Court rules against mall in security camera case
Toolbox
By Tom Mitchell STAFF WRITER - Published: November 30, 2009
QUECHEE—The Vermont Supreme Court has reversed a ruling that cleared owners of an antique mall of fraud and misrepresentation allegations related to a lack of security camera protection in a 2005 burglary during which coins and jewelry were stolen from two leased booths.
Timothy Puro leased a booth at Antique Mall at Quechee Gorge Village in 2005 to sell coins and currency and Steven Yoken leased a display booth at the site in 2002 to sell jewelry, according to court documents.
After suffering losses in a burglary on Sept. 7, 2005, Puro and Yoken alleged negligence, fraud and misrepresentation on the part of mall owner, Neal Enterprises Inc., doing business as Quechee Gorge Village, the court said.
In a joint action, both parties were induced to lease display booths based on the mall owner's misrepresentation of the security system and practices at the mall, they said. "We allege that the safety security of the premises was oversold," way beyond the reality of what was there, Kaveh Shahi, lawyer for the two plaintiffs said recently.
The high court found the mall was not entitled to a Windsor Superior Court's summary judgment in favor of the mall owners. The judgment was based on a lease contract clause, known as the exculpatory clause that mall owners said cleared them of liability.
The mall owner had filed a motion for summary judgment in the superior court based in part on a contention that they made no misrepresentations and the plaintiff's action was barred by the exculpatory clause, the high court said.
In reviewing the Consumer Fraud Act, the high court agreed with the plaintiff's claim that the contract's exculpatory clause didn't rule out the alleged counts of fraud, consumer fraud or negligent misrepresentation in the case. Decisions in other jurisdictions in New York, Massachusetts and Arizona support that result as to the fraud claims, the high court said.
The reversal sends the case to Windsor Superior Court to reconsider the fraud claim in proceedings consistent with the high court's decision.
The booth holders were consumers since they bought mall space, where mall personnel sold products to the public on leasees' behalf, Shahi said. "It preserves someone's right to challenge a transaction they have entered into, in this case … a lease agreement for display of goods at the Antique Mall," Shahi said of the high court decision.
The ruling left issues in dispute between the parties in the case, Samuel Hoar Jr. attorney for Neal Enterprises Inc. said. "We disagree as to what happened," Hoar said. There is also lack of agreement as to the legal consequences of what happened Hoar said. "If we are unable to settle the case, those areas of disagreement are going to have to be resolved by a judge and jury," Hoar said.
After hours on Sept. 7, 2005, thieves broke into the 450 booth mall by prying a rear door open and stole jewelry from the plaintiff's display booths, the court said.
An alarm sounded and a security company for the mall notified the police, the court said. The thieves fled before police arrived and the goods — valued at $25,293 for Puro and $31,698 for Yoken — were not recovered, the court said.
The plaintiffs said they had been led to believe that the mall had a working camera surveillance and the mall had security cameras in place, and some of them were attached to video recorders, the high court said.
However, images of the thieves were not recorded since security cameras were not operating at the time of the theft, the high court said. The jewelry and coin dealers, signed a pact, which included an exculpatory clause, that said the mall would be cleared from blame in the event of a theft, the high court said. Routine in business, the agreements are often unanimously upheld by courts, justices said.
Before signing the agreement, plaintiffs discussed the mall and its security system with the mall general manager, the high court said.
The manager allegedly told Yoken that the site had "video cameras everywhere," according to court documents. In a talk with Puro, the manager allegedly said the mall had a state-of-the-art alarm system, and cameras covering every booth at all times.
Key information about security was apparently omitted or misrepresented when the mall leased space, the high court said. Three black-and-white cameras on the ground floor recorded onto a VCR during business hours only, the court said. Representations the mall company made about its security is a key remaining issue in the case, the high court said.
In the one part of their appeal where plaintiffs have not prevailed, the high court rejected Puro and Yoken's argument that the exculpatory clause was invalid in this instance because it was against public policy or "publicly unacceptable."
tom.mitchell@rutlandherald.com
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