The case of Mathias v. Accor Economy Lodging delves into the question on whether failure by the motel to take preventative measures against a situation that result in offensive non-consensual touching and some degree of physical harm constitute intentional torts. It further looks at whether such failure as well as the subsequent non disclosure of possible harm is an intentional tort whose remedy can go beyond compensatory damages. The case is on the in intentional torts of fraud and battery. Battery involves the intentional offensive
non-consensual touching while fraud is the act of a known misrepresentation (Barth, 2008).
The role of punitive damages is to punish defendants and act as a deterrent to potential defendants. It is a damage awarded over and above actual damages payable to the plaintiffs (Barth, 2008). Intentional torts have punitive damages that are subject to the precedent set by United States Supreme Court cases of Pacific Mutual Life Ins. Co. v. Haslip (1991), and BMW of North America, Inc. v. Gore (1996). The damages are awarded subject to punitive damages to actual damages ratios set by these cases.
In Mathias v. Accor Economy Lodging, the plaintiffs, a brother and sister, brought a diversity suit under the Illinois law governing affiliated entities. The plaintiffs rented a room in an affiliate motel under Accor Economy Lodging and had a painful experience with bedbug bites (Scharnberg, 2003). In the case, the plaintiffs argue that the motel which charged over $100 a day did not want to portray itself as a substandard motel and as such should not have allowed its guests to get bitten by bedbugs. Since it held itself as highly placed hotel, the defendant was guilty of wilful and wanton conduct (Scharnberg, 2003; Sharkey, 2003).
According to Illinois law, it was appropriate to charge both compensatory as well as punitive damages. This argument was sufficient for the jury which awarded each plaintiff $5000 in compensatory damages and an additional $186,000 in punitive damages (Crawford, 2003). The defendant lodged an appeal on the punitive damages award and also complained on some of the evidentiary rulings made by the judge (Sharkey, 2003). The plaintiffs made a cross appeal about the dismissal of one complain which argued on the violation of a consumer protection law under the state of Illinois. However, they did not seek additional damages, as long as the verdict by the jury was upheld. The argument put forward by the defendant was that at worst, its guilt was that of simple negligence. In that case, the plaintiffs were not entitled to the punitive damages awarded to them. There defendant also complained of the excessive award (Sharkey, 2003).
The facts of this case point to negligence on the defendant’s part. EcoLab, the company that provided extermination services for the motel discovered bedbugs in 1998 in several motel rooms. EcoLab passed on the information to the motel with a recommendation to be hired for extermination services that would cover all motel rooms at a cost of $500. However, the motel was unwilling to undertake the extermination process. The following year, motel management contracted EcoLab services to spray a room that was discovered to have bedbugs. The motel later tried to negotiate for free extermination services, but EcoLab refused (Otto, 2003).
When the motel manager noticed an increase in the number of refunds during spring of 2000, accompanied by reports from client that the rooms had and bugs that bit them, she looked into the matter and found bedbugs (Otto, 2003). The manager asked the company to close the motel for the rooms to be sprayed after the situation worsened. Her superiors refused the recommendation. The refusal by the superior to take measure to eliminate a known harm or warm the motel guest of it made him liable for punitive damages as set out in judicial precedents in the case of Mattyasovszky v. West Towns Bus Co., (1975) and Kennan v. Checker Taxi Co., (1993). Under these precedents, an employer has automatic liability for compensatory damages as per the respondeat superior principle because he acted within his employment scope.
The infestation escalated to farcical proportions. In a certain instance, after a guest complained of being bitten, the guest was moved to a different room only to experience the same problem. The guest was then moved to a third room but it also had bedbugs and he was moved again. In July 2000 after the motel acknowledged to EcoLab that it had a major bedbug infestation, it instructed its desk clerks to refer to them as "ticks" in an effort to make the customers less worried. To make matters worse, even the motel rooms that were closed due to bedbug infestation were rented out to guests. The plaintiffs checked into the motel in November and were allocated room 504. This was one of the rooms that were closed off due to the bedbugs. Despite the fact that several rooms in the motel were infested with bedbugs, the motel rented out 190 out of its 191 rooms (Sharkey, 2003).
In the case, the plaintiffs give substantial evidence to show that the defendant, Accor Economy Lodging had knowledge of the existence of the bedbugs. The pest eradication company contracted by the motel noted the bed bug infestation and subsequently alerted the motel management. The motel failed to remedy the problem despite the fact that it would have cost them little to do so. Additional evidence shows that the motel staff deliberately misled its clients by use of euphemisms to refer to the kind of insects that they noted in their rooms. They referred to them as ticks yet they were bedbugs with an intention to conceal the severity of the problem.
