1. Chapter 11 Your Responsibilities for Guests Property

2. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Your Responsibilities for Guest Property Liability For Guests’ Property Liability For Guests’ Property Bailments Bailments Property With Unknown Ownership Property With Unknown Ownership

3. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved In This Chapter, You Will Learn: 1. To understand fully the responsibility hospitality managers have to safeguard the personal property of their guests. 2. To carry out the procedures needed to limit potential liability for the loss of guest property. 3. To assess the theories of bailment so as to be able to implement policies that limit potential legal liability. 4. To create the procedures required to legally dispose of personal property whose ownership status is in question.

4. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Liability for Guests’ Property Common Law Liability Common Law Liability Statutory Liability Statutory Liability

5. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Liability for Guests’ Property 1. Posting notice. 2. A secure safe. 3. Suitable locks on doors and windows. 4. Limits on required possession. 5. Limits on replacement values of luggage. 6. Penalty for negligence.

6. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.1 Traci Kennear checked into the Pullman House Hotel. During her stay, jewelry with an estimated value of $5,000 was stolen from her hotel room. Ms. Kennear maintained that the hotel should be responsible for the jewelry's replacement, and sued the hotel for the amount of the stolen jewelry. The hotel stated that its liability was limited to $300 under state law, because Ms. Kennear failed to deposit the jewelry in the safe deposit boxes provided by the hotel.

7. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.1 Ms. Kennear's attorney countered that the notice of the law, which the legislature stated must be “conspicuously posted” in order to be applied, was in fact posted on the inside of a dresser drawer filled with extra blankets for the guestroom, and that, further, the type size was so small that an average person would not be able to read the notice from a distance of two feet.

8. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.1 The hotel replied that the notice was, in its view, conspicuously posted, and that Ms. Kennear should have asked for help from the hotel if she could not find or read the notice.

9. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.1 1. Did the hotel comply with the state legislature's requirement that the notice be conspicuously posted? 2. How could the hotel manager in this case ensure compliance with the “conspicuous posting” requirement of the state legislature?

10. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Bailments Legalese: Legalese: Bailment - The delivery of an item of property, for some purpose, with the expressed or implied understanding that the person receiving it shall return it in the same or similar condition in which it was received, when the purpose has been completed. Examples include, coat checks, valet parking, safety deposit boxes, laundry, luggage storage and delivery.

11. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Bailments Legalese: Legalese: Bailor - A person or entity who gives property to another in a bailment arrangement.

12. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Bailments Legalese: Legalese: Bailee - A person or entity who receives and holds property in a bailment arrangement.

13. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Bailments Legalese: Legalese: Gratuitous Bailment - One in which there is no payment (consideration) in exchange for the promise to hold the property.

14. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Types of Bailment 1. Bailments for the benefit of the bailor. 2. Bailments for the benefit of the bailee. 3. Bailments for the benefit of both parties.

15. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.2 The Fox Mountain Country Club was a popular location for weddings in a midsized town. In the winter, the country club offered a free coat check service to its guests. A staff member employed by the country club operated the coat check service. The coat checkroom was located just outside the entrance to the club's Crystal Ballroom.

16. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.2 The Fox Mountain Country Club was a popular location for weddings in a midsized town. In the winter, the country club offered a free coat check service to its guests. A staff member employed by the country club operated the coat check service. The coat checkroom was located just outside the entrance to the club's Crystal Ballroom.

17. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.2 At a wedding held on June 15, Mrs. Kathy Weldo presented her full-length sable coat to the uniformed coat check attendant at the country club. Mrs. Weldo was given a small plastic tag with a number, which she observed corresponded to the number on a coat hanger where her coat was hung. Standing outside the coatroom, Mrs. Weldo had a clear view of her fur as it hung on the coat rack. Mrs. Weldo remarked to the attendant that the coat was “very valuable,” and that she hoped the attendant would watch over it carefully.

18. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.2 Upon leaving the club at 1:00 A.M., Mrs. Weldo went to the coat check area to retrieve her coat, only to find that her fur was missing. When she inquired about the coat's location, the coat check attendant apologized profusely, but could not explain the coat's disappearance.

19. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.2 The attendant stated that he had left the coatroom unattended only twice that evening, one time for a 15-minute dinner break, and the other was for a five- minute cigarette break. The door to the coatroom was left open and unlocked during those periods, so that guests who left early could retrieve their own coats.

20. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.2 Mrs. Weldo returned to the club the next day to speak to Ms. Miles, the Club Manager. Ms. Miles pointed to a sign prominently displayed near the coatroom door stating “The club is not responsible for lost or stolen property.” She recommended that Mrs. Weldo refer the matter to her insurance company.

21. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.2 1. What was the nature of the bailment relationship in this situation? 2. Did the club exercise reasonable care in the handling of Mrs. Weldo's coat? 3. What should the Club Manager do in the future to avoid situations such as this?

22. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Bailments Legalese: Legalese: Infra Hospitium - A Latin term meaning “within the hotel.”

23. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Bailments Legalese: Legalese: Detained Property - Personal property held by a bailee until lawful payment is made by the bailor.

24. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Search the Web 11.1 Go online to www.law.cornell.edu/ucc/ucc.table.html Go online to www.law.cornell.edu/ucc/ucc.table.html 1. Select: “ Article Seven ” from the list of articles available. 2. Scroll to: PART 2. WAREHOUSE RECEIPTS: SPECIAL PROVISIONS. 3. Select and read : “ § 7-209. Lien of Warehouseman ” and § 7- 210. “ Enforcement of Warehouseman's Lien. ” 4. What does it mean if a bailee has a lien on a bailor ’ s property? 5. Does a lien permit the possessor of property to sell it to satisfy the lien? 6. What are the implications of section 4, of 7-209, for the hospitality manager proceeding without an attorney?

25. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Property with Unknown Ownership Legalese: Legalese: Mislaid Property - Personal property that has been put aside on purpose, but then has been forgotten by the rightful owner.

26. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Property with Unknown Ownership Legalese: Legalese: Lost Property - Personal property that has been inadvertently put aside, then forgotten by the rightful owner.

27. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Property with Unknown Ownership Legalese: Legalese: Abandoned Property - Personal property that has been deliberately put aside by the rightful owner with no intention of ever returning for it.

28. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.3 Kari Renfroe was employed as a room attendant at the Lodge Inn motel. One day, as she came to work, she discovered an expensive leather jacket stuffed inside a plastic shopping bag in the employee section of the parking lot. The jacket had no ownership markings on it, and neither did the plastic bag. Kari turned the jacket over to the manager of the motel, despite the fact that there was no policy in place regarding items found outside the motel.

29. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.3 The jacket was still unclaimed 120 days later, at which time Kari approached the manager and asked if she could have the jacket, since she found it. The manager refused to give Kari the jacket, stating that all unclaimed property found on the motel's premises belonged to the motel.

30. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Analyze the Situation 11.3 1. Would the jacket be considered mislaid, lost, or abandoned property? 2. Who is the current, rightful owner of the jacket? 3. How could the motel manager avoid future confusion about handling “found” property?

31. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Disposing of Found Property 1. Review your state’s lost and found laws. 2. Require all employees and management staff to turn in lost property. 3. Keep lost-and-found log book. 4. If the value of the found item is significant, make all reasonable efforts to locate the rightful owner, and document these efforts.

32. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Disposing of Found Property 5. Hold the found property for a period of time recommended by your company or a local attorney familiar with the laws in your state regarding found property. 6. Permit only the property manager to return found property to the purported owner. 7. If the original owner does not come forward, dispose of the property in accordance with written procedures.

33. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved What Would You Do? You are the manager of a restaurant in a downtown area of a large city. Because of your location, no parking is available directly adjacent to your facility. For the past five years, you have made valet parking service available to your customers through A-1 Parking. Essentially, A-1 provided valet drivers who would stand outside your restaurant doors, approach cars as they arrived, give guests a claim check for their cars, and deliver the car to a parking garage owned by A-1.

34. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved What Would You Do? The parking garage is located one-fourth of a mile from your restaurant. When guests finished dining, the valet outside your restaurant would radio the parking lot with the claim check number, and a driver from A-1 would deliver the car back to your front door, where guests would pay a parking fee before they regained possession of their car. A-1 currently provides this service to several restaurants.

35. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved What Would You Do? The arrangement has been a good one for both you and A-1. No trouble of any kind was ever reported. Today, however, the owner of A- 1 has announced he is retiring; he approaches you to inquire whether the restaurant would be interested in buying his business. Draft a letter to the owner of A-1 Parking stating whether or not you wish to buy the parking garage business. In your letter, be sure to address the following points:

36. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved What Would You Do? 1. How operating the valet parking service yourself would change the relationship you have with your restaurant customers. 2. The need for insurance to cover potential damages to automobiles and other areas of liability you might need to insure against. 3. The potential pros and cons of assuming the responsibility for parking your guests’ automobiles, as compared to the current situation. 4. The agency, liability, and bailment issues that would arise if the purchase was made.

37. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Rapid Review 1. Discuss the impact that the common law liability of innkeepers had on the development of the early travel industry, and give three reasons why state legislatures have chosen to limit that liability.

38. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Rapid Review 2. Using the World Wide Web, contact the offices of your state hotel and motel association to secure a copy of the current innkeepers’ liability law. Review the document and create a list of posting/notice requirements that you would implement if you operated a hotel in your state. Explain your rationale for each item on the list and its posting location.

39. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Rapid Review 3. Give a restaurant example of a bailment for the benefit of a bailor and one for the benefit of the bailee. 4. Innkeepers are generally held responsible for an even higher degree of care than ordinary bailees. Why do you think this came to be under common law? 5. When a guest places a coat on a coat rack attached to his or her table in a restaurant, is a bailment created? Why or why not?

40. © 2012 Stephen C. Barth P.C. and John Wiley & Sons, Inc. All Rights Reserved Rapid Review 6. List 10 examples of bailment relationships in the hospitality industry. 7. Think of and write out an example you could use to teach employees the difference between mislaid and abandoned property. Why is such an example useful? 8. Create the portion of a lost-and-found policy for a hotel’s room attendants that refers to disposition of unclaimed mislaid, lost, or abandoned property. Did you give the property to the employee who found it? Why or why not?