ISSUES

1. Under Wisconsin negligence law and related case law, can New Horizons Travel Agency be held liable for negligence when the hotel the agency reserved for the Lees was located in a high crime area, the Lee’s personal belongings were stolen, and hotel conditions were substandard?

2. Under Wisconsin misrepresentation law can New Horizons Travel Agency be held strictly responsible when the hotel the agency recommended to the Lees was unsanitary, lacked many of the amenities represented by the agency, and the Lees relied on agency expertise to plan their vacation?

BRIEF ANSWERS

1. Probably. The court will likely find New Horizons liable for negligence. The available evidence will likely show the existence of a duty owed by the defendant, a failure by the defendant to discharge that duty, and injury to the plaintiff as a result of that failure. The incidents that occurred in this case, including the high crime area are in which the hotel was located, and the theft of the Lee’s personal belongings are factors from which a jury may reasonably infer a breach of duty and find the agency liable.

2. Probably. The court will likely find that the elements of strict responsibility misrepresentation,  defendant made a misrepresentation of fact, such representation was untrue, the representation was based on circumstances which defendant ought to have known, the defendant had an economic interest in the transaction, and the plaintiff relied on the representation, are supported by the available evidence. The incidents that occurred in this case, including the unsanitary conditions of the hotel and that lack of represented amenities are factors from which a jury may reasonably find the agency liable.

FACTS

Stephen and Diana Lee decided to marry and honeymoon somewhere in Jamaica. Upon contacting New Horizons, operated and owned by Robert Hoyt because they did not want to assume all the responsibility of planning a vacation, New Horizons advised the Lees to honeymoon at Sun Chasers Resort in Montego Bay. Mr. Hoyt showed the Lees a brochure and stated that Sun Chasers was an all-inclusive resort, which included: food, drinks, water sports, entertainment, and wedding ceremonies.

Upon arriving in Jamaica and checking in at Sun Chasers, the Lees noticed the carpet and furniture of their room was in very poor condition, the room smelled musty, lacked hot running water and the bathroom was infested with cockroaches. Furthermore, New Horizons promised to send the documentation necessary for the wedding to the resort but apparently the documents became lost as Sun Chasers claimed they never received them. Upon traveling to the beach the next day, the Lees noticed there were no kayaks as advertised in the brochure, the water skiing equipment was worn out, and the equipment in the nautilus room was nearly impossible to use because of rust. On returning to their room later that night, the Lees noticed the room ransacked and many of their personal belongings, including their wedding rings stolen. Although the Lees filed a police report the intruders were never apprehended and this last incident caused the Lees to abruptly terminate their marriage and honeymoon plans at Sun Chasers and return to the United States.

After marrying at a local courthouse and borrowing money from their parents to buy new wedding rings, the Lees called Mr. Hoyt at New Horizons Travel Agency to inform him of their trip. Mr. Hoyt was unavailable, but his secretary stated that Mr. Hoyt had learned of Sun Chasers through a fellow travel agent and admitted the Lees were the first clients they had ever sent to that resort.

On contacting the Montego Bay Police Department in order to obtain a copy of the police report, a police officer informed Mr. Lee that there had been a serious crime wave in that part of Montego Bay for the past six months. Upon notifying Mr. Hoyt of this information, Mr. Hoyt responded that he was shocked as he had inquired about the safety of the area with the resort and was told there were no crime problems in the area. Mr. Lee then contacted the Jamaican Tourism Board, which confirmed that a crime problem had existed in the area for the last six or seven months. Mr. Lee then wrote Mr. Hoyt a letter on July 9, 1998, seeking amends from New Horizons for their failed marriage and honeymoon trip.

On July 17, 1998, New Horizons responded by denying responsibility for the incidents, stating that the resort was culpable and the matter should be directly addressed to the resort.

DISCUSSION

A. Negligence

A determination of negligence requires "(1) the existence of a duty owed by the defendant to the plaintiff, (2) a failure by the defendant to discharge that duty and, (3) injury to the plaintiff as a result of that failure." Levin v.Kasmir World Travel, Inc., 540 N.Y.S.2d 639 (1989). Thus, in order to sustain a finding of liability against the defendant, the plaintiff must prove that the defendant owed him a duty. See Bucholtz v. Sivotkin Travel, 74 Misc. 2d 180,182 (1973). Second, the plaintiff must prove a breach of that duty on the part of the defendant. See Barton v. Wonderful World Travel , 502 N.E.2d 715 (1986). Third, the plaintiff must prove that his injury was a direct result of defendants breach of duty. See Compagnie Nationale Air France v. Castano, 358 F.2d 203 (1966).

