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144055 - Bailey v Schaaf

Devon Scott Bailey,
  Donald M.Fukerson
  David A. Robinson
(Appeal from Ct of Appeals)
(Genesee – Farah, J.)
Steven Gerome Shaaf,
T.J. Realty, Inc., d/b/a Hi-Tech Protection, Timothy Johnson, Captain William Boyd Baker, ChristopherLee Campbell,
Evergreen Regency Townhomes, Ltd., and Radney Management & Investments,
DefendantsAppellants/Cross Appellees.
Gary P. Supanich


On August 4, 2006, residents of the Evergreen Regency Townhouses in Flint observed Steven Schaaf – who was neither an Evergreen resident nor a guest – brandishing a gun and threatening to kill someone. A number of Evergreen residents called the police; Evergreen resident Laura Green said she alerted security guards William Baker and Christopher Campbell, and pointed Schaaf out to them more than once, but the guards did nothing. Minutes later, Schaaf shot Devon Bailey, a guest at the complex, rendering Bailey a paraplegic. Schaaf later pleaded no contest to assault with intent to commit murder and other charges; he is currently serving concurrent prison terms of 25 to 54 years.


Bailey sued Schaaf, security guards Baker and Campbell, and their employer, Hi-Tech Protection Inc., as well as Hi-Tech’s owner, Timothy Johnson. Bailey later amended his complaint to add Evergreen and its management company, Radney Management and Investments, Inc. Bailey claimed, among other matters, that Evergreen and Radney had a duty to protect Evergreen tenants and their guests from unreasonable risks of harm from the foreseeable criminal acts of third parties in Evergreen’s common areas. Bailey contended that Hi-Tech had a history of incompetence and failing to protect, and that Evergreen and Radney were therefore negligent in hiring Hi-Tech; he also alleged that Hi-Tech and Johnson were negligent in their hiring and supervision of Baker and Campbell, who, Bailey claimed, had a history of incompetence. Bailey also maintained that Hi-Tech and Johnson were vicariously liable for the security guards’ actions and that Evergreen and Radney were vicariously liable for Hi-Tech, Johnson, and the guards. In effect, the guards were acting as the apartment complex’s agents, Bailey claimed. Bailey also argued that, as an invitee on the Evergreen premises, he was a third-party beneficiary of the security contract between Hi-Tech, Evergreen/Radney, and that those defendants had breached a contractual duty by failing to protect him.


Schaaf failed to answer the complaint and the court later entered a default judgment against him. The other defendants moved for partial summary disposition, asking the circuit court to dismiss Bailey’s claims. The defendants argued that Baker and Campbell did not have a duty to protect or help Bailey; moreover, Evergreen owed no duty to maintain security guards, and assumed no such duty by retaining a security service, the defendants contended. In addition, the defendants maintained, Hi-Tech and Radney had no legal relationship with Bailey that would give rise to a duty to him. Bailey also moved for partial summary disposition, asking the court to rule that, as a matter of law, Evergreen, Radney, and Hi-Tech owed a duty to Bailey on the day of the shooting, based on a contract between Evergreen/Radney and Hi-Tech.


After hearing the parties’ arguments, the circuit judge ruled in favor of the defendants, ultimately dismissing all of Bailey’s claims, except those against Schaaf. Among other things, the judge ruled that there was no contract between Evergreen/Radney and Hi-Tech on the day of the shooting. The judge also rejected Bailey’s claim that Evergreen and Radney were negligent in failing to respond – through the security guards, acting as Evergreen/Radney’s agents – to the imminent threat that Schaaf posed to lawful invitees.


Bailey appealed. In a published, unanimous decision, the Court of Appeals affirmed in part and reversed in part, remanding the case to the circuit court for further proceedings. The appellate panel upheld most of the lower court’s rulings; however, the circuit court erred in holding that Bailey had failed to state a claim that Evergreen and Radney were negligent in failing to respond to the risk of imminent harm Schaaf presented, the panel said.


In general, “a landlord must exercise reasonable care to protect invitees from known or discoverable unreasonably dangerous conditions on the land” – and that duty includes using reasonable care to protect tenants and guests “from foreseeable criminal activities in common areas inside the structures they control,” the Court of Appeals explained. But landlords do not have a duty to make common areas safer than public streets, the panel observed.


The appellate court looked to the Michigan Supreme Court’s decision in MacDonald v PKT, Inc, 464 Mich 322 (2001). In MacDonald, the plaintiffs were injured at Pine Knob music concerts by members of the crowd hurling lumps of sod. The Supreme Court observed that a merchant has a “duty to respond reasonably to situations occurring on the premises” to protect its guests from imminent and foreseeable harm, but that duty does not require merchants to “provide security personnel or otherwise resort to self-help in order to deter or quell such occurrences,” the MacDonald Court said. Rather, the merchant’s duty is to make reasonable efforts to summon the police, the Court said.

At issue, the Court of Appeals said, was whether MacDonald and similar cases applied to apartment complexes as well as merchants. “To our knowledge, this is an issue of first impression,” the appellate panel said.
“[W]e believe that the limited duty that MacDonald imposes on merchants must necessarily apply to landlords in light of a landlord’s closer relationship to its tenants and their guests,” the Court of Appeals reasoned. “If a merchant – with lesser ability or responsibility to control or protect its invitees than a landlord – is nevertheless required to take reasonable efforts to contact the police in response to a situation presently occurring on the premises that poses an imminent risk of harm to identifiable invitees, then surely it is logical to hold a landlord, who is in a relationship of higher control, to the same standard.”

Extending MacDonald to Bailey’s case, the Court of Appeals concluded that “Evergreen and Radney as premises proprietors, clearly had a duty to ‘respond[] reasonably to situations occurring on the premises,’ which included a duty to call the police when required.” Although the security guards were not employees of Evergreen or Radney, if they acted as the apartment complex’s agents, the guards had a duty to summon the police on Evergreen and Radney’s behalf, the appellate panel said. “Reading Bailey’s allegations as a whole and taking them as true, we conclude that Bailey stated a claim against Evergreen and Radney premised on the failure of their agents to respond appropriately to criminal activities on their principal’s property.”


Evergreen and Radney appealed, arguing in part that the security guards were not their agents, and that, in any event, the guards had no duty to call the police because many Evergreen residents had already done that. Moreover, Bailey cannot show that the security guards’ alleged negligence caused his injuries; even if the guards had called the police, the police could not have arrived in time to prevent the shooting, the defendants contend.


Bailey also appealed, maintaining, among other matters, that there was a security services contract between Hi-Tech and Evergreen/Radney as of July 2006 that obligated Hi-Tech to protect tenants and their guests from trespassers’ criminal acts. Moreover, the Court of Appeals erred in upholding the circuit court’s dismissal of Bailey’s claims against Hi-Tech, Bailey argued.


In an order dated May 23, 2012, the Supreme Court granted leave to appeal to the defendants. The Court directed the parties to “include among the issues to be briefed whether the Court of Appeals erred when it extended the limited duty of merchants – to involve the police when a situation on the premises poses an imminent risk of harm to identifiable invitees, see MacDonald v PKT, Inc, 464 Mich 322 (2001) – to landlords and other premises proprietors, such as the defendant apartment complex and property management company.” The Court added that Bailey’s “application for leave to appeal as cross-appellant remains pending.”