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Tourist injured at foreign franchisee hotel

Tourist injured at foreign franchisee hotel

Travel law: When is the US-based franchiser liable?

In this week’s article, we discuss the recent case of Stenlund v. Marriott International, Inc., 2016 WL 1203749 (D. Md. 2016) “In this slip-and-fall negligence action, Plaintiff Paula Stenlund seeks to recover damages for injuries she sustained while she was a guest at the Panama City Marriott Hotel in Panama City, Panama”. This case is instructive since it discusses the circumstances under which “a hospitality company and a worldwide operator, franchiser, and licensor of hotels and timeshare properties is several countries”, i.e., Marriott International, Inc., a publicly-traded Delaware company with its principal place of business in Maryland, may be found liable under the liability theories of actual agency and/or apparent agency, for the negligence of a foreign owned and operated franchisee hotel/casino, i.e., Hotel Properties of Panama, Inc. 

This is a common type of travel law case where a U.S. citizen injured abroad can only sue a U.S. based hotel FRANCHISER or tour operator and not the foreign hotel or excursion operator because of a lack of personal jurisdiction or the application of the doctrine of forum non conveniens. Litigating this type of travel law case is further discussed in Dickerson, Travel Law (2016), Chapter 1 and Dickerson, Gould & Chalos, Litigating International Torts in U.S. Courts (2016) at Chapter 9. Often these cases will depend on the law applied whether foreign, i.e., Panama, or local State law, i.e., Maryland. For recent similar cases applying Maryland law see DeFederico v. Marriott International, Inc., 2015 WL 5516843 (D. Md. 2015) (actual agency) and Crinkley v. Holiday Inns, Inc., 844 F. 2d 156 (4th Cir. 1988) (apparent agency).

Terror Targets Update

Berlin, Germany

In Smale, Refugee’s Capture in Germany Is Said to Thwart Terrorist Attack, nytimes.com (10/11/2016) it was noted that “A major terrorist attack on a transportation hub in Germany was narrowly averted, the head of the country’s domestic intelligence agency said on Tuesday, after a 22-year-old Syrian refugee was arrested and more than three pounds of dangerous explosives was found at his home. Hans-Georg Maassen, who heads the federal domestic intelligence service, indicated…that the likely target was a Berlin airport and that the suspect had ties to the Islamic State”.

Brussels, Belgium

In Schreuer & Rubin, 2 Brussels Police Officers Are Stabbed in ‘Potential Terrorist Attack’, nytimes.com (10/5/2016) it was noted that “A man wounded two police officers with a knife in Brussels around noon on Wednesday in what authorities called ‘a potential terrorist attack’…The man suspected of carrying out the assault was shot in the leg…’. The provisional results of the investigation indicate that it would be a potential terrorist attack’”.

Istanbul, Turkey

In At least 10 people wounded in Istanbul bombing, eturbonews.com (10/6/2016) it was noted that “At least 10 people have sustained injuries after a motorcycle bomb exploded near a police station in Istanbul…the blast took place on Thursday in the district of Yenibosna on the European side of Istanbul close to Ataturk Airport…Over the past few months, there have been a number of bomb attacks in Turkey, some blamed on the Daesh Takfiri terrorist group and some on the outlawed Kurdistan Workers’ Party (PKK), which is fighting for Kurdish autonomy in the country’s southeast”.

Watch For Exploding Drones

In Schmidt & Schmitt, Pentagon Confronts a New Threat From ISIS: Exploding Drones, nytimes.com (10/11/2016) it was noted that “Kurdish forces fighting the Islamic State in northern Iraq last week shot down a small drone the size of a model airplane. They believed it was like the dozens of drones the terrorist organization had been flying for reconnaissance in the area and they transported it back to their outpost to examine it. But as they were taking it apart, it blew up, killing two Kurdish fighters in what is believed to be one of the first times the Islamic State has successfully used a drone with explosives to kill troops on the battlefield. In the last month, the Islamic State has tried to use small drone to launch attacks at least two other times, prompting commanders in Iraq to issue a warning to forces fighting the group to treat any type of small flying aircraft as a potential explosive device”.

