The Law

by Ron Davis True or false? A shopping center owner is never financially liable to the victim of a murder that occurs on the premises of a tenant. The answer, as determined by a Tennessee court, may surprise some shopping center owners. That’s because the circumstances involved may dictate that owners are in fact liable. In the Tennessee case, Northgate Shopping Center in Memphis was a seemingly unlikely target of a liability lawsuit after an employee of a tenant, Family Dollar Stores of Tennessee, Inc., died as a result of a criminal assault. The crime occurred inside the tenant’s store, and claims against Family General were settled through worker’s compensation insurance. The family of the crime victim then sued the shopping center’s owners. Family members charged that the owners “knew or should have known of criminal activity in the area” surrounding the shopping center and that the attack on the victim was “foreseeable.” The family members further maintained that the center’s owners “disregarded the known dangers of criminal activity” but failed to provide security measures at the shopping center. The shopping center’s owners in turn sued Family Dollar Stores and its insurer, claiming that the lease with the tenant required coverage that included the center’s owners. Stated the owners, “By failing and refusing to defend [the center’s owners] in the personal-injury lawsuit, [the insurer] is in breach of contract.” Moreover, the center’s owner added, “The tenant is in breach of contract for failing to procure adequate insurance as was required by the lease.” Finally, the center’s owners argued that the murder did not occur in the common area of the shopping center but in the premises occupied by the Family Dollar tenant. That meant, the owners added, that they were not liable. A Tennessee appellate court explained, however, that the lawsuit of the victim’s family actually allege acts or omissions of the shopping center’s owners in the common areas of the shopping center. In other words, the judges added, the lawsuit accuses the center’s owners of failing to take proper security measures, not within the Family Dollar premises, but in the areas that the shopping center controlled. Furthermore, the judges ruled, “the lease does not require Family Dollar to obtain insurance against a premises liability lawsuit brought against the center’s owners for damages allegedly sustained as a result of acts or omissions in the center’s common areas.” (Union Realty Company v. Family Dollar Stores of Tennessee, Slip Copy, 2007 WL 3407519 [Tenn.Ct.App.]) Decision: November 2007 Published: January 2008