209 F.3d 960 (7th Cir. 2000)
H.K. Mallak, Inc.,    Plaintiff-Appellant,v.Fairfield FMC Corp.,    Defendant-Appellee.
No. 99-1766
In the  United States Court of Appeals  For the Seventh Circuit
Argued November 16, 1999Decided April 11, 2000Rehearing En Banc Denied May 9, 2000.

Appeal from the United States District Court   for the Eastern District of Wisconsin.  No. 96-C-1207--Lynn Adelman, Judge.
Before Eschbach, Coffey, and Diane P. Wood, Circuit  Judges.
Diane P. Wood, Circuit Judge.


1
This diversity case  requires us to construe a Wisconsin statute  designed to protect what the common law quaintly  called "innkeepers"--today's hotels and motels--  from potentially astronomical liability for theft  of property stored by guests in their rooms. The  thieves here were either exceptionally lucky or  they knew only too well who their target was. As  he stepped into his room for the first time, with  more than $1 million in diamonds wrapped around  his body, salesman Eshagh Kashimallak was  assaulted by masked men and stripped of his  valuable inventory. Kashimallak and his employer,  H.K. Mallak, Inc. ("Mallak") sued Fairfield FMC  Corp., the owner of the hotel, seeking  respectively damages for personal injuries and  property loss. The district court granted summary  judgment for Fairfield on Mallak's property  claim, and, after oral argument in this court,  entered a judgment dismissing Kashimallak's claim  with prejudice. Only Mallak has appealed. The  narrow question now before us is whether the  Wisconsin statute on which the district court  relied unequivocally bars Mallak's right to  recover. We conclude that it does not, and we  therefore reverse and remand for further  proceedings.


2
The underlying facts, which we recount in the  light most favorable to Mallak, do not involve  much more than what we have already described.  Kashimallak was a salesperson for Mallak, a  wholesale jewelry business incorporated in New  York, with its principal place of business in  that state. Kashimallak is also a citizen of New  York. Kashimallak covered a wide geographical  area for Mallak, including the state of  Wisconsin. On August 23, 1995, he checked into  the Fairfield Inn in Brookfield, Wisconsin, which  was managed and operated by defendant Fairfield  FMC Corp. (a Delaware corporation with its  principal place of business in Maryland). This  was not his first visit to that Fairfield Inn; he  had stayed there seven or eight times previously  on earlier business trips to Wisconsin.


3
The Fairfield Inn at Brookfield does not assign  a room number to a guest with a reservation until  he or she checks in at the front desk. At that  time, the guest signs the reservation card, the  clerk hands the guest a plastic key card (known  as a "ving" card) that opens the security door to  both the floor and the guest's room. It took only  two or three minutes for Kashimallak to complete  this process when he arrived on August 23. He  received his key card and was assigned to room  334. Unbeknownst to Kashimallak, however, there  were two peculiarities about room 334 that  affected its security. First, four days before  his arrival, the hotel had re-keyed room 334 (a  step it did not ordinarily take between guests)  in order to prevent a guest who had been evicted  from the room from re-entering it. At that point,  room 334 had three new key cards, the standard  number for all rooms at the hotel. Three other  guests may have used the room between the re-  keying and Kashimallak's arrival. But by the time  Kashimallak checked in, only two key cards to  room 334 remained and the third was missing. No  one told Kashimallak about the missing key when  he checked in, or the fact that the holder of the  missing key would have access to his room.


4
After he checked in, Kashimallak went directly  to his room, carrying two bags. One bag contained  his personal effects and the other contained  jewelry. He also was carrying jewelry in a  special vest and a "money belt" hidden under his  shirt. He took the elevator to the third floor,  where his room was located, seeing no one either  on the elevator or in the hall as he walked to  his room. Between the elevator and his room, he  had to use his key card twice: once to pass  through the locked security door for the floor,  and once to get into room 334 itself. Once he had  the door open, Kashimallak went into the room,  closed the door behind him, secured the chain  lock, turned around, and took one step. Two  masked men attacked him violently, punching him  in the head, threatening him with a gun, and  robbing him of the jewelry in the bag, the vest,  and the money belt. The attackers stole more than  $1 million in loose diamonds, bracelets,  necklaces, pendants, earrings, and solitaire  diamonds. Neither the attackers nor the stolen  property was ever found; thus, at this point no  one knows whether the assaulters were ordinary  thieves who had crept into the hotel undetected  and were lucky enough to choose Kashimallak as  their intended victim, hotel employees doing an  inside job, or people who knew Kashimallak's  business and who had managed to reach room 334  just before he did.


