AM. BLDG. MAINTENANCE v. L'ENFANT PLAZA

Decision Date16 March 1995
Docket Number93-CV-1468.,No. 93-CV-1382,93-CV-1382
Citation655 A.2d 858
PartiesAMERICAN BUILDING MAINTENANCE COMPANY, Appellant, v. L'ENFANT PLAZA PROPERTIES, INC., et al., Appellees.
CourtD.C. Court of Appeals

Edward J. Lopata, for appellant.

Steven R. Migdal, for appellees.

Before SCHWELB and FARRELL, Associate Judges, and GREENE, Associate Judge of the Superior Court of the District of Columbia.*

SCHWELB, Associate Judge:

Invoking different provisions in the same indemnification agreement, each of two successful defendants in a "slip-and-fall" lawsuit has sought payment of its counsel fees from its codefendant. Each defendant has denied, on the other hand, that it has any obligation to indemnify its codefendant for the codefendant's counsel fees. We hold that under the terms of the parties' contract, properly construed, neither party has a right to indemnification.

I.

L'Enfant Plaza Properties, Inc. and Loews Washington Hotel Corp. (collectively L'Enfant)1 own and manage the L'Enfant Plaza Hotel in southwest Washington, D.C. At all times relevant to this dispute, American Building Maintenance Company of New York (ABM) provided janitorial and related services to L'Enfant pursuant to a written service agreement.

On March 19, 1991, Michele Saranovich filed suit against L'Enfant, alleging that she had slipped and fallen on the marble floor of the hotel lobby, and that she had suffered personal injuries on account of L'Enfant's negligence. L'Enfant filed an answer, in which it denied negligence, and a third-party complaint against ABM, in which it sought indemnification. L'Enfant claimed in essence that it had exercised due care, and that if Ms. Saranovich's allegations regarding the accident were correct, then her injuries resulted from ABM's negligence, not L'Enfant's. ABM responded to the third-party complaint by denying negligence and by cross-claiming against L'Enfant for indemnification. Ms. Saranovich filed an amended complaint in which she named both L'Enfant and ABM as defendants and alleged negligence on the part of both.

The case went to trial and, on April 8, 1993, the judge directed a verdict in favor of both defendants. The judgment established that no negligence had been proved on the part either of L'Enfant or of ABM. Both parties against whom a claim for indemnification has been made have thus been exonerated of any tortious conduct. No appeal was taken from the judgment.

Paragraph 8 of the Janitorial Service Agreement between L'Enfant (as Owner) and ABM (as Contractor) provides in pertinent part as follows:

Contractor shall indemnify and hold harmless Owner from claims for injury, death and property damage due to negligent acts and omissions of Contractor, its agents and employees which arise out of work performed under this Agreement.
* * * * * *
Owner shall indemnify and hold harmless Contractor from claims, including Workers' Compensation claims, resulting from the condition of Owner's premises or equipment.

(Bracketed numerals inserted.)2 The parties vigorously contested the meaning of these provisions, with L'Enfant claiming a right to indemnification under the first and ABM asserting that it was entitled to indemnification under the second. The judge issued two written decisions construing the agreement, one on July 1, 1993 and a second on September 21, 1993. The judge ruled that Clause 1 is plain and unambiguous and that "it is clear that the parties intended for the indemnification clause to become effective upon the filing of a claim." He held that "a finding of negligence is not required to trigger the indemnification clause as ABM contends; a filing of a claim due to the alleged negligence of ABM, its agents, or employees is."3 The judge also invoked the principle that "when the negligence of one tortfeasor is primary, and that of the other is secondary, the latter is entitled to indemnification from the former." He concluded that "as the alleged secondary tortfeasor, L'Enfant. . . is entitled to indemnification by the alleged primary tortfeasor, ABM." (Id.)

With respect to Clause 2, the judge concluded that the "more ambiguous" term "condition" should not be construed as making L'Enfant responsible even for conditions which it did not create. Such a construction, according to the judge, would "shift the burden of ABM's negligence to L'Enfant, which is precisely adverse to the contract's terms." Accordingly, the judge held that ABM was not entitled to indemnification.

On October 27, 1993, in conformity with his construction of the agreement, the judge awarded L'Enfant a total of $16,462.19 in fees and costs, including $15,092.00 in counsel fees. ABM filed separate timely appeals from the orders of July 1, 1993 and October 27, 1993.

II.

"The cardinal rule of interpretation of contracts is to ascertain, if possible from the instrument itself, the intention of the parties, and to give effect to that intention." Green v. Obergfell, 73 App.D.C. 298, 311 n. 39, 121 F.2d 46, 59 n. 39 (citation omitted), cert. denied, 314 U.S. 637, 62 S.Ct. 72, 86 L.Ed. 511 (1941). If the contract is ambiguous, its language should be read in the light of all the surrounding facts and circumstances, including the conduct of the parties. Id.

