Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—Ga. App.: Claims of premises liability against hotel franchisee revived; claims against franchisor rejected, (Mar 31, 2014)

By Linda O’Brien, J.D., LL.M.

The Georgia Court of Appeals has reversed a trial court’s grant of summary judgment to a hotel franchisee in a premises liability action filed by a hotel guest for injuries sustained in a fall. However, the court affirmed summary judgment in favor of the franchisor (Bright v. Sandstone Hospitality, LLC, March 26, 2014, Ray, W.).

In 2008, Joe Bright checked into a Wingate Inn hotel, owned by Sandstone Hospitality and franchised by Wingate International. While bathing, he used a grab bar to pull himself up and the bar pulled loose. Bright fell and was injured. Bright filed suit against Sandstone and Wingate for the injuries sustained from the fall while he was a guest of the hotel. The trial court granted Sandstone and Wingate’s motions for summary judgment, and Bright appealed.

Apparent agency. The trial court did not err in determining as a matter of law that there was no apparent agency relationship between Wingate and Sandstone. To recover under a theory of apparent agency, a plaintiff must show that (1) the alleged principal held out another as its agent; (2) the plaintiff justifiably relied on the care and skill of the alleged agent based on the principal’s representation; and (3) the justifiable reliance led to the injury. Bright contended that Wingate, as the principal, held out Sandstone as its agent and that he relied on Wingate’s care and skill in choosing the hotel. The court stated that the mere display of signs or a trademark was insufficient to show an apparent agency relationship. In this case, there was clear evidence that a sign at the hotel’s front desk stated that the hotel was owned and operated by Sandstone.

Third-party beneficiary. The appellate court found that Bright was not a third-party beneficiary of the agreement between Wingate and Sandstone. Although the franchise agreement provided for quality assurance inspection program, the program was limited to cosmetic aspects of the hotel and did not include its safety and function. Moreover, the agreement showed no intent to benefit third persons such as hotel guests. The agreement specifically disclaimed any liability on account of the quality assurance inspection and stated that the agreement was exclusively for the benefit of the parties. Thus, summary judgment was properly granted to Wingate.

Actual or constructive knowledge. The trial court erred in granting summary judgment to Sandstone, since questions of fact remained for jury determination. Owners of land are liable to their business customers for injuries caused by their failure to exercise ordinary care in keeping the premises safe. To recover, an invitee must provide that the defendant had actual or constructive knowledge of the hazard and the plaintiff lacked knowledge of the hazard despite the exercise or ordinary care due to actions or conditions within the defendant’s control. There was some evidence from the hotel’s general manager testimony that there had been a prior repair to a grab bar and a cracked wall in the hotel to create a jury question as to Sandstone’s exercise of ordinary care in inspecting the premises.

Additionally, the plaintiff’s expert testimony that the grab bar was defectively installed and noncompliant with applicable building codes was evidence from which a jury could find that Sandstone had at least constructive knowledge of the defect. A code violation is negligence per se, and evidence of nonconformity may be proof of the owner’s superior knowledge of the defect, the court concluded.

The case is No. A13A1811.

Attorneys: Patrick Arthur Cruise (The Hamilton Firm) for Joe Wayne Bright. Harry W. Bassler (Crim & Bassler, LLP) for Sandstone Hospitality, LLC.

Companies: Sandstone Hospitality, LLC; Wingate International Inns, Inc.

Cases: FranchisingDistribution GeorgiaNews