Kaitlyn Schneider v. Paragon Realty, LLC

FILED
May 24 2016, 8:18 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
John R. Helm Andrew B. Janutolo
Schreckengast & Helm James A. Goodin
Indianapolis, Indiana Goodin Abernathy, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Kaitlyn Schneider, March 24, 2016
Appellant-Plaintiff, Court of Appeals Case No.
32A01-1511-CT-1858
v. Appeal from the Hendricks
Superior Court
Paragon Realty, LLC, The Honorable Mark A. Smith,
Appellee-Defendant. Judge
Trial Court Cause No.
32D04-1307-CT-94
Najam, Judge.
Statement of the Case
[1] Kaitlyn Schneider appeals the trial court’s entry of summary judgment in favor
of Paragon Realty, LLC (“Paragon”) on Schneider’s complaint alleging that, as
a result of the negligence of Paragon and other defendants, Schneider sustained
personal injuries. Schneider presents a single issue for our review, namely,
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whether there exists a genuine issue of material fact precluding summary
judgment in favor of Paragon.
[2] We affirm.
Facts and Procedural History
[3] On October 19, 2011, Schneider consumed five vodka drinks at her home
between 6:00 p.m. and 10:00 p.m., when her friend Benjamin Burns picked her
up in his car and drove her to Bubbaz Bar & Grill (“Bubbaz”) in Camby.
Bubbaz is located in a strip mall owned by Heartland Landing II, LLC
(“Heartland”). While at Bubbaz, Schneider consumed three beers and three
shots of whiskey, and Burns also consumed alcoholic beverages. At
approximately 2:00 a.m. on October 20, Schneider and Burns left Bubbaz in
Burns’ vehicle with Burns driving. At approximately 2:30 a.m., Burns lost
control of his car and crashed into a ditch. A chemical test performed on
Burns’ blood at 4:10 a.m. that morning indicated that his blood alcohol content
was .10. Schneider sustained serious injuries as a result of the crash, and she is
now a paraplegic.
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[4] On October 17, 2013, Schneider filed her second amended complaint 1 against
Bubbaz, Paragon, Heartland, and other defendants2 alleging as follows:
3. That agents or employees of the Defendants furnished and
served alcoholic beverages to Kaitlyn Schneider and Benjamin
Burns with actual knowledge that both Benjamin Burns and
Kaitlyn Schneider were visibly intoxicated, and they continued to
furnish and serve alcoholic beverages to both Kaitlyn Schneider
and Benjamin Burns while they were in an obvious visible state
of intoxication in violation of Indiana Statutes.
4. That agents or employees of the Defendants carelessly and
negligently furnished and served alcoholic beverages to Kaitlyn
Schneider and Benjamin Burns and continued to serve them
alcoholic beverages when they knew or should have known that
Benjamin Burns and Kaitlyn Schneider were intoxicated and
soon thereafter would be driving in an automobile.
5. That the Defendants failed to properly hire, train, and
supervise their employees.
6. That the Defendants failed to adequately monitor and
supervise their alcohol sales business activities.
7. That the Defendants and the agents or employees of the
Defendants caused and contributed to cause Benjamin Burns and
Kaitlyn Schneider to become so intoxicated that they had lost
control of their usual physical and mental capabilities.
1
Schneider has not included her original complaint or first amended complaint in her appendix on appeal.
2
Heartland is Bubbaz’ landlord, and Paragon is a property management company hired by Heartland.
Neither Bubbaz nor Heartland joined in Paragon’s summary judgment motion, and they are not parties to
this appeal.
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8. That the Defendants and the agents or employees of the
Defendants then allowed Benjamin Burns and Kaitlyn Schneider
to leave the premise[s] of the bar, go to Benjamin Burns’ car
located in the Defendants’ parking lot, and Benjamin Burns to
drive off with Kaitlyn Schneider as his passenger despite their
obvious states of intoxication.
9. That Benjamin Burns ran off the road in his vehicle a short
distance from Bubbaz Bar & Grill and struck a ditch along the
side of CR 800 South in Hendricks County, Indiana.
