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Liability For Guests' Property

Most hotels and restaurants are safe places to visit and work. As explained in
last threads , “ Your Responsibilities as a Hospitality Operator to Guests, ” you, as a
hospitality manager, have a responsibility to make your facility as safe as possible.
This responsibility pertains to the well - being of the guests themselves and to the
security of their property.
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Common Law Liability
Historically, under common law, innkeepers were held responsible for the safety of
a guest ’ s property. In fact, the inns would often advertise that travelers could rely
upon their personal protection during their stay. For example, if a traveler stayed
at the Heidelberg Arms Inn, he or she was under the protection of the Heidelberg
family, including the “ arms ” (weapons) that the family would muster against any
intruders who would dare attack. This was important because, in the past, travel
was risky, and those travelers who arrived for a night ’ s lodging needed to know
that the innkeeper could provide them with a secure haven during their stopover.
Because of the importance of providing protection when traveling, an innkeeper
became, under common law, an insurer of the safety of a guest ’ s property. If the
common law had not required innkeepers to maintain a protected environment,
robbers and bandits would have made the inns unsafe places indeed, and travel
would have been greatly restricted.
In today ’ s world, hotel and restaurant guests still face the threat of robbery. The
number of crimes reported annually by hotels and restaurants is large and growing.
Jewelry, credit cards, and cash, as well as personal property such as cameras, furs,
and the like all entice those who are not honest. Vacationers, business travelers, or
simply those dining out are under the threat of an increasingly sophisticated type
of thief. Unfortunately, even hospitality employees can also be a threat to guest
property.
Hospitality managers must remain vigilant to various threats, from sophisticated
con artists to “ grab and go ” thieves, because today ’ s law may still hold those
in the hospitality industry liable for the safety of their guests ’ property. Consider
the case of Evan Gainer. Mr. Gainer checks into a hotel carrying a bag of diamonds
valued at $ 100,000. The bag is stolen from his room. Under common law,
the innkeeper could be liable to reimburse Mr. Gainer for the value of his stolen
diamonds, even if he or she was unaware that the luggage contained such valuable
items.
Of course, property liability extends beyond the threat of theft. Consider the
case of Tony Mustafa. Mr. Mustafa allowed a hotel ’ s valet parking staff to park his
new Mercedes - Benz convertible in its elevated parking garage. While retrieving the
car, a valet driver scraped the side of the car against a concrete pillar, damaging it
extensively. As could be expected, Mr. Mustafa was quite upset, and would, in all
likelihood, hold the hotel responsible for the damage done to his vehicle. In this
case, the guest ’ s property, while not stolen, was clearly damaged while in the possession
of the hotel.
In summary, theft, negligent handling, fire, flooding, and a variety of other
factors can threaten a guest ’ s property. The general rule of common law is that
the innkeeper will be liable for damage to, or loss of, a guest ’ s property, unless
an act of nature, civil unrest, or the guest ’ s own negligence caused the damage
or loss. Consequently, hospitality managers have an extraordinarily difficult
task. Fortunately, in every state, the legislatures have moved to modify, under
very specific circumstances, the common law liability requirements placed upon
innkeepers.
Limits on Common Law Liability
When innkeepers face great liability exposure, they should also have a great deal
of control over a guest ’ s possessions. It was this recognition of the great risk taken
by innkeepers that moved state legislatures to modify the centuries - old common
law liability for innkeepers. Beginning in the mid - 1800s, and continuing today,
each state has developed its own view of the extent of innkeeper liability for the
possessions of their guests. The laws in each state vary considerably, however, so it
is extremely important that hotel managers familiarize themselves with the law in
their own state.
Figure 11.1 is a copy of the Innkeepers Liability statute for the state of Ohio.
It is an excellent example of the type of law that state legislatures have passed for
the benefit of innkeepers. Let ’ s look carefully at several characteristics of the Ohio
statute, which are common to most state liability laws.
1. Posting notice.
When a state legislature modifies the common law liability of innkeepers, it
is only right that the guest be notified of the limitation. This is a critical point,
and one that must be fully understood by the hospitality manager. Simply
put, if a hotel wishes to take advantage of a state ’ s laws limiting its liability for
a guest ’ s possessions, the guest must be made aware of the existence and content
of that law. Notice that in the Ohio statute, guests must be made aware
of the statute by requiring that the innkeeper keep “ a copy of this section
printed in distinct type conspicuously suspended in the office, ladies parlor
or sitting room, bar room, washroom, and five other conspicuous places in
such inn, or not less than 10 conspicuous places in all. ”
2. A secure safe.
If a hotel is to limit its liability for a guest ’ s possessions, the hotel must provide
a safe where guests can keep their valuables during their stay. Note that the
Ohio statute states an innkeeper must provide access to a “ metal safe or
vault. ” Hotels in most states are required to provide a safe for guest valuables
and to operate the safe in a reasonable manner. That is, the safe should be in
good working order, and access to the safe should be restricted and closely
monitored.
3. Suitable locks on doors and windows.
Obviously, the hotel that intends to limit its liability must provide a reasonably
safe room for its guests. This would include providing functioning locks for
doors and windows, or as stated in the Ohio statute, “ suitable locks or bolts,
and on the transoms and windows of such rooms, suitable fastenings. ”
4. Limits on required possession.
In most states, an innkeeper is not required to accept for safekeeping an
unlimited amount of personal property. A hotel is not a bank, and it is not
reasonable to assume that it would be as secure as a bank. Note the limitation
allowed the innkeeper in the Ohio statute, which states, “ An innkeeper
should not be obliged to receive from a guest for deposit in the safe or vault
property described in … the Revised Code exceeding a total value of five
hundred dollars, and shall not be liable for such property exceeding such
value whether received or not. ”
5. Limits on replacment values of luggage.
Because it is impossible to know for certain exactly what may have been
contained in a lost piece of luggage, most states place a dollar limit on the
replacement value of such items. Thus, if a piece of luggage placed in the
care of the innkeeper is lost, the hotel ’ s liability will be limited to the dollar
value specified in the statute. Note the wording in the Ohio statute: “ Liability
shall not exceed one hundred and fifty dollars for each trunk and it ’ s [sic]
contents, fifty dollars for each valise and it ’ s [sic] contents, and ten dollars
for each box, bundle or package and contents. ” This limitation provision
is very similar to that provided to airlines, by federal law, for lost or damaged
luggage. Also, be aware that some limited liability laws also protect the
innkeeper (and their insurance companies) in the event of a fire or natural
disaster.
6. Penalty for negligence.
In nearly all states, if an innkeeper is negligent, the statute limiting liability
becomes ineffective. As the Ohio statute states, “ An innkeeper shall
be liable for a loss of any of such property of a guest in his [or her] inn
caused by the theft or negligence of the innkeeper or his [or her] servant. ”
Note that the Ohio statute makes an innkeeper responsible for theft, if
an employee (servant) commits it. Even more important, the innkeeper
becomes liable for the full amount of any property loss resulting from the
negligence of the hotel or its staff (subject to the contributory negligence
of the guest).
Post Last Edit by hotelier at 4-27-2009 07:58

