Facts
- Harry Vermes operated a jewelry store in Minneapolis’s Foshay Tower under a commercial lease with Apache Corporation containing a broad exculpatory clause.
- Vermes contracted with American District Telegraph Company (ADT) to provide and monitor burglar-alarm service for the store.
- A mechanical-equipment access room above the store had a thin floor forming the ceiling of the vault area; the design permitted relatively easy entry into the vault from above.
- On August 23, 1971, Vermes discovered a burglary; entry was made through the vault ceiling via the access room.
- The stolen jewelry had a wholesale value of $47,185.03.
- Vermes sued Apache, ADT, and the building manager (Towle) for negligence; the case was tried to a jury on special verdicts.
- The jury apportioned fault: Apache 48%, ADT 25%, Vermes 17%, Towle 10%, and awarded $23,000 in damages.
- The trial court increased damages to $47,185.03 based on the uncontroverted wholesale-loss evidence and denied defendants’ post-trial motions.
Issues
- Whether the lease exculpatory clause barred Vermes’s negligence claim against Apache for a building condition that enabled the burglary.
- Whether sufficient evidence supported the jury’s finding that ADT was negligent in recommending/designing and/or providing adequate detection for the premises.
- Whether the trial court properly increased the jury’s damages award to match the uncontroverted amount of loss.
Decision
- The Minnesota Supreme Court affirmed the judgment for Vermes and affirmed denial of defendants’ motions for JNOV and a new trial.
- The court held the lease exculpatory clause did not clearly and unequivocally release Apache from liability for the negligence found by the jury.
- The court upheld the jury’s finding that ADT, having undertaken to provide security-related services and advice, owed a duty of reasonable care and could be found negligent on the evidence.
- The court sustained the comparative-fault allocation as supported by the record.
- The court affirmed the trial court’s increase of damages to $47,185.03 where the loss amount was established by uncontradicted evidence.
Legal Principles
- Exculpatory clauses purporting to relieve a party from liability for its own negligence are disfavored, strictly construed against the benefiting party, and require clear, definite, and unequivocal language.
- A party that undertakes, for consideration or gratuitously, to render services for another may incur tort liability for failing to use reasonable care when the undertaking increases risk of harm or induces reliance, even if a contract also governs the relationship.
- Comparative-negligence fault apportionment among multiple actors is primarily a jury question and will be upheld on appeal if supported by the evidence.
- A trial court may correct a damages award that conflicts with uncontroverted proof of the amount of loss.
Conclusion
The court affirmed a negligence verdict arising from a jewelry-store burglary, holding that the landlord’s lease exculpation did not clearly bar liability for the structural vulnerability, that the alarm company could be liable in tort for negligent security recommendations and services undertaken, and that damages could be increased to the proven wholesale value when the jury’s lower figure lacked evidentiary support.