TN Court of Appeals: Premises Liability - Who is exercising control?

by Toby R. Carpenter, Esq.

The Court of Appeals issued an opinion in Jones v. Earth Fare, Inc., a Knox County premises liability case, on Wednesday, April 15, 2020, which shows how good deeds don’t go unpunished. If you own or lease commercial real estate, this opinion might affect any future liability in insurance/injury litigation you may have.

Earth Fare was a natural foods grocery store leasing space in a shopping center. The lease provided that the landlord would maintain the common areas, including the parking lot, in a “first class condition,” and would clean and remove “any impediments to easy and safe movement.”

A few minutes before the plaintiff’s injury, another customer slipped in a puddle of antifreeze in the parking lot. There was no proof of who made the puddle or how long it was there. That customer reported the puddle to the Earth Fare manager, who went outside, saw it, then returned to the store to get a bag of cat litter to absorb and clean up the puddle. While she was inside, the plaintiff exited the store and slipped and fell in the puddle, causing injuries.

In her deposition, the manager testified that although the landlord was responsible for cleaning and maintaining the parking lot, Earth Fare employees regularly cleaned up any broken glass, spills, and other hazards in the parking lot if they became aware of them. The manager also said they did not contact the landlord about those conditions.

Earth Fare moved for summary judgment, arguing that it had no legal duty to the plaintiff because of the lease terms. The trial judge, Hon. William T. Ailor, agreed with the defendant and granted the motion. The plaintiff appealed, arguing that the manager’s testimony created an issue of fact regarding whether Earth Fare had a duty of care.

The Court of Appeals reversed the summary judgment, holding that a lessee has no duty of care to a customer injured in a common area where the lease says the landlord is responsible for maintenance of that common area, but only if the lessee has not exercised control over the common area. Because the manager testified that Earth Fare had essentially exercised control over the parking lot, there was an issue of fact regarding its duty to the plaintiff that precluded summary judgment. The Court remanded the case back to the trial court.

From a risk management perspective, this case illustrates how a party can expose itself to liability through actions that it intends to be benevolent and/or efficient. I’m sure that Earth Fare’s employees believed that they were doing the landlord a favor, and that it was just easier and faster to deal with parking lot spills and debris themselves. By doing that, however, they created a legal duty that otherwise would not have existed.

While it might have been bothersome to call the landlord every time someone dropped a jar or bottle in the parking lot, that’s exactly what they should have done. To avoid this type of liability, lessees of commercial property need to make sure their management employees understand the lease terms regarding maintenance of common areas, and that they act consistent with those terms.