Objective Memorandum: King v. Sunny Days Resort

Objective Memorandum

Issue 

            In order for bailment to be created, did the Sunny Days Resort come into possession of the chattel, as well as exercise physical control over the chattel when the front desk agent, Alex, agreed to take the sunglasses from Esther and hold them in the company vault until her return? 

Brief Answer 

            Yes, the Sunny Days Resort did create an instance of bailment when the Resort’s front desk agent, Alex, agreed to take the pair sunglasses from Esther and store them in the Resort’s vault. Not only did the Resort come into possession of the sunglasses, but an intention to physically control the glasses was exercised when the front desk agent took the chattel from Esther in order to safely store them until Esther’s return. 

Facts 

            Esther recently visited the Sunny Days resort while on vacation. She wore her Dolce & Gabbana “blooming” sunglasses, worth about $1,100, to the resort. One evening, she came inside for a dinner reservation. She stopped at the front desk and asked if they could hold her sunglasses in the hotel vault while she ate dinner in the restaurant located off the hotel lobby. The front desk agent, Alex, agreed, and Esther handed him her sunglasses. She watched the front desk agent walk into the back office and she was satisfied the sunglasses would be safe. After dinner, she stopped by the front desk to retrieve her sunglasses, however, nobody was on duty since it was very late, so she returned to her room for the evening with the intention of retrieving her glasses the next morning.

            The next morning, Esther took the elevator down to the lobby, approached the front desk, and informed them she was ready to check out. Since it was the morning shift, a different front desk agent, Carson, was assisting her. Esther explained to Carson that she had left her sunglasses at the front desk with Alex the prior evening. She asked Carson if he could retrieve her sunglasses from the vault, so she could take them home with her. Carson walked to the back office to retrieve her sunglasses. Several minutes later, the hotel manager returned with Carson and explained that the sunglasses were not in the vault. Esther left the resort devastated and furious. 

A week later, she received a phone call from the hotel manager. The manager had reviewed the security footage and determined that Alex had, in fact, placed the glasses in the vault after Esther handed them to him. However, security footage also shows that Alex returned to the vault later that evening to retrieve the sunglasses and handed them to a friend of his who was waiting for him at the front desk. He never returned to work after that evening, and the hotel manager has been unable to locate Alex or the sunglasses. 

Discussion 

            A bailment was created when Sunny Days Resort came into possession of Esther’s sunglasses. In order for bailment to be created, two elements must be fulfilled - one must come into possession of the chattel and exercise the intent of physically controlling the chattel.

1.     Possession of Chattel

Possession occurs when one has physical control over another’s property and an intent to exercise that control. Morris v. Hamilton, 302 S.E. 2d 51 (Va. 1983). In Morris v. Hamilton, Morris assumed possession of a watch belonging to Hamilton, while Hamilton was away – she physically took possession of the object with the gratuitous intention of returning it to Hamilton. Id. However, upon Hamilton’s return, the watch had gone missing in Morris’s possession. Id. Originally, the trial court favored Hamilton, finding Morris guilty of negligence, without evidence of bailment. Id. However, after appealing the case, Morris was found not guilty in the appellate court. Id. The trial court erred by ruling that no bailment was created, in favor of a charge of negligence. Id. However, the decision was reversed, due to her being considered a bailee who took possession of the watch and exercised an intention to physically control the item. Id. No evidence of gross negligence was found, and judgment was granted in favor of Morris since she acted gratuitously and should not be held at the same standard of ordinary care. Id.

            In order for possession to occur, two elements must be met – physical control over an object and intent to exercise control. K-B Corporation v. Gallagher, 218 Va. 381, 237 S.E.2d 183 (Va. 1977). In K-B v. Gallagher, K-B employed Gallagher as a mechanic and was required to furnish his own tools. Id. These, locked in a box to which Gallagher had the key, were stolen from K-B’s premises while Gallagher was on K-B’s errand. Id. K-B neither provided a specific area for tool storage nor required employees to leave tools on premises. Id. Gallagher sued in General District Court for breach of bailment contract. Id. The district court ruled against Gallagher, because K-B did not have exclusive possession over Gallagher’s property at the time of the theft. Id. K-B did not have control over individual tools in the box, because the box was locked; their control over the box as a whole was not independent and exclusive so as to charge K-B with a duty of ordinary care to safeguard it. Id. There also is no evidence that K-B ever intended to exercise any dominion over the box or its contents. Id.

