Facts
The plaintiff, Jody Goldstein, was beaten and robbed, resulting in serious, permanent injuries while staying as a guest at the Chateau Orleans, a combination hotel, timeshare, and condominium facility located in the French Quarter in New Orleans. The defendant, Leisure Management, Ltd. maintained and operated the Chateau. Upon arriving at the Chateau, the plaintiff informed management that there was a large crack in the center of the door to his unit. The manager on duty told Mr. Goldstein that the door would be replaced, but it never was. Further, there were no staff members or security personnel present at the Chateau at the time of the break-in. The only security measures the management company had in place were cameras, a gate to access the property, and spike-topped gates around the Chateau.
Trial Court Decision
After a trial, a jury found that the management company was fully at fault for the plaintiff's injuries and awarded him $1,575,000 in damages. The trial court entered a judgment notwithstanding the verdict in favor of the management company, finding that the jury's award was not reasonable. The trial court reasoned that the company did not have a duty to protect Mr. Goldstein from the criminal acts of a third party, namely, the assailants who broke into his unit and who were never identified. Mr. Goldstein appealed, seeking to reinstate the jury's verdict.
Appellate Court Decision
The appeals court acknowledged that in Louisiana, typically, a business does not have a duty to protect its patrons from the criminal acts of third parties. However, the court found that two exceptions to this rule applied to the property management company. First, the management company qualified as an "innkeeper" and thus "had a duty to take reasonable precautions against criminals." Because the Chateau operated partially as a hotel by allowing non-unit owners to make reservations to stay in particular units, and because the management company maintained sole control over providing security on the premises, the company had a duty to protect all units at the Chateau and their occupants. Second, the court held that the management company had a duty to protect Mr. Goldstein because the criminal act was "reasonably foreseeable." The court considered both "the existence, frequency, and similarity of prior incidents of crime on the premises" and "the location, nature and condition of the property" in determining that the crime was foreseeable. Although there was no history of similar crimes at the Chateau, the security measures that the company took by setting up live-feed cameras and a security gate demonstrated that it knew there was a risk of criminal activities occurring on the property. Further, the crime took place in the French Quarter, a high crime area, during Mardi Gras week, a period of high crime. Therefore, the court reinstated the jury's verdict and ordered the management company to pay Mr. Goldstein a reduced award of $309,329.02 in damages.
LESSONS LEARNED:
- Knowledge of crimes or security issues in the area is sufficient to put a management company on notice and make it potentially liable for damages that were foreseeable.; and
- Property management companies should prioritize maintenance requests that relate to the safety and security of the property or of particular units to avoid potential liability.
Goldstein v. Chateau Orleans, Inc., Not Reported in So. Rptr (2021 WL 5444796),
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