Mall Owner Released from Liability for Jewelry Theft

Facts: A jewelry vendor signed a license agreement to sell its inventory from a kiosk in a mall. At the end of the day, the tenant would store its inventory in a safe contained within its space. The space was then closed off and the mall itself was not accessible to the public overnight. Thieves broke into the mall and stole jewelry from the safe.

The licensee asked the mall owner to reimburse it for the cost of the stolen items. The mall owner refused. The licensee sued the mall owner. It claimed that the mall owner was responsible for the items because it had an “implied-in-law bailment,” or a “constructive bailment,” which may be found where the property of one party is voluntarily received by another for some purpose other than that of obtaining ownership. In other words, because the mall owner had temporary custody of the items overnight, it was responsible for their safe return to the actual owner, the licensee.

A trial court dismissed the case. The licensee appealed.

Decision: An Illinois appeals court upheld the trial court’s decision.

Reasoning: The appeals court determined that the retail space license agreement refuted the allegation that a bailment was created by an implied agreement between the licensee and the owner. The license agreement required the licensee to obtain fire and other required insurance at its own expense, and specified that the owner “assumes no responsibility or liability for fire, theft, or damage to an operator’s location or property at any time.” The license agreement established that the licensee was merely a licensee of the mall owner for the use of a booth in its mall with no tenancy or other rights, stressed the appeals court. It pointed out that, “where a release is clear and explicit, the court must enforce it as written.” Here, the license agreement showed that the parties intended a license for the use of a sales booth and not a tenancy or other right giving rise to a cause of action for breach of an implied bailment.

• J&L Jewelry, Inc. v. EPK Mgmt., LP, September 2015