Nova Stylings, Inc. v. Red Roof Inns, Inc.

Citations: 747 P.2d 107; 242 Kan. 318; 1987 Kan. LEXIS 469Docket: 60,849

Court: Supreme Court of Kansas; December 11, 1987; Kansas; State Supreme Court

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The Kansas Supreme Court case Nova Stylings, Inc. v. Red Roof Inns, Inc. involves a certification from the U.S. District Court for the District of Kansas regarding several questions of Kansas law related to innkeeper liability. The issues presented include: 

1. Whether K.S.A. 36-402 eliminates the common law liability of an innkeeper for negligence concerning a guest's property.
2. The applicability of K.S.A. 36-402(b) and K.S.A. 36-402(c) to the loss of jewelry samples, specifically whether these provisions impose a duty on the innkeeper to require identification and an itemized list of items from the guest.
3. Whether K.S.A. 36-402 limits the innkeeper's liability for property belonging to a non-guest if the guest does not inform the inn that the property does not belong to them.

The facts indicate that Darryl Kulwin, a jewelry salesperson, asked Panoria Ruston, a guest at the Red Roof Inn, to arrange for his sample case to be stored at the inn while they dined. Ruston requested to leave "her bag" without specifying its contents, and the case was subsequently stolen by an unidentified individual. Neither Kulwin nor Ruston disclosed the case's jewelry contents to the clerk or provided an itemized list, despite Ruston mentioning its value. There was no written agreement indicating that Red Roof Inn would assume liability for the contents of the case, and relevant Kansas statutes on property safekeeping were posted in each guest room.

Plaintiff alleges that Red Roof Inns violated Kansas statutes (K.S.A. 36-401 et seq.) by failing to inquire about the contents and value of a bag belonging to Ruston and not issuing a receipt for it. The complaint asserts that the inn is directly and vicariously liable for negligence, seeking $650,000 for lost jewelry. In response, Red Roof Inns filed for summary judgment, contending that the plaintiff did not satisfy K.S.A. 36-402(b) and that common-law liability for innkeepers has been eliminated by the statutes. The court certified four legal questions, with the plaintiff arguing that K.S.A. 36-402 aims only to mitigate strict liability, not to protect negligent innkeepers. 

K.S.A. 36-402(b) states that innkeepers are not liable for loss of guests' merchandise unless the guest provides notice and an itemized list upon entering the establishment. If this notice is not given, the innkeeper has no liability for losses exceeding $250 unless a written agreement assumes greater liability. The court finds the statute clear, affirming that failure to notify the innkeeper removes liability for lost merchandise, including negligence claims. The court emphasizes that it must adhere to the statute's clear language and cannot disregard it in favor of common-law interpretations, noting that Kansas has not adopted a strict insurer standard for innkeepers regarding guest property. The parties reference case law from other jurisdictions, including Kahn v. Hotel Ramada of Nevada, which supports the inclusion of negligence in similar statutory protections.

The excerpt addresses the interpretation of various statutes limiting innkeepers' liability for property loss or damage. Nev. Rev. Stat. 651.010(3) establishes a $750 liability cap for innkeepers, except when they have written consent for higher liability. The Fifth Circuit ruled in Kahn that this subsection applies to all negligence cases unless the innkeeper agrees to assume greater responsibility. Similarly, the court in Link-Simon, Inc. v. Muehlebach Hotel found that Mo. Rev. Stat. 419.030 does not merely abolish common-law strict liability but protects innkeepers from negligence claims. In Ricketts v. Morehead Co., California courts rejected the notion that the $250 cap only affected common-law liability, affirming it applies to negligence as well. The Supreme Judicial Court of Maine and the Tenth Circuit in Kalpakian also upheld that their respective statutes protect innkeepers from negligence claims. The plaintiff argues against these interpretations, positing that tort law incentivizes due care; however, this view has not been upheld in the majority of relevant case law, often involving jewelry salespersons losing merchandise while lodged at hotels.

Owners of uniquely valuable property bear primary responsibility for its care and protection, as established by K.S.A. 36-402(b), which reflects legislative intent that merchandise owners are best positioned to safeguard their assets. Courts interpreting innkeeper liability limitation statutes have recognized public policy concerns supporting this view. In Link-Simon, Inc. v. Muehlebach Hotel, the court affirmed that the rationale behind such provisions aligns with sound public policy, referencing Levesque v. Columbia Hotel, which noted that hotelkeepers are not analogous to bankers and should not be liable for incidental services beyond ordinary needs. Guests carrying significant valuables should take additional protective measures, as the costs of enhanced security would ultimately be reflected in hotel rates, disproportionately affecting guests who do not require such services.

K.S.A. 36-402 applies to negligence claims against innkeepers regarding guest property. The court answered affirmatively to the question certified by the U.S. District Court. The plaintiff argued that K.S.A. 36-402(c) governs the case, as the property was delivered to the innkeeper, as required by subsection (c). However, the court clarified that the application of subsections (b) and (c) is determined by the specific types of property they address, not by the actions required of the guest. Subsection (b) pertains to "merchandise for sale or samples," while subsection (c) addresses "money, jewelry, diamonds, or other valuable stones," establishing distinct criteria for imposing liability on the innkeeper.

A court's construction of statute provisions should aim for consistency and sensibility. In interpreting K.S.A. 36-402(b) and (c), the key distinction lies in the owner's purpose for the property. Jewelry not held as personal or ornamental but as merchandise for sale falls under subsection (b). In this case, the jewelry in question was held by plaintiff Nova Stylings' sales agent as merchandise. Consequently, subsection (b) applies to the loss of the sample jewelry.

The plaintiff argues that the defendant, an innkeeper, is excluded from the protections of K.S.A. 36-402 due to a failure to inquire about the nature of the property. However, case law trends, including K.S.K. Jewelry Co. v. Chicago Sheraton Corporation and Chase Rand v. Pick Hotels, reject this argument, placing the burden on the guest to inform the innkeeper of the property's value. The courts emphasize that innkeepers cannot make special arrangements or manage liability without knowing the value of a guest's property. Thus, the duty to disclose falls on the guest, aligning with the rationale that guests must exercise reasonable care regarding their property. This perspective is supported by the Tenth Circuit’s ruling in Kalpakian v. Oklahoma Sheraton Corporation, affirming that innkeepers are not liable for undisclosed property exceeding statutory limits unless previously notified by the guest.

The duty to notify a hotel of the value of deposited property lies with the guest, allowing the hotel to decide whether to accept the deposit and assume responsibility for its loss. The Tenth Circuit has ruled that state statutes relating to hotel liability for lost property require strict adherence to the guest's obligation to disclose value, limiting hotel liability to the statutory amount unless notified otherwise. In this case, the guest failed to inform the hotel about the value of her property, which prevented the hotel from deciding on its acceptance of responsibility. Red Roof Inns complied with K.S.A. 36-403 by posting relevant statutes in guest rooms. The plaintiff argued that K.S.A. 36-402(b) did not apply since the sales agent was not a guest, but this interpretation would require unreasonable inquiries by the innkeeper regarding property ownership. The court rejected this view, stating that such a construction would make the statute impractical. Given that the guest claimed ownership of the property, K.S.A. 36-402 applies to limit the innkeeper's liability. The court answered the related certified questions affirmatively.