Supreme Court imposes new duty on landlords
by Ryan C. Mitchell
Dickinson Wright
In the 2001 case of MacDonald v PKT, Inc, 464 Mich. 322 (2001), the Michigan Supreme Court ruled that merchants have a limited duty to contact the police in situations where there is a risk of imminent and foreseeable harm to an identifiable invitee. In a recent split decision, Bailey v Schaff, 494 Mich. 595 (2013), the Court extended this limited duty to landlords. This decision is likely to result in increased litigation against landlords and property managers, and will cause them to rethink how (and if) they choose to monitor their common areas.
Under the facts of the Bailey case, the plaintiff suffered two gunshot wounds, rendering him a paraplegic, while attending a barbeque in the common areas of the Evergreen Regency Town-
homes, LTD (“Evergreen”) apartment complex. The Evergreen complex’s management company had contracted with a security firm, Hi-Tech Protection (“Hi-Tech”), to provide security services for the complex. Prior to the shooting, an Evergreen resident informed the Hi-Tech security guards on duty that a man was waving a gun and threatening to kill someone. The security guards did not respond to this information immediately, but instead drove an intoxicated resident back to his apartment. Roughly 10 or 15 minutes later, they heard the two gunshots.
The plaintiff sued multiple parties, including Evergreen, Hi-Tech and the shooter. In its decision, the Court addressed whether it was proper to extend the limited duty of merchants to contact the police under the MacDonald case to landlords and other premises proprietors. In a split decision, the Court affirmed the extension of the duty under MacDonald to landlords, holding that “a landlord has a duty to respond by reasonably expediting police involvement where it is given notice of a specific situation occurring on the premises that would cause a reasonable person to recognize a risk of imminent harm to an identifiable invitee.” In doing so, the Court recognized the consistent treatment of landlords and merchants under Michigan law with respect to physical maintenance of the areas over which they have control.
In defining the scope of this limited duty, the Court reasoned that, due to the unpredictable and irrational nature of criminal activity, this duty on a landlord is triggered only when the landlord is given notice of such a situation. Specifically, the Court stated that “without notice that alerts the landlord to a risk of imminent harm, it may continue to presume that individuals on the premises will not violate criminal law.” In addition, the Court clarified that this duty upon landlords does not extend to criminal acts occurring within the tenant’s premises, but only extends to acts occurring within those areas that are under the landlord’s control.
The Court was further careful to note that there is not duty to anticipate and prevent the criminal acts of third parties, but rather this duty is limited to reasonably expediting police involvement when a landlord receives notice of a specific situation that poses a risk of imminent harm to an invitee. While the Court did not go on to specify what would constitute reasonably expediting police involvement, it would appear that simply calling 911 would satisfy this duty.
So what does this ruling mean for landlords and property managers? On its face, the new duty being imposed appears to be limited in scope (i.e., expediting police involvement). However, whether there is a risk of imminent and foreseeable harm to an identifiable invitee, and whether the landlord reasonably expedited police involvement are all likely to be close questions of fact that will need to be determined on a case-by-case basis. Accordingly, landlords may do well to err on the side of caution and call the police any time they become aware of any situation that could result in harm to someone on their premises, rather than having to face the prospect of defending themselves in court.
Unfortunately, as Supreme Court Justice Markman points out in his dissent to the majority’s opinion, not only is the Bailey decision likely to result in more false alarms, but it may also have the unintended effect of encouraging landlords to avoid the common areas altogether (and forego providing security measures), so as to prevent this duty from being triggered in the first place. In any event, the failure to comply with the duty set forth in Bailey could result in substantial liability to landlords and property managers if a tragic event occurs in the common areas of the landlord’s property.
Ryan Mitchell is Of Counsel to Dickinson Wright, operating out of the Grand Rapids office. Graduating cum laude from both Skidmore College and DePaul University College of Law, Mitchell focuses his practice in the area of commercial real estate, representing developers, lenders, landlords and tenants in connection with the acquisition, disposition, financing, development and leasing of retail, office, industrial and mixed-use properties throughout the United States. He also has broad experience representing developers and lenders in connection with all aspects of the development and financing of utility-scale wind energy projects, including two of the largest wind developments in Michigan and Illinois.
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