PROPERTY LAW
Hannah Rogers
In Happy Farmer v. Alaska State Fair, 497 P.3d 568 (Alaska 2021), the supreme court held that a vendor’s entry into agreement with a fair organizer for use of a merchandise booth inside a fairground building did not create a constructive bailment or a bailment implied by fact that would impose liability upon the organizer. (Id. at 470, 472). Happy Farmer, LLC, doing business as Releaf Alaska (“Releaf”) entered into a lease with Alaska State Fair, Inc. (“Fair”). (Id. at 469). The lease incorporated a handbook, which explicitly stated that liability insurance did not cover merchandise and the Fair assumed no responsibility for theft of any type. (Id.). Releaf, having left some of its merchandise at the fairground overnight, discovered that a significant portion of its merchandise had been stolen. (Id.). Releaf sued Fair, alleging breach of contract and bailment claims. (Id.). Fair won at summary judgment because the lease did not obligate Fair to protect any vendor’s merchandise from theft. (Id.). Releaf appealed, contending that the superior court erred in failing to recognize a constructive or implied bailment. (Id.). The supreme court affirmed the superior court’s decision, finding that neither constructive nor implied bailment applied to the undisputed facts. (Id. at 470, 472). First, constructive bailment did not apply because Fair did not receive Releaf’s merchandise by mistake, and the supreme court was unaware of any circumstances that would have imposed legal obligations. (Id. at 470). Second, implied bailment did not apply because Fair did not have exclusive possession of Releaf’s merchandise after operating hours. (Id. at 471). Affirming the lower court’s decision, the supreme court held that a vendor who consents to a lease agreement with a fair organizer absolving the organizer of liability in instances of theft does not have either a constructive or implied bailment. (Id. at 470, 472).
