Premises Liability: The Exposure Your Business May Have Overlooked Molly Hughes
IADC Business Committee Newsletter  March 2008
Premises liability exposure arises in a variety of manners, from the slippery restaurant floor caused by food falling off the salad bar, to a wet floor at the bank’s entrance from the rain being tracked in by customers, to the attractive nuisance on a construction site created by building activities. Because of the myriad ways in which an accident may occur with a customer or other third party at a business, most companies carry a general liability policy sufficient to cover any liability claims which may arise at their place of business. However, there is one potential liability exposure at a place of business for which a general liability policy may not apply: architectural or other barriers prohibiting equal access to an individual with a disability, which may constitute a violation of the Americans with Disabilities Act of 1990.
A. Isn’t the Americans with Disabilities Act an Employment Statute?
When asked about the Americans with Disabilities Act of 1990 (“the ADA” or “the Act”), most businesses view it as an employment statute. However, the ADA is much more comprehensive in its scope, including addressing physical access for the disabled to public programs and activities, such as state and local government activities (Title II), and to private facilities or public accommodations (Title III). 28 C.F.R. §§ 36.101-36.103; ADA Title III Technical Assistance Manual, III-1.100. While Title III addresses a number of issues, the overriding prohibition of Title III is that no individual “shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.” 42 U.S.C. § 12182(a); 28 C.F.R. § 36.201. The purpose of Titles II and III is to ensure that people with disabilities have access to buildings, goods and services provided by public and private entities. Failure to provide this access can be costly for any business.
In 2000, Title III received much publicity in part as the result of a lawsuit filed against Clint Eastwood’s Mission Ranch Hotel in Carmel, California. The hotel was sued by a disabled individual for alleged violations of Title III of the ADA because various doors and bathrooms at the historic 32-room hotel and restaurant were allegedly not accessible to her. Ultimately, a verdict was reached finding two violations at the hotel for not having enough signs to the restroom and not having ramp access to the hotel office.
To date, numerous private businesses continue to face lawsuits by individuals with disabilities, claiming denied access or unequal access to or use of their facilities. For example, in 2005, a group of disabled passengers brought an action against Norwegian Cruise Line for violation of the ADA, alleging the ship maintained equipment in locations not accessible to disabled individuals. Spector v. Norwegian Cruise Ltd., 125 S.Ct. 2169 (2005). In July of 2006, the Fox Theater in Atlanta, Georgia, an historic theater owned by a non-profit company, was sued by a group of patrons claiming they and other wheelchair patrons were denied access to events comparable to the access given non-wheelchair patrons. Gathright-Dietrich v. Atlanta Landmarks, Inc., a.k.a. Fox Theatre, 452 F.3d 1629 (11th Cir. 2006).
Even more recently, in 2007, a deaf patient sued Northwest Medical Center and North Broward Medical Center in Florida under Title III of the ADA for failure to provide a sign language interpreter. Saltzman v. Board of Commissioners of the North Broward Hospital District, 2007 WL 1732893 (11th Cir. 2007). And, Jarek Molski, a paraplegic confined to a wheelchair who has filed hundreds of accessibility lawsuits under the ADA in California, most recently sued a well-known restaurant in California for numerous architectural barriers prohibiting his access to the bathroom, including allegations that the door pressure on the bathroom door was too heavy and that the door lacked a handicap accessible sign. Molski v. M. J. Cable, Inc., 481 F.3d 724 (9th Cir. 2007).
B. Does the ADA apply to my business?
The ADA applies to places of public accommodation. A public accommodation is a facility whose operations “affect commerce” and which fall within at least one of twelve categories including:
(1) places of lodging;
(2) establishments serving food or drink;
(3) places of exhibition or entertainment;
(4) places of public gathering;
(5) sales or rental establishments;
(6) service establishments such as a law office;
(7) stations used for specified public transportation;
(8) places of public display such as a museum or library;
(9) parks or zoos;
(10) places of education including nurseries;
(11) homeless shelters or other social service center establishment;
(12) places of exercise or recreation such as a gymnasium, health spa, or bowling alley.
42 U.S.C. § 12181(7); 28 C.F.R. § 36.104; ADA Title III Technical Assistance Manual III-1.2000. Therefore, hotels, bars, restaurants, movie theaters, grocery stores, and private schools are all affected by Title III. The twelve categories (more detailed than that contained above) constitute an exhaustive list. ADA Title III Technical Assistance Manual III-1.2000. However, the categories listed simply provide illustrations of the facilities covered and, in actuality, encompass a much wider range than the examples given.
