Way back in May 2012, I had a post entitled “Imposing Liability Where There Is Insurability” discussing the Court of Appeals decision in Santelli v. Rahmatulah (pdf).
Yesterday, the Supreme Court issued an opinion overturning the Court of Appeals and affirming the trial court.
The issue had to do with how to allocate fault when you have an intentional actor, the bad acts of whom it was allegedly the duty of a negligent actor to prevent. In the older blog, I described the case:
Santelli was a guest of a hotel. Pryor had been an employee of the hotel. Pryor retained a key card after he walked off the job. Pryor gained access to Santelli’s room and murdered him. The hotel (owned by Rahmatullah) hadn’t performed a background check on Pryor and, at the time he was hired, there was a warrant for Pryor’s arrest for some type of probation violation. Santelli’s estate sued the hotel for negligence in performing its duty to provide security to its patrons. The hotel named Pryor as a “non-party.” (In Indiana’s comparative negligence scheme, the default is that a jury is supposed to allocate a percentage of negligence as between the Plaintiff and Defendant that combines for 100%. A Defendant can add a “non-party” to whom the jury is permitted to distribute some of the percentage of fault. The amount the Defendant owes the Plaintiff is the Defendant’s percentage of fault multiplied by the Plaintiff’s total damages.)
The Plaintiff protested Pryor’s inclusion as a non-party and asked for an instruction that informed the jury that it could not allocate fault to Pryor if Pryor’s actions were the “very duty” imposed on the hotel to protect against. In other words, the hotel has a duty to responsibly provide security so as to protect patrons against guys like Pryor. The trial court did not give the instruction requested by the Plaintiff. The jury came back with total damages of $2 million for the Plaintiff but allocated the fault at 1% for Santelli, 2% for the hotel, and 97% to Pryor the murderer. Under that ruling, the hotel was liable to the estate of the decedent in the amount of about $40,000.
The Court of Appeals reversed the trial court and ordered a new trial, reasoning:
If the allocation of fault to a criminal defendant reduces the liability of the negligent defendant whose action or inaction allowed the harm to occur, as it did here, the injured party will not be adequately compensated. In addition, the criminal defendant who has been identified and convicted for his intentional act likely will be both judgment proof and without insurance coverage from which the injured person could be compensated. Further, the negligent business owner can insure against liability arising from inadequate security. Combining the allocation of fault of the criminal defendant with the negligent defendant imposes liability where there is insurability. Holding the negligent proprietor liable as provided under § 14 also serves as a deterrent to breaching one’s very duty.
The Indiana Supreme Court disagreed, determining that the Indiana General Assembly could design its comparative fault system in the manner desired by the Court of Appeals but finding that it had not done so.
[W]e will discuss it more generally as an argument against allocating fault to intentional actors where another, negligent actor owed a duty to the victim such as Rahmatullah owed Santelli.
. . .
[Discussion of the Indiana Comparative Fault Act and noting that the definition of “fault” includes intentional acts.]
Thus, the [Comparative Fault] Act now mandates that when determining how to assign percentages of fault, a jury must consider the intentional acts of non-parties like Pryor in addition to the negligent acts of defendants like Rahmatullah. We thus find that the trial court did not err in permitting the jury to allocate fault to Pryor and in refusing the Estate’s tendered instruction that would have permitted the jury to hold Rahmatullah liable for Pryor’s intentional act.
The Indiana Supreme Court noted that it would be possible in some situations for a jury to allocate more fault to a negligent landowner than to a criminal intentionally causing injury and permitted the opportunity to do so by the negligence of the landowner.
liked the little bit of smack down on the court of appeals for using the “very duty doctrine” where none has ever existed but in limited scholarship. I can’t remember the last time a 3-0 CoA opinion was reversed 5-0 by the Supremes.