10. That as a result of this single car collision with the ditch, the
Plaintiff, Kaitlyn Schneider, was tragically and permanently
paralyzed from the waist down due to a fractured spine caused by
the force of the vehicle colliding with the ditch.
11. That the intoxication of Benjamin Burns was a proximate
cause of the collision and the injuries sustained by Kaitlyn
Schneider.
12. That the Defendants failed to use the reasonable and
ordinary care necessary to prevent their agents and employees
from conducting themselves in such a manner which created an
unreasonable risk of harm to the Plaintiff.
13. That the Defendant and/or their employees or agents were
in a habit of misconducting themselves in a manner dangerous to
others with respect to the sale and distribution of alcoholic
beverages on their property, and they created and maintained a
nuisance that was inherently dangerous to the Plaintiff and
others.
14. That Defendants . . . are responsible for the acts of their
employees and agents under the doctrine of respondeat superior
liability.
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15. That the Defendants are liable for Kaitlyn Schneider’s
injuries under the Indiana Dram Shop Act. . . .
16. That the Defendants are liable for Kaitlyn Schneider’s
injuries under a common law theory of premise[s] liability.
Appellant’s App. at 14-15.
[5] On April 1, 2015, Paragon moved for summary judgment alleging that it owed
no duty of care to Schneider as a matter of law, and Paragon designated
evidence in support of its motion. Schneider filed a memorandum and
designated evidence in opposition to the summary judgment motion. In
particular, Schneider alleged that Paragon owed her a duty of care as property
manager of the mall where Bubbaz was located and/or that Paragon had
assumed a duty of care. Following a hearing, the trial court entered summary
judgment in favor of Paragon.3 This appeal ensued.
Discussion and Decision
[6] Our standard of review is well-settled.
We review summary judgment de novo, applying the same
standard as the trial court: “Drawing all reasonable inferences in
favor of . . . the non-moving parties, summary judgment is
appropriate ‘if the designated evidentiary matter shows that there
is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law.’” Williams v.
Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
3
This was a final judgment under Trial Rule 54(B).
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fact is ‘material’ if its resolution would affect the outcome of the
case, and an issue is ‘genuine’ if a trier of fact is required to
resolve the parties’ differing accounts of the truth, or if the
undisputed material facts support conflicting reasonable
inferences.” Id. (internal citations omitted).
The initial burden is on the summary-judgment movant to
“demonstrate[] the absence of any genuine issue of fact as to a
determinative issue,” at which point the burden shifts to the non-
movant to “come forward with contrary evidence” showing an
issue for the trier of fact. Id. at 761-62 (internal quotation marks
and substitution omitted). And “[a]lthough the non-moving
party has the burden on appeal of persuading us that the grant of
summary judgment was erroneous, we carefully assess the trial
court’s decision to ensure that he was not improperly denied his
day in court.” McSwane v. Bloomington Hosp. & Healthcare Sys.,
916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks
omitted).
Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014) (alterations original to
Hughley).
[7] Our supreme court recently set out the general law underlying Schneider’s
negligence claims against Paragon as follows:
The essential elements for a negligence action are “(1) a duty
owed to the plaintiff by the defendant, (2) a breach of the duty,
and (3) an injury proximately caused by the breach of duty.”
Pfenning v. Lineman, 947 N.E.2d 392, 398 (Ind. 2011) (citing
Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1123
(Ind. 2010)). Where there is no duty, there can be no breach, and
thus the party cannot be found negligent. Pfenning, 947 N.E.2d at
398. Whether a duty exists is generally a question of law for the
court. Id. In making this determination, “a three-part balancing
test developed by this Court ‘can be a useful tool.’” Id. (quoting
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Kephart, 934 N.E.2d at 1123) (citing N. Ind. Pub. Serv. Co. v.
Sharp, 790 N.E.2d 462, 465 (Ind. 2003)) (referencing the factors
enunciated in Webb[, 575 N.E.2d 992 at 995]: “(1) the
relationship between the parties, (2) the reasonable foreseeability
of harm to the person injured, and (3) public policy concerns”).
