This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
A minor, Victor Baldizan, suffered injuries in a near-drowning incident at a wave pool in The Beach Waterpark in Albuquerque. The wave pool was operated by Jay-Bi Property Management, Inc., under a lease agreement with the property owner, Erisa Mortgage Company. The plaintiff alleged that the operation of the wave pool was inherently dangerous and that Erisa negligently entrusted the operation of the waterpark to an incompetent lessee (paras 1, 12, and 48).
Procedural History
- District Court of Bernalillo County: Dismissed the claims against Erisa Mortgage Company, holding that the operation of a wave pool was not inherently dangerous and granting summary judgment on the negligent entrustment claim (headnotes, para 1).
Parties' Submissions
- Appellant (Plaintiff): Argued that the operation of a wave pool is an inherently dangerous activity, imposing a non-delegable duty on Erisa as the property owner. Additionally, claimed that Erisa negligently entrusted the operation of the waterpark to Jay-Bi Property Management, an incompetent lessee (para 1).
- Appellee (Defendant): Contended that wave pools are not inherently dangerous, relying on precedent involving swimming pools. Further argued that negligent entrustment does not apply to landlords and that Erisa had no duty to investigate the competence of its lessee (paras 12, 30-31).
Legal Issues
- Is the operation of a wave pool an inherently dangerous activity, thereby imposing a non-delegable duty on the property owner for the safety of patrons?
- Does the theory of negligent entrustment apply to a non-possessory landlord in the context of leasing property for a potentially hazardous activity?
Disposition
- The Court of Appeals affirmed the dismissal of the claim that wave pools are inherently dangerous.
- The Court of Appeals reversed the dismissal of the negligent entrustment claim and remanded the matter for further proceedings (para 50).
Reasons
Per Bustamante J. (Bosson and Armijo JJ. concurring):
Inherently Dangerous Activity: The court held that wave pools are not inherently dangerous under the test established in Saiz v. Belen Sch. Dist.. While wave pools present unique risks, these risks are not unusual or beyond normal human expectations, nor do they create a strong probability of harm in the absence of reasonable precautions. The court found that ordinary negligence principles sufficiently address the risks posed by wave pools (paras 13-15).
Negligent Entrustment: The court determined that negligent entrustment can apply to landlords in specific circumstances. It held that Erisa, as the property owner, had a duty to exercise reasonable care in selecting a competent lessee to operate the waterpark, given the known risks associated with wave pools and the economic benefit Erisa derived from the lease. The court found sufficient evidence to raise a factual question about whether Erisa breached this duty by leasing the property to Jay-Bi, whose principal lacked experience in operating waterparks (paras 44-49).
Policy Considerations: The court emphasized that imposing a duty of care on landlords in such cases aligns with modern trends in landlord liability and public policy. It limited the application of this duty to cases involving properties leased for inherently hazardous activities where the landlord benefits economically and has reason to foresee potential harm (paras 45-46).