Defense Digest

No More Pigeonholes In Premises Liability Law

This article was originally published in the August 21, 2006, edition of the New Jersey Law Journal.

Many of the common law doctrines governing our system of jurisprudence find their origin in English common law. The early common law classifications governing premises liability are no exception. The unwavering tripartite system of categorization regulating premises liability finds its roots in antiquated notions of private property interests developed from nineteenth century social values. Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 437-38 (1993).

In Hopkins, the New Jersey Supreme Court described the application of common law classifications of invitee, licensee and trespasser in premises liability law this way, "The attempt to pigeonhole the parties within the traditional categories of the common law is both strained and awkward."

Specifically, the classification system is based on English social mores and customs, which placed tremendous value on pastoral and agrarian ideals. As a result, courts applying these rigid standards generally maximized the protection of individual landowners' rights. In the beginning, the application of this system made sense; it precisely addressed the societal concerns governing that time period of our history. However, as the United States became less focused on land ownership and increasingly industrialized, property rights became less absolute. See Morton J. Horowitz, The Transformation of American Law, 31-62 (Harvard Univ. Press 2005) (1977), for a more in-depth discussion on the industrialization of the United States, the consequent economic growth and its effect on the development of American law. Consequently, "with the development of a more urbanized, heterogeneous, destabilized, and complex society, the status of persons in relation to the use of property could no longer be adequately accommodated by the strict traditional classifications of the common law." Hopkins, 132 N.J. at 436.

As a result of evolving societal policies and values, coupled with the resultant necessity for a modified law reflecting these changing values, the common law classifications have undergone a significant transformation in the last decade or so. However, it is important to note that these modifications are not in defiance of legal precedent. Rather, "the power of growth is inherent in the common law," such that the common law classifications should be sufficient to "fulfill the purposes of our legal system in serving the needs of present day society." State v. Culver, 23 N.J. 495, 506 (1957); Snyder v. I. Jay Realty Co., 30 N.J. 303, 311 (1959). In fact, one of the great virtues of the common law is its dynamic nature, which allows it to adapt the changing requirements of society. Culver, 23 N.J. at 505. Thus, the common law must be flexible in its application as it is designed to embody and adhere to the underlying principles of public policy and social values. Hopkins, 132 N.J. at 435. Therefore, as our societal values grow and develop over time, so, too, must the common law which governs them.

Traditionally, a landowner's liability to a person injured on his or her property was determined by the status of the person at the time of injury. That is, the right of the person to be on the land determined the duty of the landowner. Historically, common law divided the determination of status into three categories: business invitee, licensee or trespasser. Generally, to the trespasser, who has no direct privilege to be on the premise, an owner of land owed only minimal care. Basically, the owner owed only the duty to warn of artificial conditions on the property that pose a risk of death or serious bodily harm. This duty is met so long as the landowner "refrain[s] from acts that [are] willfully injurious" to the trespasser. Renz v. Penn Cent. Corp., 87 N.J. 437, 461 (1981).

To the invitee, or social guest, a landowner owed a greater duty of care, as his entrance onto the premise could be for personal reasons, as well as for the owner's benefit. While the licensee must accept the premises in their "as is" condition, she is entitled to the same knowledge possessed by the landowner of dangerous conditions. Berger v. Shapiro, 30 N.J. 89, 98 (1959). Moreover, the licensee is not expected to assume the risk of such dangerous conditions absent some sort of warning. That is, while the host is certainly not required to inspect his property to unearth dangerous conditions, nor is he required to maintain the premises in a safe condition; he is required to exercise reasonable care to correct or warn a guest of a dangerous condition, provided that the owner himself is aware of the condition.

Of the three classifications, the owner of the land owed the highest duty to the invitee as that individual was specifically invited onto the premises for the purpose of conducting business. Hopkins, 132 N.J. at 433. Unlike a licensee, a landowner owes a duty of reasonable care to make the premises safe to the invitee. This standard of care "includes the duty to make a reasonable inspection to discover defective conditions." Thus, to an invitee, the landowner has a duty to guard against any dangerous conditions on the property that she knows about or should reasonably have discovered.

