Spengler v. ADT Security Services

United States Court of Appeals for the Sixth Circuit · Torts

TortsContractsEconomic loss / tort-versus-contract distinctionMichigan lawtort vs contractindependent dutyseparate and distinct dutymisfeasance

Facts

Dwight Spengler signed a residential services contract with ADT to install and monitor a security alarm at his mother Veronica Barker's home, including a portable emergency call button. Because Barker could not speak due to cancer-related conditions, ADT had instructions to call Spengler if an alarm was triggered. When Barker activated the alarm, ADT responded by giving ambulance dispatchers an erroneous address, delaying emergency services by about sixteen minutes. Barker was in asystole when emergency personnel arrived, never regained consciousness, and later died.

Issue

Whether ADT's act of giving an incorrect address to ambulance dispatchers after receiving Barker's emergency alarm created tort liability, or whether the claim sounded only in contract because ADT breached no duty independent of the parties' agreement. Also, whether the court would consider Spengler's appellate arguments that the contract's $500 limitation of liability clause was unenforceable.

Rule

Under Michigan law, for an action in tort to arise out of a breach of contract, the defendant's act must constitute both (1) a breach of a duty separate and distinct from the contractual duty and (2) active negligence or misfeasance. The duty prong is the threshold inquiry; if no independent duty exists outside the contract, liability, if any, rests solely in contract.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Grand Rapids, Michigan, Lena Ortiz signed a service agreement with Harbor Crest Monitoring, a private company that would receive signals from a fall-alert pendant worn by her father. When the pendant was activated, Harbor Crest mistakenly transmitted the wrong apartment number to paramedics, delaying treatment and worsening her father's injuries.

Under Michigan law as applied by the majority opinion, which is the strongest argument that Lena's negligence claim against Harbor Crest sounds only in contract?

Explanation. The majority treats the duty inquiry as the threshold question. Under Michigan law, a breach of contract supports a tort action only if the defendant violated a duty separate and distinct from the contractual duty. If the obligation to act correctly exists only because of the service contract, liability rests solely in contract. (Derived from Spengler v. ADT Security Services (n.d.).)