Figure 11.1 State of Ohio limitations on innkeeper liability
(See Download: http://www.hotelmule.com/?uid-8-action-viewspace-itemid-1580)
Ensuring the Limitation of Liability
While it is implied rather than explicitly stated in the Ohio statute, failure on the
part of the innkeeper to fulfill the statute ’ s requirements will cause the innkeeper to
lose the protection of the statute. Simply put, it is the responsibility of the innkeeper
to prove that the hotel complied fully with all requirements set forth in the state
law (i.e., appropriate notice with the right language, posted in the right number of
conspicuous places, in an easy - to - read format, etc.).
ANALYZE THE SITUATION
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.
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 2 feet. 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.
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?
BAILMENTS
( 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.)
There are situations when a hotel or restaurant manager may be entrusted with a
guest ’ s property in circumstances not covered directly under a state ’ s liability statute.
For example, suppose that a guest arrives at a hotel and is greeted by a bellman
who immediately takes the guest ’ s bags and gives the guest a receipt before checking
in. Who is responsible for the luggage? In this case, the guest has not had an opportunity
to read the posted liability statutes, and has not even technically become
a guest yet. However, because the bellman has taken voluntary possession of the
bags, the hotel bears some responsibility for the safety of the guest ’ s luggage.
Restaurants are not generally covered under the state laws that limit the liability
of innkeepers. Nevertheless, restaurants too have responsibilities for the safety
of their guests ’ property, especially in situations in which the restaurant takes temporary
possession of that property.
These responsibilities have been established by the courts through the application
of a legal concept known as a bailment . In the hospitality industry, bailments
are quite common. Coat checks, valet parking, safety deposit boxes, laundry services,
luggage storage, and luggage delivery services are all examples of bailments.
Restaurant and hotel managers must understand that they are responsible for the
safety of a guest ’ s property when a bailment is established.
Bailment Relationship
In a bailment relationship, a person gives property to someone else for safekeeping.
For example, a restaurant guest may check his or her coat in a coatroom. The diner
assumes that the restaurateur will safely hold the coat until he or she comes back for
it. While there may or may not be a charge for the service, the restaurateur assumes
responsibility for the safety of the coat when it is received from the guest. In this
situation, a bailment has been created.
The word bailment is derived from an old French word bailler , which means
“ to deliver. ” In a bailment relationship, the person who gives his or her property to
another is known as the bailor . The person who takes responsibility for the property
after receiving it is known as the bailee .
To create a bailment, the property must be delivered to the bailee. The bailee
has a duty to return the property to the bailor when the bailment relationship ends.
Thus, if a guest delivers a suit of clothes to an in - house hotel tailor, the bailment
relationship begins when the tailor accepts the clothing and ends when the clothing
has been returned to the guest.
It is important to note that a bailment may be for hire; that is, the bailor may
have to pay the bailee to hold the property (as in paying for valet parking), the
bailee may pay for the privilege of using the property (as is the case when renting a
car), or the relationship may take the form of a gratuitous bailment .
Types of Bailments
The law surrounding bailments is vast and varied. Essentially, however, bailments
are divisible into three kinds:
Bailments for the benefit of the bailor : In this arrangement, only the bailor
gains from the agreement. This arrangement exists, for example, when a
refrigeration repairman asks if he can leave his tools in a restaurant ’ s storeroom
for the night so they do not have to be reloaded into the repair truck.
The tools will be used the next day to finish a repair job covered by the
refrigerator ’ s warranty. The restaurant that accepts the tools for safekeeping
also accepts the responsibility of a bailment relationship, and so must
exercise a high degree of care for the safety of the property (tools). If the
restaurant is unwilling to do so, it can of course, simply refuse to accept
possession of the property.

