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WEISSMAN v. CITY OF NEW YORK
Factual and Procedural Background
Claimant Ken Weissman brought a small claims action against the City of New York for loss of property due to alleged negligence and for services not rendered related to monies paid. In 2005, claimant rented storage space at the West 79th Street Boat Basin, operated by the City's Department of Parks and Recreation. The rental agreement included an exculpatory clause disclaiming City responsibility for damages to vessels stored there. Initially, users had unrestricted access to their vessels stored in a caged area with individual keys.
In July 2007, claimant’s two new kayaks were stolen from the caged storage area despite the cage lock remaining intact. Following this theft, the Boat Basin changed its policy: only employees retained keys to the storage cage, users had to be escorted for access, and security cameras were to be installed. Claimant was urged to continue using the facility under these new security assurances and subsequently stored two used kayaks there. Approximately a week later, one of these replacement kayaks, valued at $1,400, was stolen. Claimant filed a notice of claim and initiated this lawsuit seeking the value of the missing kayak and a refund of unused storage fees.
Legal Issues Presented
- Whether the change in access policy and defendant’s retention of the key to the storage cage established a bailment relationship, thereby imposing a duty of ordinary care on the City.
- Whether the exculpatory clause in the original rental agreement shields the City from liability for negligence under the changed circumstances.
- Whether claimant is entitled to a refund of the unused portion of the storage fee.
Arguments of the Parties
Claimant's Arguments
- The City became liable for the stolen kayak because it assumed custody and control by retaining the key and controlling access to the storage area.
- The original exculpatory clause does not cover the new arrangement under which the City took responsibility for security.
- Claimant seeks damages for the missing kayak and a refund for unused storage fees.
Defendant's Arguments
- The City asserts it had no duty of care and is not liable for the loss due to the exculpatory clause in the original contract.
- Defendant denies liability for negligence and argues the exculpatory clause insulates it from responsibility.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Milo v Biegler, 86 AD2d 503 (1st Dept 1982) | Marina not liable for loss of vessel absent bailment or assumption of custody. | Used to establish that initially no bailment existed because claimant had exclusive custody and access. |
| Snyder v Four Winds Sailboat Ctr., Ltd., 701 F2d 251 (2d Cir 1983) | Creation of bailment when marina retains keys and agrees to store vessel. | Analogized to the case facts where defendant retained keys and controlled access, thus creating a bailment. |
| I.C.C. Metals v Municipal Warehouse Co., 50 NY2d 657 | Once bailment is established, burden shifts to defendant to rebut presumption of negligence. | Applied to hold defendant liable for breach of duty as it failed to rebut negligence presumption. |
| Shalman v Board of Educ. of Cent. School Dist. No. 1, 31 AD2d 338 (3d Dept 1969) | Exculpatory clauses are enforceable but strictly construed against the party seeking exemption. | Used to analyze the scope and enforceability of the exculpatory clause in the original contract. |
| Reeves v Welch, 127 AD2d 1000 (4th Dept 1987) | Exculpatory clause must express intent to exempt from negligence liability in unequivocal terms. | Applied to find the clause vague and insufficient to shield defendant from negligence liability under changed circumstances. |
Court's Reasoning and Analysis
The court first established that under the original rental agreement, the City did not owe a duty of care because claimant had exclusive custody and access, and the exculpatory clause clearly allocated risk to the user. However, after the theft of claimant’s initial kayaks, the City changed its policy by retaining the only key to the storage cage, controlling access, and promising improved security. This shift in control transformed the relationship into a bailment, imposing a duty of ordinary care on the City to safeguard claimant’s property.
The court analogized this situation to Snyder v Four Winds Sailboat Ctr., Ltd., where a bailment was found because the marina had possession of the keys and agreed to store the vessel. Because claimant established that the City had exclusive possession and the kayak was missing, a presumption of negligence arose. The City failed to rebut this presumption by providing any evidence to show it exercised reasonable care.
Regarding the exculpatory clause, the court held that although such clauses are enforceable, they must be strictly construed against the party seeking immunity and must clearly express an intent to exempt from negligence liability. The clause in the original contract was vague and only applied to the initial arrangement where claimant retained custody. It did not cover the new situation where the City assumed control and custody. Thus, the exculpatory clause did not shield the City from liability for its negligence.
Lastly, the court dismissed claimant’s claim for a refund of unused storage fees because claimant never requested a refund nor was he denied use of the facility; he voluntarily ceased using it.
Holding and Implications
Holding: The court found that a bailment was created when the City took exclusive custody of claimant’s kayak and controlled access to the storage area. The City breached its duty of ordinary care, and the exculpatory clause in the original contract did not shield it from liability for negligence. Claimant was awarded $1,400 plus disbursements and interest for the value of the missing kayak. The claim for unused storage fees was dismissed.
Implications: This decision directly affects the parties by imposing liability on the City for negligence under the changed custodial arrangement. The ruling clarifies that exculpatory clauses must be clearly and unequivocally drafted to shield a party from negligence liability and that a change in control can create a bailment relationship, thereby imposing a duty of care. No new precedent beyond the application of existing principles was established.
RUBEN A. MARTINO, J.Page 563
Claimant sues defendant in this small claims case for loss of property due to defendant's negligence and for services not rendered for monies paid. The case was tried before me on May 8, 2008. Claimant testified on his own behalf. The City of New York did not have any witnesses.
