Dec. 7, 2006

Dear Industry Colleague:

We're writing today to provide an update on the recent court ruling in New Jersey and to urge you to support our efforts with a contribution. The danger of the trial court's decision, both in terms of the immediate impact in New Jersey as well as the potential impact in other jurisdictions as a precedent, can not be overstated.

As many of you know, NBFAA has been working with the New Jersey Burglar & Fire Alarm Association (NJBFAA) and other industry groups to band together and underwrite a legal brief in support of the pending Appellate Division appeal.

Following is a summary of the facts:

• In a recent Camden County, New Jersey trial, on a subrogation claim, the court ruled against the defendant (alarm company) in favor of awarding the plaintiff $4.5 million in connection with a burglary of computer equipment from a warehouse. The court held that exculpatory clauses in alarm contracts, including limitation of liability and indemnification clauses, are unenforceable under New Jersey law.
• If this judgment is upheld by the Appellate Division in New Jersey, it will have serious implications for the industry. Among other things, alarm companies could face increased liability exposure and significantly increased insurance rates.
• This case not only has negative implications for all companies doing business in New Jersey, but has the potential to set a precedent that may be used in lawsuits in other states.

Here are the actions we’ve taken to date:

• The NBFAA filed a motion with the New Jersey Superior Court on November 14 asking that it be permitted to file an amicus curiae or "friend of the court" brief in connection with the appeal of the trial court decision. An amicus brief is a document that is filed by a “friend of the court” or a party that has some interest in the outcome of the case. Amicus briefs are often filed on important issues facing appellate courts. This is important not only for our New Jersey chapter but for the entire industry.
• On November 27, the plaintiff filed an objection to NBFAA’s request to file a “friend of the court” brief. Among its objections was a claim that the NBFAA was a national organization and was therefore not really affected by what happened in New Jersey.
• On December 1, NBFAA filed a motion on behalf of the NJBFAA asking that it be allowed to join in the NBFAA's request and highlighting that both the alarm industry and the public in New Jersey (as well as elsewhere) would be adversely affected if the appeals court were to affirm the ruling of the lower court on this issue.

We need your immediate assistance in the form of a financial contribution to our “legal defense fund” to pay for the amicus brief. These types of briefs can be extremely involved, complicated and expensive. Please download contribution form now or visit www.alarm.org to make your contribution to support this effort.

Please note that, time is of the essence.

If you have questions, please feel free to contact one of us at the following:

Sincerely,