January 27, 2017

Score one for “reasonable” application of tort liability

By Deborah J. La Fetra Senior Attorney

When Alan Petrie was assaulted and robbed in a Houston apartment complex visitors’ parking lot at 2:00 a.m., he sued the apartment management companies for their failure to protect him. The trial court rejected his lawsuit on the grounds that the management companies owed no duty to protect him from the criminal acts of third parties but the court of appeals reversed, holding that the attack on Petrie was foreseeable because of the area’s high crime rate. Today, in UDR Texas Properties v. Petrie, the Texas Supreme Court unanimously reaffirmed the principle that a property owner owes a duty to protect people from crimes committed by third parties only when the risk of the crime is foreseeable and the risk to the plaintiff of that crime occurring is unreasonable and outweighs the magnitude of placing the burden to guard against that risk on the property owner.

This was the focus on PLF’s amicus brief in the case, in which we argued that the lower court improperly conflated these two distinct elements by holding that any time a crime is “foreseeable,” it is “reasonable” to impose legal duty to protect. Reasonableness is usually determined by reference to the cost of burdensome security measures and the economic consequences of expansive tort liability. Today’s court decision emphasizes the importance of both elements by accepting the conclusion that the attack was foreseeable but noting that there is no evidence whatsoever that Petrie faced an unreasonable risk of harm that could justify his demand that the apartment complex provide the extensive—and expensive—security measures that might have prevented the assault. Lacking this evidence, the court held that the apartment complex is not liable.

This decision bodes well for the state, particularly as applied to low-income areas that frequently suffer from higher crime rates. If apartment complexes must pay very high insurance premiums to cover third-party criminal assaults, they will raise rents, creating hardship, potentially even homelessness, for low-income tenants. If the rule applies to commercial enterprises—shops instead of apartments—the result is higher-priced goods and services, again to the detriment of low-income customers. Some businesses will have no option but to close; others that might have existed will never open. This has a further economically depressing effect on residents of low-income areas who themselves may wish to become entrepreneurs, but find the entry costs too high. Because these entrepreneurs would hire other residents, the total effect of a business precluded from opening is increased joblessness; fewer available, affordable services; and a neighborhood that remains mired in economically depressed circumstances. Fortunately, today’s decision takes a different path that reduces these obstacles to economic growth.

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