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Landlord Liability in the Wake of In re September 11 Litigation

I. Introduction

Following the terrorist attacks of September 11, 2001 on the World Trade Center, Congress passed the Air Transportation Safety and System Stabilization Act of 2001 (“the Act”). 2001, Pub.L. No. 107-42, 115 Stat. 230 (2001) (codified at 49 U.S.C. § 40101). The Act created the September 11 Victims Compensation Fund (“the Fund”). The Fund was designed to provide compensation both to victims personally injured in the attacks and to family members of victims killed in the attacks. Under the Act, anyone who is not covered by the Fund or who opts out of the Fund may only file a claim for damages in federal court in the Southern District of New York, the jurisdiction where the World Trade Center stood. Id.

Since the Fund only provides compensation for personal injury, owners of property and businesses near “Ground Zero” that suffered economic damage as a result of the attacks have no other recourse than to pursue damages in court in the Southern District of New York. These owners have alleged that the owners and operators of the World Trade Center, World Trade Center Properties LLC, and the Port Authority of New York and New Jersey negligently designed, constructed, maintained and operated the buildings and failed to provide adequate and effective evacuation routes and plans. In re September 11 Litigation, --- F.Supp.2d ----, at 21 (S.D.N.Y. Sept. 9, 2003)

The court recently denied a motion to dismiss the owners’ complaint, id. at 32, so the case will move forward to the discovery phase. Id. Since the Act provides that the law governing the claims will be based on the law of the state where the tort occurred, New York tort law will control in this case. Id.

This article examines the potential liability the In re September 11 Litigation defendants may face for damage caused by the attacks as private property owners under New York law. See --- F.Supp.2d ----, at 21 (S.D.N.Y. Sept. 9, 2003). The article will first examine a landlord’s general duty to maintain property in a safe condition. It will then look at whether that duty is mitigated by criminal actions and extraordinary events. Finally, it will conclude by examining the potential legal ramifications a finding of liability in this case may have on New York landlord law.

II. Landlord Duty of Care

According to New York law, landowners owe a duty of reasonable care under the circumstances in maintaining their property in a safe condition. Kush v. City of Buffalo, 59 N.Y.2d 26, 29 (1983). To determine whether a landowner has exercised reasonable care under the circumstances, the court will inquire into both the foreseeability of the injury and whether the landlord took reasonable care to prevent such injury. Id. at 30.

The inquiry into foreseeability concerns the likelihood of injury to another from a defective condition on the property. Id. at 29-30. If the landlord had actual or constructive notice of the defective condition for a sufficient amount of time to fix it, he or she may be held liable for injury resulting from the condition. Juarez v. Wavecrest Mgmt. Team, 88 N.Y.2d 628, 646 (1996). To determine whether the landlord took reasonable care, a court will consider what is reasonable for the particular property. A property owner who has complied with all applicable building and fire codes may still fail the reasonableness inquiry if additional steps should reasonably have been taken to make the property safe. Washington v. Albany Hous. Auth., 297 A.D.2d 426, 426 (N.Y. App. Div. 2002). A landlord has an affirmative duty to implement adequate fire safety measures, and failure to do so will render the landlord’s conduct unreasonable, even in cases where the fires were set by criminals. Brennan v. New York City Hous. Auth., 302 A.D.2d 483, 484 (N.Y. App. Div 2003).

The scope of the landlord’s duty of reasonable care is limited to those claiming personal injury or property damage, not to those who have merely suffered financial losses. 532 Madison Ave. Gourmet Foods, Inc. v. Finlandia Ctr., Inc., 96 N.Y.2d. 280, 288 (2001). Liability thus depends on a certain relationship between landlord and injured party as a means of defining the class of potential plaintiffs to whom the duty is owed. Id.

III. Landlord Liability for the Criminal Acts of Third Parties

New York law recognizes that “landowners have a duty to protect tenants, patrons or invitees from foreseeable harm caused by the criminal conduct of others while they are on the premises.” Hamilton v. Beretta U.S.A. Corp., 96 N.Y.2d 222, 233 (2001). According to the Court of Appeals, “[l]andlords have a ‘common law duty to take minimal precautions to protect tenants from foreseeable harm,’ including a third party’s foreseeable criminal conduct.” Burgos v. Aqueduct Realty Corp., 92 N.Y.2d 544, 548 (1998) (citations omitted).

