Aging Malls Breed Litigation

TASA ID: 396

Prior to October of 2012, my previous shopping center personal injury case was in 2004. Since last October, I have been asked to serve as an expert witness in four litigation matters involving serious personal injury or wrongful death that happened in or around regional malls.  In my analysis of this unique cluster of cases, it occurred to me that they all shared a common, but poorly understood, element that I thought worth sharing with readers of The TASA Knowledge Center.

After examining the underlying cause of these cases, I discovered that each incident was somehow connected to the age and quality of the malls. I discovered that each mall was over 30 years old and found to be performing at or below industry averages.

Two of the four involved traffic accidents that were directly related to the slowly evolving changes to the mall's parking and/or traffic patterns. In both instances it became obvious that the original traffic and parking arrangements, which were carefully planned by professional traffic engineers, had been corrupted over the years due to a variety of factors and had not been properly reviewed by professionals.

A third case was generated by a deteriorating roof surface that caused leaking above a movie theatre. Over time the leak caused a supersaturated ceiling tile in the theatre to fall, which hit and partially paralyzed a customer watching a movie.

The fourth was a wrongful death from drowning during a heavy rainstorm. It was due to a customer taking a late night shortcut across the mall parking lot and driving into an unprotected creek bed that normally held a trickle of water. However, over time the rural area surrounding the center had been heavily developed, which limited the ability of the surrounding soils to absorb rainfall. The upstream runoff from the storm converted the "dry" creek bed into a swollen, raging river.

There were several common threads in these cases that were connected to the age and limited sales performance of the centers.  None of these accidents would have happened when the centers were new and properly maintained by their original owners. As I pointed out in my reports, it is often the case that as a typical mall ages and loses its tax advantages of depreciation, it often is sold to a new owner who can then re-start the tax advantage cycle. All but the most successful malls are generally sold to investors and not to professional shopping center operators, which reduces the likelihood of the mall being maintained to its original standards.

Each of the four centers in my cases had been sold at least two or three times to groups of financial investors with little or no experience in regional mall management or operations. They were each managed by a professional management company with no stake in the ownership.  Further, each suffered from vacancies and had one or more of their original anchor stores replaced by a new type of anchor who wanted to reconfigure the parking or traffic arrangements to suit their relocated entrances.

In the 30+ years of their operation, the surrounding areas had undergone substantial residential growth, which created entirely new customer traffic patterns and/or customer parking distribution. It was not hard to understand why a new owner, who probably overpaid for the center and who had hired a management company now trying to wring every dollar of profit out of it to meet its mortgage payments, could easily ignore the changes that were taking  place on and around the property.

It was these changes that contributed to each of the personal injuries or death that were the basis of the litigation. In each instance, the underlying causes were not immediately obvious and required some knowledge of the history, development patterns, and standards within the shopping center industry to establish the proper perspective on what constituted negligence or fault.

Since the shopping center industry presents an entirely different set of factors impacting the discovery process, a litigator must understand the unique elements that determine where and how to find the information that might establish negligence or fault.  It is also worthy of mention that none of these four cases would have been treated in the same manner if they had occurred in any other type of real estate development. Virtually every aspect of the investigation and discovery process was totally unique to the regional mall.

In the two traffic matters, the record keeping in the mall office and/or the outsourced security office was lacking, and by simply cross-checking with the local police departments, we proved just how distorted and under-reported the accidents had become over the years. Naturally if the owners neglected to keep accurate information about the "accident hot spots," they were unable to take the proper mitigating actions that could have prevented the accidents.

In the wrongful death case, industry standards were easily established by simply photographing the nearby comparable centers and showing that the proper automobile barriers that would have prevented the accident were placed along other "dry" creeks. By ignoring the need to add protective barriers to potentially dangerous creek beds, the owners did not meet the local standards of proper maintenance and security.

In the movie roof leak case, the litigator was made aware of the "incident reports" kept in the security department and the management office that demonstrated how frequently water dripping from leaky ceilings throughout the mall was reported. It demonstrated that mall ownership had intentionally postponed replacing a roof that was well beyond what is normally considered its "useful life."

In addition to each of these matters being unique to the circumstances surrounding a regional mall, they were unique to malls of mediocre sales combined with 30+ years of ageing and indifferent ownership.

These criteria should be kept in mind when legal professionals are confronted with a case involving the shopping center industry.  Another important aspect of these cases is that they are all quite different from the typical slips and falls or personal injury cases connected with any other form of commercial real estate. As someone who has developed office parks, warehouse complexes and various types of peripheral uses on the fringes of shopping centers, I can attest to the considerable differences that impact virtually every aspect of an accident happening in or around a regional mall.  

This article discusses issues of general interest and does not give any specific legal or business advice pertaining to any specific circumstances.  Before acting upon any of its information, you should obtain appropriate advice from a lawyer or other qualified professional.

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