of an abrupt loss is insufficient to outweigh the other factors, all of which counsel against the finding of a duty.”

The court concluded that the insurance company had not alleged that the alarm company had a duty to properly alert the subscriber of low temperatures at her property independent of their contract, nor can such an independent duty be imposed by law, and accordingly, both its negligence and gross negligence claims must be dismissed.