By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

From time to time, a property owner or possessor will give permission to others to use or rent out parts of her property and put things on it. A soda machine, a vending machine, a gas line, or even a pipe trestle. Those who use that land in this manner have a duty of care to third parties to prevent injury. The same duty that the possessor has.

Here is a fun fact pattern. The land possessor runs a horse farm. He rents out horses to be ridden on the property. A customer asks for a mild horse. The land possessor gives the customer what he believes to be a mild horse. The customer takes said horse out for a ride. Said horse is not mild. Said horse goes where it wants to go and takes the customer along with him. Injury ensues:

“Plaintiff and his wife rode under the trestle along the indicated road, with plaintiff’s horse in the lead. After proceeding about 400 feet to the north at a walk, plaintiff turned his head to the left and called to his wife. As he made this movement, plaintiff’s horse suddenly reeled about to the left and began racing back on the road toward the trestle, gaining speed as it went. Plaintiff attempted in vain to control or stop the horse by pulling back on the reins as hard as he could with both hands, but the horse kept going faster, passed plaintiff’s wife and ran around the bend in the road toward the trestle. Immediately before the accident and at a distance of some 8 to 10 feet from the trestle, plaintiff noticed some underhanging beams stretching over the traveled area at a height of about 6 feet. Plaintiff was then lying flat in the saddle, with his head held down as far to the right as he could get it and his left shoulder pointing upwards. His left shoulder and neck hit a stationary object such as the understructure of the pipe trestle, and plaintiff blacked out. When he regained consciousness he was lying immediately to the south of the pipe trestle, approximately 5 feet from the nearest substructure of the trestle and immediately south of the traveled area under the trestle. As a result of the accident, plaintiff is permanently paralyzed from the waist down.”*

Not what the customer asked for or intended. Setting aside the interesting discussion of the owner’s responsibilities regarding knowledge of his horses in making recommendations (i.e., knowledge of the propensities), there is a holding in here that helps landlords defend against property-related lawsuits.

The parties installing that pipe trestle were defendants to the case as well, owing the injured plaintiff the same duty of care regarding that pipe trestle as the possessor. It turned out that there was no duty — again, due to the no-longer-applicable classifications. But the principle will help the landlord identify the culpable party in any such lawsuit.

*Palmquist v. Mercer, 43 Cal. 2d 92, 97 (1954)

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

“The childish propensity to intermeddle was the characteristic which the [property possessor] should have taken reasonable precautions to guard against.”* Sometimes the courts come up with lyrical gems that get right to the heart of the matter. Through pages and pages of drivel, more often than not there is one pithy sentence which sums up the whole case and rule. I often wonder why the esteemed appellate justices do not just give us the facts of the case and the one pithy sentence. The books would be a lot smaller and cases a lot clearer.**

The above quote comes from a case which held both a tenant and the janitor the tenant retained liable for personal injuries to a three-year-old. The proof was that the tenant was in charge of a school. The tenant also, in the same building, housed families. (It was a hotel, and the tenant was the United States Navy). The tenant retained a janitorial service to clean said school on the weekends. Said janitorial service did so. Sometimes, they would stack the furniture — desks and chairs — in a pile. (To make cleaning the floor easier?) One weekend, a child was present in the school. Not a stretch, considering the building also contained living quarters. He climbed up on the furniture pile and promptly fell out the window. From the fourth floor.

The case had a lot to do with outdated and inapplicable classifications of the child — whether his activity of playing on the furniture made him a “trespasser.” But the case did have confirmation of the agency liability principle, which should help exonerate the tenant for a good deal of liability for the injuries this contractor arguably caused. Here it is: “One who carries on an activity on land on behalf of the owners in possession is subject to the same liability and enjoys the same immunity from liability, for bodily harm caused thereby to others as though he were said owner.”***  Translation: the folks hired to do work on the property are not immune from liability because the owner hired them. They are liable. If they are insolvent, or cannot be located, then maybe the owner will assume their liability. If the owner also had control over the activity (arguably always?), they may have some independent percentage of fault.