 

1. Existence of a duty

"The travel agent has a duty to refrain from conduct which creates an unreasonably great risk of harm to others. This duty extends to his clients in all phases of his operation involving foreseeable injury to them, such as giving travel advice." Paul C. Wohlmuth, The Liability of Travel Agents , 40 Temp. L. Rev. 29 (1966). The element existence of a duty will be disputed among the parties because there will be a question as to whether the duty extends beyond the making of reservations at the resort. See id. at 40.

In Levin, 540 N.Y.S.2d at 639, plaintiff purchased through her travel agent an airline ticket from New York to Paris for her daughter. See id.at 245. Travel agency did not advise daughter that a visa was required for entry into France. See id. at 245. French immigration then denied plaintiff daughters entry upon arriving in France and placed her on the next return flight to the United States. See id. at 245. The court addressed whether a travel agent owes more than a mere duty to purchase tickets to a customer. See id. at 245. The court, holding for the plaintiff, found that "travel agents are expected to provide information which is necessary and of importance to the traveler; a travel agent is not merely a dispenser of tickets but also a fiduciary on whose expertise a traveler may reasonably rely."See id. at 245.

In A&E Investment Corp. v. Link Builders, Inc., 214 N.W.2d 764, 766 (1974), under Wisconsin negligence law, an action was bought against an architect who designed building, where architect’s negligence resulted in economic loss to buildings tenants. See id. at 764. The court addressed whether architect owed a duty to buildings tenants. See id. at 764. The court held architect liable as the architect owed a duty to properly take into account condition of subsoil when designing construction of building. See id. at 770. Further, the duty of the defendant to the plaintiff was stated as " the duty of any person is the obligation of due care to refrain from any act which will cause foreseeable harm to others even though the nature of that harm and the identity of the harmed person or harmed interest is unknown at the time of the act."See id. at 776.

The Lees will argue that New Horizons owes them a duty that amounts to more than a mere duty of purchasing tickets. See Levin, 540 N.Y.S.2d at 639. The Lees will further argue that the duty found to be owed in Levin is analogous to the duty found to be owed in A&E Investment Corp. and will argue "that the standard of care demanded of the travel agent be more than that of the ordinary prudent person. The travel agent probably falls into that category of persons viewed by the courts as professionals or those purporting to exercise special care and expertise ." See Paul C. Wohlmuth, The Liability of Travel Agents, 40 Temp. L. Rev. 29 (1966).

As a professional travel agency, the Lees will argue that the New Horizons should have known and warned them of the hotel’s unsanitary condition, and the fact that there had been a reported crime wave occurring in the vicinity of the hotel for six months which ultimately lead to the robbery of the their personal belongings.

The defendant will argue that no duty is owed by the travel agen t to inform customers of possible hazardous conditions on the property of others. See Loeb v. United States Dep’t. of Interior , 793 F. Supp. 431 (1996).

In Loe b , a tour participant was injured while walking in a national park and brought action against the federal government, the lodge, and the operator of the tour. See id. at 431. The court addressed whether a tour operator owed its customer a duty to warn of probable hazardous conditions. See id. at 436. The court held that a tour operator did not assume a duty by virtue of its status to transport participants only to hotels which kept their premises in a safe condition for guests. Furthermore, a tour operator had no duty to warn tour participants of possible hazardous conditions on the property of others. See id. at 437.

The court will likely find that New Horizons owed a fiduciary duty to the Lees and this duty amounts to more than a mere duty to dispense tickets, but rather a duty to exercise special care and expertise.

 

2. Failure to discharge the duty

When "a travel agent owes a duty and fails to discharge it, and thereby proximately causes injury to the client, liability will result."See Paul C. Wohmuth, The Liability of Travel Agents , 40 Temp. L. Rev. 29 (1966). The element of failure to discharge a duty will be disputed among the parties as there is question as to whether the New Horizons breached its duty to the Lees by not properly investigating the hotel and the surrounding area for criminal activity.

In Creteau v. Liberty Travel, Inc ., 195 A.D.2d 1012 (1993), plaintiffs commenced an action to recover damages for personal injuries sustained when they were robbed while vacationing in Jamaica. The court addressed whether defendant travel agency had breached its duty to plaintiff’s in the selection of potentially unsafe accommodations. See id. at 1013. The court stated "where the agent has knowledge of safety factors or where such information is readily available, a travel agent has the duty to inform the customer of these factors." See id. at 1014.

In Lavine v. General Mills, Inc ., 519 F. Supp. 332 (1981), however, a negligence suit was brought against a travel agency for injuries sustained when plaintiff fell on slippery rocks along a beach. The court addressed whether defendant travel agent had breached its duty to plaintiff by not warning her of the particular hazard. See id. at 335. The court held that a travel agent owes no duty of investigation unless the travel agent knew or should have known of the potential harm that occurred. See id. at 335.

