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Business Premises Act Replaces ‘Muddied’ Caselaw

The precise parameters of when a Missouri business can be held responsible for a crime that occurs on its property has long been determined on a case-by-case basis. But in late August, a new law comes into play.

On July 5, Gov. Mike Parson signed Senate Bill 608, otherwise known as the “Business Premises Safety Act.” The bill, which will go into effect on Aug. 28, codifies the existing common-law edict that businesses generally don’t have a duty to protect people on their premises from criminal acts committed by third parties.

There are exceptions to that rule, however, and some hefty judgments against businesses have survived on appeal in recent years. The Missouri Chamber of Commerce and Industry says the new statute will bring “much needed clarity to a muddied area of law.” But how the bill’s language will play out in the courtroom remains to be seen.

Under the new law, a business has no duty to guard against criminal or harmful acts on its premises unless it “knows or has reason to know that such acts are being committed or are reasonably likely to be committed in a particular area of the premises and sufficient time exists to prevent such crime or injury.”

Even if such a duty is found to exist, the business can raise an affirmative defense if it has security measures in place, the injured person was a trespasser or engaging in a felony, or the incident occurred when the business was closed.

The new law broadly tracks two common-law exceptions to the general rule that businesses aren’t liable for criminal acts on their property. One arises if the business “knows or has reason to know” that a specific person known to be violent is on the premises — and that it has time to do something about it. The other exception is invoked when similar past criminal activity on the property makes it foreseeable that people could face such crimes in the future.

Missouri Gov. Mike Parson speaks after being sworn in as the state's 57th governor following the resignation of Eric Greitens Friday, June 1, 2018, in Jefferson City, Mo. Parson moved from lieutenant governor to governor after Greitens stepped down Friday amid investigations of his political and personal life.(AP Photo/Jeff Roberson)

Missouri Gov. Mike Parson speaks after being sworn in as the state’s 57th governor. AP Photo by Jeff Roberson

Defense lawyers long have argued that court rulings have conflated those distinct exceptions and expanded businesses’ liability in the process. In 2015, for instance, the Court of Appeals Eastern District upheld a $20.5 million award for a man who suffered a brain injury after being beaten by a group of people in the parking lot of a St. Louis-area Jack in the Box. Although the case was argued on the “known persons” exception, the case hinged on the fact that the crowd had been loitering and acting disruptively in the parking lot for about an hour before the fight, making it possible for the restaurant’s staff to have foreseen the possibility of trouble.

After losing in the Eastern District, the defense tried to transfer the case to the Missouri Supreme Court, arguing in its motion that it “expands landowner liability to an unprecedented level — one that will be impossible for landowners to protect against.” The high court, however, declined to take the case.

Earlier this year, the Supreme Court reviewed a different business liability case, though its split opinion appeared to offer little clarity on the law. A Jackson County jury awarded $3.25 million to a woman whose ex-boyfriend shot her in the head in the parking lot of the business where she worked, Grain Valley truck-insurance provider Owner-Operator Services Inc. Amie Wieland survived the attack but was severely injured.

That case also involved the “known persons” exception, as Wieland had informed company officials of the threat she had faced from Alan Lovelace. The plaintiff argued that Owner-Operator had failed to carry out its own security protocols. The company argued that it had no duty of care until after the shooter was on the property.

The Supreme Court’s majority didn’t explicitly disagree with Owner-Operator’s argument about the substantive law. Nonetheless, it held that the defense had failed to preserve its argument, so it left the jury verdict intact.

The dissent, however, said the majority’s refusal to reach the merits of the case “serves only to confuse business premises liability law in Missouri.” Judge Mary R. Russell chided the majority for affirming the verdict even though the evidence didn’t show the employer knew Lovelace was on the property before he shot Wieland.

“Plaintiffs should not be allowed to recover on a basis unsupported by the relevant substantive law,” she wrote.

Justin Arnold, general counsel for the Missouri Chamber, said businesses are not only troubled that they face liability under “a really malleable standard,” but they also have a hard time discerning from the caselaw what they are supposed to do.

“It’s really difficult for anyone who isn’t following these types of things to know exactly what the state of the law is,” he said.

Arnold said the business community hopes the new law will be easier to follow. He acknowledged, however, that aspects of the statute will be subject to court interpretation. For instance, businesses can raise an affirmative defense if they have “implemented reasonable security measures.” The statute defines such measures as “precautions that a reasonable business owner in such industry would implement in a particular area of the premises to guard against criminal acts or harmful acts based on the condition of the premises and the cost of implementing such precautions.”

But it’s unclear if businesses could really win summary judgment based on such a fact-specific scenario, potentially involving not just what measures the company has but also the degree to which they were followed. Arnold said resolving such cases might require expert testimony on the reasonableness of security measures.

Owner-Operator’s security was front and center in Wieland’s suit. The plaintiff had provided the company’s security team with her ex-boyfriend’s name and photo, but she alleged the company failed to ask a nearby police station to increase its patrols and hadn’t monitored its security cameras, which recorded Lovelace entering the parking lot and getting into Wieland’s vehicle about an hour before the attack.

“We had a specific fact scenario where the business owner had specific knowledge of a threat,” said Scott Bethune of Davis Bethune & Jones in Kansas City, an attorney for Wieland. “They also had a specific protocol in place for such threats.”

Bethune said he wasn’t familiar enough with the new law’s language to know how it might have affected his case. But he argued that past appellate rulings haven’t been as confusing as defense lawyers make out, calling that a “Chicken Little argument.”

“Foreseeability was the key to the case,” he said.

Steve Gorny of the Gorny Law Firm in Kansas City and the president of the Missouri Association of Trial Attorneys, said he doesn’t think the new law will drastically change the types of cases that are filed. Cases that survived under the common-law protections, he said, tended to be those in which the business had reason to know there was some type of danger.

Although it’s unclear exactly how the affirmative defenses will be interpreted in the courts, Gorny said he anticipates some cases will be thrown out based on the security measures the businesses put in place.

“I do think it offers a layer of protection to those business owners who do it the right way,” he said.

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