ADT and First Protection battle over contract issues

Thursday, July 1, 2004

July 1, 2004

SCOTTSDALE, Ariz. - ADT Security Services has filed a lawsuit against First Protection, a former member of its authorized dealer program, claiming breach of contract, but the Arizona-based security provider has countersued for more than $3 million in damages.
ADT’s lawsuit centers on allegations that First Protection failed to meet minimum sales quotas and kept its attrition rate at a high level for the four years it was part of the program. But First Protection owner, Dave Fursman, said the company had fulfilled its dealer requirements on both ends - specifically citing that the company had consistently met the minimum 25 system sales per month ADT requires of its dealers.
“We had an average of 191 per month,” Fursman said. “That part we’re kind of at a loss to understand. We’ve never actually sold them less than 100 per month.”
As for the high attrition rate, Fursman said ADT cancelled its existing accounts with First Protection customers and re-signed them with the local corporate office. Fursman said those cancellations attributed to First Protection’s attrition rates. Stephen Rich, an attorney with Hebert Schenk who represents First Protection, said the rates were also incorrectly calculated by ADT.
“These guys had a systematic approach to calculating attrition rates that allowed them to terminate dealers,” he said.
A representative from ADT was not available for comment by press time.
The lawsuits, both filed in Colorado where ADT’s dealer program headquarters are located, are set to be argued in March 2005, although that date is tentative. Regardless of when it does go to trial, First Protection is preparing for its day in court - shifting through more than 50,000 documents.
“It will take us some time to get everything together,” Rich said.
For more on this story see the August issue of Security Systems News.