C. What does the ADA require of my business?
Title III prohibits discrimination against an individual with a disability by a place of public accommodation. 42 U.S.C. § 12182(b)(2)(A). While it is not possible to address all of the types of discrimination, the most notable is failure to remove architectural barriers in existing buildings when readily achievable. Id. at § 12181(b)(2)(A)(ii), (iv)and (v); 28 C.F.R. §§ 36.302, 36.304 and 36.305. When addressing the removal of architectural barriers, the overall policy of the ADA is to require relatively few changes to existing buildings, but to impose extensive design requirements when buildings are constructed, modified or replaced on or after January 26, 1992. See Coalition of Montanas Concerned with Disabilities, Inc. v. Gallatin Airport Authority, 957 F. Supp. 1166 (D. Mont. 1997); 28 C.F.R. § 36.401.
While existing buildings are not required to undertake major renovations, they are required to remove architectural barriers when “readily achievable” to do so. 42 U.S.C. § 12182(2)(A)(iv). An architectural barrier is a physical element of a facility that impedes access to people with disabilities. ADA Title III Technical Assistance Manual, III-4.4100. While it includes obvious impediments such as steps and curbs that prevent access by people who use wheelchairs, it also includes telephones, drinking fountains, mirrors and paper towel dispensers that are mounted at a height that makes them inaccessible to people who use wheelchairs. ADA Title III Technical Assistance Manual, III-4.4100.
There are certain exceptions to the access and barrier removal provisions for public accommodations. For example, no entity shall be required to permit disabled individuals to participate in or benefit from public accommodations where such an individual poses a direct threat to the health and safety of others. 42 U.S.C. § 12182(b)(3). The ADA also has an “elevator exemption.” For new and existing buildings, elevators are not required in buildings under three stories or with fewer than 3000 square feet per floor, unless the building is a shopping center or mall; professional office of a health care provider; public transit station; or airport passenger terminal. 28 C.F.R. § 36.404.
D. What is the exposure to my business for failure to comply with the ADA?
In addition to permitting suits by the U.S. Attorney General, the ADA allows any person who is “being subjected to discrimination of the basis of disability” in violation of the ADA to bring a private suit for injunctive relief. 42 U.S.C. § 12188(a)(1); 28 C.F.R. § 36.501(a). This is the kicker for purposes of general liability insurance, specifically whether the policy insuring your business would cover the costs of construction to remove an architectural barrier.
Another point of interest for purposes of insurance coverage is whether your business’s property insurance would cover compliance with the ADA, particularly in the case of modifications to your building as a result of property damage. To that end, of note is a recent case, Regents of the Mercersburg College v. Republic Franklin Insurance Company, wherein a private secondary and college preparatory boarding school sued its property insurer for bad faith and breach of contract after the insurer refused to pay for alterations to a hall at the school that was damaged by lightning strike and fire. 458 F.3d 159 (3rd Cir. 2006). At issue in that case was whether the school’s property insurance covered the costs to bring the building into compliance with the ADA. The primary policy only provided coverage for repairs necessary to return the property to its pre-fire condition. However, the school purchased a separate “Ordinance and Law Endorsement” to its policy, which provided coverage for the cost to repair a building caused by enforcement of a building, zoning or land use ordinance of law. The Third Circuit Court of Appeals reversed the district court’s grant of summary judgment and remanded the case for consideration of whether Title III of the ADA triggered coverage under the school’s endorsement policy.
Additionally, although only injunctive relief is permitted, the incentive for an attorney to take a plaintiff’s case is increased by the potential for an award of attorneys fees. 28 C.F.R. § 36.505. While this provision is designed to encourage an individual with a disability to bring a claim to remove architectural barriers or at least assist them in their ability to do so, the attorneys fees provision is also subject to abuse and has caused many complaints. For example, in Clint Eastwood’s case, the plaintiff’s attorney claimed that he had expended $577,000 in legal fees. Moreover, during the same time period, more than 600 large and small businesses in several Florida counties had been faced with ADA suits demanding better access, most of which were brought by two lawyers on behalf of a neighbor’s disabled daughter and often settled quickly with legal fees in the range from $5,000 to $20,000. Miami Daily Business Review, “Congressmen Rein in ‘Rogue’ Disabled Access Suits” (February 8, 2000 Dan Christensen).
Most recently, a federal court in California declared Mr. Molski a “vexatious litigant” who exploits the ADA for pecuniary gain and required him to seek court approval prior to filing any future lawsuit. Molski v. Mandarin Touch Restaurant, 347 F.Supp.2d 860 (C.D.Cal. 2004). Mr. Molski has brought hundreds of lawsuits against inaccessible public accommodations throughout California.
Failure to comply with Title III of the ADA has costly consequences for a business, from the costs of bringing a building into compliance with the ADA to the payment of a plaintiff’s attorneys fees. Anyone faced with accessibility issues should consult the regulations and assistance manuals as resources for answering questions which may arise, as well as consult their general liability and property insurance policies to determine whether they may be coverage in any particular instance. |
