COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Hotel, Restaurant, and Travel Law: A Preventive Approach, Seventh Edition Chapter 8 Protecting Patrons’ Property

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Introduction  Hotel guests bring a variety of personal property to hotels Money Jewelry Computers/electronic devices Clothing Sports equipment Cars

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Risks to Property in the Hotel  Hotel theft is a problem the hospitality industry has not fully solved  Liability of the innkeeper for losses has lessened over time

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Hotel Theft  Hotel thefts are not rare—industry- wide problem  Hotel thieves are professionals seeking money, jewels, and credit cards  They often register as guests in the hotels they plan to burglarize

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Hotel Theft (continued)  Tricks of hotel thieves: Offering money in exchange for confidential information from  Maids  Bartenders  Other hotel personnel  Generally do not carry weapons  If caught in the act, they feign drunkenness

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Hotel Theft (continued)  Strategies to stem the increase of hotel thefts: Increase number of security personnel Hiring trained professionals Warning guests to lock rooms and put valuables in a hotel safe Installing closed-circuit televisions to monitor hallways

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Keycards and Keys  Most hotels today use electronic keycards, which have a magnetic strip  Allows the code that opens the door to be changed every time a new guest occupies the room  Keycard system was inspired by problems associated with more traditional keys

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Guests’ Insurance  Many people are not personally insured against the loss of their valuables  If their property is stolen while they are at the hotel, they are likely to sue the hotel seeking compensation

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Absolute Liability for Guests’ Goods  According to common law, hotelkeepers were liable for any loss of guests’ property occurring on hotel premises  Doctrine was called absolute or strict liability  Applied to guests’ property that was infra hospitium—literally “within the inn”

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Exceptions to the Absolute Liability Rule  Three exceptions: Loss caused by an act of God Loss caused by a public enemy Negligence by the guest

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Prima Facie Liability Rule— Minority View  Six states have adopted a rule that modified absolute liability as follows: Hotelkeepers are liable for property laws only if the loss occurs through their negligence If the innkeeper can prove the loss resulted from some other cause  If the goods are stolen by robbers without aid or negligence of the innkeeper

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Limited Liability—Modern Limitations to the Absolute Liability Rule  Current law recognizes that absolute liability rule is burdensome to modern-day hotels  All state legislatures have adopted statutes to significantly limit hotel’s liability, provided hotels follow specific procedures

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Limited Liability—Modern Limitations to the Absolute Liability Rule (continued)  Hotel complies with mandated rules  Faces only liability of a few hundred dollars, even if items are valued at much more

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Limited Liability—Modern Limitations to the Absolute Liability Rule (continued)  Common provisions: Hotel must:  Provide a safe for use by guests  Post notices announcing availability of safes  Post notices announcing limited liability  Maximum recovery allowed to a guest is prescribed by statute

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Limited Liability—Modern Limitations to the Absolute Liability Rule (continued)  If the innkeeper deviates from requirements of the statute in any manner, common law rule will apply and the innkeeper will have unlimited liability

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Providing a Safe  In the past, hotels provided a safe or safe-deposit boxes  Today’s popular alternative is for hotels to provide individual safes in each guest room

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Posting Notice of Availability of Safe  Posting means displaying a sign that calls attention to the availability of a safe and that states that, by law, the hotel’s liability for valuables is limited  Must be posted at the registration desk, on the check-in form, and in guest rooms

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Strict Interpretation of Posting Requirements  Failure by the hotel to comply strictly with the posting requirements will result in loss of limited liability

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Conspicuous Posting  Notice must be displayed in such a way that people are likely to see it  Must be easily readable

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Posting Notice of Hotel’s Limited Liability  Not enough to post availability of a safe  Must also post notice that the hotel’s liability is limited  Without such notice, guests are led to believe they will be protected for the full value of deposited items  Absent notice of limited liability, common law rule applies and the hotel will be fully liable

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Languages Other than English  If a hotel can anticipate guests who speak languages other than English, it is well-advised to post written notices in other languages as well as English

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. What Property Belongs in the Safe?  Not all property is appropriate  Most state statutes require the following property to be deposited in safes: Money Jewels Ornaments Bank notes, bonds, negotiable securities Precious stones Other articles of similar value

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. What Property Belongs in the Safe? (continued)  Ambiguities exist Are cufflinks ornaments? How much money may guests keep in their rooms outside of the safe Must they put a watch in the safe? Gambling chips have been determined to be included on the list of valuables to be stored in a safe

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Theft during Checkout  A hotel’s freedom from liability is not altered by the fact that the loss occurred as the guest was preparing to leave the hotel

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Hotel Guest in Hotel Restaurant  Even in the restaurant, a guest retains status of a guest of the hotel

