Weinberg v. D-M Restaurant Corp., 53 N.Y.2d 499 (1981)
Under New York General Business Law § 201, a restaurant’s liability for loss of a patron’s checked property is limited to $75 unless a greater value is declared and a written receipt is issued, and a customary tip given to a checkroom attendant does not constitute a “fee or charge exacted” by the restaurant.
Summary
A patron sued a restaurant for the loss of her fur coat that she had checked. The restaurant argued its liability was limited to $75 under General Business Law § 201 because no value was declared. The patron contended the customary tip given to the checkroom attendant constituted a “fee or charge” that would negate the statutory limitation and that the restaurant was required to post notice of the statute to benefit from its liability limitations. The Court of Appeals held that the tip was not a “fee or charge exacted” by the restaurant and that restaurants are not required to post the provisions of § 201. Thus, the restaurant’s liability was limited to $75.
Facts
The plaintiff checked her Russian sable fur coat at the defendant restaurant’s checkroom. She received a check but did not declare the coat’s value. The coat disappeared, and the restaurant could not explain its disappearance. The restaurant did not charge a fee for checking coats, but the checkroom attendant received tips, a portion of which was shared with the owner.
Procedural History
The plaintiff sued for negligence. The defendant moved for summary judgment to limit recovery to $75 based on General Business Law § 201. The plaintiff cross-moved for summary judgment, arguing the tip was a fee. Special Term denied both motions. The Appellate Division modified, granting the plaintiff summary judgment on liability and remanding for trial on damages, finding factual questions existed regarding whether the restaurant “exacted” a fee. After trial on damages, the trial court determined that the tips constituted a fee as a matter of law, and the jury awarded the plaintiff $7,500 in damages. The Appellate Division affirmed. The defendant appealed to the Court of Appeals.
Issue(s)
1. Whether a tip or gratuity customarily given to a checkroom attendant constitutes a “fee or charge * * * exacted” for the checking service within the meaning of section 201 of the General Business Law?
2. Whether restaurants are required to post the provisions of section 201 of the General Business Law to be entitled to its limitation of liability?
Holding
1. No, because the tip given to the checkroom attendant is not a “fee or charge * * * exacted” for the checking service within the meaning of section 201 of the General Business Law.
2. No, because restaurants are not required to post the provisions of section 201 to be entitled to its limitation of liability.
Court’s Reasoning
The court relied on Honig v. Riley, which construed similar language in General Business Law § 201. The court stated that the statute limits recovery to $75 unless a value is declared and a receipt obtained, absent a “fee or charge [was] exacted.” The court distinguished between a “service charge” exacted by the employer and a voluntary payment by the patron to the employee. Citing cases from other jurisdictions, the court noted that a tip is generally considered a voluntary payment, not a compulsory fee. Because there was no fixed charge, sign, or solicitation, and the payment of a tip was discretionary, the court concluded that no fee was exacted. Regarding the posting requirement, the court noted that the statute requiring posting explicitly applies to hotels and motels, not restaurants. The court declined to extend the posting requirement to restaurants, stating that such a change must be made by the legislature. The court also addressed the plaintiff’s argument that the restaurant’s failure to prove the coat was not stolen by its employees negated the limitation of liability. The court rejected this argument because the plaintiff’s complaint was based solely on negligence, not conversion, and had never been amended. The court emphasized that a plaintiff cannot recover on a theory not pleaded. As the court stated, “The statute is aimed at loss or misadventure. It has no application to theft by the defendant or his agents”.