Las Vegas Murders On The Rise

In Healy & Williams, In Las Vegas, Rising Murders Strain a Police Force Used to Solving Them, nytimes.com (10/3/2016) it was noted that “Detectives in Las Vegas pride themselves on having one of the country’s better track records for solving homicides, clearing nearly eight in every 10 cases while many other big-city departments struggle to solve half of their murders. But like other big cities across the nation, Las Vegas is in the midst of a dramatic rise in homicides. The rising murder rate in now testing whether the 19 homicide detective at the Las Vegas Metropolitan Police Department can keep solving those crimes as new calls pour in, from parks awash with heroin, from streets where gang allies are quick to draw guns and from poor neighborhoods that lie just blocks from the shimmering casinos on the Strip”.


FAA Bans Galaxy Note 7

In FAA: Do not use, charge or stow any Samsung Galaxy Note 7 devices!, eturbonews.com (10/10/2016) it was noted that “FAA issues the following updated guidance on Samsung Galaxy Note 7 devices: ‘In response to an October 10, 2016 statement from the Consumer product Safety Commission, and following a recent decision by Samsung to suspend global sales of all Galaxy Note 7 devices, the Federal Aviation Administration urges passengers onboard aircraft to power down, and not use, charge or stow in checked baggage, all Samsung Galaxy Note 7 devices, including recalled and replacement devices”.

Samsung Phone Catches Fire

In Bromwich, Southwest Flight Evacuated After Samsung Phone Catches Fire, Airline Says, nytimes.com (10/5/2016) it was noted that “A Southwest Airlines flight scheduled to leave Louisville, Ky. on Wednesday morning was evacuated on the runway after a passenger’s Samsung cellphone caught fire, passengers and the airline said. Southwest said in a statement that passengers and airline employees were taken off Flight 994, which was scheduled to leave for Baltimore, after a customer reported ‘smoke emitting from a Samsung electronic device. The Verge identified the passenger as…and his phone as ‘a replacement Galaxy Note 7’”.

Train Crash In Hoboken

In Fitzsimmons, Train Was Traveling at Twice the Speed Limit Just Before Hoboken Crash, nytimes.com (10/6/2016) it was noted that “A New Jersey Transit train that crashed in Hoboken accelerated to about 21 miles per hour just before it smashed into the terminal, killing a woman and injuring more than 100 other people, federal investigators said on Thursday. In the minute before the crash, the train had been moving toward the platform at just eight miles per hour…The engineer had blown the train’s horn and activated the bell that signals its approach before suddenly accelerating, braking only at the last second before the train plowed through a bumper and onto the platform”.

In Schmidt & Feuer, N.J. Transit Engineer Has No Memory of Fatal Crash, Officials Say, nytimes.com (10/2/2016) it was noted that “The engineer of the New Jersey Transit train that crashed into Hoboken Terminal on Thursday, killing one person and injuring more than 100 others during the busy morning commute, felt well rested and was unaware of any mechanical problems in the moments before the accident, federal investigators said on Sunday”.

In Associated Press, Source: Agency found NJ Transit violations before deadly train crash, The Journal News (10/2/2016) it was noted that “A U.S. government official says the Federal Railroad Administration had investigated New Jersey Transit and found dozens of safety violations months before a commuter train crash, which killed one woman and injured more than 100…The official said Saturday the FRA conducted an audit of New Jersey Transit in June and violations were found. The official says the rail agency also was fined”.

In Toutant, Challenges Await Those Who Sue Over Hoboken Train Crash, njlawjournal.com (10/3/2016) it was noted that “Recovering on behalf of those injured in the Sept. 29 crash of a New Jersey Transit train in Hoboken could be challenging, according to lawyers who have made claims against the transit agency. New Jersey Transit’s self-insured status makes it a tough opponent in injury litigation and some suits could be tripped up by the many rules and requirements on New Jersey’s Tort Claims Act, lawyers said. ‘Navigating New Jersey Transit is like navigating a minefield, and you’d better know what you’re doing’”.

JetBlue Sued

In JetBlue Airways sued after flying a child into wrong airport, eturbonews.com (10/1/2016) it was noted that “A mother has filed a lawsuit against JetBlue Airways for flying her 5-year-old son to the wrong city. Maribel Martinez charged in the lawsuit that she suffered ‘great emotional distress, extreme fear, horror, mental shock, mental anguish and psychological trauma’ when she went to meet her son’s Aug. 17 flight at John F. Kennedy International Airport and he wasn’t on it”.

Ukraine Issues Travel Warning

In Ukraine issues Russia travel warning, eturbonews.com (10/5/2016) it was noted that “Citizens of Ukraine were warned on Wednesday against traveling to Russia, where they were at risk following an increase in harassment and detentions of Ukrainians by Russian security services. The move is further testimony to the breakdown in relations between the one-time allies in the wake of Russia’s annexation of Crimea in early 2014 and support for pro-Russian separatists in the ensuing conflict in eastern Ukraine”.



