Residential Landlords Placed on Notice of Criminal Activity on Premises Liable for Attacks on Tenants and Guests Even Where Attack Takes Place in Open / Public Spaces Adjacent to Apartment / Dwelling

The Michigan Supreme Court ruled today in the case of Bailey v. Schaaf Opinion.07,.30.2013.144055 Opinion, that a residential landlord could be held liable to the guest of a tenant who was randomly attacked by an unknown criminal perpetrator who entered the property.  Tenants and guests at a barbecue held by one of the tenants were made aware of an  unknown individual on the general premises at the apartment complex who was brandishing a weapon and acting in a threatening manner.  A private, contracted security patrol was notified of the perpetrator’s presence and told he was threatening to shoot someone.  The security patrol did not immediately notify the police and the perpetrator shot the plaintiff, who was a guest at the barbecue.  A summary of the background can also be found in my earlier post:  MDTC Article on Bailey v. Schaaf.

The Michigan Court of Appeals ruled there was a “special relationship” between landlords and tenants recognized by Michigan law that imposed a duty on the residential landlord to take reasonable efforts to prevent such attacks by notifying the police after being placed on notice of such a threat.  Since the landlord’s “agents”, the security patrolmen were placed on notice, the Court of Appeals held the plaintiff had stated a valid cause of action.

The Supreme Court affirmed by what is essentially a 6-1 decision.  Justice Young, who also wrote the majority opinion in MacDonald v. PKT, 464 Mich. 322 (2001), authored the opinion and was joined in the result by justices Viviano, Zahra, Kelly, McCormack, and Cavanaugh.  Justices McCormack wrote a clarifying concurrence and Justice Cavanaugh also concurred in the ruling but dissented from part of the majority’s reasoning.

Justice Markman wrote a scathing 36-page dissent in which he criticizes the majority’s “leap” from imposing a duty by and between merchants and their customers (who are allowed access and egress from what is essentially a place held open to the public at large) to imposing a duty upon landlords of residential properties who do not owe such a duty.  Having expressed no logical reason to make this leap of imposing a duty upon merchants to a duty upon landlords, Justice Markman challenges the majority’s method (although not its authority) in changing over 176 years of common-law jurisprudence in Michigan.

All pieces of the opinion are quite thorough and searching.  Justice McCormack refreshingly cites to Calabresi and Posner and maintains that the landlord tenant relationship is bound by a “voluntary market relationship” in which money is exchanged for the promise of shelter.

I authored an amicus brief in this case providing an essential taxonomy of the legal relationships that have, over time, given rise to true special relationships and heightened duties of care by and between participants in such relationships.  Amicus Brief in Bailey v. Schaaf, et al.  One point I made, that the landlord-tenant relationship is not among those types of special relationships at common law that do give rise to a heightened duty because there is not a true surrender of control by a residential tenant over his or her own person and a surrender of that ability to protect himself or herself to that of a landlord seems to have been glossed over.  True “special relationships” involve traditional innkeeper / guests; tavern owners and patrons; common carriers and passengers (although this “special relationship” has been disavowed in Michigan jurisprudence as giving rise to any heightened duty); and other inherently “custodial” relationships wherein a person actually surrenders an ability to control his or her environmental surroundings to an exceptional degree.  Another point I made in the amicus brief is that there is no true justification (other than a shifting of economic responsibility) for transferring liability for random, unpredictable acts of crime in society from the truly responsible party, i.e., the criminal, to someone else who is held liable simply because of his or her orientation in relation to the victim of the criminal act.

Indeed, a residential tenant pays money to “own” what is essentially a conditional freehold interest in property and upon that property it is assumed that he or she can do whatever he or she lawfully wants; conduct governed only by the law and the contract of the parties.  I suppose if he or she wants to pay more for greater protection and that is governed by the contract, then market forces will indeed impose a heightened duty on the landlord who owns properties that are more desirable.  What does this do for the landlords and tenants who are not so situated?  I also pointed out that it is difficult to surmise what precise “duty” exists and how damages can be truly measured.  Assuming, for the purpose of argument, that one has a duty merely to call the police, how can we measure financial liability upon the landlord for what is essentially an intentional, violent assault committed by a criminal legitimately transferred to the landlord who is said to have a “duty”?  The reason for the injury was the intentional criminal act of the perpetrator, not the failure of the landlord to call the police after the fact.  What is the measure of damages?  Under comparative fault principles, should the landlord’s responsibility be deemed “nominal”, the criminal bearing the greatest percentage of true fault?  Perhaps Michigan’s comparative fault statutes will properly orient justice in these cases and allow the juries to allocate percentages of fault.  The Court’s majority opinion here appears to leave open more questions than it set out to answer.

