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Arizona Supreme Court Clarifies Duty of Care Owed by Lessees

Author: Leah McKeever

Guest Editor: Ashley Kaye

February 1, 2021 7:57pm

In Dabush, et al. v. Seacret Direct, LLC, et al., the Arizona Supreme Court recently held tenants who helped conduct repairs owed no duty to a third party injured on the premises.[i]

Factual Background

Plaintiff Ephraim Dabush sustained injury when he fell through a skylight on the roof of a multi-tenant commercial building.  Chambers, LLC (“Chambers”) owned the building at the time of the accident.  Chambers leased the entire building to Seacret Spa, LLC (“Spa”).  Under Spa’s lease, it was responsible for collecting rents, making all necessary payments associated with the building, and repairing and maintaining the building.  Spa sublet portions of the building to Seacret Direct, LLC (“Direct”) and Prizma Capitol, LLC (“Prizma”) (collectively “defendants”).

At the time of the accident, Elad Gotlib managed the building for Spa.  Gotlib hired Prizma to perform repairs when maintenance issues arose.  Prizma would then invoice Spa for the cost of the repairs.  According to Direct’s manager David Ben-Shabat, Direct was responsible for maintaining the roof over its section of the warehouse.  Plaintiff was a friend of Ben-Shabat and often visited him at the building.  According to plaintiff, Prizma and Direct were expected to “pitch in” and make repairs to the building.  Plaintiff would help Ben-Shabat by directing Prizma’s workers.

Gotlib learned the warehouse roof was leaking and hired Prizma to fix the leaks, which required replacement of the skylights.  On the day of the accident, Prizma began replacing Skylight 18.  Plaintiff was on the roof either to supervise Prizma’s workers or to take pictures of the work.  While on the roof, he walked to Skylight 10, which was over Direct’s portion of the warehouse.  He fell through Skylight 10 after stepping onto the skylight.  The fall severely injured plaintiff, who subsequently sued Chambers, Spa, Direct, and Prizma, alleging each was negligent.  Direct and Prizma moved for summary judgment, arguing they did not owe plaintiff a duty of care.

The trial court granted defendants’ motion for summary judgment on the grounds they were not the owners or possessors of the warehouse roof and therefore owed no duty to plaintiff.  The court of appeals affirmed as to Prizma, but reversed as to Direct because a genuine fact dispute existed as to whether Direct exercised control over the roof.

Arizona Supreme Court Review

To prevail on premises liability claim, plaintiff must prove defendant owed plaintiff a duty to maintain the premises in a reasonably safe condition.  Here, plaintiff claimed a special relationship existed because he was an invitee on defendants’ premises.

Defendants only owe a duty to plaintiff if they had legal control of the premises or exercised actual, physical control over it.  It was undisputed Spa had the legal right to control and possess the entire building, including the roof.  Plaintiff argued defendants exercised control over and performed repairs on the roof and were therefore “possessors.”  Defendants claimed they had no legal right to control the common areas of the building, including the roof, under their subleases.  Defendants also assert the repairs performed did not make them possessors of the roof.

The question before the Supreme Court was whether a lessee who exercises actual possession or control over a portion of a property assumes a duty of care, absent a lease provision to the contrary.

Legal Control

The Court concluded neither Direct nor Prizma had legal control of the roof.  Direct’s sublease expressly provided Spa retained control over the “common areas” in the building.  Although Direct did not specifically list the roof as a common area, the long history of case law considers the roof a common area because a roof is part of the premises maintained for the benefit of the tenants.  Similarly, although Prizma’s sublease was not part of the record, the Court came to the same conclusion: absent an express lease provision, the landlord retains control over the common areas.  Accordingly, defendants had no legal right to possess or control the roof.

Actual Control

Absent legal control, a person may possess the land if he exercises actual, physical control over the premises.  A landowner is presumed to control the land; however, a tenant can overcome the presumption by exercising actual, exclusive control over the land.  Actual control over premises requires the authority to exclude others from the premises and direct how the premise is repaired, maintained, and used.

The Court found defendants did not exercise exclusive control over the roof because there was no evidence showing they had the authority to exclude others from entering the roof.  Further, defendants did not have absolute authority to repair and maintain the roof.  Rather, Spa discovered the leaks and hired Prizma to fix them.  Although Direct assisted with the repairs, it did not pay Prizma to do so.  Defendants’ involvement in the repairs to the roof did not make them a possessor of the premises.  Accordingly, defendants were not actual possessors of the roof and therefore owed no duty to plaintiff.

Restatement § 383

Liability is limited to the specific act or activity performed on behalf of a possessor.  In other words, a contractor assumes a duty of care is limited to the work he is performing on the premises, not the condition of the premises.[ii]  Thus, for plaintiff to be successful under this theory, he was required to show Prizma, by repairing the leaks on the roof, created a risk of falling through Skylight 10.  He provided no such evidence.

Assumption of Duty

Arizona has adopted Restatement (Second) of Torts § 324A with respect to a negligent undertaking or assumed duty.  A duty may be assumed expressly or by conduct.  The assumed duty is limited to the extent of the specific undertaking, and the undertaking must be for the specific purpose of protecting a third party from harm.  Here, plaintiff asserted defendants assumed a duty of care regarding the condition of the roof by repairing the roof and other sections of the building.  However, plaintiff failed to present any evidence showing defendants assumed a duty to protect him from harm; therefore, plaintiff could not show defendants assumed a duty under Restatement § 324A.

Holding

The Arizona Supreme Court affirmed the trial court, holding Prizma and Direct did not have a right to control the roof under their subleases, did not exercise active control over the roof, were not possessors, and therefore owed no duty to plaintiff.  Further, Prizma did not become a possessor by making repairs to the roof.  Defendants did not assume a duty to protect plaintiff from the risk of falling through a skylight.

Takeaway

In cases involving multi-tenant commercial building, it is important to understand whether a lessee owes a duty of care arising from a legal right to control it, obtaining actual control, or assuming a duty of care.  This will allow for an informed decision when it comes to determining whether a claim against a lessee is meritorious.

 

[i] Dabush, et al. v. Seacret Direct, LLC, et al., No.  CV-19-0200-PR (January 8, 2021)

[ii] See Restatement (Second) of Torts § 383

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