Wildlife Threat In Southern Africa

In Wildlife under Threat from legal trade in Southern Africa, eturbonews.com (10/5/2016) it was noted that “Southern Africa is losing protected wild plants and animals at an alarming rate. Between 2005 and 2014 around 18,000 individual species worth US$340-million were legally sold. This figure, which excludes losses from poaching, was highlighted in a report by the United Nations Environment Program…Topping the export list were hunting trophies, live parrots, live reptiles, crocodile skins and meat, live plants and their derivatives. The report exposes the high global demand for parrots as household pets. Exports of live parrots increased 11-fold over the period, from 50,000 birds in 2005 to over 300,000 in 2014. The SADC region has 18 native parrot species, half of which have declining populations and three of which are globally threatened”.

Travel Law Article: The Stenlund Case

In the Stenlund case the Court noted the following undisputed facts: “Plaintiff and her husband checked into (the Panama City Marriott Hotel with its ‘on-site’ Royal Casino). Before and during her travel to Panama, Plaintiff received Marriott marketing material promoting the Royal Casino in Panama…as being ‘on-site’ of the Hotel. On February 13, 2011, Plaintiff visited the (attached) Royal Casino (and while walking down some stairs tripped over an electrical cord draped across the stairs) and fell forward, striking her head, face, and knees, causing her to suffer various severe injuries. The Royal Casino staff made no effort to provide Plaintiff with medical care. That same evening, the manager of the Hotel took pictures of Plaintiff’s injuries and indicated that she would ‘make a full report’ but the Hotel staff also failed to provide any medical case or a referral to a local hospital that evening. The following day, the Hotel sent a doctor…to Plaintiff’s room. The doctor did not provide any substantive care, but only referred her to a local hospital to which the Hotel arranged transportation”.

The Lawsuit

“Plaintiff (sued Marriott International only) alleging that (it) breached various duties that it owed to her and other guests including a duty to ensure her safety, to avoid or remedy unsafe condition in the Hotel and (attached) Royal Casino, to provide or arrange for prompt medical case, to adequately train and supervise employees to detect and remedy unsafe conditions and attend to inured guests, to provide adequate warnings of dangerous conditions and to refrain from marketing or promoting the Royal Casino once Marriott International became aware that dangerous conditions existed or likely existed at the Casino. The Complaint alleges, in Count I, a direct liability theory of negligence (actual agency) and in Count II, vicarious liability (apparent agency) for the negligence of employees of the Royal Casino”.

The Relationships

This type of travel law case usually involves extensive discovery of the contracts and agreements between the FRANCHISER or licensor, Marriott International, Inc., and the franchisee or licensee, Hotel Properties of Panama, Inc., to determine the extent to which the FRANCHISER exercises control over the conduct of the franchisee. The Court noted that in 1995 “Marriott International entered into an International Services Agreement (International Agreement) with Hotel Properties which was to last for a term of twenty fiscal years. The International Agreement was one of many agreements specifying the scope of the relationship between Hotel Properties and Marriott International and its various subsidiaries and affiliates. Pursuant to the series of agreements, Hotel Properties was to construct and equip a ‘first class, full-service international hotel’ in Panama City, Panama, for which Hotel Properties was to be the owner. Marriott International Services, Limited (Marriott Services), a Bermuda company and foreign subsidiary (of) Marriott International, was to manage and operator the Hotel”.

Duties And Responsibilities

“Pursuant to the International Agreement, Marriott International was required to ‘provide…International Advertising, Marketing, Promotion and Sales Program’ for the Hotel. Marriott International was also required to provide certain ‘routine corporate and regional services’ including ‘executive supervision and support from Marriott International headquarters’ and ‘general expertise and general operational assistance in areas such as executive supervision, employee relations, strategic planning and policy-making, research and development, energy management, retail shop operation, insurance, life safety, meal planning, food preparation and service, accounting controls and internal auditing…’. It also provided’ core training programs for the benefit (of) management-level Hotel employees’…Hotel Properties was required to use Marriott International’s Reservations System as well as its Property Management System and Marriott International reserved the right to require Hotel Properties to use other Marriott Chain hotel systems ‘which systems are intended to benefit the Marriott Chain’”.

