209 F.3d 960 (7th Cir. 2000), 99-1766, Mallak v. Fairfield FMC Corp.

Docket Nº:99-1766
Citation:209 F.3d 960
Party Name:H.K. Mallak, Inc., Plaintiff-Appellant, v. Fairfield FMC Corp., Defendant-Appellee.
Case Date:April 11, 2000
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 960

209 F.3d 960 (7th Cir. 2000)

H.K. Mallak, Inc., Plaintiff-Appellant,

v.

Fairfield FMC Corp., Defendant-Appellee.

No. 99-1766

In the United States Court of Appeals, For the Seventh Circuit

April 11, 2000

Argued November 16, 1999

Rehearing En Banc Denied May 9, 2000.

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 96-C-1207--Lynn Adelman, Judge.

Before Eschbach, Coffey, and Diane P. Wood, Circuit Judges.

Diane P. Wood, Circuit Judge.

This diversity case requires us to construe a Wisconsin statute designed to protect what the common law quaintly called "innkeepers"--today's hotels and motels-- from potentially astronomical liability for theft of property stored by guests in their rooms. The thieves here were either exceptionally lucky or they knew only too

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well who their target was. As he stepped into his room for the first time, with more than $1 million in diamonds wrapped around his body, salesman Eshagh Kashimallak was assaulted by masked men and stripped of his valuable inventory. Kashimallak and his employer, H.K. Mallak, Inc. ("Mallak") sued Fairfield FMC Corp., the owner of the hotel, seeking respectively damages for personal injuries and property loss. The district court granted summary judgment for Fairfield on Mallak's property claim, and, after oral argument in this court, entered a judgment dismissing Kashimallak's claim with prejudice. Only Mallak has appealed. The narrow question now before us is whether the Wisconsin statute on which the district court relied unequivocally bars Mallak's right to recover. We conclude that it does not, and we therefore reverse and remand for further proceedings.

The underlying facts, which we recount in the light most favorable to Mallak, do not involve much more than what we have already described. Kashimallak was a salesperson for Mallak, a wholesale jewelry business incorporated in New York, with its principal place of business in that state. Kashimallak is also a citizen of New York. Kashimallak covered a wide geographical area for Mallak, including the state of Wisconsin. On August 23, 1995, he checked into the Fairfield Inn in Brookfield, Wisconsin, which was managed and operated by defendant Fairfield FMC Corp. (a Delaware corporation with its principal place of business in Maryland). This was not his first visit to that Fairfield Inn; he had stayed there seven or eight times previously on earlier business trips to Wisconsin.

The Fairfield Inn at Brookfield does not assign a room number to a guest with a reservation until he or she checks in at the front desk. At that time, the guest signs the reservation card, the clerk hands the guest a plastic key card (known as a "ving" card) that opens the security door to both the floor and the guest's room. It took only two or three minutes for Kashimallak to complete this process when he arrived on August 23. He received his key card and was assigned to room 334. Unbeknownst to Kashimallak, however, there were two peculiarities about room 334 that affected its security. First, four days before his arrival, the hotel had re-keyed room 334 (a step it did not ordinarily take between guests) in order to prevent a guest who had been evicted from the room from re-entering it. At that point, room 334 had three new key cards, the standard number for all rooms at the hotel. Three other guests may have used the room between the re- keying and Kashimallak's arrival. But by the time Kashimallak checked in, only two key cards to room 334 remained and the third was missing. No one told Kashimallak about the missing key when he checked in, or the fact that the holder of the missing key would have access to his room.

After he checked in, Kashimallak went directly to his room, carrying two bags. One bag contained his personal effects and the other contained jewelry. He also was carrying jewelry in a special vest and a "money belt" hidden under his shirt. He took the elevator to the third floor, where his room was located, seeing no one either on the elevator or in the hall as he walked to his room. Between the elevator and his room, he had to use his key card twice: once to pass through the locked security door for the floor, and once to get into room 334 itself. Once he had the door open, Kashimallak went into the room, closed the door behind him, secured the chain lock, turned around, and took one step. Two masked men attacked him violently, punching him in the head, threatening him with a gun, and robbing him of the jewelry in the bag, the vest, and the money belt. The attackers stole more than $1 million in loose diamonds, bracelets, necklaces, pendants, earrings, and solitaire diamonds. Neither the attackers nor the stolen property was ever found; thus, at this point no one knows whether the assaulters were ordinary thieves who had crept into the hotel undetected and were lucky enough to choose Kashimallak as their intended

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victim, hotel employees doing an inside job, or people who knew Kashimallak's business and who had managed to reach room 334 just before he did.

Mallak and Kashimallak filed suit against Fairfield in the United States District Court for the Eastern District of New York, seeking damages for Mallak's property loss and Kashimallak's personal injuries. Later, the case was transferred under 28 U.S.C. sec. 1404(a) to the Eastern District of Wisconsin. That court granted Fairfield's motion for summary judgment on Mallak's claim on January 21, 1999, finding that the Wisconsin Hotelkeeper's Liability statute, Wis. Stats. sec. 254.80, barred the property claim as a matter of law. Initially, the parties stipulated that Kashimallak's claim would be dismissed without prejudice and without costs, and that the statute of limitations on that claim would be tolled until the expiration of the final appeal period for Mallak's claim. This court pointed out to the parties at oral argument that this disposition in substance did not dispose of all claims of all parties, as required by 28 U.S.C. sec. 1291 and our decisions in JTC Petroleum Co. v. Piasa Motor Fuels, Inc., 190 F.3d 775 (7th Cir. 1999), and Continental Casualty Co. v. Anderson Excavating & Wrecking Co., 189 F.3d 512 (7th Cir. 1999). Although we ordered supplemental briefing on the jurisdictional issue, the parties responded by returning to the district court, which promptly entered an order on November 18, 1999, dismissing Kashimallak's personal injury claim...

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