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Can the Property Manager of a Retail Center Be Liable For Injuries Resulting from the Acts of Intoxicated Customers?

June 10, 2016adminUncategorized0

The Indiana Court of Appeals recently decided a case involving premises liability in which the plaintiff sought to extend liability to the property manager of a retail center for injuries a customer suffered as a result of the acts of another intoxicated customer.

In Schneider v. Paragon Realty, LLC, the plaintiff had consumed five vodka drinks at her home and then accompanied her friend to Bubbaz Bar & Grill located in a strip mall owned by Heartland Landing II, LLC.  She and her friend consumed additional drinks at Bubbaz and left the bar at 2:00 a.m.; her friend lost control of his car, and as a result of the crash, the plaintiff became a paraplegic.  The blood alcohol content of the driver was .10.

The plaintiff filed suit against Bubbaz, Heartland and the property manager, Paragon, alleging (among other things) that (1) agents or employees of the defendants served the plaintiff and her friend alcoholic beverages with actual knowledge that they were intoxicated, (2) agents or employees of the defendants carelessly and negligently served the plaintiff and her friend alcoholic beverages when they knew or should have known that they were intoxicated and soon thereafter would be driving an automobile, (3) the defendants failed to adequately monitor and supervise their alcohol sales business activities, (4) the defendants and their agents or employees allowed the plaintiff and her friend to drive off, despite their obvious state of intoxication, (5) the defendants are responsible for the acts of their agents and employees under the doctrine of respondeat superior, and (6) the defendants are liable for the plaintiff’s injuries under the Indiana Dram Shop Act and a common law theory of premises liability.

Paragon moved for summary judgment alleging that it did not owe any duty of care to the plaintiff, and following a hearing, the trial court entered summary judgment in favor of Paragon.  The plaintiff appealed, contending that Paragon owed her a duty of care because she was an invitee on the property owned, operated or controlled by Paragon.  In support of that contention, the plaintiff designated evidence showing that the property management agreement between Paragon and Heartland gave Paragon the duty and obligation to maintain, operate, control and supervise the common areas, including the parking lot.  The plaintiff alleged that Paragon should have known the plaintiff’s friend was too drunk to drive and should have stopped him from leaving the parking lot.

The Court of Appeals restated the general law for the plaintiff’s negligence claims:  the essential elements for a negligence action are (1) a duty owed to the plaintiff by the defendant, (2) a breach of the duty, and (3) an injury proximately caused by the breach of that duty; whether a duty exists depends upon (1) the relationship between the parties, (2) the reasonable foreseeability of the harm to the person injured, and (3) public policy concerns.  A landowner generally owes an invitee a duty to exercise reasonable care for her protection while she is on the landowner’s premises; the court recognized that this was an unusual premises liability case, because Paragon is not a “landowner” but a property management company hired by Heartland.

Paragon maintained that it had no control over Bubbaz’s premises or the events that led to the plaintiff’s injury.  Paragon showed that its duties under the property management agreement were to: (1), collect rents and fees, (2) maintain the property in good condition and make repairs as necessary, (3) plan and manage capital improvements, (4) select and employ workmen for the maintenance of the property, (5) contract with utilities for the property, (6) pay taxes and mortgages, (7) deposit monies received on behalf of the owner, (8) negotiate lease agreements, and (9) render advice to the owner regarding property taxes and eminent domain.  Accordingly, Paragon maintained that it did not owe any duty of care to the plaintiff to prevent the car accident that resulted in her injuries.

The Court stated that in premises liability cases, whether a duty is owed depends primarily upon whether the defendant was in control of the premises when the accident occurs.  The defendant will be subjected to liability if that defendant could have known of any dangers on the land and could have acted to prevent foreseeable harm.  The court noted that under the property management agreement, Paragon was a limited agent of Heartland, Bubbaz’s landlord.  Paragon’s duties to Bubbaz’s customers were explicitly limited to maintaining the physical integrity of the common areas, and the court surmised that had the plaintiff tripped over uneven pavement in the parking lot and been injured, Paragon might have been liable.  The Court of Appeals affirmed the trial court’s summary judgment in favor of Paragon finding that Paragon did not exercise any control over or have any responsibility for the way Heartland’s tenants conducted their business.

By George H. Abel, II

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