The motel’s conduct was a clear case of fraud and battery since the management knew that the material facts presented to its clients was a misrepresentation. This conclusion can be draw in line with the case of Garratt v. Dailey, (1955). The appeal case held that a defendant would be found guilty of battery if he had prior knowledge with substantive certainty about his action to move a chair whereas he knew the plaintiff would try to sit where it previously and hence would fall to the floor. It would have been difficult for customers to rent their rooms if they had knowledge that there were bedbugs in those rooms. Those who would have agreed to rent the rooms with such knowledge would definitely ask for lower rates. This knowledge motivated them to mislead their clients.
Bites from bedbugs have no significant health risk. However, the bites are painful and give an uncomfortable experience. The fact that the motel customers did not consent to the painful experience means that, the harmful and offensive touch of the bedbug amounts to battery. The motel’s attempt to misrepresent the bedbugs to be ticks is a possible reason that caused the motel to be reluctant in remedying the problem. The punitive damages awarded served the additional purpose of ensuring the defendant did not profit from the fraudulent actions it undertook (Sharkey, 2003).
In arguing that the maximum constitutionally legal amount per individual should be $20,000, the defendant tried to use a statement made by the U.S. Supreme Court that few damages awards that exceeded a single-digit ratio between compensatory and punitive damages, would satisfy due process in State Farm Mutual Automobile Ins. Co. v. Campbell, (2003) (Shavell, 2004). The Court further suggested that punitive damages four times the amount of compensatory damages were almost a constitutional impropriety citing Pacific Mutual Life Ins. Co. v. Haslip,(1991), and BMW of North America, Inc. v. Gore, (1996).
Based on these statements by the Court, the defendant wanted the plaintiffs paid a maximum of $20000 because $5000 (compensatory damages)*4 (maximum ratio of 4 to 1) equals $20000 (Shavell, 2004). The jury had used a 37.2 to 1 ratio for punitive to compensatory damages which the defendants considered too high (Crawford, 2003). The Supreme Court refused to lay down a single-digit-ratio rule such as the 4-to-1suggested by the defendants citing that there was another case which had already used a much higher ratio of 145-to-1; State Farm Mutual Automobile Ins. Co. v. Campbell.
The award of punitive damages is meant to punish and each punishment should fit the crime committed. In cases where the probability of detection is very low, high damages are paid when one is caught in the act of committing a crime. The assumption made is that there were other instances during which the person was not caught. A good example is the hefty fines levied for littering. High damages are also paid if the crime is a highly lucrative one such as illegal drug trafficking (Barth, 2008).
Although the compensable harm from the actions of the defendant's is relatively small and not easy to quantify, the behaviour cannot be excused. The emotional harm from the defendant’s actions is quite significant because of the pain experienced from the bedbug bites. The defendant also profited from the fraud because concealing the infestation meant that there was no need to close the motel for extermination to take place (Sharkey, 2003). In effect, the defendant was able to continue renting out the rooms and make money. The motel management opted to keep the place running because even though there were several refunds, the associated costs were far less that what it would have cost to close for an effective fumigation process. The punitive damages awarded served the purpose of ensuring the defendant did not profit from the fraudulent action of it undertook.
The motel did not have a defence for their actions. The only logical action was the case on the high cost of the damages that they were asked to pay. The motel’s argument that they should not pay punitive damages, because their case was merely that of negligence failed to hold. The appeal court argued that the material facts of the case showed sufficient evidence of deliberate misguidance by the motel to warrant the award of punitive damages. In addition to this, the punitive damages awarded were in the ration of 37.2 to 1 which falls within the accepted range set by the BMW and State Farm cases.
.
References
Barth, S. C. (2008). Hospitality law: Managing legal issues in the hospitality industry. New York, NY: Russell Sage Foundation.
Crawford J. G. (2003) Big award in bug case stirs debate Washington Bureau. Chicago Tribune.
Otto, M. (2003, Sept 2). Bloodthirsty Pests Make Comeback: Bug Infestations Raising Welts, Ire, Washington. Post.
Shavell, S. (2004). On the proper magnitude of punitive damages: Mathias v. Accor economy lodging, inc. Harvard Law Review, 5, 327-342.
Scharnberg, K. (2003, Sept 28). You'll Be Itching to Read This: Bedbugs Are Making a Comeback: Blame World Travelers and a Ban on Certain Pesticides, Chicago. Tribune, p. 1
Sharkey, C. M. (2003). Punitive damages as societal damages. The Yale Law Journal, 113, 347.
Cases
Cirrincione v. Johnson, 184 Ill.2d 109, 234 Ill.Dec. 455, 703 N.E.2d 67, 70 (1998);
Barton v. Chicago & North Western Transportation Co., 325 Ill.App.3d 1005, 258 Ill.Dec. 844, 757 N.E.2d 533, 554 (2001).
BMW of North America, Inc. v. Gore, 517 U.S. at 583-85, 116 S.Ct. 1589.
Garratt v. Dailey, 46 Wash.2d 197, 279 P.2d 1091, 1093-94 (1955),
Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353, 359 (1978);
Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1, 23-24, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991),
