PLST202: Legal Writing
Professor Babatunde
Samantha Wnek
February 29, 2024
Objective Memo Assignment
Issue
Did Sunny Days Resort possess Ms. King’s glasses and exercise physical control over the
glasses, thereby creating a bailment?
Brief Answer
Yes, there was bailment because Sunny Day Resort voluntarily accepted Ms. King’s sunglasses
for safekeeping. K-B Corp. v. Gallagher, 237 S.E. 2d 183 (Va. 1977).
Facts
Esther King visited the Sunny Days Resort in Virginia Beach, Virginia. Esther took her Dolce &
Gabbana sunglasses to the resort. The resort lost her sunglasses given to her by her great aunt
Ruth. Esther’s Dolce & Gabbana sunglasses were worth about $1,100. One evening, she stopped
at the front desk and asked if they could hold her sunglasses in the hotel vault while she ate
dinner at a restaurant located off the hotel lobby. The front desk agent, Alex, agreed, and Esther
handed him her sunglasses. She watched the front desk agent walk into the back office and she
was satisfied the sunglasses would be safe. Esther then returned to the front desk after dinner to
retrieve her sunglasses. No one was on duty, so she returned to her hotel room. The next morning
Esther went to the front desk to check out. There was a different front desk agent, Carson, who
assisted her. Esther explained to Carson that she had left her sunglasses at the front desk with
Alex the prior evening but when she came to retrieve them no one was on duty. She asked
Carson to retrieve her sunglasses from the vault. Carson walked to the back office to retrieve her
sunglasses. Several minutes later, the hotel manager returned with Carson and explained that the
sunglasses were not in the vault. Esther left the resort devastated. A week later after leaving the
resort, Esther received a phone call from the hotel manager. The manager had reviewed the
security footage and confirmed that Alex had placed the glasses in the vault after Esther handed
them to him. The security footage also showed that Alex returned to the vault later that evening
to retrieve the sunglasses and handed them to a friend of his who was waiting at the front desk.
He never returned to work after that evening, and the hotel manager was unable to locate Alex or
the sunglasses.
Discussion
Esther established physical control when she handed Alex her sunglasses. As a result, the two
factors of possession and physical control came into union to create bailment. According to
Virginia Law, for an alleged bailee to have possession, “there must be the union of two
elements, physical control over the thing possessed, and an intent to exercise that control.”
Brown, supra, s 10.2 at 213-14. K-B Corp. v. Gallagher, 237 S.E. 2d 183 (Va. 1977). Alex was
in possession of the sunglasses when he placed them in the hotel vault.
1. Physical Control
“Physical control is the hallmark of ‘care, custody, and control’ of another's property.” Zurich
Am. Ins. Co. v. Pub. Storage, 743 F. Supp. 2d 525, 542 (E.D. Va. 2010). Public Storage hired
Sam's Contracting, a third-party general contractor, to repair the ceiling. Zurich Am. Ins. Co. v.
Pub. Storage, 743 F. Supp. 2d 525, 532 (E.D. Va. 2010). At some point during the repair process,
the Underlying Complaint alleges that “defendants removed and destroyed all of the medical and
financial records in Nsouli's storage unit without authorization.” Zurich Am. Ins. Co. v. Pub.
Storage, 743 F. Supp. 2d 525, 532 (E.D. Va. 2010). During that time, “numerous Public Storage
representatives and agents witnessed and directly authorized the removal and destruction of the
property.” Zurich Am. Ins. Co. v. Pub. Storage, 743 F. Supp. 2d 525, 532 (E.D. Va. 2010). Public
Storage's representatives and agents “failed to inquire, intercede or otherwise take reasonable
steps to safely secure the property.” Zurich Am. Ins. Co. v. Pub. Storage, 743 F. Supp. 2d 525,
532 (E.D. Va. 2010). Under Washington law, coverage for Virginia common-law and statutory
bailment claims against insured rental storage company was barred by commercial general
liability (CGL) policy's exclusion for property damage to personal property in the care, custody,
or control of the insured; in order to show that storage company was bailee with lawful
possession of bailor's property, bailor would have to show that storage company had physical
control of property, thereby triggering exclusion. West's V.C.A. § 8.7–403(1). Zurich Am. Ins.
Co. v. Pub. Storage, 743 F. Supp. 2d 525 (E.D. Va. 2010). Washington courts have not precisely
defined the phrase “care, custody, or control,” but they have provided some guidance for
determining whether the exclusion applies in a given case. Thus, there is no doubt that an insured
has care, custody, or control of property when the insured has physical control over the property.
