HOSPITALITY RISK SOLUTIONS

Hotel owners and managers must remember that under the common law, most jurisdictions and subject to certain limited exceptions, they are strictly liable for loss or damage to a guest’s property, unless that liability has been limited by statute.

Innkeeper statues are a product of local rather than federal law. Each state (and the District of Columbia) is free to enact its own innkeeper statute. For this reason, the first thing the innkeeper must do is check the law in each state in which a hotel is located and clearly understand what that law requires.

In this case (Paraskevaides v. Four Seasons Washington), a hotel guest just happened to be traveling with, and decided to place in her in-room safe, jewelry valued at approximately $1.2 million. When someone removed the jewelry from the in-room safe after entering both the hotel room and the safe without force, the guests sued the hotel. One of the defenses the hotel asserted was based upon the Innkeeper Statute applicable in the District of Columbia.

Although the trial court allowed the defense, the appeals court determined that the hotel was not entitled to the statute’s protection because the hotel had failed to comply with the statute’s requirements. The appeals court then sent the case back to the trial court for a determination of the hotel’s liability under the common law. Noting that neither party had addressed that issue on appeal, the appeals court remained silent as to the applicable common law standards. Accordingly, after several years of litigation, the parties are back to square one and the extent of the hotel’s liability remains wide open.

If an innkeeper fully complies with applicable innkeeper statues, the benefits can be significant. Under the District of Columbia Innkeeper Statute, for example, compliance allows innkeepers to avoid all liability for the loss, theft or destruction of property not deposited in the hotel’s safety deposit boxes unless it is “usual, common or prudent” for a guest to retain such property in his or her room. Moreover, compliance with the statute limits an innkeeper’s liability for the loss, theft or destruction of property deposited in the safety deposit boxes to the lesser of $1,000 or the fair value of the property. In order to reap the benefits of these statutes and limit a guest’s common law rights, a hotel must be precise in its compliance.

The District of Columbia’s version of the innkeeper statute required, among other things, that hotels display either a printed copy of the innkeeper statute or a summary of the law in both the guest rooms and in the public rooms of the hotel. The appeals court in this case concluded that the hotel did not display a copy or summary of the statute in its public rooms, and, therefore, could not rely on the statute to limit its liability.

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