Nev. SC: 'Mode of operation' doesn't apply to sit-down eateries

By Jessica M. Karmasek | Jun 21, 2012


CARSON CITY, Nev. (Legal Newsline) - The Nevada Supreme Court ruled last week that the "mode of operation" approach to premises liability does not extend to sit-down restaurants.

In its June 14 ruling, the Court explained that under the approach, a plaintiff does not have to prove a defendant's knowledge of a particular hazardous condition if the plaintiff can prove that the nature of the defendant's business tends to create a "substantial risk" of the type of harm the plaintiff suffered.

It is premised on the idea that business owners should be held responsible for the risks that their choice to have customers serve themselves creates, the Court said.

In the case at issue, plaintiff Debbie Giglio filed suit in Clark County District Court against FGA Inc., which operates Carmine's Little Italy and is owned by the Carmine and Ann M. Vento Revocable Trust. Giglio also sued the trust, which is FGA's landlord.

Also named as defendants were Carmine Vento, the sole officer of FGA and a trustee of the trust, and Carmine's son, Frank Vento, who is the president of FGA and the general manager of Carmine's Little Italy.

Giglio alleged negligence and requested more than $3.3 million in damages following her June 2004 fall at the restaurant.

On the day of the fall, Giglio was on a date with her future husband, Raymond Schrefel.

The two were at the restaurant for 45 minutes to an hour before the fall, during which time they consumed four beers and two glasses of wine. Schrefel later said he thought he and Giglio consumed two beers each and that he had two glasses of wine.

Giglio was on her way to the restroom when she fell. She claimed to have slipped on a greasy or oily substance.

Schrefel did not see the fall but corroborated the fact that there was an oily substance on the floor.

The managers who assisted Giglio after she fell testified that the floor was clean and that she fell without slipping.

Although the restaurant had video surveillance cameras, no video footage of the fall was available because the camera system was inoperable at the time.

After the fall, Giglio had an intervertebral disc in her neck and two discs in her lower back removed.

She required pain medications and extensive physical therapy, resulting in medical damages of more than $400,000.

However, Giglio's pain was not alleviated by her surgeries. She claims that in the future she will need a spinal stimulator and injections for pain management.

FGA moved for judgment as a matter of law, arguing that the trust, as a mere landlord, cannot be held liable for physical harm caused by a dangerous condition on the premises. The district court denied the motion, and the trial proceeded.

The jury was then instructed on alternative theories of negligence. It was additionally instructed on the "mode of operation" approach to premises liability.

Over FGA's objection, the district court allowed the instruction.

The jury found that FGA was 51 percent negligent and Giglio was 49 percent at fault. No interrogatories were given to the jury for it to indicate under which theory of liability it found FGA to be negligent.

The jury awarded damages of $5,551,435, which the court reduced by 49 percent. The court entered a $3,526,545.19 judgment against FGA, which included costs, attorney fees and prejudgment interest.

FGA appealed to the state's high court.

In its ruling last week, the Court vacated the lower court's order denying judgment as a matter of law, reversed its judgment and remanded the case.

Justice Michael L. Douglas, who authored the Court's opinion, explained that the district court abused its discretion by giving the mode of operation instruction.

"The rationale underlying the mode of operation approach is that an owner of a self-service establishment has, as a cost-saving measure, chosen to have his customers perform tasks that were traditionally performed by employees," Douglas wrote.

"If a customer who is performing such a task negligently creates a hazardous condition, the owner is 'charged with the creation of this condition just as he would be charged with the responsibility for negligent acts of his employee' because it was the owner's choice of mode of operation that created the risk."

In this case, Giglio failed to show that the handling of food in a particular area by the restaurant's employees gave rise to a "foreseeable risk" of a "regularly occurring hazardous condition" for its customers, similar to the condition that caused the injury.

"We find no reason to extend mode of operation liability to such establishments absent such a showing as their owners have not created the increased risk of a potentially hazardous condition by having their customers perform tasks that are traditionally carried out by employees," Douglas concluded.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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