2 United States Court of Appeals,
Fifth Circuit.
No. 94-10786.
Joe Frank WASHINGTON, Plaintiff-Appellant,
v.
RESOLUTION TRUST CORPORATION, as Receiver of Independent American
Savings Assoc., etc., et al., Defendants,
Resolution Trust Corporation, as Receiver of Independent American
Savings Assoc., etc., Defendant-Appellee.
Nov. 10, 1995.
Appeal from the United States District Court for the Northern
District of Texas.
Before HIGGINBOTHAM and PARKER, Circuit Judges, and TRIMBLE1,
District Judge.
ROBERT M. PARKER, Circuit Judge:
Appellant Joe Washington ("Washington") appeals the summary
judgment dismissal of his state law negligence action against the
Resolution Trust Corporation ("RTC"). Washington argues that the
district court misapplied Texas negligence law to the summary
judgment evidence and abused its discretion in not allowing him to
supplement the record after judgment. Because we find that the
district court erred in its analysis of Texas negligence law, and
because Washington did not have adequate notice of that portion of
the summary judgment entered sua sponte, we reverse the summary
judgment and remand for further proceedings.
FACTS
1
District Judge of the Western District of Louisiana,
sitting by designation.
1
Washington was an employee at NuLook Dry Cleaners ("NuLook"),
located at the Bruton Masters Retail Center ("Retail Center"), a
strip shopping center in Dallas, Texas. The store fronted on a
common area and parking lot owned and controlled by the Retail
Center. John Kapdia, NuLook's owner, privately leased the area
inside NuLook. In the late afternoon of May 14, 1992, three men
entered NuLook as part of a robbery. During the crime, Washington
was shot in the head.
Washington filed suit in state court against Kapdia, P. O'B.
Montgomery & Company, the property management company, and
Independent American Savings Association ("IASA"), the one-time
owner of the Retail Center. He claimed that IASA should be liable
because they had not provided adequate security. As IASA had
failed, however, its assets at the time of suit were held by the
RTC. The RTC removed the case to federal court and sought summary
judgment on the ground that it owed no duty to protect Washington
from third-party intentional torts occurring within NuLook's
premises.
Washington settled or dismissed his claims against Kapdia and
the management company. The district court then granted summary
judgment for RTC against Washington because it concluded that
Washington had not shown that the Retail Center attracted or
provided a climate for crime, a showing which, according to the
district court's analysis, was necessary to prove that the RTC owed
a duty of care under a premises liability theory. The district
court also found that Washington had not submitted sufficient
2
evidence to establish a fact question on breach or proximate cause.
Washington then moved to supplement the record and have the
district court reconsider its judgment. This motion was denied.
RTC'S DUTY TO WASHINGTON UNDER TEXAS LAW
a. Standard of review
We review a grant of summary judgment de novo, applying the
same standard as the district court. Hanks v. Transcontinental Gas
Pipe Line Corp., 953 F.2d 996, 997 (5th Cir.1992). Summary
judgment is appropriate "if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." FED.R.CIV.P. 56(c).
We begin our determination by consulting the applicable Texas
substantive law to determine what facts and issues are material.
See United States v. Muniz, 374 U.S. 150, 153, 83 S.Ct. 1850, 1853,
10 L.Ed.2d 805 (1963) (holding that substantive state law applies
in civil actions against the United States under Federal Torts
Claims Act); see also 28 U.S.C. § 1346(b) (1993) (Federal Torts
Claims Act). We then review the evidence relating to those issues,
viewing the facts and inferences in the light most favorable to the
non-movant. Transcontinental Gas Pipe Line Corp., 953 F.2d at 997.
If the non-movant sets forth specific facts in support of each
allegation essential to his claim, a genuine issue is presented.
Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555,
91 L.Ed.2d 265 (1986).
3
b. Washington's relationship to RTC
No Texas court has decided whether a duty exists in this
unique fact situation. We are therefore charged with making an
Erie2 prediction concerning what the Texas courts would do if they
were faced with the question before us.
As a preliminary matter, we must determine Washington's
relationship to the RTC at the time of the shooting. The district
court held, and the parties do not dispute, that Washington was a
business invitee. An invitee is one who enters onto another's land
with the owner's knowledge and for the mutual benefit of both
parties. Rosas v. Buddies Food Store, 518 S.W.2d 534, 536
(Tex.1975); Ronk v. Parking Concepts of Tex., Inc., 711 S.W.2d
409, 411 (Tex.Civ.App.—Ft. Worth 1986, writ ref'd n.r.e.). RTC
knew that NuLook would have someone in charge of the dry cleaning
operations. Washington, as an employee of NuLook who benefitted
NuLook and in turn benefitted RTC, was a business invitee under
Texas law, according to the district court's analysis. It is well
settled Texas law that an occupier of land owes a duty of ordinary
care to make and keep the premises safe for his invitees.
