Dear Bob,
I had my bike stolen yesterday from the enclosed parking garage in my office building. It’s operated by a local company that runs several lots in the San Francisco area. It was locked up to a bike rack bolted to the floor about 30 feet from the lot attendant’s shack. The attendant, by his own admission, watched it happen and didn’t try to stop the guy or call the cops. He said that “customers park at their own risk.” It was a $4000 bike. (I commute in 26 miles one way, so I’m not about to ride a clunker.) Can I sue the building owner or the lot operator?
S.M.
California

Dear S.M.,
This is one question where I have to give two different answers, one for California and another for the general law. In California, you have an excellent chance of recovery, and given the value of your bicycle, I urge you to talk to a qualified California attorney. If you were not in California, it may depend on if you were paying to park your bicycle or were parking for free, depending on your state’s laws.

The legal jargon is confusing here, so let’s start with some definitions. A bailee is one accepts the temporary care and possession of the property of another. When you take your bike to a bike shop to get it fixed, the shop owner is a bailee, and while she has it your bike is a bailment. (California and some other states refer to the bike shop as a depository and the person leaving off the good as the depositor. The bike is a deposit.) The bike shop does not own the bike, but the law gives it enough ownership power to protect it, carry out the repairs, and return it. If Joe Lowlife tries to steal it, Barbara Bikeshop has the same right to stop him as Ollie Owner would. On the other hand, Barbara is responsible for Ollie’s bike, and if negligent in its care, Barbara will owe Ollie if she lets something bad happen to it. As the Restatement of Torts (a general “state of the art” manual — not binding but highly influential everywhere) puts it:

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“One who undertakes, gratuitously [for free] or for consideration [for pay] to render services to another which he should recognize as necessary for the protection of another or for his things is subject to liability resulting from his failure to perform his undertaking if his failure to exercise reasonable care increased the risk of such harm . . . or the harm was suffered because of the reliance of person upon the undertaking.”

A good explanation was provided in England v. Lyon Fireproof Storage, a 1928 California case. England stored his household possessions in Lyon’s warehouse, including 40 gallons of brandy and bourbon. (How England happened to have 40 gallons of legal, licensed booze as part of his “household effects” during the height of Prohibition was not explained.) Upon his return a year later, he discovered the spirits were missing and sued for their value. The court awarded him the full amount of his complaint, $200:

“Absent a specific agreement, a bailee or proprietor of a general warehouse does not become an insurer of property against theft. All that is required of him is the exercise of ordinary care for the protection of the owner’s property such as would be used by the owner himself under similar circumstances. A warehouseman is bound to exercise reasonable care to avoid the theft of stored goods. He must use such care in the protection of the property from thieves without and thieves within, in the selection of employees and in the supervision of their conduct.”

The warehouse argued that its standard contract made it “not responsible for loss or damage” to customers’ goods, and by the terms of the contract the only service the warehouse provided was the rental of storage space. The court rejected this “we only rent air” argument:

“A warehouseman may not limit his liability for damage or loss of goods stored for him for hire, so as to exempt himself from damages resulting from his own negligence, nor to relieve himself from the exercise of ordinary care . . . such an effort on the part of a bailee to exempt himself from negligence is contrary to public policy.”

A very recent California case, Intercargo Insurance v. Burlington Northern-Santa Fe (BNSF) extends this principle beyond bricks-and-mortar warehouses. Panasonic was expecting a trailer load of TVs and camcorders worth $231,000 at Burlington’s Hobart Yard outside Los Angeles. The yard was run by a Burlington subcontractor, ITS. A fake Panasonic truck and driver stole the trailer, and Panasonic’s insurance carrier sued the railroad. The court said that the railroad was liable for the stolen goods:

“Based on the uncontroverted facts, the court has no trouble concluding that ITS should have recognized that fulfillment of its contractual obligations to BNSF was necessary to protect Panasonic’s equipment. This duty of care necessarily includes an adequate system of checkpoint procedures, the purpose of which was to ensure that no unauthorized person removed a shipment from the Hobart Yard. Expert testimony established that this standard was not met. ITS did not maintain a list of approved drivers and did not have a pick-up number system in place. The driver of the Panasonic truck exhibited suspicious behavior, but was not questioned.”

Note that the general law places the same level of care upon the bailee who cares for another’s goods for free or for pay. However, many states, including California, set a different duty of care for the two. Section 1852 of the California Civil Code states that:

“A depository for hire must use at least ordinary care for the preservation of the thing deposited.”