While the landlord’s duty to protect their tenants is firmly established, the plaintiff must also establish proximate cause in order to hold landlords liable. Thus, “[a] tenant may recover damages . . . only on a showing that the landlord’s negligent conduct was a proximate cause of the injury.” Id. at 548. For example, “in order to demonstrate the proximate cause burden in a security premises case, a tenant victimized in a criminal attack must prove that the assailant was an intruder who gained access to the premises through a negligently maintained entrance.” Price v. New York City Hous. Auth., 92 N.Y.2d 553, 558 (1998). “A plaintiff is not required to exclude every other possible cause, but need only offer evidence from which proximate cause may be reasonably inferred.” Id. at 550.

Whether the landlord’s negligence in providing adequate security constitutes proximate cause for the plaintiff’s harm is based largely on the foreseeability of criminal activity on the landlord’s premises. Thus, “[a] landlord has a duty to minimize the foreseeable danger from criminal acts when past experience alerts it to the likelihood of criminal conduct on the part of third persons.” Mason v. U.E.S.S. Leasing Corp., 96 N.Y.2d 875, 878 (2001). “Foreseeability in this context has generally been equated with the degree to which a landlord has been apprised of the incidence of criminality within a particular building under his or her proprietorship.” Todorovich v. Columbia Univ., 245 A.D.2d 45, 46 (N.Y. App. Div. 1997).

In making the foreseeability determination, however, “there is no requirement . . . that the past experience relied on to establish foreseeability be of criminal activity at the exact location where plaintiff was harmed or that it be of the same type of criminal conduct to which plaintiff was subjected.” Jacqueline S. v. City of New York, 81 N.Y.2d 288, 294 1993). Instead, the determination of foreseeability “depend[s] on the location, nature and extent of those previous criminal activities and their similarity, proximity or other relationship to the crime in question.” Id. at 595.

However, even where a landlord fails to provide minimal security measures, a jury may still find for the defendant if it finds that the landlord’s negligence was not a proximate cause of the criminal act. For example, the Court of Appeals affirmed a jury verdict for the defendant in a case where an intruder had entered the unlocked lobby of the victim’s apartment building and assaulted her in an elevator. Price v. New York City Hous. Auth., 92 N.Y.2d 553 (1998). The court held that the jury could have reasonably found for the defendant, based in part on expert testimony that “the minimal security afforded by a lock and intercom would not have deterred plaintiff’s attacker.” Id. at 558. Thus, even where a defendant landlord has failed in his duty to provide adequate security measures, the defendant may still prevail on the issue of proximate cause.

A defendant may also prevail on the proximate cause question if an intervening act “is of such an extraordinary nature or so attenuates defendants’ negligence from the ultimate injury that responsibility for the injury may not reasonably attributed to the defendant.” Kush, 59 N.Y.2d at 33. The courts have varied in defining what constitutes an event of an “extraordinary nature.” For example, in Martinez v. Lazaroff, the court found the defendant landlord not liable for injuries sustained by a child when his father accidentally spilled boiling hot water on him which the father was carrying because the defendant landlord had failed to supply the tenants with hot water. 48 N.Y.2d 819 (1979). However, in Kush, the court found a school liable for a child’s injuries that occurred when the child found dangerous chemicals on the school property that two students had purposely dropped from the window of the chemistry laboratory. Kush, 59 N.Y.2d at 26.

V. Analysis of Landlord Liability in In re September 11 Litigation

Landowners currently have a duty to protect tenants, patrons or invitees from foreseeable harm caused by the criminal conduct of others while they are on the premises. Hamilton, 96 N.Y.2d at 233. This duty of protection against foreseeable criminal conduct has never been extended to plaintiffs not on the premises or claiming only property damage. However, a finding that defendants are liable in the case arising out of the September 11th attacks may expand the types of plaintiffs that can recover based on a landlord’s breach of duty to protect against foreseeable criminal actions.

A finding of liability would further set a precedent in determining what type of intervening act may be judged as foreseeable or extraordinary in nature. To allow liability in this case would, in essence, characterize the terrorist attacks as not sufficiently extraordinary or unforeseeable as to fall under the Kush rule in severing the chain of causation. Kush, 59 N.Y.2d at 462. This ruling would likely make it difficult for any future defendant to claim that a terrorist attack was a superseding cause that limits his liability. It might also raise the bar in characterizing other events in different contexts as extraordinary or unforeseeable.

VI. Conclusion