5
Mallak and Kashimallak filed suit against  Fairfield in the United States District Court for  the Eastern District of New York, seeking damages  for Mallak's property loss and Kashimallak's  personal injuries. Later, the case was  transferred under 28 U.S.C. sec. 1404(a) to the  Eastern District of Wisconsin. That court granted  Fairfield's motion for summary judgment on  Mallak's claim on January 21, 1999, finding that  the Wisconsin Hotelkeeper's Liability statute,  Wis. Stats. sec. 254.80, barred the property  claim as a matter of law. Initially, the parties  stipulated that Kashimallak's claim would be  dismissed without prejudice and without costs,  and that the statute of limitations on that claim  would be tolled until the expiration of the final  appeal period for Mallak's claim. This court  pointed out to the parties at oral argument that  this disposition in substance did not dispose of  all claims of all parties, as required by 28  U.S.C. sec. 1291 and our decisions in JTC  Petroleum Co. v. Piasa Motor Fuels, Inc., 190  F.3d 775 (7th Cir. 1999), and Continental  Casualty Co. v. Anderson Excavating & Wrecking  Co., 189 F.3d 512 (7th Cir. 1999). Although we  ordered supplemental briefing on the  jurisdictional issue, the parties responded by  returning to the district court, which promptly  entered an order on November 18, 1999, dismissing  Kashimallak's personal injury claim with  prejudice and without costs. As in JTC Petroleum,  this modification has now eliminated the bar to  our jurisdiction, and we can proceed to decide  the merits of Mallak's appeal.


6
The Wisconsin Hotelkeeper's Liability statute  provides that a hotelkeeper who fulfills certain  obligations will not be held liable for a guest's  loss of jewelry, precious metals, or gemstones.  The relevant section reads as follows:


7
(1) A hotelkeeper who complies with sub. (2) is  not liable to a guest for loss of money, jewelry,  precious metals or stones, personal ornaments or  valuable papers which are not offered for  safekeeping.


8
(2) To secure exemption from liability the  hotelkeeper shall do all of the following:


9
(a)  Have doors on sleeping rooms equipped with  locks or bolts.


10
(b)  Offer, by notice printed in large plain  English type and kept conspicuously posted in  each sleeping room, to receive valuable articles  for safekeeping, and explain in the notice that  the hotel is not liable for loss unless articles  are tendered for safekeeping.


11
(c)  Keep a safe or vault suitable for keeping  the  articles and receive them for safekeeping  when tendered by a guest, except as provided in  sub. (3).


12
(3) A hotelkeeper is liable for loss of articles  accepted for safekeeping up to $300. The  hotelkeeper need not receive for safekeeping  property over $300 in value. This subsection may  be varied by written agreement between the  parties.


13
Wis. Stats. sec. 254.80. Also relevant is another  section of the Wisconsin Hotelkeeper's Liability  Act, Wis. Stats. sec. 254.81, which addresses the  hotelkeeper's duties once property is tendered to  it:


14
Every guest and intended guest of any hotel upon  delivering to the hotelkeeper any baggage or  other property for safekeeping, elsewhere than in  the room assigned to the guest, shall demand and  the hotelkeeper shall give a check or receipt, to  evidence the delivery. No hotelkeeper shall be  liable for the loss of or injury to the baggage  or other property of a hotel guest, unless it was  delivered to the hotelkeeper for safekeeping or  unless the loss or injury occurred through the  negligence of the hotelkeeper.


