The case of Keith R.E. Johnson and KREJ Leasing, Inc. v. Akeefe Garrett presents significant insights for property managers, especially those involved in leasing commercial spaces. The court’s decision, delivered on April 4, 2024, deals with issues of liability concerning a shooting incident at a strip club leased by the defendant property owners to a tenant. While the plaintiff, Akeefe Garrett, suffered severe injuries, the court ruled in favor of the defendants, holding that they did not have sufficient control over the premises to be held liable. For property managers, this case underscores several crucial lessons regarding liability, the limits of control over leased premises, and the importance of clear lease agreements.
Case Background
In this case, Garrett visited Flashdancers, a strip club, where he was shot by another patron after an altercation. The suit initially targeted several parties, but by the time the trial proceeded, only Keith R.E. Johnson, the property owner, and KREJ Leasing, the management entity, remained as defendants. Garrett’s argument was based on the claim that the defendants had a non-delegable duty to provide a safe environment for business invitees, such as himself. He pointed to lease provisions that allowed the property owner to intervene in certain circumstances as evidence of control over the premises.
However, the court ruled in favor of the defendants, reversing the initial decision that had denied them a directed verdict. The crux of the decision was that the defendants, despite certain rights in the lease agreement, did not actually exercise control over the day-to-day operations of the strip club, including security. Therefore, they could not be held liable for the injuries Garrett suffered during the shooting.
Liability in Leased Premises
1. Right to Control ≠ Actual Control
One of the most critical takeaways from this case is that having the right to control a premises in the event of a tenant’s failure to operate within lease terms does not equate to exercising that control. The court clarified that a right stipulated in the lease to enter or take over operations does not establish liability if such control has not been exercised.
Property managers should understand that liability for incidents, particularly third-party criminal acts, often hinges on actual involvement or control over the premises. The defendants in this case had provisions in the lease that allowed them to enter and inspect the property or take over operations under certain conditions. However, the court emphasized that these rights were not relevant to the security issues that led to Garrett’s injury. Hence, unless you actively manage or control key aspects of the property, such as security, you may not be held liable for incidents on the premises.
2. Clear Distinction Between Ownership and Operational Responsibilities
This case also highlights the importance of maintaining a clear distinction between ownership of the property and the day-to-day operations handled by tenants. Johnson and KREJ Leasing were not involved in the security arrangements at Flashdancers, nor did they participate in any operational decisions. The tenant was responsible for hiring security and ensuring a safe environment for patrons. As such, liability for the shooting did not transfer to the property owner or management entity.
Property managers should ensure that their lease agreements clearly outline the responsibilities of tenants, especially when it comes to security, maintenance, and daily operations. This can protect them from liability in cases where incidents arise from the tenant’s negligence or failure to provide adequate safety measures.
3. Non-Delegable Duty and Exceptions
The concept of a non-delegable duty can be complex. In some cases, property owners or managers may be found to have a non-delegable duty to provide a safe environment, especially in spaces open to the public. However, as this case illustrates, this duty largely depends on the degree of control exercised by the owner or manager. The trial court initially ruled that Johnson and KREJ Leasing had such a duty, but this decision was overturned because the defendants had little to no involvement in the club’s operations.
Property managers should be cautious when structuring their lease agreements and delegating responsibilities to tenants. While certain duties may be non-delegable, clarifying the extent of your involvement and avoiding direct control over the tenant’s business can help limit liability.
4. Regular Inspections and Minimal Involvement
The court noted that Johnson visited the premises only a few times a year and that these visits were limited to inspections. The defendants argued successfully that their occasional presence for inspections did not constitute control over the security measures or day-to-day operations of the strip club. This is an important consideration for property managers who may worry that even limited interaction with the tenant’s business could open them up to liability.
Property managers should continue to conduct necessary inspections and repairs as part of their lease agreements, but they should refrain from getting involved in the tenant’s operational decisions unless explicitly required by law or specific circumstances. Keeping interactions limited to the scope defined in the lease agreement can help minimize exposure to liability.
Understanding Control and Liability
The ruling in Keith R.E. Johnson and KREJ Leasing, Inc. v. Akeefe Garrett provides valuable insights for property managers regarding liability and control over leased properties. Property managers must be aware that merely having the right to control or inspect premises does not equate to actual control that establishes liability. Clear lease agreements that delegate operational responsibilities to tenants and limit the property manager’s involvement can help shield against legal exposure in cases of third-party injuries or criminal acts on the property.
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