For the homeowner--or the owner of any real estate--there's the nagging and recurring fear: A guest slips on a throw rug at the top of your stairs, does a header all the way down and ends up in a wheelchair for the rest of his life.
The typical "all-risk" homeowners' policy (HO-3) normally covers this sort of liability, according to the Insurance Information Institute, up to only about $100,000, unfortunately--far short of the mark in reimbursing a person for lifelong disability.
But in California, the risk to the property owner in a case like this goes far beyond the physical injuries and loss of income suffered by a guest. The same sort of financial nightmare can descend on the property owner even if the injured party is neither an invited guest nor an innocent trespasser simply wandering off-course, but is on the property for the purposes of committing a felony.
Hazard Not Posted
. . . A youth steals a motorcycle in San Benito County, goes joy riding across a farmer's field, hits a furrow and is thrown from the bike, ending up with a permanent disability. The farmer's insurance company settles for $500,000 on the youth's complaint that the hazard wasn't posted.
. . . A homeowner awakens in the middle of the night, emerges from his bedroom and finds a prowler at the top of his stairs with one of the homeowner's TV sets in his arms. The startled burglar starts to flee, steps on a skateboard at the top of the stairs and crashes to the bottom and gets a permanent disability. Because he was later questioned without benefit of legal counsel, and because the TV set--for some reason--yielded no fingerprints, the criminal case against him was dropped. Again: a six-figure settlement because of the homeowner's negligence in leaving the skateboard in a dangerous place.
. . . In Los Angeles County, a school is found negligent and financially responsible for injuries suffered by a student because the school permitted him to be truant and the student was struck by a car during that truancy.
But the "classic" case that has spurred efforts in the state Legislature to get property owners off this unpleasant hook was another one involving a school district.
As Assemblyman Alister McAlister (D-Milpitas), author of AB 200, put it: "In one case, a burglar fell through a skylight while trying to break into a school and was paralyzed in the fall. He sued for $5 million, charging that the school failed to warn him that the skylight was unsafe. He managed to extort from the school district $260,000 in an out-of-court settlement plus $1,200 a month for life."
Now in committee, McAlister's bill would free property owners of liability to any person for any injury occurring upon the property during or after the commission or attempted commission of a specified felony by the injured person.
What muddied the legal waters here, according to Dave Simmons of the Insurance Information Institute, was a 1968 California Supreme Court ruling on the important distinctions among the words trespasser , licensee and invitee .
Until then, McAlister said, California followed the common-law rule that a property owner's liability for injuries occurring on his property depended upon the legal status of the injured party as a trespasser (in the obvious meaning of the word), an invitee (a business visitor) or a licensee (a social guest). And common law held that he owed a duty of care to his business guests (invitees), but not to social guests (licensees) or to trespassers.
Repudiating Common Law
But in Rowland vs. Christian in 1968, McAlister added, the California Supreme Court repudiated the common law in a case involving an injury to a social guest caused by a defective condition on a piece of property. The court eliminated the distinction not only for social guests but even for trespassers. The result is that a possessor of land owes a duty of care and is liable not only to business visitors and social guests but even to trespassers.
Whether the court actually intended to lump felonious trespassers into this catch-all liability category is immaterial. The end result was to open the door of litigation for every burglar and footpad who gets hurt on the job because of a real or imagined defect in the property he is invading.
Several previous efforts by McAlister to exclude the felonious trespasser--notably a measure in 1979 that passed overwhelmingly in both the Assembly and the Senate only to be vetoed by Gov. Edmund G. Brown Jr.--have been impaled on a variety of fears--again real or imagined--on the part of their opponents. Organized labor has misgivings that the bill would favor management over labor and farmers over farm laborers; the California Trial Lawyers Assn. fears that it would encourage landowners to commit violent attacks on trespassers, and the American Civil Liberties Union has misgivings that such immunity from liability shouldn't be given to property owners unless the trespasser is actually convicted of a felony.
But McAlister feels that his latest drafting of the legislation successfully skirts any valid objections by strictly limiting the property owner's immunity from liability to those cases where the trespasser has been injured "upon a finding that a felony or attempted felony was committed by the injured person beyond a reasonable doubt by the civil court having jurisdiction." And "felony" is spelled out as any of 25 specific felonious activities that might logically lure a lawbreaker onto a piece of property.
