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Hellriegel v. Hansen

A-2879-98T5 (N.J. Super. App. Div. 2000) (Unpublished)

BAILMENTS—A gratuitous bailee is liable for loss of property only if he or she acts in bad faith or is grossly negligent.

At a courthouse, immediately before being sentenced to a long jail term, a prisoner turned over a bag of gold coins to a friend and asked her to deliver it to his accountant. Afterwards, the friend received a phone call from a cohort of the prisoner who told her that the prisoner had directed that she turn the coins over to him instead of to the accountant. She did so. The prisoner became very angry upon hearing that the coins had been delivered to the “cohort.” Subsequently, the prisoner sued his friend, but not his cohort. The Court held the delivery of the coins to the friend to constitute a gratuitous bailment because the friend was holding the coins for the prisoner’s benefit, not her own. In such a situation, a bailee is liable for loss of property only if he or she had acted in bad faith or engages in grossly negligent conduct. The lower court found credible the friend’s testimony that she turned over the coins to the “cohort” because she believed that the “cohort” was carrying out the prisoner’s instructions. She knew that person to be a friend and associate of the prisoner. From those facts, the lower court concluded that she did not act in bad faith even if she was negligent in not first conferring with the prisoner about the ultimate disposition of the coins. Nor was she grossly negligent in believing the “cohort” and turning over the coins to him. Consequently, no liability was imposed on her, as bailee.


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