While the classifications originally developed in England, they were quickly adopted by a majority of the States. Even from the beginning, however, courts struggled with factual scenarios that did not directly comport with one of the strictly defined categories. See Kerrie Restieri-Heslin, Note: Negligence – the Common Law Categories of Trespasser, Licensee, and Invitee That Govern a Landowner's Duty in a Premises Liability Action are Replaced by a Single Standard to Exercise Reasonable Care Against Foreseeable Harms – Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 625 A.2d 1110 (1994), 24 Seton Hall L. Rev. 2227, 2256 n.3 (1994) (providing examples of New Jersey courts struggling early on with the three categories); see also William L. Prosser, Business Visitors and Invitees, 26:5 Minn. L. Rev. 573 (April 1942) (discussing problems in the definitions of licensee, invitee and business invitee). As evidence of the unworkable standards, even Britain abolished the licensee-invitee distinction with the passage of the Occupiers Liability Act in 1957. Occupiers Liability Act, 5 & 6 Eliz. 2, c. 31 (1957). While retaining the common law classification of "trespasser," the Occupiers Liability Act abandoned the licensee-invitee categories, substituting instead a reasonable care standard under all circumstances. The Act explains that an occupier has no duty of care to a person in respect of risks willingly assumed by the person other than a duty not to "create a danger with intent to do harm to the person or damage to the person's property, or act with reckless disregard to the safety of the person or the integrity of the person's property."

Two years later, in 1959, further demonstrating the frustration in applying these standards, the United State Supreme Court refused to extend the common law categories to maritime law in Kemarec v. Compagnie Generale Transatlantique, 358 U.S. 625 (1959). Kemarec visited the issue of whether a plaintiff, who was granted permission to board a ship to visit a friend, could recover for injuries sustained when he fell down a stairway. Consequently, the factual scenario raised questions of the plaintiff's status. In Kemarec, the Supreme Court noted that the common law distinctions between an invitee and a licensee were inherited from a culture deeply embedded in feudalism with strong ties to land ownership. Acknowledging that these common law distinctions have proved difficult in modern application, often forcing the creation of subclassifications and distinctions, the Supreme Court refused to apply the standards to maritime law. Instead, noting that the common law has moved "unevenly and with hesitation, towards 'imposing on owners and occupiers a single duty of reasonable care in all the circumstances'," the Supreme Court held the ship owner owed a single duty to exercise reasonable care under the circumstances of each individual case.

Following the Kemarec case, California was the first jurisdiction to eliminate the common law classifications in its premises liability law. In Rowland v. Christian, 443 P.2d 561(Cal. 1968), the California Supreme Court found it apparent "that the classification of trespasser, licensee, and invitee…often do not reflect the major factors which should determine whether immunity should be conferred upon the possessor of land." In an oft cited paragraph, the Court concluded,

The Court explained, however, that while a person's status as trespasser, licensee or invitee is not determinative of such a decision, it may still have some bearing on the question of liability. Thus, the California Supreme Court abandoned the rigid classification system in favor of the infinitely more simplistic question of whether a "property owner acted as a reasonable man would have in view of the probability of injury to others."

Since California's landmark decision in Rowland, other jurisdictions have generally fallen into one of three approaches: while some states have abolished the entire classification system for an overall reasonableness standard, others have abolished only the licensee-invitee distinction, and still others have upheld the classification system in its entirety. Compare Mariorenzie v. Joseph DiPonte, Inc., 333 A.2d 127 (R.I. 1975) (abolishing the classification system in entirety), with Wood v. Camp, 284 So. 2d 691 (Fla. 1973) (eliminating the distinction between licensee and invitee, but retaining the common law classification of trespasser), and Ex parte Mountain Top Indoor Flea Mkt., 699 So. 2d 158, 161 (Ala. 1997) (holding the duty owed by a landowner to a person on his property varies greatly based upon the classification of the person as either trespasser, licensee, or invitee). See also Hopkins, 132 N.J. at 437 (providing an extensive listing of jurisdictional approaches to premises liability classifications). Interestingly, only Connecticut has taken legislative initiative to abolish the classifications by statute. Conn. Gen. Stat. § 52-557a (2006) provides, "the standard of care owed to a social invitee shall be the same as the standard of care owed to a business invitee." Similar to the Occupiers Liability Act, the Connecticut statute does not affect the duty owed to trespassers, or their common law classification.

