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KABO v. SUMMA CORP.

October 15, 1981

Harry KABO and Roslyn Kabo
v.
SUMMA CORPORATION



The opinion of the court was delivered by: BECKER

MEMORANDUM

While plaintiffs were guests at the Desert Inn in Las Vegas, Nevada, and were asleep in their hotel room, the room was burglarized, and property (mostly jewelry) which they value at $ 63,600 was taken. Plaintiffs have brought this negligence action against Summa Corporation, the operator of the Desert Inn, alleging breach of a duty to provide adequate security. *fn1" It appeared at a pretrial conference that Nevada's law governing such matters is far more hospitable to innkeepers than is Pennsylvania's, and therefore, that the outcome of the case might depend on a choice of law determination. It also appeared that if Nevada law should apply, liability might turn on resolution of the questions: (1) whether the rights of the parties are governed by Nevada common law or the Nevada Innkeepers Statute; and (2) whether, in the event that the Innkeepers Statute applies, plaintiffs bear the burden of proving defendant's gross neglect or defendant bears the burden of proving the absence of gross neglect. We asked the parties to brief the questions, and we make herein an in limine determination thereon.

 For the reasons which follow, we conclude that: (1) Nevada law governs; (2) the Nevada Innkeepers Statute, Nevada Revised Statutes § 651.010 (1953), *fn2" rather than Nevada common law applies; and (3) plaintiffs must bear the burden of proving gross neglect on the part of the defendant. These positions are those advanced by defendant. They also agree with the conclusions of United States Magistrate Peter B. Scuderi who gave us an excellent memorandum on this matter following a pretrial conference which he conducted.

 I. Choice of Law

 In this diversity action, our choice of law decision must be governed by the choice of law rules of Pennsylvania, the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941). Pennsylvania has adopted a hybrid choice of law approach combining Professor Brainerd Currie's "interest analysis" *fn3" with the Restatement (Second) of Conflict of Laws (1971) grouping of contacts theory. Melville v. American Home Assur. Co., 584 F.2d 1306 (3d Cir. 1978); Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (1964). This approach is applicable in tort as well as contract actions. See Melville, 584 F.2d at 1311-12; Cipolla v. Shaposka, 439 Pa. 563, 267 A.2d 854 (1970).

 The law of three states, Delaware, Nevada, and Pennsylvania, is potentially applicable to this case. Because the only alleged connection to Delaware is that it is defendant's place of incorporation, and further, because no party argues that Delaware law should govern, we need decide only between Nevada and Pennsylvania law.

 Under the common law of both states, an innkeeper is liable as an insurer for losses suffered by his guests. See Cloward v. Pappas, 79 Nev. 482, 387 P.2d 97 (1963); Buck v. Hankin, 217 Pa.Super. 262, 269 A.2d 344 (1970). In an attempt to ease the burden of common law liability, the legislatures of Nevada and Pennsylvania have enacted innkeepers statutes. See Owens v. Summa Corp., 625 F.2d 600, 602 (5th Cir. 1980) (per curiam ) (interpreting the Nevada Innkeepers Statute); Buck v. Hankin, 217 Pa.Super. at 268, 269 A.2d at 347 (Pennsylvania Innkeepers Statute enacted "in derogation of the common law"). See also, Kelly v. Milner Hotels, 176 Pa.Super. 316, 318, 106 A.2d 636, 637 (1954).

 The two statutes, however, provide significantly different degrees of protection for guests' property. Nevada's primary concern appears to be limited to reducing an innkeeper's liability. A Nevada innkeeper is liable "for the loss of any property left in the room of any guest (only if the innkeeper acted with) gross neglect." Nev.Rev.Stat. § 651.010 (1953). The Pennsylvania legislature, on the other hand, sought to ensure that guests in hotels and inns would benefit from a minimum level of safeguards against harm to their belongings. Under the Pennsylvania law, an innkeeper is liable for his guests' losses unless he provides such things as (1) a metal safe or vault for the storage of guests' belongings, (2) bolts or locks on doors, (3) suitable fastenings on transoms and windows, and (4) a copy of the Pennsylvania Innkeepers Statute "printed in distinct type, constantly and conspicuously posted, in not less than ten conspicuous places in all" throughout his inn or hotel. Pa.Stat.Ann. tit. 37, § 61 (1954).

 Despite Pennsylvania's interest in this case, we believe that Pennsylvania courts would apply Nevada law. The Pennsylvania Supreme Court's opinion in Cipolla v. Shaposka, supra, compels this conclusion. That case involved a conflict between Pennsylvania and Delaware law. Plaintiff was a Pennsylvania resident who, while a guest in a car driven by defendant, a Delaware resident, suffered injuries in an accident occurring in Delaware. The car was registered in Delaware under the name of defendant's father, also a Delaware resident. If Delaware law were applied to the case, plaintiff would be barred from recovering due to Delaware's Guest Statute which prohibited a guest from recovering for losses caused by his host's mere negligence. Pennsylvania had no such statute and would have permitted recovery upon proof of the driver's negligence.

 The Pennsylvania Supreme Court held that Delaware law should apply. The court recognized that Pennsylvania's policy was to permit guests to recover for injuries caused by their host's negligence. Because the plaintiff was a Pennsylvania resident, Pennsylvania was an interested jurisdiction with a relevant contact to the case. That was, however, Pennsylvania's only contact. Delaware was also an interested jurisdiction with a relevant contact, for it had a policy that hosts should not be liable to their guests for mere negligence and the defendant was a Delaware resident. The court found an additional and significant Delaware contact in that the automobile involved in the accident was registered and housed in Delaware, and insurance rates depend on the state in which the automobile is housed rather than the domicile of the owner or driver. On these grounds the court concluded that Delaware had the qualitatively greater contacts and the greater interest in having its law applied.

 
(It) seems only fair to permit a defendant to rely on his home state law when he is acting within that state .... Inhabitants of a state should not be put in jeopardy of liability exceeding that created by their state's laws just because a visitor ...

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