Factual and procedural background
Ji Hoon Oh was employed by I.B.S. Beauty Co., which leased the property from Teachers Insurance and Annuity Association of America. The property was managed by Cushman & Wakefield Management Corporation and consisted of part of a building in an industrial complex in Santa Fe Springs, California. IBS initially leased the property from TIAA in Oct. 2017 and subsequently renewed the lease multiple times. The last renewal of the lease occurred in Oct. 2015. IBS sold a hair product called MOA Oil and stored it in 55-gallon drums in the facility. The drums did not have markings to indicate that the chemicals were hazardous or volatile.
On March 2, 2016, Oh was pouring MOA Oil from one of the drums into smaller containers when it exploded, causing a fire that engulfed Oh and the facility. Oh was killed, and his parents filed a lawsuit against TIAA, Cushman & Wakefield, and others, alleging causes of action for negligence, negligence per se, and wrongful death. IBS was unaware that the MOA Oil was volatile until after the explosion. TIAA and Cushman filed a motion for summary judgment. They argued that they did not owe a duty of care to Oh because they had no knowledge that the substances that IBS was storing were hazardous.
The evidence that was presented showed that Mr. Kim, the owner of IBS, did not know that the MOA Oil was highly flammable and hazardous before the accident. He did not inform TIAA or Cushman that the substances were hazardous since he wasn’t aware that they were. The lease that IBS signed included a provision prohibiting the storage of hazardous chemicals or using them on-site without prior written consent from the owners. The lease also placed the responsibility for complying with all regulations and laws regarding hazardous chemicals on the tenant. The landlord retained the responsibility for maintaining the exterior of the premises.
In the plaintiffs’ opposition to the summary judgment motion, they presented information that the senior property manager had observed several blue 55-gallon drums outside of the premises in its yard. The plaintiffs argued that the presence of these drums gave the defendants notice that the materials inside of the drums were hazardous because of their labels. Kim ordered three 55-gallon drums of MOA Oil in Sept. 2015 from a new supplier in South Korea to save money. He had questioned the supplier about why they said that they were made in Japan, and the supplier told him that it had simply reused drums that had previously been used to store something else. When the explosion occurred, two of the drums were inside of the building. The third one outside was empty, according to the testimony of Kim and Christopher Gardea, a fire inspector who investigated the fire after it occurred.
The court granted the defendants’ motion for summary judgment. It found that the defendants had presented evidence showing their lack of knowledge about the hazardous nature of the MOA Oil and that the drums had been mislabeled. It also found that landlords are not liable when a tenant violates an ordinance. The plaintiffs filed an appeal.
Issue: Does a landlord have a duty to discover hazardous materials on the property leased by a tenant?
The plaintiffs argued that TIAA and Cushman had a duty to discover that Kim and IBS were storing and using hazardous chemicals on the leased property. They argued that the chemicals should have been discovered by the property manager when she performed her inspections of the outside of the premises since some drums were present in the fenced-in yard of the premises rented by IBS. They argued that the defendants owed a duty of care to the decedent to discover the hazardous materials and to abate the dangerous condition that they created.
Rule: Landlords do not owe a duty to discover hazards that they did not create.
Landlords owe a duty of care to tenants to correct hazards that the landlords create or that they know or reasonably should know about. However, this duty does not extend to hazards that the landlords are unaware of and that are created by the tenants and that they could not reasonably have discovered.
The plaintiffs argued several things on appeal. They argued that the negligence per se doctrine requires a presumption that the defendants acted negligently when a regulation or statute was violated. They then argued that there was substantial evidence that the defendants violated multiple provisions of the fire code. They argued that the defendants violated the code that required people to obtain an operational permit to store, transport, handle, or dispense hazardous materials. However, the court noted that no evidence had been presented to show that the defendants had engaged in any of those activities and that they could not have reasonably known about the existence of the hazardous chemicals since Kim was not even aware that the MOA Oil was dangerous. The plaintiffs argued that ignorance of the law is not an excuse. However, the appeals court pointed out that the defendants were unaware of the facts but not the law. This meant that they could not be responsible for their tenant’s violation of the fire code.
The plaintiffs also argued that another section of the fire code was violated by the defendants. This section makes owners responsible for abating dangerous conditions that violate the fire code. The appeals court found that the defendants did not have the responsibility to abate a dangerous condition that was created by IBS and that the defendants did not know about it.
The appeals court also found that the defendants did not have control over the fenced area after reviewing the lease. Instead, IBS had control of both the portion of the building it had leased as well as the fenced yard. The court also found that the defendants had no knowledge that dangerous chemicals were being stored even though one drum was sitting outside of the building in the fenced yard since it was mislabeled and empty. The plaintiffs also argued that the landlords had a duty to inspect the premises at the time of the 2015 lease renewal. However, the appeals court found that the duty to inspect only arises when the landlords learn of a reason for doing so. In the case of IBS, the court found that the landlords had no reason to believe that an inspection was necessary at the time of the lease renewal.
The appeals court affirmed the trial court’s judgment dismissing the case. The defendants were awarded their costs on appeal.
Contact an experienced Los Angeles personal injury lawyer
People who are injured while they are visiting or working on premises that are owned by a landlord may have grounds to file a lawsuit. However, the landlord’s liability will depend on whether the landlord knew or had reason to know about the existence of dangerous conditions. An experienced attorney at the law firm of Steven M. Sweat, Personal Injury Lawyers can evaluate the facts of what happened and explain whether you might have grounds for a claim. Contact us today to request a consultation by calling us at 866.966.5240.