Tuesday, May 10, 2011

PARK AND PAY: Liability of hotels for guest’s vehicle

By Obiter07

In “DURBAN APARTMENTS CORPORATION doing business under the name and style of City Garden Hotel vs. PIONEER INSURANCE AND SURETY  CORPORATION,” G.R. No. 179419  (January 12, 2011),  the Supreme Court passed upon the liability of hotels for providing valet parking to guests.

This arose after a hotel guest, and Pioneer’s insured, checked into the City Garden hotel in Makati. The hotel’s parking attendant and co-defendant got the keys to the guest’s vehicle and parked it an adjacent lot owned by a third party.  The guest was subsequently awakened so as to be advised that his car had been taken. The guest made the necessary reports and thereafter filed a claim for insurance with Pioneer which paid the same as indemnity for the vehicle’s loss.  Pioneer alleged that the loss was an offshoot of the hotel’s negligence and accordingly filed a claim by means of subrogation, against the hotel and its parking valet. It was established that there was a previous similar incident and yet no “no necessary precautions were taken to prevent its repetition xxx”.  Pioneer argued that the hotel was “was wanting in due diligence in the selection and supervision of its employees particularly its parking valet.”

On a procedural note, Pioneer was allowed to present evidence ex parte in view of the hotel’s failure to file a pre-trial brief and to appear at pre-trial.

The Hotel argued that the insured was not a guest of the hotel but a visitor therein, that its valet did not get his keys but it was the insured who requested him to find a space wherever one was available, that valet parking was provided for convenience of its customers and that it was a special privilege that was given to the insured.  The vehicle was taken without using the key which was even turned over to the owner. Its valet even tried to run after the carnappers to no avail.

 The guest testified that he drove his vehicle in front of the hotel where the parking attendant approached and asked him for his key, and issued a “valet parking customer’s claim stub.”  He then checked in at the hotel with a companion.  At around 1 a.m., he was advised of the carnapping incident.   An adjuster testified that based on his investigation, the hotel would assist guests in parking, and with only 12 parking slots, entered into an agreement with an adjacent bank to use the latter’s space at night. He discovered that a van had been carnapped from the same lot barely a month before.

The lower court ruled in favor of Pioneer and ordered Durban to pay the “sum of P1,163,250.00 with legal interest thereon from July 22, 2003 until the obligation is fully paid and attorney’s fees and litigation expenses amounting to P120,000.00.”   This was affirmed by the Court of Appeals.

The High Court upheld the ruling that the hotel was in “default for failure to appear at the pre-trial conference and to file a pre-trial brief, and thus, correctly allowed respondent to present evidence ex-parte.”  It also affirmed the finding that it was liable for the loss of the vehicle. The procedural aspect will not be dealt with in detail here.

Despite the finding of default, the Supreme Court emphasized that “defendant’s (petitioner’s) preclusion from presenting evidence during trial does not automatically result in a judgment in favor of plaintiff (respondent). The plaintiff must still substantiate the allegations in its complaint. 

It found that the allegations of Pioneer in the complaint were substantiated, “i.e., a contract of necessary deposit existed between the insured xxx and petitioner. On this score, we find no error in the following disquisition of the appellate court:

[The] records also reveal that upon arrival at the City Garden Hotel, See gave notice to the doorman and parking attendant of the said hotel, x x x Justimbaste, about his Vitara when he entrusted its ignition key to the latter. x x x Justimbaste issued a valet parking customer claim stub to See, parked the Vitara at the Equitable PCI Bank parking area, and placed the ignition key inside a safety key box while See proceeded to the hotel lobby to check in. The Equitable PCI Bank parking area became an annex of City Garden Hotel when the management of the said bank allowed the parking of the vehicles of hotel guests thereat in the evening after banking hours.
Interesting is the finding that the bank’s parking area was deemed an “annex” to the hotel.  A hotel’s use of an adjacent lot appears to subject the same to its control.  

The Court cited Article 1962, in relation to Article 1998, of the Civil Code:
“Art. 1962. A deposit is constituted from the moment a person receives a thing belonging to another, with the obligation of safely keeping it and returning the same. If the safekeeping of the thing delivered is not the principal purpose of the contract, there is no deposit but some other contract.

Art. 1998. The deposit of effects made by travelers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects.”

The insured deposited the vehicle for safekeeping with the hotel, through its employee.  This employee issued a claim stub to the insured. The contract of deposit was perfected from the delivery of the vehicle, when the keys were handed over to the hotel’s employee, and which he “received with the obligation of safely keeping and returning it.”   

This could conceivably be used as basis for users of mall and other public parking lots to claim indemnity for loss or damage to their vehicles.  It would be interesting to see if the practice of placing disclaimers of liability in the parking stub, as well as in signages, would be upheld by the courts as binding on the users. It does stand to reason that when you are made to park and pay, parking lot providers owe a degree of care to insure your vehicle is kept safe and sound.  And if they fail to adhere to this standard, then they should be sorry they didn’t, as in this case.


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