However, this test is only needed “in those instances where the
element of duty has not already been declared or otherwise
articulated.” Sharp, 790 N.E.2d at 465; see also Paragon Family
Rest. v. Bartolini, 799 N.E.2d 1048, 1053 (Ind. 2003) (“Where, as
in this case, the alleged duty is well-established, there is no need
for a new judicial redetermination of duty.”).
With respect to claims of liability against an owner for injuries
sustained on the premises, the duties of a landowner are well
established. “A landowner owes to an invitee or social guest ‘a
duty to exercise reasonable care for his protection while he is on
the landowner’s premises.’” Pfenning, 947 N.E.2d at 406
(quoting Burrell v. Meads, 569 N.E.2d 637, 639 (Ind. 1991)). To
delineate this duty we have adopted the Restatement (Second) of
Torts § 343 (1965):
A possessor of land is subject to liability for physical
harm caused to his invitees by a condition on the
land if, but only if, he
(a) knows or by the exercise of reasonable care would
discover the condition, and should realize that it
involves an unreasonable risk of harm to such
invitees, and
(b) should expect that they will not discover or realize
the danger, or will fail to protect themselves against
it, and
(c) fails to exercise reasonable care to protect them
against the danger.
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Id. (quoting Burrell at 639-40). Within the contours of this duty,
we have held that landowners “have a duty to take reasonable
precautions to prevent foreseeable criminal acts against invitees.”
L.W. v. Western Golf Ass’n, 712 N.E.2d 983, 985 (Ind. 1999); see
also Delta Tau Delta, Beta Alpha Chapter v. Johnson, 712 N.E.2d
968, 973 (Ind. 1999). However, when the landowner is a lessor
and the lessee is in operational control of the premises, such duty
rarely exists. “[A] landlord under many circumstances has no
liability to tenants or others for injuries on the property when the
tenant is in full control of the leased premises.” Dutchmen Mfg.,
Inc. v. Reynolds, 849 N.E.2d 516, 525 (Ind. 2006). “[I]n the
absence of statute, covenant, fraud or concealment, a landlord
who gives a tenant full control and possession of the leased
property will not be liable for personal injuries sustained by the
tenant or other persons lawfully upon the leased property.” Olds
v. Noel, 857 N.E.2d 1041, 1044 (Ind. Ct. App. 2006) (citation
omitted), trans. not sought; cf. Rossow v. Jones, 404 N.E.2d 12, 14
(Ind. Ct. App. 1980) (holding that a landlord has a duty of
reasonable care over common areas or other areas over which the
landlord has retained control), trans. not sought.
Yost v. Wabash College, 3 N.E.3d 509, 515-16 (Ind. 2014).
[8] This is an unusual premises liability case in that Paragon is not a “landowner”
but a property management company hired by Heartland, which is the
landowner. Indeed, in support of its summary judgment motion, Paragon
argued that, as property manager of the mall where Bubbaz is located, it “had
no control over the premises or over the events that led to Schneider’s injury
and was essentially three steps removed from any connection” to Schneider.
Appellant’s App. at 129. Paragon designated evidence showing that, under its
property management contract, its duties entailed the following:
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1. To collect rents and fees from tenants;
2. To maintain the property in good condition and effectuate
repairs as necessary;
3. Plan and manage capital improvements to the property;
4. To select and employ workmen for the maintenance of the
property;
5. To contract with utilities for the property;
6. To pay taxes and mortgages on the property;
7. To deposit monies received on behalf of the owner;
8. To work with tenants and negotiate the Lease Agreements
with them. The form of the Lease Agreement was provided by
Heartland Landings and Paragon specifically was directed to
utilize that form without material change to the terms;
9. To render owner advice regarding matters of property taxes
and eminent domain.
Id. at 127. Thus, Paragon alleged that it owed no duty of care to Schneider to
protect her from the accident in Burns’ car.
