Lead Opinion
OPINION
Peggy and Samuel Feld were tenants in the large Cedar-brook Apartment complex, consisting of 150 acres and 1,000 apartments housed in three high rise buildings. For an
While the Felds were parking their car, they were set upon by three armed felons. At gun point, accompanied by two of the felons, they were forced to the back seat of their car. Followed by the third felon in an “old, blue broken down car,” they were driven past the guard on duty at the gate, out into the night, to the ferine disposal of three criminals. To clear the car for their main criminal purpose, the felons started to force Mr. Feld into the trunk of the car. Mrs. Feld pled her husband’s illness and to save him, offered herself for her husband’s life. Thereupon the felons released Mr. Feld on a deserted street corner and drove Mrs. Feld to the lonely precincts of a country club. There is no need to recite the horrors that brave and loving woman suffered. Suffice it to say they extorted a terrible penalty from her defenseless innocence.
The Felds brought suit against the appellees, owners of the complex,
On appeal the Superior Court affirmed the lower court, with the exception that the award of punitive damages to Samuel Feld was reduced by one half. Both Cedarbrook and Mr. Feld filed petitions for allowance of appeal, which were granted. We now reverse.
I
The threshold question is whether a landlord has any duty to protect tenants from the foreseeable criminal acts of third persons, and if so, under what circumstances. Well settled law holds landlords to a duty to protect tenants from injury rising out of their negligent failure to maintain their premises in a safe condition. See Smith v. M.P.W. Realty Co. Inc.,
The closest analogy is the duty of owners of land who hold their property open to the public for business purposes. See Leary v. Lawrence Sales Corp.,
Tenants in a huge apartment complex, or a tenant on the second floor of a house converted to an apartment, do not live where the world is invited to come. Absent agreement, the landlord cannot be expected to protect them against the wiles of felonry any more than the society can always protect them upon the common streets and highways leading to their residence or indeed in their home itself.
An apartment building is not a place of public resort where one who profits from the very public it invites must bear what losses that public may create. It is of its nature private and only for those specifically invited. The criminal can be expected anywhere, any time, and has been a risk of life for a long time. He can be expected in the village, monastery and the castle keep.
In the present case the Superior Court departed from the traditional rule that a person cannot be liable for the сriminal acts of third parties when it held “that in all areas of the leasehold, particularly in the area under his control,
The Superior Court viewed the imposition of this new duty as merely an extension of the landlord’s existing duty to maintain the common areas to be free from the risk of harm caused by physical defects. However, in so holding that court failed to recognize the crucial distinction between the risk of injury from a physical defect in the proрerty, and the risk from the criminal act of a third person. In the former situation the landlord has effectively perpetuated the risk of injury by refusing to correct a known and verifiable defect. On the other hand, the risk of injury from the criminal acts of third persons arises not from the conduct of the landlord but from the conduct of an unpredictable independent agent. To impose a general duty in the latter case would effectively require landlords to be insurers of their tenants safety: a burden which could never be completely met given the unfortunate realities of modern society.
Our analysis howevеr does not stop here, for although there is a general rule against holding a person liable for the criminal conduct of another absent a preexisting duty, there is also an exception to that rule, i.e., where a party assumes a duty, whether gratuitously or for consideration, and so negligently performs that duty that another suffers damage. Pascarella v. Kelley,
This exception has been capsulized in Section 323, of the Restatement (Second) of Torts, which provides:
§ 323. Negligent Performance of Undertaking to Render Services
One who undertakes, gratuitously or for consideration, to render services to anоther which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical*393 harm resulting from his failure to exercise reasonable care to perform his undertaking, if
(a) his failure to exercise such care increases the risk of such harm, or
(b) the harm is suffered because of the other’s reliance upon the undertaking.
Previously we adopted this section as an accurate statement of the law in this Commonwealth. Gradel v. Inouye,
Expounding on the proper application of Section 323 the drafters indicated that
[Tjhis Section applies to any undertaking to render services to another which the defendant should recognize as necessary for the protection of the other’s person or things. It applies whether the harm to other or his things results from the defendant’s negligent conduct in the manner of his performance of the undertaking, or from his failure to exercise reasonable care to complete it or to protect the other when he discontinues it.
Comment (a) § 323 Restatement (Second) of Torts. These comments are particularly relevant in a situation such as the present where a lаndlord undertakes to secure the areas within his control and possibly fosters a reliance by his tenants on his efforts.
Absent therefore an agreement wherein the landlord offers or voluntarily proffers a program, we find no general duty of a landlord to protect tenants against criminal intrusion. However, a landlord may, as indicated, incur a duty voluntarily or by specific agreement if to attract or
A tenant may rely upon a program of protection only within the reasonable expectations of the program. He cannot expect that a landlord will defeat all the designs of felonry. He can expect, however, that the program will be reasonably pursued and not fail due to its negligent exercise. If a landlord offers protection during certain periods of the day or night a tenant can only expect reasonable protection during the periods оffered. If, however, during the periods offered, the protection fails by a lack of reasonable care, and that lack is the proximate cause of the injury, the landlord can be held liable. A tenant may not expect more than is offered. If, for instance, one guard is offered, he cannot expect the same quality and type of protection that two guards would have provided, nor may he expect the benefits that a different program might have provided. He can only expect the benefits reasonably expected of the program as offered and that that program will be conducted with reasonable care.