*Roberts v. Del Monte Properties Co., 111 Cal. App. 2d 69, 74, 77 (1952)

**And the lawyers less numerous?

***This quote is not as pithy as the one that opened this post, but it is arguably as important.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

One of my practice areas is insurance coverage work. I represent people and help businesses work out issues with insurance companies regarding whether a particular lawsuit, loss, or claim is covered by insurance. For many people and businesses, insurance is a must and coverage is a matter of everyday life and business practice. Drive a car, get insurance. Own a home, get homeowners insurance. Run a business, purchase a CGL policy. Get business interruption coverage.

A gray area is when we are not quite acting as a person or a business. We are volunteering. We are working selflessly for others. For the common good. Sometimes we are paid. Sometimes we are not. The soccer league, church council, and the HOA cannot get along without us. There are important decisions to be made for the soccer league, for the church, and for the condominium complex.

But those decisions have implications! People are affected by them. People are denied permission to do things. The HOA must act if it has information. If the collective “it” of the HOA knows of a dangerous condition, act it must, as we know. But what if only some of the directors are aware of the dangerous conditions? What if that director or directors do nothing? And what if someone gets hurt?

He gets sued! And he could, in California, be personally liable for not acting on that knowledge. Yes, personally liable, separate and apart from the HOA entity on which board he serves. In a recent post we talked about a case that holds the HOA to the same duty as a landlord. That same case also involved a cause of action within the lawsuit against an individual director for ordering the removal of the installed lights (which were put in to deter criminal activity) and then failing to report the criminal activity to the board. Ordinarily, the law does not make the individual director responsible for the board’s actions. That’s one point of having the board. But when the individual director personally participates in conduct which is a “tort,” he can be joined as a defendant.

So this director was sued. And the lawsuit survived legal challenges. I hope he or the board bought Directors and Officers liability insurance!

Meanwhile, California has enacted some legislation that mitigates against liability for certain classes of directors in these situations. And we’ll discuss them in the next couple of blog posts.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I like insurance law. Not many people do, but I do. But then again, I like heavy metal and not many people like that either. (Their loss. And my hearing loss. I digress). I like insurance law because it feels good to help policyholders obtain insurance coverage, and I am also rewarded when the insurance contract is upheld to enforce the mutual agreement of the parties — insurance coverage is denied because there was no agreement to cover a particular loss. I work with both policyholders and insurance companies and I see both sides of the equation. Sometimes the law interjects to help or hinder the implications of the insurance contract in real-world situations, such as when a volunteer HOA director participates in negligent conduct that leads to an injury.

In California, the Civil Code has some statutes that protect the volunteer director from the liability scenario we discussed last post. As a refresher, that director participated in conduct that was arguably negligent with respect to known criminal activity and ordered some lights installed in the common area removed. Later, someone got hurt and sued the HOA and that director for removing the lights and leading to a criminal assault. The director was a volunteer but nonetheless was potentially personally liable. Enacted a couple of years after that lawsuit, Civil Code §1365.7 provides some protection for similarly situated directors.

That section provides immunity for a volunteer director of a residential HOA, as long as the HOA maintains certain levels of certain types of insurance. If the HOA manages less than 100 units, there should be $500,000 of coverage for both general liability (i.e., CGL policy for the complex) and also for the directors (i.e., D&O — Directors and Officers insurance). As long as that insurance is maintained, and the person does not get paid for being a director, he will receive the benefit of this section. He also will have done the tort while in course and scope as a director, done in good faith, and without reckless or intentional conduct. The protections go away if that “volunteer” owns more than two interests in the development.

The net effect of these rules is that the volunteer director will not have to pay anything out of pocket when he otherwise might have had to. See? Insurance is fun!