Zurich Am. Ins. Co. v. Pub. Storage, 743 F. Supp. 2d 525, 541 (E.D. Va. 2010). In K-B
Corporation v. Gallagher, when plaintiff left the confines of his employment on his employer's
business, the defendant thereby acquired exclusive possession of the bailed property which
continued during the 40 minutes plaintiff was away from the premises and a bailment for the
mutual benefit of the parties existed requiring the defendant to exercise ordinary care for the
safety of the tools. We do not agree; we are of the opinion that the defendant did not have
exclusive possession of the plaintiff's property at the time of the theft. The important elements of
possession physical control and an intent to exercise such control are missing here. Manifestly,
the defendant did not have control of any kind over the individual tools within the toolbox
because the box was locked, and the plaintiff retained the only key. And while it may be said that
defendant had a degree of control over the box, including its contents, because the box was
located on premises owned by the defendant, nevertheless such control was not independent and
exclusive so as to charge defendant with a duty of ordinary care to safeguard it. Other employees
and defendant's customers had ready access to this box, which stood in an open area only about
20 feet from a public street. K-B Corp. v. Gallagher, 218 Va. 381, 384–85, 237 S.E.2d 183, 186
(1977). K-B Corp did not have physical control because the key was with Gallagher and not in
the possession of K-B Corp. In the Zurich American Ins. Co. v. Public Storage case, the medical
records were damaged by a third party, which Public Storage had no control over. In the
Zurich American Ins. Co. v. Public Storage case, the medical records were damaged by a third
party, which Public Storage had no control over. In Esther King’s case, there was physical
control established when the front desk agent physically took control of the sunglasses and
them into the vault for safe keeping while Esther could be content that the sunglasses
would be safe and would be able to retrieve them after dinner. Physical control is one of the
two requirements for a bailment to be established.
2. Lawful Possession
Lawful Possession In order for an alleged bailee to have possession, “there must be the union of
two elements, physical control over the thing possessed, and an intent to exercise that control.”
Brown, supra, s 10.2 at 213-14. K-B Corp. v. Gallagher, 218 Va. 381, 384, 237 S.E.2d 183, 185
(1977). Plaintiff took the position that if he had merely been sent on an errand to another part of
defendant's premises, a bailment would not have been created because he would have continued
jointly in possession of the tools with his employer. K-B Corp. v. Gallagher, 218 Va. 381, 384,
237 S.E.2d 183, 186 (1977). When plaintiff left the confines of his employment on his
employer's business, the defendant thereby acquired exclusive possession of the bailed property
which continued during the 40 minutes plaintiff was away from the premises. Defendant did not
have exclusive possession of the plaintiff's property at the time of the theft. K-B Corp. v.
Gallagher, 218 Va. 381, 384–85, 237 S.E.2d 183, 186 (1977). The defendant did not have control
of any kind over the individual tools within the toolbox because the box was locked, and the
plaintiff retained the only key. K-B Corp. v. Gallagher, 218 Va. 381, 385, 237 S.E.2d 183, 186
(1977). “No particular formality or actual meetings of the minds is necessary to
establish the relationship but there must be lawful possession, however, created: and to have
possession there must be a union of two elements-physical control over the thing
possesses and an intent to exercise that control” K-B Corporation v. Gallagher, 2018 Va.
381, 384 (Va. 1977). Under Virginia law, to succeed on a bailment claim, the plaintiff must
establish that the alleged bailee had lawful possession of the property. West's V.C.A. § 8.7–
403(1). Zurich Am. Ins. Co. v. Pub. Storage, 743 F. Supp. 2d 525 (E.D. Va. 2010) Under
Washington law, coverage for Virginia common-law and statutory bailment claims against
insured rental storage company was barred by commercial general liability (CGL) policy's
exclusion for property damage to personal property in the care, custody, or control of the
insured; in order to show that storage company was bailee with lawful possession of bailor's
property, bailor would have to show that storage company had physical control of property,
thereby triggering exclusion. West's V.C.A. § 8.7–403(1). Zurich Am. Ins. Co. v. Pub. Storage,
743 F. Supp. 2d 525 (E.D. Va. 2010). Here, the Care, Custody, or Control exclusion operates to
relieve Zurich of the duty to defend the bailment claims because, in order to prove the elements
of a bailment claim, Nsouli must prove facts that trigger the exclusion. Under Virginia law, to
succeed on a bailment claim, the plaintiff must establish that the alleged bailee had “lawful
possession” of the property. K–B Corp. v. Gallagher, 218 Va. 381, 237 S.E.2d 183, 185 (1977)
(quoting Crandall v. Woodard, 206 Va. 321, 143 S.E.2d 923, 927 (1965)). To have lawful
possession, an alleged bailee “must have both physical control with the intent to exercise that
control.” Morris v. Hamilton, 225 Va. 372, 302 S.E.2d 51, 52–53 (1983). Of course, if Nsouli
succeeds in establishing that Public Storage was a “bailee” of his records because Public Storage
had control of the records, this would trigger the Care, Custody, or Control exclusion. Zurich
Am. Ins. Co. v. Pub. Storage, 743 F. Supp. 2d 525, 542 (E.D. Va. 2010). However, in K-B
Corporation v. Gallagher, Gallagher was the only person who held possession of the
single key for the toolbox in which he had his tools in. When it comes to Esther King’s
case only the hotel staff could access the safe, not Esther as the owner of the sunglasses.
Therefore, possession and physical control were established by the front desk agent
when he took the sunglasses and placed them in the vault.
Conclusion
There was bailment because Sunny Day Resort voluntarily accepted Ms. King’s sunglasses for
safekeeping. K-B Corp. v. Gallagher, 237 S.E. 2d 183 (Va. 1977). When the sunglasses were
placed in the hands of Alex, he gained physical control and possession. The two elements of
bailment are possession and physical control and there must be a union of the two elements to
create bailment.
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