II
Cedarbrook also argues that the evidence of negligence failed to support the jury’s punitive damages award, and that the introduction of evidence concerning аppellant’s considerable wealth was so prejudicial as to taint the jury’s compensatory damages award. In light of our grant of a new trial on the issue of liability, the issues regarding damages are moot. However, in anticipation of the same issues arising at retrial, we will address them.
A. Punitive Damages
This Court has embraced the guideline of Section 908(2) of the Restatement (Second) of Torts regarding the imposition of punitive damages: “Punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others.” See Chambers v. Montgomery,
Further, one must look to “the act itself together with all the circumstances including the motive of the wrongdoers and the relations between the parties ...” Chambers v. Montgomery, supra,
The danger here was not an easily perceptible one. While a jury might find that Cedarbrook failed to reasonably perform the duty it undertook, the evidence presented was insufficient to supрort a finding that they acted with the state of mind necessary to impose punitive damages. While the record indicates that the security systems might have been inadequate under the circumstances, there was no evidence of an evil motive or a reckless indifference to the safety of the tenants.
In deciding whether to impose punitive damages a court should not look to the third party’s criminal conduct, which in this case was truly outrageous; a court should not look at the end result, which in this case also was outrageous; rather, the court should examine the actor’s conduct. As a mattеr of law, on this record, a jury could not conclude that appellants’ conduct was outrageous. Thus the trial court erred in submitting this issue to the jury.
B. Compensatory Damages
As a result of the trial judge’s determination that the issue of punitive damages was a jury question, evidence was allowed concerning appellant’s considerable wealth. Cedarbrook argues that this evidence had a prejudicial effect on the jury and thus the compensatory damage award of three million dollars should be vacated. We agree.
A jury may not consider a defendant’s wealth in setting compensatory damages. It is “improper, irrеlevant, prejudicial, and clearly beyond the legally established boundaries.” Trimble v. Merloe,
Where the issue of punitive damages incorrectly goes to the jury, and where the trial court fails to sufficiently warn the jury that they may not look to a defendant’s wealth in setting compensatory damages, evidence of the wealth of a defendant may improperly prejudice the jury and a compensatory damage award should be set аside.
For the reasons stated above, this case must be remanded to the lower court for a new trial, in accordance with the standards stated.
Notes
. This case was reassigned to this author on May 16, 1984.
. Cedarbrook is owned by John W. Merriam, and Thomas Wynne, Inc. Merriam and Thomas Wynne, Inc. were co-venturers in a company trading as the Cedarbrook Joint Venture. Merriam owns all of Thomas Wynne, Inc.’s stock, and, at trial, was appropriately treated as Cedarbrook’s sole owner.
. Samuel Feld was awarded $1 million in compensatory damages and $1.5 million in punitive damages. Peggy Feld was awarded $2 million in compensatory damages and $1.5 million in punitive damages. Delay damages, pursuant to Pa.R.Civ.P. 238, were assessed against Cedarbrook in the amount of $83,835.24.
. Although in DeJesus v. Liberty Mutual Insurance Co.,
. See Phillips v. Chicago Housing Authority,
. The drastic remedy of a new trial is not required in every case. In some cases a sufficient cautionary instruction may overcome the prejudice triggered by the introduction of evidence of a defendant’s wealth.
Concurrence Opinion
concurring.
We are called upon to decide an issue of first impression — under what circumstances may a landlord be held
Mr. Justice McDermott has admirably resolved a complex case, which was made more difficult by the procedural posture in which the appeal arose. The great majority of appellate courts which have wrestled with this issue have reviewed lower court decisions made at a рreliminary stage of the proceedings — such as motions for judgment on the pleadings and summary judgment. Consequently, their review was limited to the question of whether, reading the record most favorably to the plaintiff, a cause of action could be made out. This issue comes to us for the first time following the complete trial.
At the outset I note that I completely subscribe to the Court’s treatment of the issues of compensatory and punitive damages set forth in sections II A and II B of the opinion. Because the liability issue has not been addressed previously by this Court, I write separately to explain my understаnding of the reasoning which leads to the Court’s decision.
The Appellees urge this Court to hold, as did the Superior Court, that a landlord owes a duty — to provide security to protect against criminal acts of third persons — based upon the implied warranty of habitability in residential leases. This approach was adopted in the seminal case of Kline v. 1500 Massachusetts Avenue Apartment Corp.,
The landmark Pennsylvania case which reflects the trend towards treating the residential lease as a contract, rather than a conveyance of land for a term, is Pugh v. Holmes,
[t]he implied warranty is designed to insure that a landlord will provide faсilities and services vital to the life, health, and safety of the tenant and to the use of the*400 premises for residential purposes ... In order to con-. stitute a breach ... [a] defect must be of a nature and kind which will prevent the use of the dwelling for its intended purpose to provide premises fit for habitation by its dwellers.”
