## Facts

- Patricia Ann Elsken leased an apartment where a 24-hour intrusion-alarm monitoring service was offered through Network Multi-Family Security Corporation (Network).
- Patricia signed a Residential Alarm Services Agreement providing alarm monitoring in exchange for a modest service fee.
- The agreement included (1) a limitation-of-liability clause capping Network’s exposure for losses from system failure and (2) an indemnity/hold-harmless clause requiring the resident to indemnify Network for certain claims.
- On April 11, 1988, an alarm signal indicated a possible intrusion at Patricia’s apartment.
- Network attempted to call Patricia, could not reach her, and notified the apartment manager’s office; the manager did not immediately investigate.
- Patricia was later found dead in her apartment from multiple stab wounds and blood loss.
- The estate sued Network in federal court alleging negligence, breach of contract, breach of warranties, and deceptive trade practices based on Network’s response to the alarm.
- Network relied on the agreement’s limitation and indemnity provisions and sought summary judgment; the federal court certified state-law questions to the Oklahoma Supreme Court.

## Issues

1. Under Oklahoma law, is a contractual limitation of liability for personal injury in a burglar-alarm service contract valid and enforceable?
2. Under Oklahoma law, is the specific limitation-of-liability clause in Network’s Residential Alarm Services Agreement valid and enforceable?
3. Under Oklahoma law, is the agreement’s indemnification and hold-harmless clause valid and enforceable?

## Decision

- A contractual limitation of liability for personal injury in a burglar-alarm service contract may be valid and enforceable under Oklahoma law.
- The specific limitation-of-liability clause is enforceable to limit liability for ordinary negligence if the agreement was properly executed and the parties dealt at arm’s length.
- The indemnification and hold-harmless clause is valid and enforceable.
- Because the proceeding involved certified questions, the court did not decide ultimate liability; it provided controlling answers for application in the federal case.

## Legal Principles

- In commercial alarm-monitoring contracts, the alarm company is not an insurer; contract price reflects monitoring services rather than underwriting catastrophic losses.
- Oklahoma permits contractual risk allocation through liability caps when the provision is clearly expressed, properly executed, and the transaction is at arm’s length.
- A liability cap is treated more favorably than a complete exculpation and may be enforced, at least for ordinary negligence, absent contract defects such as fraud or coercion.
- Indemnity/hold-harmless provisions in this setting are generally enforceable when stated clearly and negotiated in a private commercial context, and are not per se void as against public policy.

## Conclusion

The Oklahoma Supreme Court held that, in the context of residential burglar-alarm monitoring services, contractual clauses capping the provider’s liability and requiring the customer to indemnify the provider are generally enforceable under Oklahoma law when clearly stated, properly executed, and agreed at arm’s length, with the liability limitation applying at least to ordinary negligence.


Elsken v. Network Multi-Family Sec. Corp., 838 P.2d 1007 (Okla. 1992)