Judge stays ADT’s second lawsuit against Vision Security

ADT ordered to first comply with previous settlement agreement it made with the door-knocking company in an earlier lawsuit over deceptive sales techniques
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Wednesday, April 30, 2014

OREM, Utah and BOCA RATON, Fla.—A federal judge has put a 45-day hold on a second lawsuit that ADT had brought against Utah-based Vision Security over alleged deceptive sales practices. During that time, the two companies must follow a recent settlement agreement ADT worked out with Vision after ADT previously sued that door-knocking company on very similar charges.

Florida-based ADT declined to comment to Security Systems News, saying, “it would be inappropriate for us to comment on a pending legal matter.”

But Vision’s attorney, Sean Brown, told SSN, “From our perspective, [the judge’s ruling] is great news. We want to let the security industry know that when you enter into settlement agreements, ADT can’t come and sue you for the same exact thing.”

Brown summed up the judge’s ruling in this way: “At the end of the day the court said, ‘Follow the settlement agreement that you guys all signed [in the earlier lawsuit].’”

ADT announced last November that it was filing a second lawsuit against Vision for what ADT characterized as Vision's deceptive sales pitches.

The lawsuit, filed in U.S. District Court in Florida, seeks to prohibit sales representatives of Vision, a Utah door-knocking company, from using deceptive sales techniques, and to obtain damages and attorney fees.

But that lawsuit came just a couple months after ADT has just settled a similar lawsuit against Vision and Security Networks, of which Vision is an affiliate. In that settlement, reached just last September, Vision and Security Networks agreed to pay ADT $2.2 million and also agreed to a permanent injunction, prohibiting Vision from using deceptive and misleading sales practices when dealing with consumers.

Also part of the injunction, according to court records, was an agreement between the companies that essentially stipulated they would make “a mutual, good faith effort to resolve any controversy prior to initiating litigation.”

ADT said in a press release at the time it filed the second lawsuit that the new litigation was necessary because of discoveries ADT made after the settlement was agreed upon. ADT contends that while Vision previously stated that any deceptive sales techniques “came from isolated ‘rogue’ sales agents,” that was not true. ADT says former Vision sales employees provided ADT with copies of audio and video recordings of Vision sales agent training sessions indicating “that Vision trained more than one hundred sales agents to use false sales pitches and urged them to record and share these pitches with others.”

Also, ADT says in a court filing in March of this year, “ADT continues to receive more reports of frauds caused by Vision sales agents than by those of any other alarm company—all in violation of the agreed injunction.” ADT also notes that Vision has an “F” rating from the Better Business Bureau.

Vision has denied ADT’s allegations. Brown contends that Vision had “only one allegation of misconduct prior to that [second] lawsuit being filed.” That is why, he said, the second lawsuit, involving court costs and attorney’s fees, “frustrated us.”

Vision has argued in court that the previous settlement means that ADT had no right to bring another lawsuit against it. ADT argues that the earlier settlement does not cover its latest claims against Vision.

U.S. District Judge Daniel Hurley ruled on April 17 that the previous settlement does not preclude ADT from bringing further litigation. However, he said, because some of ADT’s new allegations fall under the previous settlement agreement, the company must first comply with the terms of that. He gave the companies 45 days to present him with a status report on their compliance.

Brown said that under the settlement, ADT must notify Vision in writing of any complaints on a case-by-case basis, and then Vision must investigate them and report back on its findings to ADT. Brown said that if Vision finds evidence of a problem, “we’ll refund the customer to them and we’ll cancel the contract.”