Allison David, Esq.
Reni is correction in asserting that she mislaid her watch. Mislaid property is property which is intentionally placed somewhere by the owner, but then accidentally left with no intent to relinquish ownership. A finder of mislaid property acquires no ownership rights; the owner of the premises is generally entitled to the property. In this instance, a valuable gold watch with an airplane design was recovered on a lamp stand. It is improbable that Reni intended to relinquish ownership of the watch at the party. Rather, it is more likely that Reni intentionally placed it on the lamp stand and then forgot that she had done so. Sam then obtained custody/control over the watch, and as owner of the premises, he was entitled to the watch as against everyone EXCEPT the true owner.
Reni is correct in asserting that a constructive bailment was created. A constructive bailment is created when a bailee comes into possession of property without the affirmative consent of its true owner, such as taking or having possession of lost or mislaid property. Constructive bailments are created where a person has taken involuntarily possession or control of personal property. An involuntary bailee, such as Sam, owes the owner a slight duty of care and is only liable for gross negligence. In this case, Sam satisfied his duty of slight care by placing the watch is a desk drawer. The fact that the house was burglarized is not gross negligence on Sam’s behalf.
Sam is incorrect in his assertion that the watch was abandoned; it is possible that the court could find that the watch had been lost. Abandonment is an intentional relinquishment of all rights in an object which gives new ownership rights in a finder. If Reni had abandoned the watch, then Sam could have acquired an interest in the watch. However, it is unlikely that Reni would have intentionally abandoned her rights and interests in an expensive gold watch. Sam’s argument that the watch was “lost” is stronger. Property that is “lost” has been unintentionally left somewhere. It is possible that Reni’s watch was “lost” if it slipped off her wrist, fell to the ground, and was placed on the lamp stand by someone. When property is lost, a finder is entitled to the property against everyone except the true owner. Since the true owner, Reni, was still in the picture, Sam never acquired any finder rights. Finally, Sam is incorrect in his assertion that he is entitled to the $ 1000 security deposit back from Shady’s Recyclables Store. Sam failed to return the watch to Shady, and because Sam was not the true owner, Sam had no entitlement to the watch.
Jen is incorrect on all three accounts. A bailment with an innkeeper, such as Jen’s Motel, is known as an extraordinary bailment. Innkeepers are absolutely liable for the loss or damage to the personal property of their guests. It is undisputed that the innkeeper put the watch in the safe and that the watch disappeared, probably as a result of the actions by a motel employee who had access to the safe. Therefore, the motel will be strictly liable for the loss.
Jen’s liability will probably be limited to $500, however, because the court will probably find that the Limitation of Liability Sign was valid and enforceable. Generally, innkeepers have a statutory right to limit their liability for breach of their bailment duties. However, any limitation must be properly brought to the bailor’s attention before he bails the property. Limitations of liability must be in writing, conspicuous, and they should clearly inform the bailor of all limitations or variations of liability. In this case, there was a sign above the safe, which Sam saw before giving the watch to the clerk, which stated in large, conspicuous letters “THIS MOTEL IS NOT LIABLE FOR VALUABLES OVER $500. GUESTS MAY, FOR AN ADDITIONAL $5 CHARGE, INSURE THEIR VALUABLES FOR AN ADDITIONAL $500.” Thus, Jen’s Motel could assert that there was proper notification to Sam of the Motel’s limitation of liability, that there was an opportunity for Sam to purchase additional insurance; that Sam rejected the opportunity to purchase additional insurance; and that the Motel could not be liable beyond the $500 amount. (See Calvin Klein case where the limitation of liability clause was upheld even though the Trylon Trucking Corp.’s employee was obviously at fault for the theft of the clothes) (However, the Calvin Klein case involved a commercial setting between parties of equal bargaining power who had been dealing with each other for a long time. It is possible that the court in this case could find that the liability limitation was unenforceable due to the fact that the disappearance of the watch was solely the fault of the bailee, and that the Motel remains liable for the full amount of the watch).
Finally, Jen is correct in her assertion that the bailment legally terminated when Sam checked out. However, under the facts in this case, Sam inquired about the watch a mere one hour after he checked out of the hotel. Therefore, the Motel has the burden to prove that the watch was not lost while Sam was a guest. Moreover, one of the essential elements of a bailment is to return the property to the bailor or to dispose of it according to the bailor’s directions, which the Motel neglected to do.
Shady is incorrect in his reasoning. Shady is not the true owner of the watch. Shady knowingly received stolen property, and therefore he has no ownership rights in the watch. Even if Shady had acquired the watch without knowing that it had been stolen, Shady’s interests in the watch would be no greater than the rights of the true owner.
This Court finds that Sam, as an involuntary bailee, exercised the proper standard of care over Reni’s mislaid gold watch, and that Sam is not liable to Reni for the loss of her watch. This court further finds that Jen’s Motel, as an extraordinary bailee, is absolutely liable for the disappearance of the watch, in the amount of $500, and is ordered to pay this sum to Reni, the true owner of the watch.
IT IS SO ORDERED.
P.S. Sam is out-of-luck big time! Reni is also out of luck for the other $500. unless the court finds that the limitation of liability clause was invalid.
It seems like the only winners are Shady and whoever stole the watch from the Motel’s safe!