United States: The California Innkeeper Statute Defense

An important legal defense available to operators of hotels in California1  – but one which is relatively unknown to the plaintiffs' Bar -- is the so-called "Innkeeper Statute", codified at California Civil Code sections 1859 and 1860. Basically, these sections (originally enacted in 1872 and subsequently amended) limit the liability of a hotel operator to either $1,000 or $500, in the event that a guest's personal valuables are stolen, damaged or otherwise lost while a guest at the hotel.

Section 1859:
Section 1859 refers to guests' property of remaining in their possession in the rooms of the inn or hotel. Gardner v. Jonathan Club (1950) 35 Cal.2d 343, 351. This section limits the liability of a hotel operator for losses of or injuries to a guest's personal property: "...in no case shall such liability exceed the sum of one thousand dollars ($1,000) in the aggregate....unless he (the operator) shall have consented in writing with the owner thereof to assume a greater liability."

Section 1860:
This section refers to articles placed in the hotel's safe in the possession of the innkeeper. Gardner, supra, at 351. In today's hospitality industry, most hotels offer safe deposit boxes at or near the front desk, wherein guests can temporarily lodge their valuables. The availability of these safe deposit boxes is generally posted on a sign behind the door in each guest room. Additionally, some hotels also post this information in the guest information directory in each guest room.

Section 1860 provides in pertinent part:

"If an innkeeper, hotelkeeper...keeps a fireproof safe and gives notice to a guest...either personally or by putting up a printed notice in a prominent place in the office or the room occupied by the guest...that he keeps such a safe and will not be liable for money, jewelry, documents, furs, fur coats and fur garments, or other articles of unusual value and small compass, unless placed therein, he is not liable, except so far as his own acts shall contribute thereto, for any loss of or injury to such articles if not deposited with him to be placed therein, nor in any case for more than the sum of five hundred dollars ($500) for any or all such property of any individual guest,...unless he shall have given a receipt in writing therefore to such guest..." (Emphasis added.)

Although the section refers to a "fireproof safe", case law establishes that this includes safe deposit boxes, of the type commonly available in hotels. In Nagashima v. Hyatt Wilshire Corporation (1991) 288 Call.App.3d 1006, the Court of Appeal upheld the $500 limit of liability provided by section 1860. Further, Nagashima held that the property need not be in the hotel's possession when damaged, lost or stolen, in order for the liability limit of section 1860 to apply.

In Nagashima, the plaintiff, a guest at the defendant hotel, had deposited personal jewelry worth $72,000 in one of the hotel's safe deposit boxes. She had not informed the hotel in writing of the value of this property, nor had the hotel agreed in writing to assume any liability greater that the amount specified in section 1859. The hotel had posted printed notices in every room of the hotel informing guests that a safe was available for safekeeping of their valuables and that the hotel would not be liable for property of unusual value unless placed in the hotel safe. Just before checking out of the hotel, the plaintiff retrieved her jewelry from the hotel's safe and was standing at the checkout counter in the lobby when an unidentified thief stole the jewelry from her person.

The facts of the foregoing were stipulated to by the parties, and the case was submitted to the trial judge for a determination of whether the limits of the Innkeeper Statute applied. The trial judge reasoned that, because the property was not under the control of the hotel at the time of the theft, the liability limit of section 1860 did not apply, and the court entered judgment for the plaintiff in the sum of $72,000.

The Court of Appeal reversed, stating at page 1010:

"In the present case, defendant kept a fireproof safe and gave notice thereof to plaintiff, thus invoking the protection of section 1860.

Because defendant did not agree to assume liability in excess of the statutory limitation, defendant's liability 'for losses of or injuries to personal property' is limited to $500 whether or not the property was in the possession of the hotel at the time of the loss or injury. (Citation omitted.)". (Emphasis added.)

The court further stated at page 1011:

"As to articles which have been 'placed in the safe in the possession of the innkeeper' [citation], section 1860 clearly limits the liability of a hotelkeeper to $500 (except where the hotelkeeper has agreed in writing to assume a greater liability). This liability is not restricted to the period of time in which the articles are actually inside the hotel safe; the language of section 1860 encompasses the plaintiff's situation, where the valuables were deposited in a safe, subsequently withdrawn by the guest, and taken from her as she checked out of the hotel."

Practice Tips:

In a case where the plaintiff seeks recovery for loss or damage to personal property while a guest at a hotel, the defendant hotel's Answer to the Complaint should include an affirmative defense asserting the liability limits of the "Innkeeper Statute" (Civ. Code §§1859 and 1860.) A determination should also be made as to whether: (1) the hotel offers a safe or safe deposit boxes to its guests for their valuables, and (2) whether the hotel posts a sign in the guest's room (usually on the back of the door), advising of the availability of the safe/safe deposit boxes. Some hotels also include this information in their guest information directory in each room.

If the guest's lost or stolen property was large in volume (eg, multiple suitcases) which would not fit into a safe deposit box, a determination should be made as to whether the hotel offers to its guest its "Bell Closet" or other secured room, for those who wish to store their luggage or other large items (eg, an expensive bicycle) temporarily. This is a common request by hotel guests, particularly on the day of check-out. Such a secured room is arguably tantamount to a safe or safe deposit box, and should help to invoke the liability limits of section 1860, when a large amount of property was lost or stolen.

Finally, a Motion for Summary Judgment and/or for Summary Adjudication should be pursued in an effort to short-circuit the plaintiff's lawsuit and/or to lower the plaintiff's damages expectations.

Footnote

1 These Code sections actually provides protection to a wide array of businesses, including operators of licensed hospitals, rest homes or sanitariums, and boardinghouse or lodging house keepers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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