            When we compare Esther’s case with the Morris and Gallagher cases, we find definite similarities. The front desk agent with Sunny Days resort came into possession of Esther’s property when he not only came into physical contact with the property, but when he consciously agreed to take the property with the intention of maintaining control over it. The same instance of possession can be observed in Morris v. Hamilton when Morris picked up Hamilton’s property and intended to exercise control over it. Hamilton, 302 S.E. 2d 51. However, in K-B v. Gallagher we see the opposite; no physical control or intent to physically control Gallagher’s tools was exercised, therefore no instance of possession occurred. Gallagher, 218 Va. 381, 237 S.E.2d 183. Gallagher’s case is a good example of how possession can be avoided, however, this does not parallel what happened to Esther and her property.

2.     Exercise of Physical Control Over the Chattel

In order for a party to exercise physical control over property, possession, which includes physical control and an intention to exercise physical control, must be present. Otto Wolff Handelsgesellschaft v. Sheridan Transp., 800 F. Supp. 1359 (E.D. Va. 1992). In Otto v. Sheridan, Otto Wolf purchased a large amount of steel from Port Everglades with the intention of delivering the order to Puerto Rico. Id. Amidst the negotiation, Port Everglades entered into a charter party with Sheridan Towing Company, so that Port Everglades could use one of Sheridan’s barges to deliver the freight. Id. In the process of moving the freight, environmental conditions caused some of the steel to become damaged. Id. Otto decided to sue Sheridan to recover damages. Id. However, since the barge was in complete control of Port Everglades, and not Sheridan (even though the barge belonged to Sheridan), no damages could be recovered. Id. Not only did Otto and Sheridan not have any kind of conscious agreement or knowledge of each other, but Sheridan did not even have control over the barge. Id. Instead, it was Port Everglades that had control over the barge. Id.

            Physical control can be best described as the care, custody, and control of another’s property. Zurich American Insurance Company v. Public Storage, 743 F. Supp. 2d 525 (E.D. Va. 2010). In Zurich vs. Public, Talal Nsouli rented out a storage unit from Public Storage with the intent of safeguarding medical records. Id. Later, Public Storage hired a company to do repairs on the roof above Nsouli’s storage unit. Id. In the process, the medical records were destroyed. Id. Nsouli’s insurance company, Zurich, decided to seek damages from Public Storage on the basis that Public was acting as a bailee for Nsouli’s belongings. Id. Public Storage argued that they should not be considered liable for the destruction caused by the repair company; they had no physical control of the property, thus bailment was not created in that instance. Id. However, under certain circumstances, a bailee may be liable for the destruction of bailed property that is no longer within its physical control; a bailee is held liable in those circumstances precisely because the bailee was entrusted with the goods by the bailor, and the bailee cannot divest himself of the responsibility for safeguarding the goods by giving them away. Id.

            When the Sheridan case is compared to Esther’s case, there are similarities. One could argue that Sunny Days resort should not be liable for breach of bailment, the same way Sheridan was not liable for the damage done to Otto’s freight. However, this a false comparison. Sheridan had no knowledge or contract with Otto; the contract was between Port Everglades and Otto, since Port had full physical control of the barge and transportation of Otto’s freight. Sheridan Transp., 800 F. Supp. 1359. Comparatively, the front desk agent that was responsible for taking possession of Esther’s property is directly employed by Sunny Days resort and not an unknowing third-party like Sheridan. With regards to the Public Storage case, both Esther and Nsouli entrusted a private company as a bailee; both Sunny Days and Public Storage maintained physical control over the properties, and both failed their duty as a bailee to safeguard the property of their bailor. Public Storage, 743 F. Supp. 2d 525.

Conclusion 

          In conclusion, Sunny Days resort displayed a state of possession over Esther’s belongings when they inherited physical control, as well as an intention to exercise physical control, over the belongings. There was a mutual, informal agreement between Esther and the Sunny Days representative to safeguard the belonging in the business’s vault, thus a duty of care was entrusted upon the resort. Physical control was demonstrated by the resort when the employee took the belonging. Regardless of who took Esther’s glasses, the resort demonstrated physical control over the glasses when an employee, hired directly by/with the resort, came into possession of the glasses. In this case, both possession of the chattel and exercise of physical control can be measured by the actions taken by the resort.