First Am. Bank, N.A. v. District of Columbia - 583 A.2d 993 (D.C. 1990)

Rule:

A bailee that takes possession of goods solely for the benefit of the owner is a gratuitous bailee and liable only for gross negligence, willful acts or fraud. In contrast, a bailee that receives compensation for its services is held to a standard of ordinary care. A person becomes a bailee for hire when he takes property into his care and custody for a compensation. The nature and amount of the compensation are immaterial. The law will not inquire into its sufficiency, or the certainty of its being realized by the bailee. The real question is, was the contract made for a consideration? If so, then it was a locatum, and not a depositum, and the defendant was liable for the want of ordinary care. The law does not undertake to determine the adequacy of a consideration. It is sufficient if the consideration be of some value, though slight, or of a nature which may inure to the benefit of the party making the promise.

Facts:

The courier for the appellant bank parked the bank's vehicle in a no-parking zone. When the towing company came, it refused to allow the courier to drive the vehicle away or to remove the locked dispatch bags from the vehicle. When the bank retrieved the vehicle from impoundment, one of the bags was missing. The bank brought an action against the district and the towing company for breach of bailment and conversion. The trial court found in favor of the district and towing company. Appellant bank appealed. 

Issue:

Could the appellant bank recover from the district and the towing company on a showing of failure to exercise ordinary care? 

Answer:

Yes.

Conclusion:

On appeal, the court affirmed in part and reversed in part. The district's impoundment of the vehicle involved a mutual benefit and so created a quasi-bailment for hire. The district and towing company thus were obliged to exercise ordinary care toward the vehicle. The illegal parking did not constitute contributory negligence or assumption of the risk. No conversion occurred because the district had authority to tow the vehicle. The court remanded with directions to the trial court to determine whether the district and towing company had exercised reasonable care.