In Fling v. Hollywood Travel and Tours , 765 F. Supp. 1302 (1990), the plaintiff’s were robbed at gun point near their hotel as they walked along the beach. The court addressed whether the travel agent owed a duty to warn of a high crime area around the hotel, and whether they breached that duty. See id. at 1303. The court held that plaintiff’s failed to prove special circumstances showing the travel agent could have foreseen the attack. See id. at 1302.

The Lees will argue that New Horizons breached a duty to warn of potential criminal activity at the hotel. The Lees will further argu e that the travel agency should have known of this criminal activity as it was readily available from the Jamaican Tourism Board and, therefore, New Horizons breached its duty to inform customers of readily available information.

New Horizons will argue that it investigated the reputation of the hotel with a fellow travel agent and with the hotel itself, and that no special circumstances existed. New Horizons will conclude that because no special circumstances existed, no duty was imposed to warn travelers of a dangerous condition, and as such no duty was breached. See Fling, 765 F. Supp. at 1306.

The court will likely find that New Horizons owed a special duty to investigate and warn travelers of a dangerous condition. The court will likely find defendant liable of breach of duty as contacting the hotel itself to inquire about the criminal activity in the area was insufficient to satisfy New Horizons special duty to the Lees. The court will probably hold that the hotel is a biased party that is unlikely to divulge negative information about itself. Therefore, New Horizons breached its duty to the Lees.

 

3. Injury resulting from breach of duty

A travel agent must act as a reasonable person or exercise special care depending on the circumstances and if he does not " he would be liable for foreseeable injury resulting to the client." See Paul C. Wohlmuth, The Liability of Travel Agents, 40 Temp. L. Rev. 29 (1966). The element of injury resulting from a breach of duty will be disputed as there will be a question as to whether the breach caused the injury.

In Loretti v. Holiday Inns, Inc., No. 85-0709, 1986 U.S. Dist. LEXIS 25871, at *3 (E.D. Pa. May 6, 1986), the plaintiff instituted an action against a travel agent for breach of duty in recommending a hotel in which she was assaulted and raped while vacationing. The court addressed whether there was a causal relation between the breach of the duty and plaintiff’s injuries. See id. at 11. The court, in finding that plaintiff’s injury resulted from defendant’s breach of duty, held that "a travel agent has a duty to disclose reasonably obtainable information to its client unless that information is so obvious to the client that as a matter of law, the travel agent would not be negligent for failing to disclose it." See id. at 3.

The Lees will argue that New Horizons breach of duty was the cause in fact of their injuries, that but for New Horizons recommendation of the hotel, they would not have traveled there and their injuries would not have resulted.

New Horizons will argue that the intentional acts of thieves are unforeseeable and constitute an intervening cause which cuts off their liability. "An intervening cause is a new and independent act, itself a proximate cause of an injury which breaks the causal connection between the original wrong and the injury." See 29 Creighton L. Rev. 379.

The court will likely find but for New Horizons recommendation, the Lees would not have vacationed at this particular hotel, and the Lees would not have been robbed of their personal possessions. The court will likely reach this result after determining the police report attesting to a substantial increase in criminal activity at the hotel within the past six months was reasonably obtainable by New Horizons. The court will likely find that the robbery of the Lee’s personal belongings was not an intervening cause that would bar liability on the part of the New Horizons, as the robbery was a foreseeable act resulting from the high crime area surrounding the hotel.

 

B. Strict Responsibility Misrepresentation

A determination of strict responsibility misrepresentation consists of: a representation by defendant of fact, a representation that was untrue, a representation based on circumstances in which defendant had an economic interest in the transaction, and that plaintiff believed such representation to be true. See Reda v. Sincaban , 426 N.W.2d 100, 101 (1988).

 

1. A representation made by defendant of fact

"A real estate broker may be held strictly responsible for a representation of fact." Gauerke v. Rozga , 332 N.W.2d 804 (1983). In Gauerke, a real estate purchaser sued the real estate brokers for misrepresentation of the amount of acreage and river frontage the subject property contained. See id. at 805. The court addressed whether brokers were strictly responsible for misrepresentation, not only as to facts which a broker could normally be expected to know without investigation, but as to any facts that a broker could be expected to know." See id. at 805. The court held that a broker could be held strictly responsible for misrepresentations made to purchasers concerning any facts which he would normally be expected to know, not only those facts which he would normally be expected to know without investigation. See id.at 805.

The element of representation of fact is likely to be undisputed as the Lees will introduce evidence in the form of a confirmation letter that New Horizons stated resort had everything they could ask for and would see to all of their needs.

