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Hillsborough Rare Coins, LLC v. ADT LLC

United States District Court, D. New Jersey

February 22, 2018

ADT LLC, f/k/a ADT SECURITY SERVICES, INC, et al. Defendants.



         This matter comes before the Court by Plaintiff Hillsborough Rare Coins, LLC (“Plaintiff” or “HRC”) on a Motion for leave to file a Second Amended Complaint [ECF No. 48]. Plaintiff, a small business that collects and sells rare coins, brings this action against Defendant ADT Security Services, Inc. (“Defendant” or “ADT”), alleging that ADT breached a contractual obligation under an Agreement entered into in 2014. For the reasons set forth below, Plaintiff's Motion for leave to file a Second Amended Complaint is granted in part and denied in part.


         In 2006, Plaintiff had an ADT burglary alarm system installed on its premises, located in Green Brook, New Jersey. Second Amended Complaint (“SAC”), ¶ 6. In exchange for a fee, Plaintiff alleges that ADT “promised” to provide store monitoring services, as well as contact law enforcement and Plaintiff if the alarm system was triggered. Id., ¶ 7. But Plaintiff contends that an agreement was never signed; rather, Plaintiff “[r]ecently” discovered that a representative of ADT forged the signature of Victor Fabricatore (“Mr. Fabricatore”), HRC's owner, on a Sales Proposal/Agreement containing Terms and Conditions limiting ADT's potential liability, dated May 7, 2006 (the “2006 Agreement”). Id., ¶ 8.

         In 2014, Plaintiff entered into a new contract, under which HRC's existing burglary alarm unit was upgraded and converted to the “Pulse” system (the “2014 Agreement”). Id., ¶ 12. ADT's responsibilities under this contract remained essentially the same; specifically, pursuant to Paragraph B, ADT agreed to provide signal receiving and notification services: “If an alarm signal registers at ADT's [Customer Monitoring Center], ADT shall endeavor to notify the appropriate Police or Fire Department and the designated representative of Customer.” Id., ¶ 15. Plaintiff alleges that this contract provision is consistent with an ADT associate's earlier representation, when the alarm system was first purchased and installed. Id., ¶ 16.

         On June 1, 2015, at approximately 10:30 p.m., three burglars broke into HRC using sophisticated tools and techniques, entering through the wall of an adjoining business and accessing HRC's rear room. Id., ¶¶ 17-19. As video surveillance purportedly demonstrates, the heist lasted for approximately three hours and the burglars absconded with “numerous valuable rare coins and other merchandize, while also causing extensive physical damage to the store.” Id., ¶¶ 18, 20.

         Upon entering HRC, the burglars “cut or attempted to cut” the alarm system's cables and ripped its components from the wall, but the silent panic system was activated, alerting ADT's monitoring station of the intrusion. Id., ¶¶ 21-23. Although ADT informed HRC of the silent panic alarm through a computer-generated email to HRC at 10:36 p.m., it was marked as spam and noticed only after the burglary concluded. Id., ¶¶ 23, 24.

         Nevertheless, Plaintiff alleges that ADT had a contractual obligation to call Mr. Fabricatore's cell phone and law enforcement, yet ADT failed to notify either party. Id., ¶¶ 24-25. On June 2, 2015, the following morning, it was discovered that HRC had been burglarized. Id., ¶ 30.

         On December 2, 2015, Plaintiff brought the instant action against ADT in New Jersey Superior Court, Somerset County. On February 19, 2016, ADT filed a Notice of Removal to the United States District Court of New Jersey on the basis of diversity jurisdiction. Subsequently, Plaintiff filed an eight-count Amended Complaint, among which include breach of contract and New Jersey Consumer Fraud Act (“NJCFA” or the “Act”) claims. Defendant then moved for dismissal, which this Court granted as to every claim except the breach of contract claim.

         Plaintiff now seeks leave to amend its claim under the NJCFA, arguing that on September 26, 2014, Defendant induced “Plaintiff to sign their alarm installation and services contract” by representing that ADT would “competently monitor the alarm system . . . and, if the alarm system was triggered, immediately notify [Plaintiff] as well as local law enforcement.” Id., ¶ 59. Allegedly unbeknownst to Plaintiff, the 2014 Agreement contained “exculpatory clauses, within print so tiny as to be illegible and effectively hidden from view, ” which, in turn, limited ADT's contractual liability. Id., ¶ 60. Plaintiff also seeks to correct its name in the caption of the Complaint, because it was wrongly designated as a limited liability company, despite operating as a sole proprietorship owned by Mr. Fabricatore. ADT opposes the motion, arguing that the proposed Second Amended Complaint fails to establish the required element of causation under the NJCFA.

         II. ANALYSIS

         A. Standard of Review

         Pursuant to Federal Rule of Civil Procedure 15(a), “a party may amend its pleading only with the opposing party's written consent or the court's leave” and “[t]he court should freely give leave when justice so requires.” The decision to grant leave to amend rests within the sound discretion of the trial court. Zenith Radio Corp. v. Hazeltine Research Inc., 401 U.S. 321, 330 (1970). In determining a motion for leave to amend, courts consider the following factors: (1) undue delay on the part of the party seeking to amend; (2) bad faith or dilatory motive behind the amendment; (3) repeated failure to cure deficiencies through multiple prior amendments; (4) undue prejudice on the opposing party; and/or (5) futility of the amendment. See Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 174 (3d Cir. 2010) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

         B. ...

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