Transcript Premises Liability Overview: Current Issues, Risk

Premises Liability Overview:
Current Issues, Risk Management & Drafting
Strategies
University of Houston
ADVANCED REAL ESTATE COURSE
BY
Cynthia López Beverage
JACKSON WALKER, L.L.P
112 E. Pecan Street
Suite 2100
San Antonio, Texas
(210) 978-7700
Austin  Dallas  Fort Worth  Houston
Richardson  San Angelo  San Antonio
Member of GLOBALAW™
FOCUS
The Impact A Real Estate Document Can Have
on the Liability of An Owner and/or Occupier
of Property:
– In relationships with contractors and
vendors
– In relationships with customers, client,
guests, and their companions
– In relationships with tenants and their
guests
– In relationships with employees
Topics of Discussion
• The General Rule - Duty Follows Control
• Duties Owed - Based on Type of Guest
Visiting Property
• Duties Owed - Based on Criminal Activity on
Property
• Special Rules - As Between Landlords and
Tenants And the Tenant’s Guests
• Special Rules - As Between Owner,
Independent Contractor, their Employees
and the Public
The General Rule Duty Follows Control
– A “possessor” is the person or entity in
control of the premises:
– There can be more than one
“possessor”
– Stoneham v. Nationsbank of Texas, N.A., Mutual
Ins. Co. of New York, Alamo Fed. Credit Union v.
City of San Antonio: Example of 4 our
entities in “possession” of
property
The General Rule - Duty
Follows Control
• In Stoneham v. Nationsbank, et al.—
•elderly gentleman flipped his bike as the
tires fell into grate
•very fit before the accident
•paraplegic after the accident
•4 entities were sued over 1 pathetic
drainage grate
• There were 4 Possessors because of:
•the property lines;
Mut. of NY
AFCU
NationsBank
Drainage Grate
City of S.A.
Site of Injury to
Mr. Stoneham
The General Rule - Duty
Follows Control
In Stoneham v. Nationsbank, et al.—
CRUCIAL LANGUAGE
1.11 Common Areas. Such parking areas, streets, driveways, aisles,
sidewalks, curbs, deliver passages, loading areas, lighting
facilities, and all other areas situated on or in the Property
which are designated by Landlord, from time to time,
for use by all tenants of the Property in common
The General Rule - Duty
Follows Control
• In Stoneham v. Nationsbank, et al.—
• elderly gentleman flipped his bike as the tires fell
into grate
• very fit before the accident
• paraplegic after the accident
• 4 entities were sued over 1 grate
• There were 4 Possessors because of:
•the property lines;
•a property management
agreement; and
AXIOM REAL ESTATE MANAGEMENT, INC.
PROPERTY MANAGEMENT AGREEMENT
3.
Duties of Agent
Agent hereby accepts such . . . and agrees to devote its time,
attention, skill, experience, and best efforts to the management,
operation, and supervision . . . .
(a)
. . . . Agent shall operate the premises and shall
perform all repairs and maintenance and shall make all
replacements of existing equipment and installations as shall be
necessary to preserve, maintain and keep . . . . Without limiting the
generality of the foregoing the Maintenance Obligation shall include . . . .
make ordinary repairs, provided that expenditures for any one item of
repair in or to the Building shall not exceed $5,000.00 without written
consent of Owner, unless such expenditures are within the guidelines
established in the Annual Forecast approved each year by Owner; or
are made under circumstances which Agent shall consider to constitute
an emergency. . . . To hire, pay, supervise, and discharge all
persons necessary to be employed in order to properly manage,
supervise, maintain, and operate the Building in accordance,
wherever and whenever possible, within the guidelines established in
the Annual Forecast.
The General Rule - Duty
Follows Control
• In Stoneham v. Nationsbank, et al.—
• elderly gentleman flipped his bike as the tires fell
into grate
• very fit before the accident
• paraplegic after the accident
• 4 entities were sued over 1 grate
• There were 4 Possessors because of:
•the property lines;
•a property management
agreement; and
•the lease.