 

2. Representation was untrue

The element of untrue representation is likely to be undisputed as the Lees will introduce evidence that the hotel was musty, unsanitary, lacked hot water, and adequate recreational activities.

 

3. Defendant knew or ought to have known the truth or untruth of the representation

Strict responsibility for misrepresentation does not depend upon the source of speaker’s knowledge, but rather, this element is satisfied if the speaker professes or implies personal knowledge. See Gauerke, 332 N.W.2d at 804. The element that defendant knew or ought to have known the truth or untruth of the representation will likely be disputed because there will be a question as to whether defendant as a professional providing services should have known the conditions of the hotel to insure that the representations being made were accurate.

In Reda, purchasers of lot sued vendors and real estate brokers for misrepresentation of lot size. See Id. at 102. The court addressed whether defendant’s representations were based on personal knowledge, or on circumstances in which he ought to have known the truths of his misrepresentations. See id. at 102. The court held the defendant liable of strict responsibility misrepresentation because "the speaker either had particular means of ascertaining the pertinent facts, or his position made possible complete knowledge and the statements fairly implied that he had it." See id. at 102.

The Lees will argue that the New Horizons as a professional travel agent should have better investigated the hotel to assure the accuracy of the representation that was being made. The Lees will further argue that because of New Horizons professional standing as a travel agent it should have known of the hotel’s substandard conditions such as the lack of hot water, the unsanitary bathroom, and the poor condition of the recreational facilities.

New Horizons will argue that it investigated the hotel both with hotel personnel and with a fellow travel agent and that it had no reason to believe that it was in fact misrepresenting the hotel as all the information it gathered amounted to excellent reviews of the hotel’s amenities and reputation.

The court will likely find New Horizons should have known of the hotel’s substandard conditions because of its standing as a professional travel agent. The court will also likely hold that a travel agent inquiring into a hotel’s conditions with the hotel itself is not a suitable form of investigation because of the potential for bias favoring the hotel among hotel personnel. The court will not look favorably upon New Horizons investigation of the hotel because "the doctrine of strict responsibility for misrepresentation does not depend on the source of the speaker’s knowledge, but rather, this element is satisfied if speaker professes or implies personal knowledge." See Reda, 426 N.W.2d at 281.

 

4. Defendant had an economic interest in transaction

An element of strict responsibility misrepresentation is "the defendant had an economic interest in the transaction."See Reda, 426 N.W.2d at 281. This element will likely be undisputed as there is evidence in the form of a Visa bill that defendant was paid for his travel referral services.

 

5. Plaintiff believed representation to be true and relied on it

An element of strict responsibility misrepresentation is "plaintiff believed such representation to be true and relied on it." See Reda, 426 N.W.2d at 281. This element is likely to be undisputed because the Lees will introduce evidence showing they contacted the travel agency because they did not have the time to assume all the responsibility of planning a vacation and decided to call a travel agent to handle the arrangements. The Lees will show the brochure New Horizons gave them, along with the confirmation letter stating "the resort will see to all your needs," to show they believed and relied on the representations of New Horizons.

 

C. Damages

The Lees will likely be awarded by the court any of the following damages, to include the purchase price of the vacation, damages for annoyance, damages for emotional distress, damages for ruined vacation, damages for what would have been a pleasant week and damages for the loss of the intangible pleasure of a 24 hour vacation day. See Pelligrini v. Landmark Travel Group, 628 N.Y.S.2d 1003, 1006 (1995).

CONCLUSION

The evidence likely supports the elements of negligence, duty, breach of duty, and injury as a result of the breach. The court will likely find that New Horizons, owed the Lees a fiduciary duty to warn against possible dangers and the duty arose from the agent’s standing as a professional providing travel services. The court will further find that New Horizons’ breach of duty in not informing the Lees of the possible danger associated with the hotel’s high crime rate, directly resulted in the loss of their wedding rings and other personal belongings, as the Lees would not have traveled to this particular resort but for New Horizons recommendation. Based on these findings the court will likely find New Horizons liable to the Lees for negligence.

The elements of strict responsibility misrepresentation: defendant made a representation of fact, representation was untrue, representation was based on circumstances in which the defendant ought to have known the truth or untruth of the representation, defendant had an economic interest in the transaction, and plaintiff believed such representation to be true and relied on it, will likely be supported by the available evidence. The court will likely hold that the New Horizons ought to have known of the hotel’s inferior conditions and amenities because of its status as a professional in the travel industry. The court will also likely find that the Lees entrusted their wedding and honeymoon plans to New Horizons, and relied on New Horizons’ expertise to ensure a satisfactory wedding. Therefore, the court will hold New Horizons strictly responsible for misrepresentation.