A shopper slips on a banana peel on the floor in the produce section of a grocery store and tears a ligament in her knee. A resident steps in a hole on the grounds of the apartment complex where he lives and breaks his ankle. A child drowns in a neighbor’s swimming pool. These are classic examples of incidents that are governed by the law of premises liability.
Jacob E. Daly
Premises liability is the area of the law that deals with the civil liability of an owner of property for injuries sustained by people on the property. The General Assembly enacted the general premises liability statute in 1895, and for close to a century the statute applied almost exclusively to incidents like the examples cited above. That is, incidents caused by an allegedly hazardous condition of the property.
Until the 1980s, application of the premises liability statute was largely confined to incidents caused by physical defects on property. Some early cases alleged that a property owner was liable for injuries caused by third-party crime, but the property owners in these cases usually were not liable because the third-party crime was considered to be the cause of the victim’s injuries. In other words, the third-party crime superseded the property owner’s alleged negligence in failing to prevent the third-party from committing the crime. The few early cases where a property owner was liable involved a known third-party.
In the 1980s, the courts dramatically changed this longstanding view of liability for third-party crime. Because third-party crime committed by unknown perpetrators is not constant, it is a condition of the property only in the abstract. It is a legal fiction created by the courts to expand the scope of the law of premises liability. Under this new expansive theory, the occurrence of past crimes could create a present hazardous condition that could trigger the property owner’s duty to exercise ordinary care to protect its invitees from crimes committed by unknown third-parties at unknown times. (An invitee is a person with whom the property owner has a mutually beneficial relationship, such as a customer of a business or a tenant of an apartment complex.) Somewhat perversely, this made property owners liable for crimes that the police were not able to prevent either.
Under this much more relaxed standard of liability, an owner could be liable for third-party crime on its property only if the crime at issue was reasonably foreseeable. Initially, a plaintiff could prove reasonable foreseeability by presenting evidence of prior substantially similar crimes on the property of which the owner had actual knowledge. The required degree of similarity between the prior crimes and the litigated crime was strict at first, but the Georgia Supreme Court loosened it in 1997 when it held that prior property crimes can be substantially similar to a violent crime. This again caused an expansion of the scope of the law of premises liability.
This standard prevailed until June 29, 2023, when the Georgia Supreme Court loosened it further by holding that the reasonable foreseeability of a third-party crime must be determined by the totality of the circumstances. This new standard is deeply flawed because it places virtually no limits on the types of evidence a jury may consider. For example, it seems to allow a jury to consider crimes that occurred in the surrounding neighborhood of the owner’s property even though the owner has no right or obligation to control crime on someone else’s property. Thus, not requiring evidence of prior substantially similar crimes as a limitation on liability will cause yet another expansion of the liability of property owners for third-party crime.
The consequences of this new standard are much worse than simply enriching plaintiffs and their attorneys. It greatly accelerated the trend of easing the burden of plaintiffs to prove liability, and so the likelihood of property owners being liable for third-party crime is substantially increased. Insurance companies are not in the business of insuring against virtually guaranteed liability, and so they are reacting. For example, some businesses that own and operate apartment complexes or gas stations no longer are able to obtain general liability insurance in Georgia, and for those that still can obtain general liability insurance, insurers are increasingly issuing such insurance only if it excludes coverage for claims that arise out of a crime or limits coverage for such claims to a ridiculously low amount, such as $25,000. Earlier this year, Donegal Insurance Group announced that it was exiting the commercial insurance market in Georgia because of “profitability challenges.” These things will damage Georgia’s business reputation by causing increases in insurance premiums and the costs of goods and services.
Another consequence of relaxing the standard for proving reasonable foreseeability in premises liability cases based on third-party crime is the likely increase in nuclear verdicts. Nuclear verdicts are verdicts that are unreasonably excessive in relation to the nature of the injury sustained by the plaintiff, the amount of medical bills, and other circumstances of the case. For example, in 2019 a DeKalb County jury returned an $81 million verdict for a man who was shot but not killed in the parking lot of a grocery store. Also in 2019, a Fulton County jury returned a $45 million verdict for a man who was shot but not killed in the parking lot of a drug store while attempting to sell an iPad. Nuclear verdicts have been a problem for many years, and this problem is likely to become worse without legislative intervention.
Fortunately, Gov. Brian Kemp recognizes the need to reform the law of premises liability. In a speech at the Georgia Chamber of Commerce Congressional Luncheon on August 8, 2023, he announced his intention to support tort reform during the 2024 session of the General Assembly. Specifically addressing the need to reform the law of premises liability and the impact of frivolous lawsuits on insurance and business costs, Gov. Kemp said, “business owners live in fear of being sued for ridiculous claims on their property.” Gov. Kemp has not yet specified the reforms he wants, but there is already a pending bill in the General Assembly. SB 186 was introduced in 2023 and passed the Senate Insurance and Labor Committee before being tabled for the remainder of the session. It would enact the Georgia Landowners Protection Act and would provide that a landowner may be liable to an invitee who is injured by a third-party crime on its property only if it (1) participated in the crime, or (2) had actual knowledge of the specific threat posed by the third-party criminal to the invitee and could have prevented the crime through reasonable action.
Whether through the enactment of SB 186 or some other law, reforming the law of premises liability with respect to claims against property owners based on third-party crime is necessary to level the playing field and to ensure that Georgia retains its favorable business climate.
Jacob E. Daly is Senior Counsel with Freeman Mathis & Gary, LLP in Atlanta where he primarily defends businesses, government entities, and individuals in personal injury cases, including premises liability cases. He is also the President of GDLA Action Fund, Inc., the lobbying arm of the Georgia Defense Lawyers Association. The views expressed in this article do not necessarily represent the views of Freeman Mathis & Gary, LLP or its clients, GDLA Action Fund, Inc., or the Georgia Defense Lawyers Association.