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

Continuing my theme of misquoted quotes and special rules for HOAs, let’s talk about the individual unit owners. The HOA can be sued for issues in the common areas that lead to injuries or damage. What about the person who owns the unit near the common area? Doesn’t he also — as a tenant in common of the condominium project — own an interest in that common area? Can he be sued as well?

Ordinary principals of duty would suggest he could be. Take the prior case example about the unit owner that installs lights as an additional security measure to ward off crime she knows is happening near her unit. What if she knew about that burgeoning crime and did not take action? One factor mitigates attaching liability and it is the one that got the HOA in trouble in that case. We know it, right people? Control. In most cases, the owner of the “separate interest” — i.e., the adjoining unit — is not allowed to put anything in the common area. This is true even though the unit owner technically owns a piece of the common area by virtue of her ownership of the individual unit. This unit owner tried to effect a security measure in the common area and was rebuked by the HOA and one of its members. So it seems likely on that basis for the unit owner not to be sued. (There it was, the unit owner who was the crime victim. She did not sue herself, so this issue was not discussed … )

But the law in California affords another, more explicit protection. Civil Code §1365.9 provides that only the HOA and director can be sued for injuries that result from common area deficiencies. The HOA has to carry certain minimum amounts of insurance, again.

Now here are — unrelated to the above fact scenario or legal points – some of my favorite quotes, attributable to no one in particular, and used too much during my law practice.

“It beats a poke in the eye with a sharp stick.”

“That and a dollar will get you a cup of coffee at Denny’s.”*

“If a frog had wings, it wouldn’t bump its a$$ hopping.”

“Between you, me, and the lamp post.”**

*But not Starbucks.

**I am usually nowhere near a lamp post when I say this.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

Everyone has their own story or has heard the stories. Those living in condominium complexes cannot so much as hang a Christmas decoration outside their unit without the blessing of the HOA or the CCRs. Everything outside the four interior walls is the condo owner’s and everything outside is a “common area.” The ins and outs of who can do what and who is responsible for what is subject to precise analysis of the CCRs and HOA established rules and regulations for each particular complex.

But the general gist is that the HOA will be responsible for maintaining the common areas and the owner for maintaining his unit. What if an injury arises from lack of maintenance of the common area? Or the owner is not given permission to install, maintain, or repair something which, by doing, he thinks will prevent injury. The question thus arises after the inevitable injury: Who is responsible for that injury?

In California, under such circumstances, the HOA “is, for all practical purposes, the Project’s ‘landlord.’”* In one case, a condominium project was beset by a crime wave. There was crime after crime. One condominium owner wanted to install a light near his unit to help prevent crimes from occurring there. The HOA denied him permission, citing the CCRs, which did not allow individual unit owners to install security apparatus. The HOA also argued that it was constrained by budget and majority membership approval of improving the security in common areas. It could not do it without money and a majority vote.

Irrespective of these restraints, the appellate court found that the traditional negligence notions applicable to a landlord applied to the HOA. Since it in effect controlled that area, the common areas, the HOA had a duty to prevent injuries in those areas.

There are some liability implications to HOA directors in these situations. They are interesting enough to merit a detour to discuss them. So in the next couple of posts, we’ll discuss.

*Frances T. v. Village Green Owners Assn., 42 Cal. 3d 490, 499 (1986)

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

So in American Horror Story, after some certain traumatic events occur and the building’s history is uncovered, the protagonists STILL don’t move out of the house. The writers are nuanced enough to know that the audience will ask the question “Why do they not move out now?” So they actually attack this head on. Money problems prevent both an immediate move-out and obstruct a potential sale. So because I like to think I am still more nuanced than the newly nuanced writers, I counter with: “Why don’t you just rent the place out?”

Somebody could move in and you could get paid for it. Not only will you get paid rent, you will also be removed from liability for injuries to third parties entering on the premises, the thinking goes. Well, the first part would be true. The second part — non-liability of an owner not in possession — is not as clear.