Bailments for the benefit of the bailee : In some cases, the person holding the
property gains from the bailment relationship. When the foodservice
director of the local country club borrows chafing dishes from the food and
beverage director of the local athletic club in order to service an extremely
large wedding, the bailment is for the benefit of the bailee only. Again, it is
important to note that this bailment relationship could be a gratuitous one,
or the dishes could be rented to the country club. In either case, the bailee
who benefits from the relationship is responsible for the safety of the property
while it is in his or her possession.

Bailments for the benefit of both parties : In many cases, a bailment, either for
payment or gratuitous, is for the benefit of both parties. This would be the
case, for example, when a restaurant agrees to park its guests ’ cars for
them while they dine. The guests (bailors) gain the convenience of having
their cars parked for them, and the restaurant (bailee) gains because of the
increase in business that comes from providing the parking service.

While the rule of law varies somewhat in each of these three arrangements,
as a manager, you need to realize that guest property, when in your possession,
subjects you to the duty of reasonably caring for that property. A simple way to
consider your responsibility is to assume that you should exercise as much care for
the property of a guest as you would for your own property. If you cannot exercise
that degree of care, it is best not to enter into a bailment relationship.
ANALYZE THE SITUATION
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.
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.
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 it was missing. When she inquired about
the coat’s location, the coat check attendant apologized profusely but could
not explain the coat’s disappearance. 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 for a 5-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.
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.
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?
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