While Section 1846(a) says that:

“A gratuitous depository must use at least slight care for the preservation of the thing deposited.”

Although “slight care” may not sound like much, one California real estate developer discovered, in Greenberg Brothers Co. v Hahn, that it is not just empty talk. Hahn was building a new mall, and was running behind. In order to open as soon as possible, Hahn talked the Greenberg Brothers into moving the merchandise to stock their yet-unopened store into their unfinished space while the rest of the mall was still under construction. Hahn assured the storeowners that his contractor, Rogers, would watch the merchandise, which was stolen. The brothers sued, but . . .

“Hahn argues here that if he was a bailee at all, he received no consideration and therefore as a gratuitous bailee, its obligation was to exercise only slight care for the preservation of the thing deposited.”

But the court pointed to the testimony of an employee named . . .

“Herbert, a dry-wall hangar employed by the contractor, who indicated that he saw the store standing open all day, and that on one occasion he noticed merchandise scattered about. He reported to Rogers that ‘it would be awful easy for someone to take something out of the store.’ When asked what Rogers response was, Herbert said, ‘He just shrugged his shoulders and laughed. That was about it.’”

The court concluded that:

“Even if the merchandise was stolen by the [construction men] who opened the store in the morning as the testimony of Herbert implies, or was removed by other employees or by outsiders who simply wandered in unnoticed, Hahn would be liable in that he failed properly to supervise the location. There is no evidence that any care, even the ‘slight care’ which Hahn admits is its obligation, was taken to supervise the store.”

The parallel between this 1966 case and your situation, where the attendant simply watched someone walk off with your bike without lifting a finger, is extraordinary. It is likely that the attendant was under orders not to try to stop any larceny or breaking or entering (reasonable, given the possible danger), but the fact that he didn’t even call the cops or pull the alarm is pretty damning.

As to the attendant’s assertion that “they aren’t responsible for loss,” tell him to take a look at Section 1630 of the California Civil Code. That section says that a parking-garage operator cannot waive its liability for loss or damage unless the customer is:

1) Given a written contract with the waiver in clear, legible print at the top;2) The terms must be reproduced on a highly visible, clearly posted sign no smaller than 17 x 22 inches in size;3) If the customer refuses the waiver, the garage must still park her vehicle.

What if you didn’t pay to park? No problem. Remember how the legal language says “consideration,” not “pay”? There is a technical difference. Consideration is anything of value, not just money. If the building says you can’t bring your bike into the office, and must park in the garage, the building receives consideration — the increased convenience for its other tenants and visitors. The same is true if a city prohibits parking on the street and makes you park in a garage. (Hint: Even if you don’t have to pay, insist on a ticket, and write “refused” on the back of the ticket in front of the attendant (or write a letter to the building owner refusing to waive your rights if you’re a regular.)

I took a quick glance through a few state laws and found that about half had parking-garage ordinances, mostly states with big cities. So keep in mind that regardless of whether you’re riding or driving, if you are covered by one of these state laws, you may not have to accept the “we’re not responsible” terms, and you definitely do not have to accept second-class status simply because you are on a bicycle, even if you don’t have to pay!

Good luck,
Bob(Research and drafting assistance provided by Bruce Epperson, JD)

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Now read the fine print:
Bob Mionske is a former competitive cyclist who representedthe U.S. at the 1988 Olympic games (where he finished fourth in the roadrace), the 1992 Olympics, as well as winning the 1990 national championshiproad race.After retiring from racing in 1993, he coached theSaturn Professional Cycling team for one year before heading off to lawschool. Mionske's practice is now split between personal-injury work, representing professional athletes as an agent and other legal issues facing endurance athletes (traffic violations, contract, criminal charges, intellectual property, etc).If you have a cycling-related legal question, please send it to mionskelaw@hotmail.comBob will answer as many of these questions privately as he can. He willalso select a few questions each week to answer in this column. Generalbicycle-accident advice can be found at www.bicyclelaw.com.Important notice:
The information provided in the "Legally speaking"column is not legal advice. The information provided on this publicweb site is provided solely for the general interest of the visitors tothis web site. The information contained in the column applies to generalprinciples of American jurisprudence and may not reflect current legaldevelopments or statutory changes in the various jurisdictions and thereforeshould not be relied upon or interpreted as legal advice. Understand thatreading the information contained in this column does not mean youhave established an attorney-client relationship with attorney Bob Mionske.Readers of this column should not act upon any information contained inthe web site without first seeking the advice of legal counsel.