Chapter 08

Hotel, Restaurant, and Travel Law:A Preventive Approach, Seventh Edition: 

Hotel, Restaurant, and Travel Law: A Preventive Approach, Seventh Edition Chapter 8 Protecting Patrons’ Property

Introduction : 

Introduction Hotel guests bring a variety of personal property to hotels Money Jewelry Computers/electronic devices Clothing Sports equipment Cars

Risks to Property in the Hotel: 

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

Hotel Theft: 

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

Hotel Theft (continued): 

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

Hotel Theft (continued): 

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

Keycards and Keys: 

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

Guests’ Insurance: 

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

Absolute Liability for Guests’ Goods: 

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”

Exceptions to the Absolute Liability Rule: 

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

Prima Facie Liability Rule—Minority View: 

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

Limited Liability—Modern Limitations to the Absolute Liability Rule: 

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

Limited Liability—Modern Limitations to the Absolute Liability Rule (continued): 

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

Limited Liability—Modern Limitations to the Absolute Liability Rule (continued): 

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

Limited Liability—Modern Limitations to the Absolute Liability Rule (continued): 

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

Providing a Safe: 

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

Posting Notice of Availability of Safe: 

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

Strict Interpretation of Posting Requirements: 

Strict Interpretation of Posting Requirements Failure by the hotel to comply strictly with the posting requirements will result in loss of limited liability

Conspicuous Posting: 

Conspicuous Posting Notice must be displayed in such a way that people are likely to see it Must be easily readable

Posting Notice of Hotel’s Limited Liability: 

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

Languages Other than English: 

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

What Property Belongs in the Safe?: 

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

What Property Belongs in the Safe? (continued): 

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

Theft during Checkout: 

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

Hotel Guest in Hotel Restaurant: 

Hotel Guest in Hotel Restaurant Even in the restaurant, a guest retains status of a guest of the hotel

Door Locks and Window Fastenings: 

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

Clothes and Other Personal Property: 

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

Checkrooms: 

Checkrooms Some states differentiate between clothing lost or damaged in guest rooms and property lost in a check-room

Baggage Rooms: 

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

Merchandise Samples: 

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

Merchandise Samples (continued): 

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

Property in Transit: 

Property in Transit Most states have statutes that limit a hotel’s liability for guests’ property while in transit

Property Not Covered: 

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

Fire : 

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

Estoppel: Loss of Limited Liability: 

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

Misrepresenting Risk: 

Misrepresenting Risk Principle of estoppel imposed if innkeeper (or employee) misleads a guest and causes a guest to disregard posted directions for safekeeping property

Hotel’s Negligence: 

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

Comparative Negligence: 

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

Nevada’s Limiting Statute: 

Nevada’s Limiting Statute Limitation of liability (maximum $750) even if the hotel is grossly negligent

Liability during Check-In/Out: 

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

Bailment : 

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

Bailment (continued): 

Bailment (continued) Essential elements of a bailment: Personal property Delivery of possession Acceptance of possession Bailment agreement

Bailment (continued) : 

Bailment (continued) Effect of bailment on liability Existence of bailment affects liability If no bailment exists, neither does liability

Bailment (continued): 

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

Bailment (continued): 

Bailment (continued) Types of bailment: For the sole benefit of the bailor For the sole benefit of the bailee Mutual benefit

Bailment (continued): 

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

Bailment (continued): 

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

Bailment (continued): 

Bailment (continued) Mutual benefit Bailment for hire Both parties receive some benefit Duty to exercise ordinary care

Bailment (continued): 

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

Bailment (continued): 

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

Bailment (continued): 

Bailment (continued) Items inside bailed property Bailment of property inside exists if bailee could reasonably anticipate property would be inside

Bailment (continued): 

Bailment (continued) Rules particular to cars Taking care of cars is a great responsibility Disclaimers of liability on signs or receipts not effective

Bailment (continued): 

Bailment (continued) Significance of a car key If driver keeps possession of key, she has not delivered possession of property—no bailment exists

Liability for a Patron’s Property in a Restaurant, Bar, or Cloakroom: 

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

Constructive Bailment: 

Constructive Bailment Bailment created by law as a result of special circumstances rather than by agreement between the parties

Checkrooms: 

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

Concessionaires : 

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