Id.,
Proceeding with the contract analysis, the Kline court determined that a duty was owed by a landlord to his tenants simply because the risk of harm existed. The court stated, "... we place the duty of taking protective measures guarding the entire premises and the area peculiarly under the landlord’s control against the perpetration of criminal acts upon the landlord, the party to the lease contract who had the effective capacity to perform these necessary acts.”
The Appellees suggest that a duty to protect tenants from the risk of criminal conduct is nothing more than a continuation of the landlord’s existing duty to maintain the common areas of the leased premises; and that we need not impose a new duty, but merely delineate the scope of an existing obligation. This existing obligation which the Appellees perceive as the basis for their contention is a landlord’s duty to maintain the common areas in a reasonably safe сondition for the use of tenants and their invitees.
The term “reasonably safe” has traditionally been interpreted to include physical deficiencies, health hazards, and structural defects. Liability may be imposed upon a landlord where he had actual notice of a defective condition within the common areas or where a reasonable inspection would have disclosed the condition. The Appellees would expand “defective condition” to include not only a physical defect, but also a risk of physical harm to tenants from criminal conduct. The duty of a landlord would be two-fold —i.e., a duty to alleviate an existing condition which creates a risk of harm from criminal conduct and a duty to conduct a reasonable investigation to discover such a condition.
The traditional duty which has been imposed upon a landlord who retains control over the common areas is an exception to the general rule that, absent an agreement to the contrary, a landlord who surrenders possession of the leasehold does not have an obligation to maintain the prem
As noted in the Opinion of the Court, the weakness of Appellees’ argument is demonstrated by their failure to recognize a crucial distinction between the risks of injury from a condition of the property and from criminal acts of a third person. In failing to maintain the condition of the common areas of the leased premises, the landlord’s conduct has created the risk of injury to a tenant. It is the responsibility of the landlord to abate the risk which his conduct has created. Liability may then be imposed upon a landlord where injury results because of his conduct or failure to remove the risk of harm created by his conduct. The risk of injury from criminal acts arises not from the conduct of the landlord, but from the conduct of a third person.
Where, as here, the conduct of the parties is regulated neither by statute, ordinance, or regulation, nor by the lease-contract itself, the courts have struggled with the issue of whether liability may be imposed upon a landlord for criminal acts.
As has been ably detailed in the Opinion of the Court, although the creation of the landlord-tenant relationship in and of itself does not impose a duty on the landlord to provide security services to a tenant, where a landlord voluntarily undertakes to provide protection from criminal acts he has a duty to do so reasonably. Liability is to be imposed only where the measures taken by the landlord either are unreasonable to reduce the risk of harm or have the effect of increasing the risk of harm; or where the landlord fails to maintain the measures which have been adopted in their normal operable condition.
Although it has never bеen generally accepted that a landlord undertakes an obligation to protect the premises, and the tenant, from the risk of harm from third parties simply by leasing premises to a tenant, Appellees argue that public policy dictates that we now so hold. As this Court stated, however, in Mamlin v. Genoe,
[t]he right of a court to declare what is or is not in accord with public policy does not extend to specific economic or social problems which are controversial in nature and capable of solution only as the result of a study of various factors and conditions. It is only when а given policy is so obviously for or against the public health, safety, morals or welfare that there is a virtual unanimity of opinion in regard to it, that a court may constitute itself the voice of the community in so declaring. There must be a positive, well-defined, universal public sentiment, deeply integrated in the customs and beliefs of the people and in their conviction of what is just and right and in the interests of the public weal.
. In Kline, the level of security services which had been provided by the landlord at the inception of the lease had deteriorated. The application of contract principles was, therefore, peculiarly appropriate because of this decline in the protective measures which had been in existence at the time the parties had entered into the lease. The expansive language of the opinion made it apparent, however, that the court would not be inclined to limit liability to those instances in which the level of existing measures had been relaxed.
. The implied warranty/contract analysis must also be rejected for the further reason that the remedies available thereunder are inconsistent with the remedies sоught in a tort action such as this. In Pugh v. Holmes we noted that where a landlord breaches the implied warranty of habitability, the tenant may a) vacate the premises thereby terminating his obligation to pay rent, b) remain in possession and assert the implied warranty as a defense in an action for unpaid rent, c) make necessary repairs at his own expense and deduct the cost from the amount of rent due, or d) pursue other "traditional” contract remedies such as specific performance. See generally,
. The structural soundness of the premises is readily subject to inspection and correction, even in the absence of knowledge of a particular defect. Without actual notice of criminal activity, however, the protective integrity of the premises, its soundness against the risk of harm from the intentional misconduct of unknown third parties, is not similarly susceptible to meaningful examination. Possible dеficiencies in this regard are infinite, limited only by the imagination.
. Unlike Pennsylvania, other jurisdictions have adopted regulations which define the minimum standards for safety in multiple dwellings. For example, the New Jersey legislature has authorized its State Commissioner of Community Affairs to promulgate regulations for the maintenance of multiple dwellings pursuant to the Hotel and Multiple Dwelling Law, N.J.S.A. 55: 13A-1 et seq. In Trentacost v. Brussel,