[9] On appeal, Schneider contends that Paragon owed her a duty of care because
she “was an invitee on the property owned or operated or controlled by
Paragon[.]” Appellant’s Br. at 24. In support of that contention, Schneider
directs us to her designated evidence purporting to show that a management
agreement between Heartland and Paragon
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gave [Paragon] the duty and obligation to maintain, operate,
control, and supervise the common areas, including the parking
lot in front of the bar, and to hire the necessary employees to
police the area and the right to prevent or restrain the use of the
common areas by people whose conduct or appearance was
objectionable.
Appellant’s Br. at 8. Schneider alleges that, in light of its duties and obligations
to its invitees, Paragon should have known that Burns was too intoxicated to
drive and should have stopped him from leaving the parking lot.
[10] In premises liability cases, whether a duty is owed depends primarily upon
whether the defendant was in control of the premises when the accident
occurred. Rhodes v. Wright, 805 N.E.2d 382, 385 (Ind. 2004). The rationale is
to subject to liability the person who could have known of any dangers on the
land and therefore could have acted to prevent any foreseeable harm. Id. (citing
Harris v. Traini, 759 N.E.2d 215, 225 (Ind. Ct. App. 2001), trans. denied). Here,
by virtue of the property management agreement, Paragon was a limited agent
of Heartland, Bubbaz’ landlord. Paragon’s duty to Bubbaz’ invitees was
explicitly limited to maintaining the physical integrity of the common areas
used by invitees. For example, had Schneider tripped over uneven pavement in
the parking lot and sustained injuries, Paragon might have been held liable.
[11] In particular, under the property management agreement with Heartland,
Paragon agreed in relevant part “to perform certain administrative services,”
including maintaining “the Property and common areas thereof including . . .
parking lots[.]” Appellant’s App. at 628. Contrary to Schneider’s assertion on
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appeal, there is no designated evidence showing that Paragon had a duty or had
assumed a duty4 to “police” the parking lot or any obligation to invitees beyond
physical maintenance of the property. Paragon owed no duty of care to
Schneider related to the allegations of negligence she asserts in her complaint. 5
Under the circumstances here, we hold, as a matter of law, that Paragon did not
owe Schneider a duty to protect her from the dangers associated with getting in
a car with an intoxicated driver. The trial court did not err when it entered
summary judgment in favor of Paragon.6
Conclusion
[12] Considering the designated evidence on summary judgment, none of
Schneider’s contentions support a claim against Paragon. As Heartland’s
property manager, Paragon was responsible for physical maintenance and
administrative duties, such as collecting rents. While Schneider was Paragon’s
invitee with respect to the physical integrity of the common areas outside of
4
Schneider’s only contention on the issue of assumption of duty is that Paragon assumed a duty “by
entering into the Management Agreement[.]” Appellant’s Br. at 22. Because we address Paragon’s alleged
duty pursuant to that Agreement, we need not make a separate analysis under the law of assumed duty.
5
Schneider also contends that, even if no duty is established under premises liability law, “a duty can still be
found to exist under a Webb analysis[.]” Appellant’s Br. at 41. However, a Webb analysis is only appropriate
“in those instances where the element of duty has not already been declared or otherwise articulated.” Sharp,
790 N.E.2d at 465; see also Bartolini, 799 N.E.2d at 1053 (“Where, as in this case, the alleged duty is well-
established, there is no need for a new judicial redetermination of duty.”). Here, because a landowner’s duty
to an invitee is established as a matter of law, Webb is inapplicable.
6
Schneider also contends that Paragon acted in a “joint venture or partnership” with the other defendants
and Paragon is, therefore, jointly liable for the alleged negligent acts of each of the defendants. Appellant’s
Br. at 45. We do not address this issue, however, because Schneider does not direct us to any designated
evidence to show that Paragon was engaged in a joint venture or partnership with any party.
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Bubbaz, there was no contractual or other relationship between the parties with
respect to the allegations against Paragon set out in her complaint. Neither as a
matter of law nor as a matter of fact did Paragon exercise control over, or have
any responsibility for, the manner in which Heartland’s tenants conducted their
businesses. The trial court properly entered summary judgment in favor of
Paragon.
[13] Affirmed.
Robb, J., and Crone, J., concur.
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