15
The district court concluded that sec. 254.80  operated to protect Fairfield from Mallak's suit.  In its proposed findings of fact, submitted under  Local Rule 6.05, Fairfield had stated that the  Brookfield hotel complied with all of the  requirements of sec. 254.80(2). Mallak did not  object to that proposed finding, and the district  court accordingly took it as uncontested. Mallak  also admitted that Kashimallak had not tendered  his valuables to the hotel for safekeeping. It  argued instead that the posted notice provisions  of sec. 254.80(2)(b) did not control, because  there was no notice displayed at the registration  desk that a new guest could see while checking  in. Furthermore, it asserts, Kashimallak was not  informed verbally of the tender requirement, and  he was assaulted before he ever had the chance to  see the notice posted on the back of the bathroom  door inside the room. In making this argument,  Mallak did not refer to sec. 254.81, but the  district court commented in its order granting  summary judgment that sec. 254.81 conceivably  might afford Mallak a theory of relief, but that  it had waived the point. The court specifically  noted that there would be a contested issue of  material fact over Fairfield's negligence,  because it did not re-key room 334 when it  discovered that one of the three key cards was  missing. H.K. Mallak, Inc. v. Fairfield FMC  Corp., 33 F. Supp. 2d 748, 754 (E.D. Wis. 1999).


16
We agree with the district court that Mallak  has waived its chance at this stage to rely on  sec. 254.81, through its failure to argue the  point before the district court. The court's  mention of the law in its opinion is not a  substitute for a party's proper presentation of  the point. The opposing side is entitled to an  opportunity to argue the contrary, which would be  missing were we to find that the court's  awareness of the law is sufficient. We also find  no fault in the district court's decision to hold  Mallak to its acquiescence in the Rule 6.05  submission, which amounted to an admission that  Fairfield had satisfied the three hotelkeeper  duties outlined in sec. 254.80(2). We have  repeatedly held that district courts are entitled  to insist on compliance with local rules designed  to make the summary judgment process operate more  smoothly, and there is nothing in this case that  warrants an exception to that principle. See,  e.g., Markham v. White, 172 F.3d 486, 491 (7th  Cir. 1999); Bradley v. Work, 154 F.3d 704, 707-08  (7th Cir. 1998); Waldridge v. American Hoechst  Corp., 24 F.3d 918, 923 (7th Cir. 1994).


17
These omissions by Mallak may have been  perfectly reasonable, at least as to the facts,  despite Mallak's efforts before this court to  stuff that genie back into the bottle. At this  point, they have the effect of distilling the  issue before us into the following: does sec.  254.80, which sets forth security measures  Wisconsin hotels must take in order to limit  their liability for lost jewelry (among other  things) and establishes in part a notice-based  regime, apply to a case in which the guest did  not and (in the light most favorable to him)  could not have received the required notice? This  was the central theory on which Mallak relied  before the district court, and so it is properly  before us.


18
There is a dearth of caselaw in Wisconsin  construing sec. 254.80, and so, as a federal  court sitting in diversity, we must do a certain  amount of tea-leaf reading to decide whether  Wisconsin law supports Mallak's right to recover  on this record. The parties agree that the  leading decision is the 82-year old ruling in  Busley v. Hotel Wisconsin Realty Co., 164 N.W.  826 (Wis. 1917), which construed the predecessor  to sec. 254.80. In Busley, as here, the parties  had stipulated that the innkeeper had complied  with the applicable statutory notice  requirements. An additional stipulation provided  that the loss in question occurred either through  the theft or the gross negligence of the  innkeeper's servants. The court thus had only to  consider what was the extent of the innkeeper's  liability for the loss of property delivered to  him, when that loss occurred without any  negligence on his part.


19
The court held that the statute did not  eliminate the innkeeper's liability for loss  caused by the theft or gross negligence of  himself or his servants, although sec. 1726 of  the statute in question limited liability to $10  for packages placed under the care of the cashier  under the predecessor to sec. 254.81, sec. 1725a.  The innkeeper argued that the $10 limitation of  liability applied to the loss of money and  jewelry, but the court disagreed. Noting that  sec. 1725, the predecessor to sec. 254.80, was  limited to "money, jewelry and articles of gold  or silver manufacture," the court stated that  "[i]t never was the legislative intent to limit  an innkeeper's liability to $10 for the contents  of a package of goods described in section 1725.  For the loss of such a package, caused by the  gross negligence of himself or his servants, the  value thereof is the true measure of damages."  164 N.W. at 828.