Contractual language is ambiguous if it is susceptible of more than one reasonable interpretation. Howard Univ. v. Best, 484 A.2d 958, 966 (D.C.1984). The question whether a writing is ambiguous is one of law. Clyburn v. 1411 K St. Ltd. Partnership, 628 A.2d 1015, 1017 (D.C.1993). Accordingly, an appellate court owes no deference to the trial court's resolution of that question, but considers the issue de novo. Sacks v. Rothberg, 569 A.2d 150, 154 (D.C.1990). For reasons set forth below, we discern substantial ambiguity in the indemnification provisions of this contract.

Generally, the interpretation of an ambiguous agreement is for the trier of fact. Best, supra, 484 A.2d at 966-67. But indemnity agreements in which an innocent indemnitor agrees to indemnify an indemnitee are "narrowly construed by the courts so as not to read into them any obligations which the parties never intended to assume." Cf. Rivers & Bryan, Inc. v. HBE Corp., 628 A.2d 631, 635 (D.C.1993) (citation omitted). As Justice Souter stated for the court in Hamilton v. Volkswagen of Am., Inc., 125 N.H. 561, 484 A.2d 1116 (1984), "indemnity agreements are rarely to be implied and always to be strictly construed." Id. 484 A.2d at 1118; see also Smith v. Tenneco Oil Co., Inc., 803 F.2d 1386, 1388 (5th Cir.1986); Wyoming Johnson, Inc. v. Stag Indus., Inc., 662 P.2d 96, 99 (Wyo.1983). "There is no liability to indemnify unless it is plainly spelled out in the contract." Rosado v. Proctor & Schwartz, Inc., 106 A.D.2d 27, 483 N.Y.S.2d 271, 274 (1st Dept.1984).

The rule of strict construction applies with particular force where a party is seeking indemnification for costs incurred as a result of its own negligent acts or omissions. Rivers & Bryan, supra, 628 A.2d at 635; see also Wyoming Johnson, Inc., supra, 662 P.2d at 99 (citing 41 AM.JUR.2D, Indemnity, §§ 15 & 16, at 699-704 (1963)). Narrow construction is equally appropriate where, as here, a party from which indemnity is sought has engaged in no wrongful or tortious conduct. Cf. Rivers & Bryan, supra, 628 A.2d at 635; Hill v. American President Lines, Inc., 194 F.Supp. 885, 891 (E.D.Va.1961).

The character of the indemnification sought is also significant. Here, each defendant is seeking payment of its counsel fees from its codefendant. "Generally, under the `American Rule,' absent express statutory authorization or a contractual provision, each party is responsible for its own attorneys' fees." Schlank v. Williams, 572 A.2d 101, 108 (D.C.), cert. denied, 498 U.S. 938, 111 S.Ct. 341, 112 L.Ed.2d 306 (1990).

The parties appear to have assumed that if the indemnification agreement applies to this controversy, it requires the indemnitor to compensate the indemnitee for the indemnitee's counsel fees. The principles of narrow construction outlined above have been applied to the scope of the indemnitor's duty as well as to its existence, however, and the courts have not readily inferred an obligation to indemnify a party for such fees in the absence of explicit and unambiguous contractual language so providing. See, e.g., Queen City Coach Co. v. Lumberton Coach Co., 229 N.C. 534, 50 S.E.2d 288, 289 (1948); French v. Isham, 801 F.Supp. 913, 924 (D.R.I.1992); Barber Blue Sea v. Trailer Marine Transp. Corp., 725 F.Supp. 1220, 1221 (S.D.Fla.1989); Nicholson v. Great Lakes Towing Co., 185 F.Supp. 685, 688 (N.D.Ohio 1960); cf. Oelrichs v. Spain, 82 U.S. (15 Wall.) 211, 230-31, 21 L.Ed. 43 (1872). Where the contractual language is unclear on the question, an obligation to pay counsel fees is not to be inferred, except in cases in which the indemnitee is willing to step aside and turn over to the indemnitor complete control over the litigation. Cf. Hill, supra, 194 F.Supp. at 891.4

In French, supra, the court aptly summarized the foregoing principles:

It is well settled that indemnity provisions are to be strictly construed against the party alleging a right to indemnification. Muldowney v. Weatherking Products, Inc., 509 A.2d 441, 443 (R.I.1986). See also Gordon v. Campanella Corp., 112 R.I. 417, 311 A.2d 844, 849-50 (1973) (citations omitted) ("Where money is sought because of an indemnity provision in a contract, we have emphasized that such clause will be strictly construed against the indemnitee"); Dower v. Dower's Inc., 100 R.I. 510, 217 A.2d 437, 438 (1966) ("Following the rule that indemnity provisions must be strictly construed against the indemnitee, the courts in most of the states have refused to draw inferences from words of general import found in the apparently all-inclusive and catchall language of a general indemnity provision.").

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