New Jersey first recognized the underpinnings of the classification system in 1898. See Delaware, L. & W.R. Co. v. Reich, 61 N.J.L. 635 (N.J. 1898) (finding "the general rule with regard to the duty which a landowner owes to persons coming upon his premises is that where the entry is made by his invitation, either express or implied, he is required to use reasonable care to have his premises in a safe condition; but that where the entry is made merely by his permission (and, a fortiori, where it is an actual trespass) the landowner is under no obligation to keep his premises in a non-hazardous state; his only duty to a licensee or a trespasser is to abstain from acts willfully injurious"); see also Fitzpatrick v. Cumberland Glass Mfg. Co., 61 N.J.L. 378 (N.J. 1898) (finding "the owner or occupier of lands who, by invitation, express or implied, induces persons to come upon the premises for any purpose, is under a duty to exercise ordinary care to render the premises reasonably safe for such purpose, or at least to abstain from any act that will make the entry upon or use of the premises dangerous, but that mere permission to pass over dangerous lands, or acquiescence in such passage for the benefit or convenience of the licensee, creates no duty on the part of the owner except to refrain from acts willfully injurious.") (internal citations omitted). However, the loose ideas expressed in the earlier cases were not congealed until 1917 in Fleckentstein v. Great Atl. & Pac. Tea Co., 91 N.J.L 145 (N.J. 1917) (finding that the common law classifications of trespasser, licensee and invitee govern landowner liability).

Once established, New Jersey strictly adhered to the application of the tripartite system, even reiterating the necessity of such distinctions in cases such as Snyder, which stated, "Adherence to the traditional classifications is desirable in that it lends a reasonable degree of predictability to this area of the law. These classifications also aid in the proper distribution of trial functions between judge and jury, wherein the latter determines only disputed questions of fact." It was not until 1977 in Caroff v. Liberty Lumber Co., 146 N.J. Super. 353 (App. Div. 1977), that any New Jersey court expressed doubt over the usefulness of the distinctions.

In Caroff, the plaintiff urged the court to abolish the common law classifications in place of a uniform standard requiring a single duty of reasonable care and foreseeability under the circumstances of the situation. While noting both that plaintiff's argument was "not without cogency" and that other jurisdictions had abandoned use of the system, the court declined to abolish the common law classifications for two reasons. Most importantly, the court sheepishly explained, it was required to adhere to the Supreme Court's ruling in Snyder, which rigorously upheld the application of the categories. Thus, it was incapable of changing the law even if it desired to do so. In addition, the court also stated that the classification of the plaintiff did not truly matter in the case as the plaintiff was entitled to the highest degree of care regardless.

After the brief discussion and categorical brush off in Caroff, the dispute over the use of the categories laid mostly dormant. It was not until 1993, when the New Jersey Supreme Court heard Hopkins, that the dispute again gained momentum. Hopkins, 132 N.J. 426 (1993). Hopkins involved the possible liability of a realtor for the safety of a visitor at an open house showing. In analyzing the issue, the Court reviewed the evolution of the common law distinctions, evaluating their applicability and necessity in the process. Recognizing that the Court had a role to play in the modernization of the standards, the Court determined the archaic common law standards no longer corresponded with the needs of our present day society. Specifically, the court stated,

Consequently, the Court abolished the tripartite system, explaining that whether a person owes a duty of reasonable care to another is a question of whether "the imposition of such a duty satisfies an abiding sense of basic fairness under all of the circumstances in light of considerations of public policy." Hopkins, 132 N.J. at 439. Effectively eliminating the rigidity of the common law system, the New Jersey Supreme Court explained that the inquiry is a fact specific analysis which considers a multitude of factors, including, "the relationship of the parties, the nature of the attendant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution."

Since the Hopkins decision, however, New Jersey courts have lacked true consistency in the application of the new standard. See DiPonte, 333 A.2d at 308 (J. Joslin, dissenting), for an informed discussion of the implications of abolishing the common law distinctions. Justice Joslin presented the argument that modifying the common law is perhaps a concept better suited to be decided by the Legislature, in a similar fashion to Britain's Occupiers Liability Act. That is, the courts have seemed uncertain as to the proper application of the new standard, as well as what role, if any, the common law classifications play in the determination of a duty. Compare Clohesy v. Food Circus Supermarkets, 149 N.J. 496 (1997) (applying a totality of the circumstances test which focused heavily on the forseeability of harm); with Tighe v. Peterson, 356 N.J. Super. 322 (App. Div. 2002), aff'd, 175 N.J. 240 (per curiam) (adhering to traditional social guest rule); and Parks v. Rogers, 176 N.J. 491 (2003) (adhering to the traditional social guest rule); and Monaco v. Hartz Mt. Corp., 178 N.J. 401 (2004) (recognizing the holding in Hopkins, but applying a combination of the traditional standard and more modern approach); and, Bedell v. St. Joseph's, 367 N.J. Super. 515 (App. Div. 2004) (noting the standard for imposing a duty has evolved from the common law methodology of premises liability to a more flexible approach based on basic fairness under all circumstances); and Sussman v. Mermer, 373 N.J. Super. 501 (App. Div. 2004) (recognizing the common law rules provide guidance, but stating the task is now to consider all of the circumstances).