20
Busley therefore indicates that, at a minimum,  the notice and delivery provisions of the  predecessors to sec. 254.80 do not suffice to  protect an innkeeper from liability for its own  gross negligence or that of its employees. This  rule appears to be consistent with the general  understanding in the area, although we repeat  that there are not many cases to consult. The  following decisions, however, all indicate in one  way or the other that the statutory limitations  found in laws like Wisconsin's (a) do not relieve  the hotelkeeper from liability based on acts of  its own employees, and (b) merely modify the duty  of insurer that the common law otherwise imposed  on innkeepers, replacing it with a negligence  regime. See, e.g., Shifflette v. Lilly, 43 S.E.2d  289, 293-94 (W. Va. 1947) (holding that a similar  statute requiring the deposit of jewelry in the  office and the posting of notices did not relieve  the innkeeper of the general duty to exercise due  care in providing honest servants and to take  reasonable precautions to protect the person and  property of guests); Rockhill v. Congress Hotel  Co., 86 N.E. 740, 741-42 (Ill. 1908) (Illinois  statute did not apply to case involving theft of  handbag containing valuables and jewelry, where  the loss occurred by the negligence of the porter  or servants of the hotel); Shamrock Hilton Hotel  v. Caranas, 488 S.W.2d 151, 153 (Tex. Civ. App.  1972) (statute limiting hotel liability did not  apply to case alleging that loss occurred through  the negligence of the hotel); Kutbi v.  Thunderlion Enterprises, Inc., 698 P.2d 1044,  1048 (Or. App. 1985) (summary judgment improper  in case where plaintiff alleged negligence and  gross negligence, including through knowledge of  lost master key for area where plaintiff was  staying and through loss of key, where jewelry  was stolen from room; innkeepers' law only  modified common law rule of strict liability).


21
In a case dealing with the check-out process,  rather than the check-in process, a New York  appellate court found that the hotel was not  entitled to summary judgment where a departing  guest's tote bag, containing jewelry and other  valuables, was snatched away from her while she  sat in a livery cab in the hotel's driveway. See  Penchas v. Hilton Hotels Corp., 603 N.Y.S.2d 48  (App. Div. 1993). Under those circumstances,  notwithstanding the hotelkeepers' liability laws,  the hotel continued to have a duty to exercise  reasonable care to protect its guests from injury  at the hands of third persons who were not hotel  employees, and to protect them from the criminal  acts of third parties. Id. at 49-50. In our view,  in light of the cases mentioned above, we think  it likely that a Wisconsin court would follow a  similar rule for a guest who was subjected to a  criminal act during the process of checking in.  Just as the provisions for notice and a safe are  no longer useful for a guest who has checked out,  they cannot help a guest who has not even  penetrated the interior of his room and had a  chance to use them. Even if that prediction about  Wisconsin law is wrong, however, and Wisconsin  gives absolute protection to hotels that have the  proper notices posted in the rooms no matter  where or when the crime occurs, we are confident  that Wisconsin would not extend the protection of  the statute to the case of an inside job, as this  may have been. We have not found a single  jurisdiction that would go so far, and there is  no reason to think that Wisconsin would become  such an outlier.


22
Before concluding, we add a word about a  potentially important aspect of the case that is  not before us. In its motions for summary  judgment before the district court, Fairfield  also argued that it owed no duty to Mallak or  Kashimallak to prevent harm from unforeseeable  criminal activity by a third party. It has not  pursued that argument on appeal as an alternate  ground in support of the district court's  judgment. Furthermore, Fairfield does not appear  ever to have challenged Mallak's right to  complain about the theft from Kashimallak. We  express no opinion at this point either on the  question whether Fairfield has therefore waived  its right to introduce that question into the  suit on remand, or what the correct answer should  be if the issue is properly in the case. We  conclude only that the district court erred in  granting summary judgment for Fairfield FMC  Corp., and the judgment is REVERSED and REMANDED for  further proceedings.