Confining the immunity only to those cases where the injured party is subsequently convicted of a felony, McAlister feels, would emasculate it "because most felonies do not result in a felony conviction." Many are never prosecuted at all, he maintains, and most of the others are reduced to misdemeanors on plea bargaining--particularly in those cases where the trespasser has suffered a serious injury in the commission of the felony.
In no way would it grant immunity to the property owner for serious assault on a trespasser, nor would it prevent the innocent trespasser from suing for injuries suffered from an unsafe condition.
"Whatever may be said in defense of the alleged right of a trespasser to sue a landowner for the trespasser's injuries sustained while trespassing," McAlister said, "there is nothing to be said on behalf of a thief, a cattle rustler or other felon or would-be felon who is injured in the course of his felony. Such a wrongdoer should not be allowed by the law to add still more injury to insult. Surely innocent, law-abiding landowners should have some rights that are respected by the courts of our state."
Question: In your May 9 column, your method of computing one's tax rate mystified me completely.
If an individual's "adjusted gross income" was $43,316 and his tax was $9,486, according to Mr. Orozco's formula, he divides the $49,316 by the $9,486. My computer yielded a quotient of 5.1988193. That, obviously, is not my "percentage tax bracket."--H. DeL.
Answer:No, it surely isn't. Somehow in the editing process into got changed to by , which, of course, changes the whole thing.
What the IRS's Chris Orozco and I both said was the adjusted gross income should be divided into what you paid in taxes. If (as we both intended to tell you) you divide the adjusted gross income ($49,316) into the actual tax ($9,486) you end up with .192, or the 19.2% tax bracket (1.00, of course, would be 100%).
Sorry, these things happen when you're putting several hundreds of thousands of words together every day.
Question:My question concerns commissions paid to brokers for stocks purchased for an IRA. Can the IRA be reimbursed? For example: I deposit $2,000 in my IRA and direct my broker to purchase 100 shares of XYZ Corp. at $19 a share. The commission is $85. My IRA is now worth $1,915. Can I pay the IRA back with $85 to make the initial value $2,000 again?--S.K.
Answer:In a word, no. That, unfortunately, is one of the problems with the so-called self-directed Individual Retirement Account, according to First Interstate Bank's resident IRA expert.
"The stockbroker's commissions are capitalized as a part of the purchase price of the stock," she added, "so the price of the stock, plus the commission, is considered the net price."
And this, in turn, makes it a very tricky thing, indeed, to buy a specific stock through a broker for your IRA and hit the $2,000 maximum IRA contribution right on the head.
"Theoretically, then, if you want to invest in a 'round lot' (100 shares) of a stock," she said, "you can't pay more than 19 5/8 for it in order to take the commission into account."
At the Market
But, of course, most stock purchases are made "at the market"--or at the best price prevailing when the floor trader for the brokerage receives the order, and that might be at 19 5/8, 19 1/2 or even 20. And there goes the old arithmetic ballgame. You can, of course, specify that the purchase be made only at 19 5/8, but the buy order won't be executed at all unless it actually hits that price.
So, there you have it: If the total investment (together with commission) totals less than $2,000, then you've lost the difference. If it goes slightly over $2,000, then you face a penalty for over-contributing.
What if, inadvertently, you do go slightly over $2,000--say, to $2,035?
"Then," she said, "you can either sell off a share or two to bring it back to or under $2,000, or you can offset the overage in your next IRA contribution by making it $35 less than $2,000."
In other words, if you contributed $35 too much on your $2,000 1985 IRA before this past April 15, you'll have to wait until Jan. 1-April 15, 1986, to make the offsetting adjustment by contributing $35 less--$1,965--to your '86 IRA, because you can't make an '86 contribution until Jan. 1, and you've shot your wad for '85.
Why do I feel that you're sorry you ever asked?
Don G. Campbell cannot answer mail personally but will respond in this column to consumer questions of general interest. Write to Consumer VIEWS, You section, The Times, Times Mirror Square, Los Angeles 90053.