Stoneham Office Lease
OFFICE LEASE
6243 NW I-10
San Antonio, Texas 78294-1230
This Lease, made as of the _____ day of ____________,
_____ by and between NCNB Texas National Bank
(“Landlord”) and the Tenant named below:
ARTICLE1. - BASIC LEASE TERMS
For the purposes of this Lease, the following terms shall
have the meanings set forth below:
Stoneham Office Lease [CONT.]
1.1
Landlord. NCNB Texas National Bank, a national banking
association, whose address is 300 Convent, San Antonio,
Texas 78291. [Mut. of NY purchased & became Landlord]
1.2
Tenant. NCNB Texas National Bank, a national banking
association, whose address is 901 Main Street, Dallas, Texas
75202, Attn: Executive Vice President, Properties.
1.3
Building. The Building (including the Leased Premises)
known as NCNB Northwest San Antonio, 6243 NW I-10,
San Antonio, Texas 78294-1230, located on that tract of
land (the “Land”) described on Exhibit A hereto, together
with all other buildings, structures, fixtures and other
improvements located thereon from time to time. The
Building and the Land are collectively referred to herein as
the “Property.”
Stoneham Office Lease [CONT.]
1.3
...The Building (including the Leased Premises) ...NCNB
Northwest San Antonio, 6243 NW I-10, San Antonio, Texas
78294-1230...land (the “Land”) described on Exhibit A ...The
Building ...the Land ...the “Property.”
1.4
Leased Premises.
a.
All of the Unit 1 in the condominium regime
established for the Property by that Condominium
Declaration dated June 1, 1976, recorded in Volume
2, Pages 839-878 of the Condominium Records of
Bexar County, Texas, which Unit 1 contains
approximately 17,662 net rentable square feet of
space on the first floor of the Building, together with
all of the interest appurtenant to said Unit 1 in the
Land and in the General and Limited Common
Areas established by such Condominium
Declaration. The portion of the Leased Premises
described in this Section 1.4.a. may sometimes
hereinafter be referred to as “Tenant’s Office Space.”
Stoneham Office Lease [CONT.]
1.3
...The Building ...(Leased Premises) ...land (the
“Land”)...The Building ...the Land ...the “Property.”
1.4
Leased Premises.
a. . . . the Building, ... the Land
b. All of that certain 0.79 acre tract of land (the “Motorbank Tract”) described on Exhibit A-1 attached hereto
and made a part hereof, together with all buildings,
structures, fixtures and other improvements located
thereon from time to time (collectively, with the
Motorbank Tract, the “Motorbank.”)




1.11 Common Areas. Such parking areas, streets, driveways, aisles,
sidewalks, curbs, deliver passages, loading areas, lighting
facilities, and all other areas situated on or in the Property
which are designated by Landlord, from time to time,
for use by all tenants of the Property in common
Duties Owed Based On
Type of Guest
• Invitee
• Licensee
• Trespasser
Three Categories of Guests-Invitee
• An Invitee is--
– A person who is on the premises (1) at the
express or implied invitation of the
possessor of the premises and (2) who has
entered thereon either as a member of the
public (3)(a) for a purpose for which the
premises are held open to the public, or
(3)(b) for a purpose connected with the
business of the possessor that does or may
result in their mutual economic benefit.
• DUTY OWED– to warn of unreasonable risks of harm
you know of or should know of, or
to make safe
Three Categories of Guests—
Companion of Invitee?
• Case law inconclusive on whether equal
status is given to a companion-– In Parking, Inc. v. Dalrymple, 375 S.W.2d 758
(Tex. Civ. App. — San Antonio 1964, no writ)
equal status was given to companion but
without any precedent.
– In American Indus. Life Ins. Co. v. Ruvalcaba,
64 S.W.3d 126 (Tex. App.—Houston [14th Dist.]
2001, pet. filed), the court rejected Dalrymple
and concluded that the plaintiffs failed to
provide evidence that the injured child (a
traumatic brain injury) was a “public invitee,”
which the Texas Supreme Court had not yet
adopted anyway.