We know from our previous entries that possession and control are big factors in imposing liability. An absent landlord is not necessarily in possession, and may or may not have control. The law we know trends to basic duty of care obligations. The out-of-possession owner must act as a reasonably prudent person in similar circumstances.

They have to do those things that they can do to prevent injury, such as inspect the premises as permitted by the lease or between renters. You may be relieved while out of possession if there was no opportunity to inspect for new dangers. If the danger was added or formed after you left and you did not know or have the opportunity to inspect, there is a strong argument for relief. The defense is probably stronger in a commercial setting owing to the sophisticated nature of the tenant, the stronger lease language regarding duties, and an inability or obligation to inspect when a sophisticated commercial tenant is installed and alters the property.

In residential or commercial leases, the California courts have set forth their factors for determining the existence of a duty. These harken back to our very first discussions and the “Rowland” factors, for any of you paying attention. The factors are “likelihood of injury, the probable seriousness of such injury, the burden of reducing or avoiding the risk, and his degree of control over the risk-creating defect.”* All of this assumes the out-of-possession lessor knew or could have known about such risk-creating defects. If he did, the essence is, was there potential for serious injury and if so, could the out-of-possession owner get in there and fix the situation?

Perhaps because this area was not so clear, the ever-so-clever American Horror Story writers avoided the rental idea. Maybe they knew all about this.

*Brennan v. Cockrell Invest., Inc., 35 Cal. App. 3d 796, 801 (1973)

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

So let’s talk American Horror Story and the liability of prior owners for dangerous conditions. Our favorite fun subjects, right? Before things got too silly, there’s an episode where [spoiler alert] somebody dies and gets buried under the gazebo. This being a horror show, the victim is not content stay under the gazebo. Said victim gets out and causes all sorts of mayhem, including injuries and some pretty serious property damage. Would you stop throwing stuff around? If you, dear reader, saw a great investment opportunity in this property and bought it nonetheless, would you be liable for this victim’s subsequent mayhem on your tenants?

OK, well, let’s put it in slightly more realistic terms. Let’s say you build a nice fish pond in your back yard, because you like Japanese carp. You get that promotion and transfer across the country and away you go.  You sell the property to Mrs. Investor, who is most definitely going to rent it out. She does, and the new family moves in and their toddler drowns in the pond. Are you, dear reader — seller — liable for that wrongful death claim? Come on — you know the answer. What were we discussing all last year?

Control. Once you sell the property, do you have the ability to go back in and warn the new tenant about the pond? Can you remove it? You think the new owner would like you going on the property with some bulldozers on the grounds that you want to make it safe for her new tenants? I didn’t think so. Congrats — you readers and California law are in accord!  The California Supreme Court in Preston v. Goldman said there was no liability. The main issue was, as usual, control. The seller, even though he installed the pond, had no right to control the danger related to it once he sold it. He could not remove the pond, fence it off, warn about it, or control who came onto the property.

The situation might be different if this were some kind of special, hidden carp pond that you, dear reader, forgot to disclose to the purchaser. Or if you installed a garden cover that was camouflaged and did not tell the owner how to access it, or some other hidden danger that led to the death. Then you might be liable if the buyer would not discover it under most circumstances, i.e., if the seller could discover the hidden carp pond with a reasonable inspection, you would be off the hook.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I saw and liked the latest James Bond flick. I say latest and not “new” because I realize it was released last year and by now everyone is discussing Django Unchained. I will be ready to discuss that film in six months, when I have time to see it. Skyfall was good, but something about it bugged me. In discussing it with my brother and reading some reviews after the fact, it occurred to me: it wasn’t any fun. It was so serious! Who wants to see a drunk, depressed James Bond? Not me. He didn’t even say “Shaken, not stirred.” They just showed the bartender shaking the martini.

