Crinkley v. Holiday Inns, Inc.

• Decision Date: 07 April 1988
• Docket Number: No. 87-1547,87-1547
• Citation: 844 F.2d 156
• Parties: Sarah B. CRINKLEY; James E. Crinkley, Plaintiffs-Appellees, v. HOLIDAY INNS, INC.; Traveler's Management Corporation, a/k/a Travco; American Health Home, Inc.; Frank Schilagi; C. Roger Harris, Defendants-Appellants, and Tola J. Litaker, individually; Dennis L. Hall, individually; John A. Howard, Jr., individually and as partners in Summit Associates, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 156

844 F.2d 156

Sarah B. CRINKLEY; James E. Crinkley, Plaintiffs-Appellees, v. HOLIDAY INNS, INC.; Traveler's Management Corporation, a/k/a Travco; American Health Home, Inc.; Frank

Schilagi; C. Roger Harris, Defendants-Appellants,

and

Tola J. Litaker, individually; Dennis L. Hall,

individually; John A. Howard, Jr., individually

and as partners in Summit Associates, Defendants.

No. 87-1547.

United States Court of Appeals, Fourth Circuit.

Argued Oct. 6, 1987.

Decided April 7, 1988.

Stephen McDaniel Russell, Winston-Salem, N.C., Lloyd C. Caudle, Charlotte, N.C William Kearns Davis, Winston-Salem, N.C., for defendants-appellants.

Kennon C. Walden, Jr. (Walden & Walden, P.C., Blackstone, Va., on brief), Walter E. Clark, Jr., Greensboro, N.C., for plaintiffs-appellees.

Before HALL, PHILLIPS and WILKINSON, Circuit Judges.

JAMES DICKSON PHILLIPS, Circuit Judge:

This is a civil action in which various defendants associated with the Holiday Inns enterprise appeal from jury verdicts finding them liable for personal injuries inflicted by third persons upon the plaintiffs Crinkley, while the Crinkleys were guests in a Holiday Inn Motel. The defendants raise several issues on appeal, principally that the district court erred in denying their motion for judgment notwithstanding the verdict and in refusing to set aside the jury's verdicts as excessive and the product of improper considerations. We find no reversible error and affirm.

I

Sometime before the weekend of February 27, 28, 1981, the Crinkleys decided to attend a function being held during that weekend at the Charlotte, North Carolina Civic Center. They tried to reserve a room at the Holiday Inn-Charlotte, close to the center, but found that it was fully booked. Looking for alternate lodging, they consulted a Holiday Inn directory that they had obtained during a previous stay at a Holiday Inn. From it they selected the Holiday Inn-Concord and reserved a room for the nights of February 27 and 28. The Holiday Inn-Concord is located some twenty-odd miles north of Charlotte, just off Highway 29, which runs directly south into downtown Charlotte, and Interstate 85, which runs to and around the northern edge of Charlotte.

During the approximately two weeks preceding the weekend of February 27, guests at several Charlotte area motels had been assaulted and robbed on the premises by a group later dubbed the "Motel Bandits" in media reports. The motels involved were located throughout the metropolitan Charlotte area, and many of them were located close to Interstate 85. The assistant manager of the Holiday Inn-Concord, Brian McRorie, was aware of the Motel Bandits from the various news media. He was contacted by several unidentified members of the local County Sheriff's Office who wanted to know if McRorie was aware of the Motel Bandits and what plans he had for security at the motel while the Motel Bandits were at large. Some of these officers also offered to serve for a fee as security guards during their off duty hours, a security measure that the motel had used in the past, but did not avail itself of in this instance.

As a result of this information, McRorie contacted Jim Van Over about the possibility of hiring security guards to patrol the motel. Van Over was the manager of the Holiday Inn on Woodlawn Road in Charlotte, and had some supervisory responsibility over the Holiday Inn-Concord as an employee of defendant Travelers Management Corporation (TRAVCO), the entity in operational control of the Holiday Inn-Concord. Van Over was also the president of the Metrolina Innkeepers Association and had been interviewed for a newspaper story covering the Motel Bandits. In that article, he noted that his hotel had added security personnel for night patrols. As to McRorie's requests for additional security at the Concord property, however, Van Over concluded that extra security measures were not justified. McRorie did instruct his employees to be particularly alert for anything suspicious and he periodically patrolled the premises on February 27, the last time being sometime between 8:00 and 8:30 p.m. The motel also continued its program to encourage local law enforcement personnel to frequent the premises by offering a free snack tray and discount meals in the restaurant though it did not employ any as security guards.