Three Categories of Guests-Licensee
• A Licensee is-– A person who is on the premises with
the permission of the possessor but
without an express or implied
invitation.
• DUTY OWED– to warn of unreasonable risks of
harm you know about, or to make
safe
Three Categories of Guests-Licensee
• A person's status can change from that of
an invitee to a licensee to a trespasser in a
matter of seconds, or even based on the
location of the Plaintiff changing just a few
feet.
• The presence of warnings can make a
licensee a trespasser. Smither v. Texas
Utility Electric Co., 824 S.W.2d 693, 694
(Tex. App.—El Paso 1992, writ dism'd by
agmt.)
Three Categories of Guests--Licensee
Three Categories of Guests-Trespasser
• Trespasser
– (1) a person on the property of another without
any right, lawful authority or express or implied
invitation, permission or license, (2) who is not
in the performance of any duty to the owner or
person in charge or on any business of such
person, (3) but merely for his own purposes,
pleasure, or convenience or out of curiosity, (4)
without any enticement, allurement,
inducement or express or implied assurance of
safety from the owner or person in charge.
• DUTY OWED– The only duty that a landowner owes a
trespasser is to refrain from injuring him
willfully, wantonly or through gross
negligence.
Duties Owed - Based on
Criminal Activity on Property
• The Rule:
–A person has no legal duty to
protect another from the criminal
acts of a third person, unless
that person retains control over
the security and safety of the
premises.
Duties Owed - Based on Criminal
Activity on Property
• To Determine If You Had a “DUTY” to Prevent the
Criminal Acts of a Third Party – Foreseeability
Analysis:
– Proximity-Did any crime previously occur on or near
property?
– Recency & Frequency-How long since any crime occurred
and how frequent has the
– Similarity-How similar was/were prior occurrence(s) of crime
to crime that occurred on property?
– Publicity-Was enough publicity given to prior occurrence(s) of
crime to that Landlord should have known crime would occur
on property?
• How A Contract May Affect Application of Rule
– Courts frequently look to agreements to
determine who retained control over the
security and safety of the premises
Duties Owed - Based on Criminal
Activity on Property
Thompson v. CPN Partners, et al.--Aycox
shot to death during robbery at AMC
Cinema’s
To determine responsibility, Court looked
to :
(1) Lease
(2) Mgmt. Agreement
(3) Security Contract
Mgmt. Agreement Language:
Manager under took rent and maintain premises, employing personnel necessary to operate and
maintain Commerce Park, contracting for the provision of “utilities and other services such as
water, electricity, gas, telephone ,vermin extermination, trash removal, heating, ventilating and air
conditioning maintenance, security and other services deemed by [Property manager] to be
necessary or advisable for the operation, maintenance or repair of [Commerce Park] . . .” of the
Common Facilities.
Lease Language:
AMC paid a “common area charge” for “common area expenses” which were defined as “maintaining, repairing, insuring, lighting, protecting and securing the Common Facilities on the Entire
Premises . . .”
“common facilities” includes “parking areas, streets, driveways, curb cuts, access facilities,
aisles, sidewalks, malls, landscaped areas, lighting and other common and service areas”
Security Agreement:
Whelan agreed to provide one unarmed guard to patrol the exterior common areas
of Commerce Park.
Thompson v. CPN Partners, et al.
Duties Owed - Based on Criminal
Activity on Property: Thompson v. CPN Partners,
et al.
• A review of the three agreements by the Court led it
to the conclusion that none of sued parties had been
in control of the theatre. It noted:
– The Property Management Agreement - gave
Mall Manager duty to secure common facilities
to include providing security
– The Lease - gave Owner duty to secure
common facilities, which did not include
inside the Theatre, and which was delegated to
Manager.