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Door Locks and Window Fastenings  Some states’ statutes require a hotel to maintain suitable locks and bolts on doors and fastening on windows to benefit from limited liability

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Clothes and Other Personal Property  Hotel liability is limited for clothing, inexpensive watches, sporting equipment, or merchandise samples  If loss is due to negligence on the part of the hotel, it will be liable for the full amount of a guest’s loss

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Checkrooms  Some states differentiate between clothing lost or damaged in guest rooms and property lost in a check- room

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Baggage Rooms  Most states restrict a hotel’s liability for loss or damage to a guest’s property stored in a baggage or storage room

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Merchandise Samples  Refers to goods for sale brought to a hotel by a salesperson-guest  Even common law recognized a distinction between items for personal use and property brought for commercial purposes

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Merchandise Samples (continued)  Innkeeper must receive written notice that samples are in the hotel, acknowledge that the guest has such property, and its value  Some states’ statutes require the guest to declare to the hotel value of the merchandise before the hotel is liable for the loss

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Property in Transit  Most states have statutes that limit a hotel’s liability for guests’ property while in transit

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Property Not Covered  Statutes do not cover all property that might be stolen  Applies only to hotel guests, not to nonguests  Cars, property of nonguests, and property of restaurant patrons is covered by law of bailments

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Fire  Hotels’ liability is limited or eliminated if fire is not a result of hotel’s negligence  The hotel will be fully liable if a fire is caused by the hotel’s failure to exercise reasonable care

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Estoppel: Loss of Limited Liability  Equitable estoppel—legal principle that precludes a person from claiming a right because that person made a false representation to another who relied on the untruthful statement

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Misrepresenting Risk  Principle of estoppel imposed if innkeeper (or employee) misleads a guest and causes a guest to disregard posted directions for safekeeping property

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Hotel’s Negligence  Most limiting statutes do not protect an innkeeper in situations where the loss of guests’ property is due to the hotel’s negligence

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Comparative Negligence  Hotel and guest are both negligent— loss is due to combined negligence  Hotel’s liability will be reduced by the percentage of responsibility attributed to the guest

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Nevada’s Limiting Statute  Limitation of liability (maximum $750) even if the hotel is grossly negligent

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Liability during Check-In/Out  Before guests have had a chance to access hotel safe  Valuables have been removed from hotel safe  Limiting statutes are applicable—hotel not liable for full loss

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment  Transfer of possession of personal property from one person to another with understanding that property will be returned  Bailor—person transferring possession of property  Bailee—person receiving possession

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Essential elements of a bailment: Personal property Delivery of possession Acceptance of possession Bailment agreement

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Effect of bailment on liability Existence of bailment affects liability If no bailment exists, neither does liability

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Bailee is liable only if it fails to exercise amount of care required in tending to bailed goods  Requisite care depends on type of bailment

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Types of bailment: For the sole benefit of the bailor For the sole benefit of the bailee Mutual benefit

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  For the sole benefit of the bailor Bailee receives no benefit from the bailment Bailee obligated to exercise only slight degree of care Liable only for gross negligence

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  For the sole benefit of the bailee Bailor lends property to bailee and receives nothing in return Take great care of the property Exercise a great deal of care higher than a reasonable person exercises with their own property

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Mutual benefit Bailment for hire Both parties receive some benefit Duty to exercise ordinary care

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Duty of bailor in mutual-benefit bailment Obligated to warn bailee of any defects in bailed property that might result in injury to bailee or interfere with use of property

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Proof of negligence in bailment cases Bailor not required to prove that bailee was negligent Bailor need only prove:  delivery to bailee  acceptance by bailee  failure to return property or return of property in damaged condition

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Items inside bailed property Bailment of property inside exists if bailee could reasonably anticipate property would be inside

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Rules particular to cars Taking care of cars is a great responsibility Disclaimers of liability on signs or receipts not effective

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Bailment (continued)  Significance of a car key If driver keeps possession of key, she has not delivered possession of property—no bailment exists

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Liability for a Patron’s Property in a Restaurant, Bar, or Cloakroom  Only portion of limiting statutes that apply covers no-fee checkrooms where customer is given a receipt for checked property

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Constructive Bailment  Bailment created by law as a result of special circumstances rather than by agreement between the parties

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Checkrooms  Bailment is created between customer who leaves property with checkroom attendant and the facility  Attendant accepts garments and issues a receipt  Limiting liability laws cover attended checkrooms and baggage rooms  If checkroom is unattended, limiting liability statutes do not apply

COPYRIGHT © 2008 by Delmar Learning. ALL RIGHTS RESERVED. Concessionaires  Independent contractor who operates a checking facility  Usually concessionaire pays hotel a fee  Concessionaire is not entitled to benefits of statutes designed to protect innkeepers and restaurateurs