As Justice Markman pointed out in his dissent, the majority does not explain how a private, residential landlord’s relationship with a tenant can be analogous to situations in which merchants are held responsible because they open their property up to the public at large, inviting guests as well as potential criminal perpetrators.

In any event, insurers and residential (and most likely commercial landlords) will have to adequately prepare for the fall-out of this opinion as it is now official that the duties expressed in the Court’s 2001 MacDonald opinion now extend to residential property owners who lease their property to tenants.

I have worked on this issue in many capacities, defending insurers and property owners, and even in seeking subrogation and indemnity from others who may bear a part of the legal burdens of the harm.  It is an ever-evolving body of law and this case is likely to create additional litigation.

Michigan Defense Quarterly Article by Carson J. Tucker

My article on the amicus curiae brief I filed in the Michigan Supreme Court in the case of Bailey v. Schaaf, et al., Supreme Court Docket No. 144055 (Oral Argument held on March 5, 2013) was published in the Michigan Defense Quarterly Spring Edition.

Read the article on page 24 of the Quarterly here:  MDTC Spring 2013  

2-1 Court of Appeals Opinion Rules Landlord Not Liable to Tenant for Failure to Maintain Common Pathway to Access Trash Disposal

This is an interesting case if only for the colloquy between the majority opinion and Judge Shapiro’s dissent.

The facts are unremarkable. Plaintiff was a residential tenant living in an apartment owned by the defendant.  Several other tenants lived in separate apartments in the same structure.  A common area (driveway / pathway) was accessed by all the tenants to dispose of their trash in trash bins located outside the dwelling.

Plaintiff injured herself when falling upon ice and snow accumulation on the narrow, singular pathway that led to the trash bins.  She filed suit alleging common-law premises liability and a failure to maintain the premises on the part of the landlord under MCL 554.139 (the “fit for its intended use” provision under the Landlord-Tenant Act).

The circuit court granted the landlord’s motion for summary disposition, ruling that the condition was open and obvious under the common-law defense to a premises liability claim, and, further, that the landlord breached no duty under MCL 554.139.

In a 2-1 decision (Whitbeck and Saad in the majority; Shapiro in dissent), the Court of Appeals affirmed.  Affirming the trial court’s disposition of the common-law claim and addressing the statutory claim, the majority held that as long as the common area was reasonably fit for its intended use and purpose, there was no breach under MCL 554.139.  The majority also injected a concept from the common-law open and obvious doctrine, reasoning that in Michigan one can expect common areas open to the elements to be affected by accumulations of snow and ice and ideal conditions for access and use are not to be required.

Judge Shapiro raises some interesting points in his dissent.  First, he points out that the act of which MCL 554.139 is a part is to be “liberally construed” according to the Legislature’s own mandate: MCL554.139(3).  Next, Judge Shapiro argues that the Supreme Court’s decision in Allison v. AEW Capital Mgt. LLP, 481 Mich. 419 (2008), which the majority here viewed as dispositive to deny Plaintiff’s claim, actually contained the important caveat that where a review of the record and facts demonstrates that the common area was reasonably fit for its intended use and/or purpose, then an appellate court can make the determination, but the question is one of “fact” in the first instance, and therefore, should be left to the discretion of the fact-finders, i.e., the jury.  Moreover, Judge Shapiro points out that the question must be considered in light of the legislative mandate to liberally construe the provision, which is, in this case, a liberal or expansive reading of the landlord’s duty to keep the common areas fit for their intended use.  He concludes that it is presumptuous to believe that the Supreme Court would usurp the legislature’s mandates by injecting common law defenses concerning “open and obvious” and “premises liability” into the statutory duties found in the residential Landlord-Tenant Act.

In my judgment, Judge Shapiro has a point.  While the majority of the current Supreme Court is loathe to “liberally” or “strictly” construe any statutory provision, without more, the fact that the Legislature explicitly mandates such construction in my judgment requires precisely such a reading.

If the end result of that means that common law defenses to statutory duties are not available upon a reading of the duty-imposing provision, then this is the way the statute should be interpreted and applied.  As Judge Shapiro concludes: “[r]eaching this conclusion does not mean that [] plaintiff is entitled to a judgment against the defendant; only that under the law established by the Legislature she is entitled to her day in court and to have this factual questions determined by a fact-finder.”

The entire opinion can be read here:  Rousaki v. Souliotis