Fellow blog persons, as we look back at 2012, I hope I avoided Skyfall syndrome. This should be fun. Even though we discussed some serious stuff, hopefully we had fun. We have pretty thoroughly discussed the types of situations that can lead to landlord liability for injuries or damages to others, and the circumstances for attaching liability. It’s all about notice, control, and the opportunity to correct people. Having thoroughly flogged that horse to death, we’re going to shift gears and start talking about issues to look for in defending against such actions. There are (as usual) three main areas we’re going to look at. See? This is fun!

First, we’ll delve into some detail about which persons or entities are the “landlord” for purposes of imposing liability. Is it the owner, the lessor, the sub-lessor, or all three? What about the person who sold me this money pit? Can the former owner be roped into this instead of me for that obvious hole-in-the-floor trip hazard? What about the vending machine operator who maintains the soda machine that tore that guy’s hand off? Or the HOA? Which among these various entities will be on the hook?

Next, we will take a look at some potential laws (i.e., “statutes”) which provide defense (“immunity”) to such liability suits. Many states, including California, have various laws on the books which will provide the landlord defendant with a complete defense to an action wherein liability would otherwise be imposed. In other words, even if the landlord had notice, control, and an opportunity to fix, in certain circumstances the law will exonerate the defendant for public policy reasons. One such law in California provides immunity for serving booze at parties under most circumstances, so as not to mute one’s inclination to have parties. (I think a certain Buildium man’s birthday is coming up in February and I intend to celebrate it — with or without him.) We’ll talk about some of the more obvious ones to look for.

Finally, we will bust out the old case books to talk about some other defenses a landlord/owner can raise when sued. The common law of American jurisprudence and its origins in English law offer up a “plethora”* of other defenses that can be raised to defeat claims against a landlord/owner for actions. These are some concepts like “the firefighters rule” — sounds exciting, doesn’t it?!

That should take us through a good part of the year. Thanks for reading, and hope I don’t bore you.

*Virtual high five who can name the movie in which that word was used in the following context:

“Would you say I had a plethora of birthday gifts?”

“Oh, yea, boss, yea. I would say you have a plethora of birthday gifts.”

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

There’s been an awful lot of discussion around this blog regarding a landlord’s liability for personal injuries and property damage occasioned to tenants and third parties. It would seem like the landlord is exposed in all manner of fronts for all manner of different circumstances. Appearances notwithstanding, the blog readers will know that the issue of notice, control, and an opportunity to remedy are all important in California in determining whether a landlord owes a duty to protect someone from injury. If they do, more forward-planning readers might be thinking: “Well I’ll just protect myself by inserting a clause in my lease agreement that waives the tenant’s rights against me.” There are two problems with that.

The first is that in California, any such language is prohibited by statute (Civil Code §1953) and public policy. The statute provides that unless the lease is presented to the lessee before she takes possession of the property, any provision in a lease which purports to waive the lessor’s liability to the landlord for breach of a duty which leads to personal injury or property damage is void. This might suggest that if you show the lease agreement before the tenant takes possession, you might be able to work around it. Not so. Case law takes this exception away in the case of residential leases. The public policy behind it is that housing is important and difficult to come by, so a person should not be forced to waive these rights just to get a great apartment. So in California, you cannot require your tenant to waive the right to sue you for these types of injuries.

The second problem is that any such release would not inure to the landlord’s benefit regarding those other third parties who visit your tenant and get injured. The landlord still has to protect them from potentially dangerous conditions of which he is or should be aware, over which he has control, and over which he has an opportunity to exert that control. If he does, he should fix the problem, warn about it, or do something to prevent injury or damage to that third person.

It is always best to get counsel to review a lease agreement or draft it for you so that the agreement puts into effect those things you need to be in effect, does not have unnecessary verbiage (such as a clause referenced above), and which clearly spells out each party’s responsibilities, obligations, and rights under the agreement. A good lawyer can help the landlord or the tenant get what each needs. I recommend employing one.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.