September 30, 2014
The legal theory of premises liability holds property owners responsible for accidents and injuries that occur on their property. The law in this area is highly developed and can differ from state to state. Premises liability claims are wide ranging – from slip-and-fall accidents to intentional shootings during a robbery. Recent cases from the South Carolina Supreme Court have detailed a business owner’s liability for criminal acts conducted on their property, and the implications of the decisions are important for business owners to understand.
Premises Liability Generally
To establish negligence in a premises liability action, an individual must prove three elements: 1) a duty of care owed by the property owner to the individual; 2) the owner’s breach of that duty by a negligent act or omission; and 3) damage proximately resulting from the breach of duty. The scope of the duty of care owed by a property owner to an individual in a premises liability action, if any, “is determined based upon the status or classification of the person injured at the time of his or her injury.”
There are four general classifications South Carolina recognizes: adult trespassers, children, invitees, and licensees. Different standards of care apply depending on the classification of the individual. Thus, an owner of a property owes varying levels of care to people who might enter their property.
- Adult trespassers are those who have entered the property without permission. Generally, a business owner owes no duty of care to them except the duty to not inflict willful or wanton injury.
- Children are owed varying degrees of duty depending on why they are on the premises.
- Invitees are those who enter a property by an express or implied invitation to do so, and whose entry is connected with the owner’s business or with an activity the owner allows on the premises. There is some sort of mutuality of benefit between the invitee and the business owner. Common examples are business guests, contractors like a pest control serviceman or customers at a restaurant. There are also public invitees, which enter property held open to the public.
- A licensee, is a person who has the privilege to enter the premises by virtue of the possessor’s consent. However, when a licensee enters onto the premises, the primary benefit is for the licensee as opposed to the property owner. In other words, a licensee is “a person whose presence is tolerated, a person not necessarily invited on the premises, but one who is privileged to enter or remain on the premises only by the property owner’s express or implied consent.”A common example is a social visitor, such as a guest who comes to a home for dinner, or a person who enters a property to ask for directions.
The distinction between invitees and licensees has warranted careful analysis by the courts over the years. Indeed, it often determines the outcome of a case, because “[t]he duty owed to a licensee differs from the duty owed to an invitee.” A business owner’s duty to an invitee is discussed more thoroughly below, but generally this duty is one of reasonable or ordinary care used to insure the safety of the invitee. In other words, “an invitee enters the premises with the implied assurance of preparation and reasonable care for his protection and safety while he is there.”
In contrast, a business owner “has no duty to search out and discover dangers or defects in the land or to otherwise make the premises safe for a licensee.” This is because licensees are there for their own benefit, and thus they “can be said to accept the premises as they are and demand no greater safety than [the] host provides himself.”
Most – if not all – customers of a business are considered invitees. As noted, this distinction is important because business owners must provide a higher duty of care to insure a customer’s safety. Business owners may be liable for injuries that occur on their premises if they owe a duty to the person that was injured.
Outside the classic hazards for slip-and-fall claims or injuries from lack of maintaining the premises, one area of liability business owners may not consider is for criminal acts of third parties. As it relates to the duty of safety owed to customers, a business owner may wonder: Do I owe a duty to protect customers from criminal activities that happen at or near my business? If my business is robbed, and a customer gets hurt during the robbery, am I liable? The answers may be surprising.
Duty of merchants to protect invitees against criminal acts of third parties.
In Bass v. Gopal, Inc., the S.C. Supreme Court held that a balancing test should be applied as to whether a business owner should be held liable for the criminal acts of third parties on their premises. The balancing test seeks to balance the degree of foreseeability of harm against the burden of the duty owed by a business owner. Ultimately, the Court ruled, “a business owner has a duty to take reasonable action to protect its invitees against the foreseeable risk of physical harm.”
What does this mean? Under the court’s ruling in Gopal, a business owner may be liable for injuries sustained by customers or employees during the course of a robbery or other criminal activity. Basically, for a business owner to be held liable 1) there must be a foreseeable risk, and 2) a business owner must have failed to take reasonable action to protect their customers from that risk.
The concept of “foreseeability” may be troubling to some business owners. For example, it could be argued that a business that operates in a high crime area will always have a foreseeable risk of robbery just by virtue of the business’s location. In that case, what factors should a business owner consider? Factors that may contribute to the “foreseeability” of a third-party criminal act are the presence of crimes at the business previously, similar businesses being robbed in the area (i.e., a string of jewelry store robberies), or news stories detailing a crime spree in the vicinity. Whether something is foreseeable is generally determined by what an ordinary person in similar circumstances may expect to happen.
Given all of this, what sort of safety measures does a business owner need to implement in order to ensure the safety of their customers? Or, perhaps more importantly, what safety measures will meet the duty owners owe to their customers under Gopal? Depending on the circumstances, it could mean installing adequate lighting, security cameras, or even hiring a security guard. Unfortunately, this question is one that is not easily answered, and may require consultation with legal counsel or a security expert to assist in assuring that a business is taking reasonable steps to safeguard the livelihood of its customers.
The Gopal decision is one that business owners should consider, as it arguably increases the likelihood of their potential liability. More recently, in Lord v. D & J Enterprises, the S.C. Supreme Court unequivocally held that the Gopal decision applied retrospectively, as opposed to prospectively. Generally, “decisions creating new substantive rights have prospective effect only, whereas decisions creating new remedies to vindicate existing rights are applied retrospectively.” The Court decided the Gopal decision fell into the latter category, because that decision “created no new duty for business owners, but, rather, clarified the test in assessing the scope of this duty.”
This means that the balancing test in Gopal will be applied to harms that may have occurred before that decision was announced (in Lord, the court applied it to a shooting that happened in 2008; the Gopal balancing test was announced in 2011). While a retrospective application of a balancing test isn’t entirely unusual, in this instance it may make it easier for plaintiffs to survive a motion for summary judgment.
Summary judgment may be granted in cases where there is no dispute as to material facts. In Lord, the plaintiff presented expert testimony regarding the foreseeability of the crime and whether a security guard posted at the entrance of the business would have deterred the crime. Using the Gopal balancing test, the court in Lord decided that this was enough to create a question of fact for the jury and allow for the plaintiff’s case to survive a summary judgment motion.
Impact on Business Owners
The Lord and Gopal decisions arguably make it easier for plaintiffs to survive summary judgment motions and present their case to a jury. The dissent in Lord, written by Justice John W. Kittredge, lamented that “[t]oday the Court holds that a merchant has a duty to provide a security guard where random acts of criminal violence occur miles away from the business.” Id. at 704 (J. Kittredge dissenting). While this may overstate the impact of the Lord holding, the decision should make business owners think twice about the security measures they employ on their premises.
The last thing a business owner wants is to be in front of a jury explaining why he or she didn’t spend a little extra on proper lighting in a parking lot or invest in security cameras. A jury will likely be less sympathetic to a business owner than to the wounded victim; and with a plaintiff’s ability to survive summary judgment made easier by Lord and Gopal, this is exactly the type of situation in which business owners may find themselves if they are not careful.
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Authors Molly Cherry and Paul Dominick thank Nick Gex for drafting and research on this article. Gex is a clerk in the firm’s Charleston office and 3L at the Charleston School of Law.