In 2005, claimant rented storage space at the West 79th Street Boat Basin which is owned and operated by the New York City Department of Parks Recreation. The written agreement contains an exculpatory clause which states:
"I understand that the City of New York Parks Recreation Department will not be held responsible for any damages incurred to my vessel while at the dinghy dock or while in the facility at the 79th Street Boat Basin, and that I store my vessel at my own risk."
The policy and practice at the facility was that users would store their vessels in an enclosed cage-like structure which has storage bins. Each user had a key to the caged storage area and had unrestricted access. Within the cage, users could further secure their vessels to the bin with their own devices such as a chain and lock. In July 2007, claimant had two brand new kayaks stolen from the caged storage area. The lock to the storage cage was intact but his kayaks and locks were missing. Claimant reported this theft to the police, staff and management. These were not the subject of this lawsuit. Claimant indicated to the Boat Basin that he was no longer going to use the facility because of the theft. The head manager of the facility spoke to claimant and urged him to continue using the facility because they were changing their practice and policy by adding more security measures. Only West 79th Street Boat Basin employees would have keys to the caged storage area. Users no longer had unrestricted access and would have to get an employee to escort them, open the lock and admit them to the storage area. Security cameras were going to be installed. The Boat Basin posted a notice with the new changes which said:
"Attention Kayak Owners
"Please see marina staff to gain access to kayak storage area. We have had a security issue and have temporarily changed the locks. We will be adding security cameras to the area shortly. We apologize for any inconvenience in the meantime."
Based on the assurances by the manager that the security would be better, claimant purchased two used kayaks and again stored them in the caged area. He and the other users no longer had keys to the area and had to be admitted and escorted by an employee to access the vessels in the storage area. On or about July 23, 2007, a week after the first two kayaks were stolen, one of claimant's replacement kayaks, which cost $1,400, was missing from the storage area. Claimant filed a notice of claim and thereafter started this case. He sues for the value of the missing kayak and a refund of the unused portion of the storage fee.
The general rule is that a marina is not liable for negligence for loss of a vessel not due to the condition of the docking facility ( Milo v Biegler, 86 AD2d 503 [1st Dept 1982]). The privilege of keeping a vessel in a marina without an agreement to keep daily or continuous guard over the vessel or without the marina taking over or assuming the custody of the vessel does not constitute a bailment ( id.). This was initially the situation under the original arrangement between claimant and defendant. Claimant had exclusive custody of his vessels and unrestricted access because he had the key to the storage area. He had the privilege of storing his kayaks there but defendant was not an insurer. However, the arrangement between the parties changed when defendant took custody of the kayaks by retaining the key and controlling access to the kayaks, notifying users that this was the new temporary policy, promising better security and urging claimant to keep his kayaks there because of the new security measures. Under these facts a bailment was established. This is similar to the case of Snyder v Four Winds Sailboat Ctr., Ltd. ( 701 F2d 251 [2d Cir 1983]), where a boat owner sued a marina for loss of a stolen boat. The court found that because the marina had the keys and agreed to store the vessel, a bailment was created. A bailment gives rise to the duty of exercising ordinary care in keeping and safeguarding property ( id.). In the instant case, claimant has made out a prima facie case of breach of that duty by establishing that defendant had exclusive possession of the kayak under lock and key and that the kayak is now missing. It then becomes the obligation of the defendant to come forward with evidence to rebut the presumption of negligence ( I.C.C. Metals v Municipal Warehouse Co., 50 NY2d 657). Here, defendant did not come forward with any evidence and argues that it had no duty of care. However, when defendant took exclusive custody of claimant's kayak and urged him to continue using the facility because of its improved security, it created the duty of ordinary care in safeguarding the property.
Defendant argues that it cannot be held liable for negligence because of the exculpatory clause in the original 2005 contract which claimant concedes was subsequently renewed by his yearly payments. Although exculpatory clauses are enforceable, they are strictly construed against the party seeking exemption from liability ( Shalman v Board of Educ. of Cent. School Dist. No. 1, 31 AD2d 338 [3d Dept 1969]). Unless the intention of the parties to insulate one of them from liability for its own negligence is expressed in unequivocal terms, the exculpatory clause will not operate to have such an effect ( Reeves v Welch, 127 AD2d 1000 [4th Dept 1987]). The exculpatory clause in this case is vague and does not suggest an intent to shield the defendant from its own negligence in carrying out its duty to care for claimant's kayak. This makes perfect sense because the City did not initially have any duty to safeguard claimant's vessel. There was no bailment. Claimant had the key to the storage cage and retained custody and control of his kayak. He stored the vessel at his own risk and the Boat Basin would not be responsible for any damages. This was the intent of the exculpatory clause. However, the relationship changed when the defendant took it upon itself to secure and take control of claimant's vessel. Defendant now had the only key and assured claimant that his kayaks would be safer under defendant's custody because of the heightened security. The initial contract could not have been meant to cover this new arrangement. The court holds that under the facts of this case, a bailment was created and defendant was negligent by breaching its duty of care. The exculpatory clause in the original contract is too vague to shield defendant from liability for its own negligence.
Claimant's cause of action for the balance of the unused storage fee is dismissed. He never requested a refund and was never denied use of the storage space. He chose to stop using the facility.
Accordingly, claimant is awarded a judgment for $1,400 representing the value of the missing kayak plus disbursements and interest from July 23, 2007.
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