Control Over The Royal Casino

“Although the Casino was subject to annual quality assurance reviews ‘covering surcharges as guest experience, service delivery, integrity of games, maintenance and cleanliness’, Marriott Services was not to perform ‘any services at the Casino relating to the gaming operations or security and surveillance, not [would] [Marriott Services] receive any revenue tied to the profitability of the gaming operations at the Casino’. To further distinguish the Hotel from the Casino operations, the Casino was to have a name independent of the Hotel name, Casino employees were required to wear different uniforms from those worn by Hotel employees (and) which could not use or display the name ’Marriott’ or bear any Marriott trademarks’…Marriott Services was permitted, however, to list the Royal Casino ‘as an amenity of the Hotel in the worldwide directory or in connection with any other advertising’.

Plaintiffs’ Reliance On Marriott Name

This type of travel law case often involves assertions by guests of their reliance on the apparent involvement of the FRANCHISER hotel chain in operating the foreign hotel. Plaintiffs asserted “that she and her husband chose to stay in the Hotel because they are members of Marriott International’s Reward Program and when they booked online ‘at various Marriott website portals’ they saw promotions for the Marriott Hotel Panama City, Panama, which they understood included an ‘in-house, on site Casino’…Plaintiff submitted certain website pages that were ‘representative of the website pages that [she and her husband] saw and relied upon in making [their] decision to go to the Marriott Hotel’ in Panama and the attached Royal Casino. In the description of the Hotel those websites advertise that guests could’[s]hare a cocktail or a delightful meal with friends at any of our 3 restaurants or tempt Lady Luck at our on-site casino’… Plaintiff indicates that he traveling decisions ‘often depended on whether there was a Marriott at a given destination’ and that ‘[i]t was [her] understanding that the location [she and her husband] visited was owned and operated by Marriott’ and that she ‘did not in any way differentiate the Casino from the Hotel’”.

Actual Agency Analysis 

Whether “Marriott International may be liable on the basis of an actual agency relationship between itself and Marriott Services [Bermuda] and/or Hotel Properties, the relevant question is the degree of control that Marriott International exercised over the operations of the Hotel and Casino (citing DiFederico v. Marriott International, Inc.)…The minimal oversight that Marriott International had over the Hotel and Casino is far from that which is necessary to deem Marriott International the ‘master’ of Hotel Properties, or even its subsidiary, Marriott Services, with respect to their management and operations of the Hotel and Casino. Marriott International’s right to conduct annual quality assurance reviews of the Casino does not establish that it controlled the instrumentality that caused Plaintiff’s injury, i.e., the cord that was draped over a staircase, or that it had ‘the right to control and direct [Hotel Properties] in the performance of [its] work…Nor did Marriott International’s obligation to provide certain executive oversight for the Hotel mean that it was responsible for any alleged failure of Hotel employees to provide medical care after Plaintiff’s injury”.

This analysis is same whether the law of Maryland or Panama is applied.

Apparent Agency Analysis

“In order to recover o this theory, Plaintiff must prove three elements: (1) that the apparent principal created or acquiesced in the appearance that an agency relationship existed; (2) that the plaintiff believed that an agency relationship existed and relied on that belief seeking the services of the apparent agent; and (3) that the plaintiff’s belief and reliance was objectively reasonable…Although Plaintiff submitted evidence that the Royal Casino was promoted and marketed as Marriott’s ‘on-site’ Casino…any subjective expectation that Plaintiff had regarding whether the Casino was owned or controlled by Marriott International was not objectively reasonable in light of the totality of the other facts in the record. Importantly, Casino employees were required to wear different uniforms than Hotel employees; those uniforms could not bear the name ‘Marriott’; the exterior entrance to the Casino was ‘identifiable as a distinct entrance from the Hotel both in location and markings’ and the Casino operator was not permitted to use any Marriott trademarks or trade name except for any advertising material used ‘solely for the purpose of indicating the location of the Casino and the Hotel”. This analysis is same whether the law of Maryland or Panama is applied.

Justice Dickerson has been writing about travel law for 39 years including his annually updated law books, Travel Law, Law Journal Press (2016) and Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2016), and over 400 legal articles many of which are available at nycourts.gov/courts/9jd/taxcertatd.shtml. Justice Dickerson is also the author of Class Actions: The Law of 50 States, Law Journal Press (2016). For additional travel law news and developments, especially in the member states of the EU, see IFTTA.org.

This article may not be reproduced without the permission of Thomas A. Dickerson.

Read many of Justice Dickerson’s articles here.

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