– The Security Agreement - gave Security
Company to patrol and secure the exterior
common facilities and not inside the
theatre
Duties Owed - Based on Criminal
Activity on Property: Dickinson Arms-REO,
L.P. v. Campbell
• Murder in Parking Lot of an Apartment Complex
• Court looked at Foreseeability Factors
• Court introduced evidence of Mgmt. Co’s
“Administrative Policy & Procedures Manual”
Duties Owed - Based on Criminal
Activity on Property: Dickinson Arms-REO,
L.P. v. Campbell
• Court introduced evidence of Mgmt. Co’s
“Administrative Policy & Procedures Manual” - It
stated:
• mgmt. “should check with . . . local police
department for any preventative safety programs
they offer”
• “when crimes and /or assaults on residents occur,
management should notify the residents of the
community and take necessary measures to
improve the situation”
Special Rules - As Between
Landlords and Tenants And the
Tenant’s Guests
• General Rule -- No duty is owed to
Tenants or Their Guests if
– Complete transfer of control
– No intention to possess
– No power to exclude
Special Rules - As Between
Landlords and Tenants And the
Tenant’s Guests
• Exceptions to General Rule
(1)
(2)
(3)
Repairs made by Landlord cause injury
because made negligently
Injury in Common Area (over which
Landlord retains control)
If Lease or Law requires Landlord to
maintain or repair, and failure to do so
causes injury-
Special Rules - As Between
Landlords and Tenants And the
Tenant’s Guests
Exceptions to General Rule
(1)
(2)
(3)
(4)
(5)
Repairs made by Landlord cause injury because
made negligently
Injury in Common Area (over which Landlord
retains control)
If Lease or Law requires Landlord to maintain or
repair, and failure to do so causes injury If Landlord creates a dangerous condition that
causes injury
Any hint of intent to control or possess
leased premises
Effect of Contractual Agreements
On a Property
Owner’s/Landlord’s Tort Duties
• In Landlord-Tenant Relationships-– Contract held of prime importance on
control issue
– Tenant can enforce obligations
against Landlord
– Tenant’s guests have same rights of
enforcement, and therefore, Tenant’s
same limitations in enforcing
Special Rules - As Between Owner,
Independent Contractor, Their
Employees and the Public
Special Rules - As Between Owner,
Independent Contractor, Their
Employees and the Public
Special Rules - As Between Owner,
Independent Contractor, Their
Employees and the Public
• Under Common Law--Liability Follows
Control
•
At inception, Owner has duty to warn of
know defects
•
During work, Entity in Control --duty for
safety
•
During work, Entity in Control of work --duty
to ensure safe performance
• BUT YOU CAN ENSURE SAFETY AS LONG
AS YOU DO NOT CONTROL THE MEANS,
METHODS OR DETAILS OF THE WORK!
Special Rules - As Between Owner,
Independent Contractor, Their
Employees and the Public
• Effect of Contract on Determination of Liability
• (1) if contract formed -- “ A contract between the
parties that establishes an independent contract
relationship is determinative of the parties’ relationship in the absence of extrinsic evidence that the
contract was subterfuge or that hiring party exercised
control in a manner inconsistent with the contract.”
• (2) if no contract -- then actual exercise of
control
Special Rules - As Between Owner,
Independent Contractor, Their
Employees and the Public
• Getting Around The No Duty
Rule When Owner Proves No
Control:
• If respondeat superior (aka vicarious
liability) doesn’t work, then use
• Negligent Hiring!
Conclusion
• In drafting agreements:
– In leases, be consistent in terms used to
identify various areas
– Draft limitations on remedies available to
the parties to the agreement
– As a property owner - distance yourself
from those in control by contractual
language - - and stick to the language in
real life
– As a property manager - hire independent
contractors to maintain/repair and for
security
QUESTIONS?
Cynthia López Beverage
Litigation Partner
(210) 978-7700
[email protected]
Jackson Walker L.L.P.
www.jw.com
www.jwtechlaw.com
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