Atchison, Topeka and Santa Fe Railroad Co. v. Smith, 563 S.W.2d 660
(Tex.Civ.App.—Waco 1978, writ ref'd n.r.e.).
However, regardless of whether Washington was a business
invitee, he enjoyed a landlord-tenant relationship with RTC. A
landlord is generally not liable to a tenant for injuries caused by
2
Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817,
82 L.Ed. 1188 (1938).
4
an unsafe condition, which can include the unreasonable risk of
harm from criminal intrusions, unless the landlord was aware of the
condition at the time the premises were let. Exxon Corp. v.
Tidwell, 867 S.W.2d 19, 21 (Tex.1993). But when the landlord
retains some possession or control over a portion of the premises,
it is charged with the duty of ordinary care to the tenant and its
employees in maintaining the portion retained. Id. In such a
situation the duties owed by the landlord to an employee of the
tenant are the same as those owed by the landlord to the tenant.
Id., citing Flynn v. Pan Am. Hotel Co., 143 Tex. 219, 183 S.W.2d
446, 449 (1944). Because the duty of ordinary care owed to an
invitee is the same under Texas law as that owed to a tenant in so
far as it pertains to the common area controlled by the landlord,
we cannot say that the district court erred in applying invitee law
to Washington's claims.
c. The nature of the duty owed
Generally, a landowner has no duty to prevent criminal acts
of third parties who are not under the landowner's supervision or
control. See El Chico Corp. v. Poole, 732 S.W.2d 306, 313
(Tex.1987). A landowner does, however, have a duty to protect
invitees on the premises from criminal acts of third parties if the
landowner knows or has reason to know of an unreasonable risk of
harm to the invitee. Exxon Corp. v. Tidwell, 867 S.W.2d 19
(Tex.1993). This duty developed out of the premise that the party
with the "power of control or expulsion" is in the best position to
protect against the harm, and when that party, by reason of
5
location, observation or past experience, should reasonably
anticipate criminal conduct on the part of third persons, that
party has a duty to take precautions against it. Id. at 21. In
this context, Texas courts weigh risk, foreseeability, and
likelihood of injury against the social utility of the actor's
conduct, the magnitude of the burden of guarding against the injury
and the consequences of placing that burden on the defendant. Otis
Eng'g Corp. v. Clark, 668 S.W.2d 307, 309 (Tex.1983). Among the
Otis Eng'g factors, foreseeability has long been considered the
most significant. Corbin v. Safeway Stores, Inc., 648 S.W.2d 292
(Tex.1983). While the existence of a duty is a question of law for
the court to decide, if foreseeability requires resolution of
disputed facts or inferences, these questions are inappropriate for
legal resolution. Kendrick v. Allright Parking, 846 S.W.2d 453,
458 (Tex.App.—San Antonio 1992, writ denied).
There was evidence that this tenant alone had ten prior
robberies and RTC had in fact taken precautions against such
incidents by hiring part time security guards. If the fact finder
concludes that RTC had recognized the danger and responded to it,
the factual basis of foreseeability must be resolved against RTC.
In premises liability cases, control is also a central factor
in deciding the question of duty. When an employee attempts to
hold someone with contractual ties to both the land and his
employer liable for negligence in failing to prevent harm inflicted
by a third party which would not have occurred but for the
operation of the business, we must examine whether the defendant
6
had the right of control over the security defects which allegedly
led to the injury. Brooks v. National Convenience Stores, Inc.,
897 S.W.2d 898, 903 (Tex.App.—San Antonio 1995, n.w.h.), citing
Exxon Corp. v. Tidwell, 867 S.W.2d 19 (Tex.1993). Texas courts
look to the written agreement governing the relationship between
the landowner and the lessee, as well as any evidence of actual
exercise of control by either party. Tidwell, 867 S.W.2d at 22.
It is undisputed in the record on appeal that RTC exercised actual
control over the safety and security of common area. While the
bedrock issue is right of control, evidence of actual control is
relevant insofar as it shows a right of control not manifested by
the agreements between the parties, or even in derogation of the
written agreements. Id. at 21 n. 3 and 22.
The district court relied on Castillo v. Sears, Roebuck &
Co., 663 S.W.2d 60 (Tex.Civ.App.—San Antonio 1983, writ ref'd
n.r.e.), a twelve year old intermediate appellate court opinion,
which states:
There is no duty upon the owners or operators of a shopping
center, individually or collectively, or upon merchants and
shopkeepers generally, whose mode of operation of their
premises does not attract or provide a climate for crime, to
guard against the criminal acts of a third party, unless they
know or have reason to know that acts are occurring or are
about to occur on the premises that pose imminent probability
of harm to an invitee; whereupon a duty of reasonable care to
protect against such act arises.
