Legal Reporter

Article excerpt

U.S. JUDICIAL DECISIONS

Hospitality. In a case of first impression, the South Carolina Court of Appeals has ruled that a state law does not protect a hotel from liability arising out of theft of a guest's property. According to the court, the law quires that hotels conspicuously post the availability of safe deposit boxes to protect themselves from liability. The court ruled that a jury could decide whether the hotel posted sufficient notice of safe deposit boxes.

While on a trip, Joseph and Marie Ippolito rented a room at the Holiday Inn in Walterboro, South Carolina. Joseph Ippolito signed a registration card at the hotel. Written on the card was a statement: "The management is not responsible for any valuables not secured in safe deposit boxes provided at the front office." This same notice was posted on the pouch that contained the room key and on the back of the door in the room.

After putting their luggage in their room, the Ippolitos walked to a restaurant and returned about 40 minutes later. Once in their room, the couple noticed that some of their luggage was missing. The luggage contained jewelry valued at more than $500,000 and $8,000 in cash.

The Ippolitos sued the hotel, claiming that the theft of their property was due to the negligence and recklessness of the innkeeper. The hotel denied the charge, arguing that South Carolina law protects innkeepers from liability in cases where the hotel has provided "conspicuous notice" of safe deposit boxes available for guests' use.

At trial, the Ippolitos testified that they did not see any notices for safe deposit boxes. However, Joseph Ippolito also said that had he been aware of the notices, he probably would not have requested one. Ippolito testified that he felt it would be better if fewer people knew about his belongings.

Several former and current hotel employees testified on behalf of the defense, confirming the establishment's dedication to security. A police officer who investigated the incident testified that he saw the safe deposit box notice on the back of the door in the Ippolitos' room. A security expert also testified that the hotel's security was higher that the industry standard at the time of the incident.

The jury found in favor of the plaintiffs and awarded them $350,000 in actual damages. However, the jury also determined that the Ippolitos were partly responsible for the thefts, so the award was reduced to $210,000.

Attorneys for the defense requested a new trial. The Colleton County Circuit Court judge denied the motion. The defendants then appealed to the South Carolina Court of Appeals. In their appeal, the defendants claimed that they could not be held liable because the state statute protects innkeepers from liability.

The appellate court upheld the trial court's decision. The court ruled that the hotel could not claim exemption from trial based on the innkeepers' law. Because the parties disagreed about whether the safe deposit box notice was "conspicuous," said the court, a jury must determine whether the hotel met the requirements of the innkeepers law.

The court also allowed the trial court's decision to stand because there was no error in the jury's ruling. The court noted that because no court had ever considered the 100-year-old innkeepers statute, this case was a matter of first impression--in other words, no precedent for interpreting the state law existed, leaving the jury free to establish its own interpretation. (Ippolito v. Hospitality Management, South Carolina Court of Appeals, No. 3586, 2003)

U.S. REGULATORY ISSUES

Background checks. The Environmental Protection Agency (EPA) has issued a proposed rule that would require that all contractors and subcontractors doing work for the agency conduct background checks on employees. The rule would require that background checks include criminal history checks, a credit check, Social Security number verification, employment and education history, and a professional license and certification check. …