Strategies, Challenges, and Answers

Dude, Where’s My Car?

Bailment in Nevada

Las Vegas, Nevada has a greater proportionate share of valet services than any other large city in the county and probably the world.  Where else can you have a company park your car for free with the only expectation in return is a buck or two when your car is returned in the same condition that it left your hands.  What happens though, when the valet can’t find your car?  Or if it comes back with damage that was not there when you handed over your keys?  These are classic bailment cases.  How to handle them depends on how much you know and understand about how bailment works in Nevada.

What is Bailment?

Jag Keys 003 Bailment is the legal relationship that is created when one person gives another property for safekeeping.  This can be created when the valet takes your insured’s keys or when the insured leaves their car with a mechanic for repair work.  Both times, the company or person becomes the bailor of the vehicle.

Bailment can extend to items beyond vehicles, such as giving a jewelry repair shop a watch for repair or a stable boarding your prized Arabian stallion.

A bailment can occur with the exchange of an item for a ticket or when a person simply takes possession of the property with the intent to safeguard it for the owner.  Bailment can occur everyday and in every city.  One is bound to fall into your lap and being prepared will help you resolve these types of cases much quicker.

Can an Insurer Recover in a Bailment Case in Nevada?

Yes.  Knowledge of the case law in Nevada will help you in reaching your ultimate subrogation goal:  payment.  There are three key cases in Nevada that help us reach our goal.

First is the Cloward v. Pappas case, which states that the common law in Nevada regarding bailment is that a valet attendant is:

practically an insurer of the safety of property entrusted to his care by a guest and, in the event of loss, he may exonerate himself from liability only by showing that such loss or injury resulted from an act of God, or of the public enemy, or from the fault of the guest himself.  (emphasis added.)

What this means is that once a valet attendant or any other bailor takes possession of the property, they are liable unless they show that the loss occurred by an act of God, through fault of the insured or by a public enemy.

The first two are easy to understand.  An act of God is an event that is outside of human control, such as a natural disaster.  Second, the insured cannot cause the loss to occur, such as arranging for the property to be stolen.  In both instances, the bailor would be free from liability.

The third exclusion is for a loss committed by a public enemy.  Many have argued that a public enemy would include a car thief or other criminal third party that causes the loss to occur.  This brings us to the second important case.  The Nevada Supreme
Court in Nevada v. Nevin has clearly held that a public enemy is one that the nation is at open war with and

not merely robbers, thieves, and other private depredators, however much they may be deemed, in a moral sense, at war with society.  Losses, therefore, which are occasioned by robbery on the highway, or by the depredations of mobs, rioters, insurgents, and other felons, are not deemed losses by enemies within the meaning of the exception.

Therefore, under Nevada law the definition of a “public enemy” does not include a vehicle thief.

So essentially, the bailors only defenses that would allow him to evade liability are: that an earthquake destroyed the property, the insured arranged for the property to be taken or that Osama Bin Laden stole the property.

What About the Release Language on the Back of the Ticket?

 

Many times the bailor will try to wrangle his way out of liability by holding their trump card. “Ah ha” they say.  “The back of the ticket given to your insured states that we are not responsible for any damage caused by theft, fire or damage to the property.”  This is where the third Nevada case law comes in handy.

In Tienda v. Holiday Inn, the Nevada Supreme Court held that the language on the back of a claim check ticket does not preclude recovery of damage to property in a bailment action.

The Tienda v. Holiday Inn case also discusses some limitations on a bailment action.  Nevada has an Innkeeper’s statute which limits the liability of an innkeeper to $750.00 in certain instances.  The Nevada Innkeeper’s statute specifically states that:

an owner or keeper of any hotel, inn, motel, motor court, boarding-house or lodginghouse in this state is civilly liable for the theft, loss, damage or destruction of any property left in the room of any guest of such an establishment because of theft, burglary, fire or otherwise, in the absence of gross neglect by the owner or keeper.

The Innkeepers statute provides an exemption from the $750.00 limitation if the property that is damaged or stolen was housed in a fire proof safe that was provided by the hotel.  In that instance, the hotel would be liable for the full amount.

This statute however, does not apply to valet cases.  The Tienda case is clear that the Innkeeper’s statute only applies to the hotel room and does not extend to the valet parking lot.

Does This Work in the Real World?

You are probably thinking that this sounds nice and neat on paper, but how does it work in the real world?

We have had great success with bailment actions in Nevada.  While some bailors fight more than others, they all eventually come to the realization that they are on the hook and will pay up.

We have had success in bailment actions in both the court system and before an Arbitration Forums panel.  Each time, it has come down to having knowledge of the Nevada legal system and the case law that governs Nevada.  This is an important Nevada Factor.

With this information, you will be able to counter most excuses or arguments that a bailor will make to weasel their way out of paying the subrogation amount.  In Nevada, the weasel cannot get away with it.

                                                                            Mills & Associates Coverage Lawyers 702-240-6060

Share