Id. at 66. Based on this articulation of the Texas law of duty,
the district court concluded that Washington's summary judgment
evidence failed because it did not raise a genuine issue of
material fact concerning whether RTC's operation of the Retail
7
Center "attracted or provided a climate for crime" or that RTC knew
or had reason to know that "criminal acts were occurring or were
about to occur that posed imminent probability of harm to an
invitee." The district court's ruling is in error.
The common law of torts, including the concept of duty,
evolves in light of the changing conditions and circumstances of
society. El Chico Corp., 732 S.W.2d at 310-11. Texas courts now
recognize that violent crime has become a significant and pervasive
social problem and have imposed a duty to take affirmative action
to control or avoid increasing the danger from another's conduct
that the actor has at least partially created.3 Berly v. D & L
Sec. Serv. & Investigation, Inc., 876 S.W.2d 179, 188
(Tex.App.—Dallas 1994, writ denied). This is a broader duty than
the Castillo court recognized in 1983. However, it is at least
arguable that the facts of this case may meet the Castillo test as
well.
The record on appeal contains evidence that the lease was
silent regarding who was responsible for providing security in the
parking lot/common area, but that RTC had assumed that
responsibility by hiring an off duty police officer a few hours a
week. There is also evidence that NuLook had been robbed ten times
3
The question of whether RTC "at least partially created"
the danger that resulted in Washington's injury by negligently
failing to adequately provide for safety and security of the area
is a problem of causation rather than duty. In the event this
case survives for trial, Washington must prove that any such
negligence was causally connected to his injuries and damages.
Causation is not before us. Consequently, we do not reach that
question.
8
prior to Washington's injury and that the budget devoted to
security had more than tripled between 1989 and 1992. Further, it
is undisputed that the person who shot Washington gained access to
NuLook from the common area. Based on this evidence, we find that
Washington created a genuine issue of material fact concerning both
foreseeability and control. A rational fact finder could conclude
that the history of repeated robberies in NuLook committed by
individuals who gained access to NuLook's leased premises from the
common area, combined with a rapidly growing budget devoted to
providing premises security over this same time period established
that a crime problem at the Retail Center directly affecting NuLook
was foreseeable. A rational fact finder could further conclude
that by setting the security budget and deciding the type and
amount of security to provide, the RTC controlled the center's
safety and security response to that problem. We therefore hold
that the district court's grant of summary judgment for RTC on the
question of duty was error.
BREACH AND CAUSATION
The district court went on to hold that even assuming that RTC
had a duty to provide security, Washington failed to submit
evidence that raised a fact issue as to breach or causation.
Washington moved to supplement the record and to have the district
court reconsider the summary judgment. Because RTC's motion for
summary judgment was based on the issue of duty, Washington argued
that he did not have notice that the district court would reach the
questions of breach and causation, and for that reason did not
9
submit summary judgment evidence on those questions. RTC opposed
the motion, taking the position that the district court's ruling on
duty mooted Washington's claims on breach and causation, and the
district court denied the motion without a discussion of its
reasons. On appeal, Washington contends that the district court
erred in denying him the opportunity to supplement his summary
judgment record prior to ruling on breach and causation. We agree.
District courts can enter summary judgment sua sponte, so
long as the losing party has ten days notice to come forward with
all of its evidence. Judwin Properties, Inc. v. United States Fire
Ins. Co., 973 F.2d 432, 436-37 (5th Cir.1992). The record on
appeal supports Washington's contention that he did not have notice
as required by Rule 56 of the Federal Rules of Civil Procedure. We
review such failure for harmless error. Leatherman v. Tarrant
County Narcotics Intelligence & Coordination Unit, 28 F.3d 1388,
1398 (5th Cir1994). In this case, we cannot say that the lack of
notice was harmless. The focus of the motion for summary judgment
and the district court's order was the issue of duty. When
Washington moved to submit more evidence, the RTC's response again
focused on the fact that without a finding of duty, breach and
causation were moot. Breach and causation, far from being moot,
may be the central controlling issues of Washington's claim. The
evidence should be fully developed on summary judgment or at trial
before the court is called upon to decide them. RTC contends that
it had no duty to Washington because he was not within the common
area controlled by RTC at the time of the shooting. Clearly RTC
10
had no duty to provide security inside NuLook. However, rather
than duty, Washington's location inside NuLook creates a problem of
establishing a causal connection between any breach of duty on the
part of RTC to adequately provide for the safety and security of
the common area and the criminal activity occurring within NuLook.
To summarize, Washington must prove that RTC breached its duty
to him as an employee of a tenant (NuLook) by negligently failing
to provide adequate security in the common area and that such
failure was a proximate cause of his injuries and damages.
CONCLUSION
For the foregoing reason we REVERSE the summary judgment
granted by the district court to RTC, and REMAND for further
proceedings consistent with this opinion.
11