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Levitt v. Desert Palace Inc.

decided: July 6, 1979.


Appeal from a money judgment entered after a jury verdict in favor of the plaintiffs-appellees in the United States District Court for the Southern District of New York, Hon. Lee P. Gagliardi, Judge, and pursuant to a memorandum decision and order denying defendant-appellant's motion for judgment notwithstanding the verdict or, in the alternative, for a new trial on all issues. Plaintiff-appellees cross-appealed for a new trial on damages conditioned on this court's ordering a new trial on the issue of liability. Reversed and remanded for entry of judgment in favor of defendant-appellant.

Before Lumbard, Friendly and Mulligan, Circuit Judges.

Author: Mulligan

William Levitt and his wife Simone Levitt were nonpaying guests at Caesar's Palace Hotel and Casino in Las Vegas, Nevada from May 16 through May 19, 1975. They had been invited by the Hotel to attend the Alan King Tennis Tournament which features professional players and celebrities (I. e., movie stars, theatrical and business personalities). Unfortunately as it developed, Mrs. Levitt brought with her an assortment of her jewelry including a 24 carat diamond engagement ring, a diamond wedding band, a sapphire necklace, sapphire earrings and a sapphire ring, claimed in all to be worth in excess of $1,300,000. She also brought other gold and diamond jewelry of lesser value. Shortly after registering, the Levitts deposited the jewelry in the Hotel's safe deposit box where it remained until Saturday, May 18 when the Levitts were to attend a costume ball. Prior to the ball, Mr. Levitt retrieved the jewelry from the box and his wife selected the large diamond engagement ring, the diamond wedding band, the sapphire pieces and several others. Mr. Levitt then returned the case and the rejects to the safe deposit box.

After the ball was over at 1:00 or 1:30 A.M., the Levitts dropped in at the Noshorium, an all-night restaurant off the hotel lobby. Thirty minutes later they returned to their room where Mrs. Levitt placed the jewelry on top of a dresser near the bed. Mr. Levitt then engaged the night lock, or "dead bolt" and they retired. Upon arising late the next morning, Mrs. Levitt instructed her husband to collect the jewelry on the dresser and return it to the safe deposit box. Mr. Levitt scooped up the jewelry, placed it in a hankerchief, and returned the contents to the box. He failed to notice that the major pieces the two diamond rings, the sapphire ring, necklace and earrings were missing. Not until later that afternoon after the jewelry case had been brought back to the room did Mrs. Levitt become aware in the course of packing that the five valuable pieces were gone. After the local police and hotel security people were summoned it was discovered that the dead bolt had been tampered with and rendered inoperable.

Invoking diversity jurisdiction, the Levitts brought suit in the United States District Court for the Southern District of New York against Desert Palace, Inc. (the Hotel), the owners and operators of Caesar's Palace. Plaintiffs sought a substantial punitive award and compensatory damages of $1,300,000, and the alleged value of the stolen jewelry. The trial was bifurcated one jury found the defendant liable for the loss and a second returned a verdict of $548,599 in favor of the Levitts. The Hotel then moved for judgment notwithstanding the verdict or, in the alternative, for a new trial. The Levitts moved for a new trial solely on the issue of damages. All motions were denied in a memorandum decision and order of the Hon. Lee P. Gagliardi, District Judge, on September 27, 1978. Judgment in favor of the Levitts in the sum of $548,599 was entered on October 3, 1978. This appeal by the Hotel ensued. The Levitts have cross-appealed for a new trial on the issues of damages only if this court orders a new trial on the issue of liability.

The Standard of Care

The extraordinary standard of care imposed upon the innkeeper at common law originated in the feudal conditions of the Middle Ages, R. Brown, The Law of Personal Property § 102 at 482 (2d ed. 1955), and has long since been ameliorated by state legislation. Id. § 106 at 501. Nevada's pertinent statute provides:

No owner or keeper of any hotel, inn, motel, motor court, or boardinghouse or lodginghouse in this state shall be civilly liable after July 1, 1953, for the loss of any property left in the room of any guest of any such establishment by reason of theft, burglary, fire or otherwise, in the absence of Gross neglect upon the part of such keeper or owner.

Nev.Rev.Stat. § 651.010 (emphasis supplied).

The Levitts urge on this appeal, however, that the Nevada "Innkeepers Statute" we have quoted is not applicable because it only purports to cover the loss of property "left" in the room of the guest. Since the jewels were taken while the Levitts were sleeping in the room they claim that the jewels had not been "left" there. Appellees argue, therefore, that the Hotel should be held liable as an insurer on common law principles. Prior to trial the Levitts in the "points for charge" filed with the court asked for an instruction that the defendant was an insurer under Nevada law. Their pre-trial memorandum in support of a motion to amend the complaint*fn1 also made the argument that the Nevada Innkeepers Statute was not governing since the jewels were not "left" in the room. The same point was reiterated in the motion for a directed verdict at the end of the defendant's case.

On the morning of November 23, 1977, however, Judge Gagliardi delivered to counsel for both sides a copy of his proposed charge and requested comments and objections before delivering it to the jury. The charge on the liability issue was framed only in terms of gross neglect under the Nevada statute and made no reference at all to any common law liability. Yet counsel for the Levitts took no exception to the charge on this point even though he did specifically object to other aspects of the charge, including the instruction on contributory negligence. Furthermore, the trial judge stated to both counsel: "I am going to say that this is a civil case for them to find out whether the defendant is liable to the plaintiff under the special provisions of the statute under the laws of Nevada . . . ." Counsel for the Levitts responded, "Yes, sir. That would be all right." After the charge was given and counsel were asked if they had any exceptions, the attorney for the Levitts responded, "Your, Honor, I have no exception other than that you refused to give my points earlier." It could be argued that counsel's term "points" referred to the initially filed "points for charge" which included, Inter alia, the "left" argument. More realistically, the phrase would seem to refer to those points made earlier that morning in the robing room, especially since the objection by Levitts' counsel to the instruction on contributory negligence had not caused the trial judge to alter the charge on that issue. Such an interpretation is made even more likely by the fact that during that conference the Levitts' attorney had specifically acquiesced in the reading to the jury of the Nevada gross negligence charge.

Thus, although the Levitts had raised the question of the standard of care owed them by the Hotel on several occasions earlier in the proceedings their counsel made no specific reference whatsoever to this key issue when the jury charge was submitted for his inspection and comments. Even more importantly, the record indicates his affirmative approval of the trial court's proposed version of the critical portion of the charge. The acquiescence of the Levitts' counsel in the jury instruction on gross negligence precludes appellate review of the propriety of that portion of the charge.*fn2 Fed.R.Civ.P. 51; see Wilson v. Crouse-Hinds Co., 556 F.2d 870, 875 (8th Cir. 1977) (en banc), cert. denied, 434 U.S. 968, 98 S. Ct. 513, 54 L. Ed. 2d 455 (1977). See also Spano v. N. V. Koninklijke Rotterdamsche Lloyd, 472 F.2d 33, 34 (2d Cir. 1973) (per curiam).

Gross Negligence

The state courts of Nevada have not yet construed its Innkeepers Statute, Nev.Rev.Stat. § 651.010. Judge Gagliardi did charge the jury, however, in the language employed by the highest court of the State in Hart v. Kline, 61 Nev. 96, 116 P.2d 672 (1941), which construed the phrase ...

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