Thus, while the New Jersey Supreme Court alleviated the difficulties in applying the traditional standards in Hopkins, it created a sentiment of uncertainty in the application of the new standard. Fortunately, the New Jersey Supreme Court recently clarified this uncertainty in Olivo v. Owens-Illinois, Inc., 186 N.J. 394 (2006).

Olivo involved the question of whether a landowner could be liable for the asbestos-related injuries of Eleanor Olivo, the wife of an independent contractor welder. Anthony Olivo, husband to Eleanor, was a career welder whose job duties brought him into close contact with asbestos on Exxon Mobil's premises. Reversing a grant of summary judgment, the Appellate Division found that the risk of harm to Eleanor from exposure to asbestos was foreseeable to Exxon Mobil. Ultimately, the Appellate Division had no qualms with the imposition of a duty on Exxon Mobil, finding no issues of unfairness. The New Jersey Supreme Court granted certification.

The New Jersey Supreme Court began its analysis by restating that the "imposition of a duty to exercise care to avoid a risk of harm to another involves considerations of fairness and public policy implicating many factors." Specifically, the Court acknowledged that premises liability law is no longer governed by the rigid common law characteristics based on an individual's status. Thus, since the introduction of flexibility into the classification system, the Court noted that the common law categorical approach has been applied with "pliancy to avoid foreseeable harm to others."

Continuing its analysis, the Court explained that the gate keeping question in a premises liability case is simply whether the harm was foreseeable. That is, whether the risk of harm to that individual, or an identifiable class of individuals, was foreseeable. In the context of a duty inquiry, the Court explained, the concept of forseeability involves "the knowledge of the risk of injury to be apprehended. The risk reasonably to be perceived defines the duty to be obeyed; it is the risk reasonably within the range of apprehension, of injury to another person, that is taken into account in determining the existence of the duty." However, once forseeability is established, the inquiry requires considerations of fairness and policy to determine the imposition of a duty.

While the Court did not delineate which factor or factors carry the most weight, it explicated that the considerations of fairness involve balancing several factors, including, "the relationship of the parties, the nature of the attendant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution."

Affirming the judgment of the Appellate Division, the New Jersey Supreme Court found the risk of injury to Eleanor Olivo was one that should have been foreseeable to Exxon Mobil. Specifically, the Court noted that as early as 1937 there was sufficient evidence of the hazards associated with asbestos particles, as well as suggestions to combat these risks, such that Exxon Mobil should have taken preventative action. Despite having adequate notice of the risks involved, Exxon Mobil simply failed to provide any precautionary warnings to its workers.

In applying and balancing the various fairness factors, the Court found that the nature of the risk and the relative ease of providing warnings outweighed any public policy concerns of Exxon Mobil's exposure to liability. While the Court did limit the holding to these particularized facts, so as not to expose Exxon Mobil to limitless liability, it nonetheless found an imposition of a duty to be fair under the circumstances of the case. Consequently, the Court "[did] not hesitate to impose a derivative duty on Exxon Mobil" and remanded the case for further proceedings.

What does it all mean? While the Court is not there yet, it appears that the trend is away from the Common Law Distinctions of business invitee, licensee or trespasser. In fact, one would be hard pressed to find a situation where an individual would be classified as a licensee and not an invitee. Certainly, as the lines of distinction are blurred, summary judgment motions will be an ineffective means to resolve issues of "duty" as the courts moved towards a reasonableness standard. As such, any such distinctions may turn on a specific set of facts, which will be for the jury to decide.

* Walt is a shareholder in our Cherry Hill, New Jersey office. He can be reached at wjklekotka@mdwcg.com or (856) 414-6032.