Frost v. ADT
Unreported, 10th Cir., January 17, 2020 (2020)
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Rule of Law:
A clear and conspicuous contractual provision shortening the statute of limitations is generally enforceable under Kansas law, even against tort and wrongful death claims, unless it violates a strongly held public policy.
Facts:
- Elizabeth Frost entered into a 'Residential Alarm System and Services Agreement' with ADT for 24/7 monitoring of her home security system for a monthly fee.
- The contract contained a clause, Section 9, stating that any legal action arising from the contract or services must be brought within one year of the cause of action accruing.
- The contract also included provisions stating ADT was not an insurer and significantly limiting its liability.
- Representations on ADT's website stated that in an emergency, the company would notify local police or fire assistance.
- On August 15, 2016, a fire ignited in Frost's home, and she ultimately died from smoke and soot inhalation.
- During the fire, ADT received 'sensor tamper' and 'expansion module failure' alerts from Frost's system.
- ADT employees attempted to call Frost and a backup contact number multiple times but were unable to reach anyone.
- After the failed call attempts, ADT 'fully cleared' the alarms and did not contact any emergency services.
Procedural Posture:
- The administrator of Elizabeth Frost's estate and her minor heir, M.F., (Claimants) filed suit against ADT in the United States District Court for the District of Kansas more than one year, but less than two years, after Frost's death.
- The complaint asserted claims for wrongful death, negligence, fraud, and violations of the Kansas Consumer Protection Act.
- ADT filed a motion to dismiss under Rule 12(b)(6), arguing that the claims were time-barred by the one-year suit-limitation provision in the service contract.
- The district court granted ADT's motion to dismiss, holding that the contractual provision was enforceable and barred all of the Claimants' claims.
- The Claimants (Appellants) appealed the district court's dismissal to the U.S. Court of Appeals for the Tenth Circuit, with ADT as the Appellee.
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Issue:
Does a one-year suit-limitation provision in a home security monitoring contract bar wrongful death and tort claims brought more than one year after the incident, even when the claims are brought on behalf of a minor?
Opinions:
Majority - Chief Judge Tymkovich
Yes. A one-year suit-limitation provision in a home security monitoring contract is enforceable and bars claims brought after its expiration. The court found the contract was not unconscionable, as limitations on liability are reasonable for low-cost monitoring services and the terms were conspicuously presented. The provision did not violate Kansas public policy because the claims did not implicate a 'strongly held public policy interest' sufficient to override the freedom of contract, distinguishing this case from the narrow exception for retaliatory discharge claims in Pfeifer. The contract's limitation applies to all claims, including the wrongful death claim, which is derivative of the decedent's rights, and the tort claims, which are subsumed by the contract because they cover the same subject matter. Finally, the statutory provision for tolling statutes of limitations for minors does not apply to a clear, contractually agreed-upon limitation period.
Analysis:
This decision strongly reinforces the principle of freedom of contract, particularly regarding contractual suit-limitation clauses. It clarifies that such provisions are difficult to overcome and will generally be enforced against related tort and statutory claims, including wrongful death actions brought by heirs. The court's narrow interpretation of the public policy exception from Pfeifer signals that only specific, legislatively or judicially recognized policies of great importance can invalidate such a contractual term. This case serves as a strong precedent for companies using service agreements to manage risk by significantly shortening the time frame for potential litigation.