At approximately 8:00 p.m. on February 27, the Crinkleys arrived at the Holiday Inn-Concord. After spending a short time checking in, they parked their car in front of their room and began unloading their baggage. As James Crinkley was bringing in the last of their items, Sarah Crinkley, who was standing in the doorway to their room, noticed a man come around the corner of the motel and begin walking toward them. When the man reached the Crinkleys' room, he stopped and asked to speak with James Crinkley. Almost immediately, the man began trying to push the Crinkleys into their room. Despite James Crinkley's efforts to resist him, the man succeeded in getting the Crinkleys into their room. The man was armed with a gun, and once inside he beat James Crinkley, turned on the television and called for his accomplices. He was joined in the room by two men who again beat James Crinkley, bound and gagged him, and put a mattress on top of him. After going through the Crinkleys' possessions, the men approached Sarah Crinkley. They pushed her down and asked for her money and her engagement ring. When she told them that the ring would not come off, one of the men put a gun to her head and told her that if she did not take it off, he would "blow her brains out." She got the ring off and gave it to the men. They then bound and gagged her before fleeing. She was able to free herself after a short time. She removed the mattress and gag from her husband and called the front desk for help. The desk clerk notified the Cabarras County Sheriff's Office and a deputy arrived at the Crinkleys' room within minutes.

The Crinkleys were taken to an area hospital for emergency medical care. James Crinkley sustained multiple bruises to his head and upper body region, as well as a severely broken jaw. His broken jaw was wired, a condition which lasted approximately six weeks. Sarah Crinkley's subsequent condition was more complicated. Before the assault she was under a doctor's care for hypertension and obesity. In April of 1982--approximately fourteen months after the assault--she suffered a heart attack. A balloon angioplasty was performed in an effort to clear the blockage in her arteries, but was not successful. After consulting with her doctors, she opted for heart by-pass surgery to treat her condition. In addition to her cardiac problems, friends and family noted that Sarah Crinkley's personality changed drastically after the assault. She became fearful, anxious and withdrawn. Her activities also were observed to be much more restricted. In early 1984, she began seeing a psychiatrist who diagnosed her as suffering from post-traumatic stress disorder and major affective disorder.

The Crinkleys brought suit against several defendants variously associated with the Holiday Inn-Concord alleging, inter alia, that the defendants were negligent by providing them inadequate security and that such negligence was the proximate cause of their injuries. After pre-trial rulings, Holiday Inns, Inc., TRAVCO, American Health Home, Inc., Frank Schilage, and Roger Harris remained as defendants. The last three were alleged to be liable as the actual owners of the motel. TRAVCO was alleged to be liable as the entity in actual day-to-day control of the operation of the motel, which was managed under a franchise agreement with Holiday Inns. Holiday Inns was alleged to be liable on the theory of actual authority or, alternatively, apparent agency. The basis of both agency theories was a franchise agreement, which gave Holiday Inns the right to control certain aspects of the motel's operation.

At trial, the Crinkleys relied primarily on the testimony of Brian McRorie to show that the assault was reasonably foreseeable. They introduced testimony from a security expert that the measures in effect at the Holiday Inn-Concord were inadequate to deal with the potential threat. The main deficiencies identified were inadequate fencing around the perimeter of the property, and the lack of no trespassing signs and of any security patrols. Medical experts opined that both Sarah Crinkley's heart attack and her psychological problems were due to the stress she continued to experience in the wake of the assault.

Following the denial of motions for directed verdict, the jury returned verdicts in favor of the Crinkleys against all the defendants above identified, finding in special verdicts that the criminal acts were reasonably foreseeable by the motel owners and TRAVCO, that those defendants were negligent in providing inadequate security, and that such negligence caused the Crinkleys' injuries. Holiday Inns was found vicariously liable on the basis of apparent agency. The jury awarded Sarah Crinkley $400,000 and James Crinkley $100,000 in compensatory damages.

Following the verdict, defendants moved for judgment notwithstanding the verdict or, conditionally, for a new trial. The motions were denied and this appeal followed.

II

We first consider defendants' contention that the district court erred in denying their motion for judgment n.o.v.

In a diversity case, the standard for assessing the sufficiency of the evidence to establish a submissible case under state substantive law is governed by federal law, Owens ex rel. Owens v. Bourns, Inc., 766 F.2d 145, 149 (4th Cir.1985) (citation omitted).

Under the federal standard, applied alike at trial and on review, the evidence and all reasonable inferences from it are assessed in the light most favorable to the non-moving party, Lovelace v. Sherwin-Williams Co., 681 F.2d 230, 243 n. 14 (4th Cir.1982), and the credibility of all evidence...