Protecting Yourself from Liability for Injuries Sustained During Special Events

Q: A visitor to the mall I own was injured while taking part in a recreational activity held in the parking lot by a local charity group that also leases space there. The charity group provided the entertainment free of charge. I’ve heard about “recreational use immunity” sometimes protecting property owners from liability in this scenario. Does recreational use immunity apply to me?

A: In most cases, it depends on whether there was any commercial component to the activity. For example, if the activity was held during mall business hours, a court may see that as an intent to increase foot traffic to the mall and boost commercial activity—and recreational use immunity would not apply. In past cases involving an injury suffered by a visitor to a recreational event held at a mall by a tenant, courts have interpreted state “recreational use immunity” laws as not providing a commercial mall owner and manager immunity where there are both recreational and commercial components to the operation.

Mall Owner, Manager Claim Immunity

In an important North Dakota case, a visitor to a mall injured her right ankle when she stepped in a hole in a parking lot where she was attending an outdoor skate boarding exhibition. The event was held by a church group that also leased space for church services inside the mall. The show was being performed during the mall’s regular Saturday business hours and was intended to be a community outreach program to expose area youth to religion, according to the mall manager and the church’s pastor.

At the direction of the mall manager, the exhibition was held on the parking lot area of the mall that had been part of the lumber yard of a previous home improvement store tenant. The area had holes and depressions in the concrete from the removal of posts that had formed part of an enclosure around the lumber yard.

The visitor severely injured her ankle when she stepped in a leftover post hole in the parking lot concrete. She sued the mall owner and manager, alleging that they “negligently and carelessly” failed to eliminate the holes in the parking lot or to warn exhibition attendees about the holes, and were, therefore, liable for the hazardous condition.

The mall owner and manager denied that they had been negligent and claimed that the visitor’s lawsuit was barred by recreational use immunity under North Dakota laws. The mall owner and manager asked the trial court for a judgment in their favor without a trial, asserting that they were entitled to immunity because the premises were used for recreational purposes and the visitor had not been charged an admission fee to enter the premises.

The trial court granted the mall owner and manager a judgment in their favor without a trial, concluding that they were entitled to recreational use immunity because the visitor entered the land for “the recreational purpose of enjoying the exhibition” and “was not charged to enter the premises.” The visitor appealed.

Scope of Immunity One Determining Factor

Under North Dakota law for premises liability, a commercial property owner generally owes a duty to lawful entrants to “exercise reasonable care to maintain the property in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to another, the seriousness of the injury, and the burden of avoiding the risk,” the appeals court in this case pointed out.

The appeals court also noted that North Dakota’s recreational use immunity laws had been enacted to encourage commercial property owners to open their land for recreational purposes by giving them immunity from lawsuits under certain circumstances. Under those laws, “an owner of land owed no duty of care to keep the premises safe for entry or use by others for recreational purposes, or to give any warning of a dangerous condition, use, structure, or activity on such premises to persons entering for such purposes.”

Furthermore, an owner who either directly or indirectly invited or permitted—without charge—any person to use such property for recreational purposes did not, as a result, assume responsibility for or incur liability for any injury.

However, at the time of the skateboarding exhibition in this case, state laws also made clear that there was no recreational use immunity for “willful and malicious failure to guard or warn against a dangerous condition, use, structure, or activity,” or for “an injury suffered in any case where the owner charges the person or persons who enter or go on the land other than the amount, if any, paid to the owner of the land by the state.” “Recreational purposes” under the laws included “any activity engaged in for the purpose of exercise, relaxation, pleasure, or education.”

Consider ‘Commercial Component’

The appeals court had to determine the scope of “recreational purposes” in this case where the property owner was a mall and the organization holding the event was a church and a mall tenant. The appeals court pointed out that, crucially, their purposes had recreational and nonrecreational components.

The appeals court took into account the intent of both the mall owner and manager and the church, and the location and nature of the visitor’s conduct when the injury occurred. Here, the court had to determine whether nonrecreational uses or purposes, such as the church’s use of its leased space, could be mixed with recreational uses or purposes, such as the church-sponsored exhibition, and still allow the mall owner and manager to claim recreational use immunity.

The appeals court declined to interpret recreational use laws to necessarily provide a commercial property owner and manager recreational use immunity where there were recreational and commercial components to its operation.

Although there was evidence that the mall owner and manager opened an area of the mall parking lot that was not normally accessible to the public, there also was evidence that they allowed their tenant, the church, to hold the exhibition on mall property on a Saturday during regular business hours to increase foot traffic for the other mall tenants. The mall was a commercial enterprise and increasing foot traffic was a commercial, not recreational, strategy for the operation of the mall, noted the appeals court. Additionally, the church was a rent-paying tenant, which supported the inference that the owner allowed it to use the parking lot as part of that landlord-tenant arrangement.

Because there were issues as to whether the mall owner and manager were entitled to recreational use immunity in light of the fact that the church tenant’s exhibition wasn’t purely for recreational purposes, the appeals court concluded that a judgment in their favor without a trial was inappropriate [Schmidt v. Gateway Community Fellowship, et al., April 2010].

If recreational immunity doesn’t protect you from liability for these types of accidents, your general liability insurance policy would normally cover them—unless alcohol was served and was a factor in the injury. Talk to your insurance broker to be sure you’re covered for special events. Occasionally, a separate policy or rider may be needed for special events.

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