J&L had a retail space license agreement with EPK and under that agreement operated a jewelry booth at EPK’s “Super Discount Mall.” There were more than 100 vendors at the mall and about 11 of them sold jewelry. Due to the high value and risk of loss or theft, each jewelry vendor had a commercial vault in their booth to store inventory during the evening. The mall was open for business Monday through Saturday, from 10 a.m. to 8 p.m., and Sunday, from 10 a.m. to 7 p.m. Upon the close of business each evening, vendors left the building and were not allowed back inside until the doors opened for business the next day. On the evening of November 7, 2012, intruders entered the mall by blasting a hole through the brick wall at the rear of the building, blasted a hole into the back of J&L’s commercial vault, and took J&L’s entire inventory of jewelry. J&L sued EPK for breach of an implied bailment. EPK made a motion to dismiss for failure to state a claim on which relief could be granted. The motion to dismiss was granted, and J&L appealed.
JUSTICE PUCINSKI … A bailment is defined as the rightful possession of goods by one who is not an owner…. Common characteristics of every bailment are the intent to create a bailment, delivery of possession of the bailed items, and the acceptance of the items by the bailee…. A bailment can be established by express contract or by implication, either as an implied-in-fact bailment or an implied-in-law bailment …
An implied-in-law bailment, or a constructive bailment, may be found where the property of one is voluntarily received by another for some purpose other than that of obtaining ownership…. Under these circumstances, the law implies a contract for the keeping of the property until it is restored to the owner, and the contract implied is that of a depositary, whose duty is imposed without an actual contract for that purpose. “The holder is bound to take care of, keep, and preserve the property, not for the sake of any benefit to himself or upon any expectation of compensation for his services, but solely for the convenience and accommodation of the owner.”
Here, J&L alleged in its complaint that a bailor-bailee relationship, “by virtue of a constructive bailment and/or bailment implied in law,” was created between EPK and J&L when EPK assumed care, custody, and exclusive control of J&L’s inventory every night. However, the retail space license agreement attached to J&L’s complaint as an exhibit refutes J&L’s allegation that a bailment was created by an implied agreement. J&L acknowledged in its complaint the language in paragraph three of the retail space license agreement, entitled “Business Insurance,” which states in its entirety, “Each operator must obtain fire and other required insurance at its own expense. [EPK] assumes no responsibility or liability for fire, theft or damage to an operator’s location or property at any time.” We further observe that paragraph 17, entitled “License Rights,” states, “The operator understands that it is a license [sic], not a tenant of [EPK], and its use of its location creates no tenancy or other rights in its location. The operator consents to its status as a licensee of [EPK] for the use of its location and understands that these rules and regulations shall not be construed as creating any legal right to occupancy on behalf of the licensee.” The signatory portion of the retail space license agreement reflects the same language as that in paragraph 17 and the relevant signatures. Despite J&L’s allegation in its complaint that a bailor-bailee relationship, “by virtue of a constructive bailment and/or bailment implied in law,” was created between EPK and J&L when EPK assumed care, custody, and exclusive control of J&L’s inventory every night, the attached retail space license agreement establishes that J&L was merely a licensee of EPK for the use of a booth in its mall with no tenancy or other rights…. Because an exhibit to the complaint contradicts an essential term of the alleged implied-in-law contract for the keeping of the property until it is restored to the owner, J&L has failed to sufficiently allege a constructive bailment…. J&L’s complaint was properly dismissed with prejudice for failure to sufficiently plead a cause of action for breach of an implied bailment.
Although we are sympathetic to J&L’s situation, which more closely resembles a kiosk operator inside a mall, the retail space license agreement shows that the parties intended a license for the use of a sales booth and not a tenancy or other right giving rise to a cause of action for breach of an implied bailment.
CRITICAL THINKING:
What was the primary evidence the judge relied upon in finding there was no bailment? What type of evidence might the plaintiff have brought in that might have made it more difficult for the court to side with the defendant?
ETHICAL DECISION MAKING:
Which values are furthered by this decision?