Ralph D. Smith and Thelma Smith v. Arbaugh's Restaurant, Inc., a Body Corporate

LEVENTHAL, Circuit Judge,

concurring:

The majority understands this case to pose a clear conflict in values: the value of human safety on the one hand, and the value of a landowner’s unrestricted exploitation of his property on the other. With all respect, I believe this overly simplifies the issues. What is ultimately at issue here is not “people” versus “property,” but rather how to allocate the costs and risk of loss for human injury.

Those who advocate change in the rules governing the liability of persons controlling real property frequently refer to the commercial and industrial necessities of modern life, and the strong differences from the pastoral life of yesteryear. I am completely convinced as to the reasons of policy which would lead the court to announce an end to the differential duties of a possessor of land with respect to trespassers, invitees or licensees, where the land is used as a business establishment. I am not so clear as to the broader sweep of the majority’s rule. I therefore limit myself to concurring in the result, and to a separate statement of my reasons.

The use of the common law distinctions with respect to business establishments is mischievous because, in the context of a business establishment, it is generally almost impossible to tell the trespassers from the licensees, or either from the invitees. If a man scales the fence and uses my back yard as a shortcut, I have little difficulty -in saying he is a trespasser, on my premises without my consent. But if he takes a shortcut through my parking lot or store, classification is beclouded. While a businessman may not prefer his premises to be used as a thoroughfare, he does value goodwill of individuals, often prospective customers. In the totality, such goodwill is a business asset. Given the probable ambiguity of the status of anyone on business property, I am satisfied that the proper rule in such circumstances is one which gives the jury broad latitude to affix liability under a general standard of reasonable care in all of the circumstances of the case. I assume it is understood that the “circumstances” of *108 the case include the factual and legal relationships of the parties. Presumably the jury will not be awarding verdicts to burglars.

A second factor which underscores a change of rule as to business establishments is the matter of loss-distribution. The costs of foreseeable harms can, in a business context, be distributed among all customers by means of insurance or self-insurance.

However, this loss-distribution capability does not necessarily apply in non-business situations. The occupier of residential property is not in a position to distribute either the costs of foreseeable los'ses or the cost of insurance against those losses. He must bear such costs himself.

Today’s decision exposes many less-affluent homeowners — whose modest home represents their major capital asset— and apartment dwellers, to lawsuits not previously permitted, where there is no concealed defect — e. g., a sliding rug. It may increase the costs of insuring against such risks, and it may increase the risks of not insuring at all. This may not be sound public policy. Furthermore, the rule may be unwise insofar as it permits recoveries, where insurance is available, with the too-ready acquiescence of the owner or resident of the home or apartment. In the broad, I am concerned that this rule of law may furnish incentives for redressing loss through litigation, and a corresponding disincentive for persons to insure themselves against losses due to personal injury.

As to residential premises, while I see a good case for a rule that places business and social visitors on the same footing, I also discern some rough common-sense in the notion that a social guest, broadly, takes a host as he is, expecting that the host will take as much care of his guest as he takes of himself, and that he will point out latent defects. I certainly see some rough common sense in the broad notion that a householder has no legal duty, as to trespassers entering without his consent, to fill up holes and otherwise tidy up his property so that it is in reasonably safe condition — though this is a broad conception subject to limited exceptions * . I do not find these principles “awkward . in the circumstances of modern life” or contrary to “accepted values and modern experience.” Perhaps my difficulty is that I have not studied these problems deeply enough. But then, they are not involved in the case at bar, and were not argued.

Compare Restatement Torts (Second) §§ 333-339.