Great Atlantic & Pac. Tea Co., Inc. v. Wilson

• Decision Date: 28 July 1980
• Docket Number: No. 1-979A255,1-979A255
• Citation: 408 N.E.2d 144
• Court: Indiana Appellate Court
• Parties: The GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., Defendant-Appellant, v. Leslie WILSON, Plaintiff-Appellee, PH & T Realty Corporation, Defendant-Appellee, Paul Teegarden, Defendant-Appellee.

Page 144

408 N.E.2d 144

11 A.L.R.4th 569

The GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., Defendant-Appellant, v. Leslie WILSON, Plaintiff-Appellee PH & T Realty Corporation, Defendant-Appellee Paul Teegarden, Defendant-Appellee.

No. 1-979A255.

Court of Appeals of Indiana, First District.

July 28, 1980.

Robert L. Bever, Harlan, Schussler, Keller & Boston, Richmond, for defendant-appellant.

Robert L. McLaughlin, Dawn Sturwold, Wooden, McLaughlin & Sterner, Indianapolis, Richard N. Smith, Himelick, Himelick & Smith, Connersville, for Leslie Wilson.

G. Daniel Kelley, Jr., Marc C. Frankenstein, Ice, Miller, Donadio & Ryan, Indianapolis, for PH & T Realty Corp. and Paul Teegarden.

NEAL, Judge.

STATEMENT OF THE CASE

This is an appeal by defendant-appellant The Great Atlantic & Pacific Tea Company, Inc. (A&P) from an adverse judgment against both A&P and PH&T Realty Corporation (PH&T) awarding damages for personal injuries to plaintiff-appellee Leslie We reverse.

Wilson (Wilson). PH&T does not appeal, but has filed a brief in support of the judgment against A&P.

FACTS

The facts necessary for decision in this case are not materially disputed and are as follows: On January 26, 1959, A&P entered into an agreement with PH&T by the terms of which PH&T would construct a store building in Connersville according to specifications approved by A&P, and would lease the building to A& P on specified terms. The building was completed by PH&T and occupied by A&P until the end of 1972, when A&P served notice on PH&T that it did not intend to renew the lease and would vacate the premises at year's end. A&P vacated the building and removed all its fixtures, and on January 8, 1973, a lease termination agreement was executed effectively terminating the lease on December 31, 1972. Section 24 of the lease provided, in part, that "at the expiration of the said term or extension thereof, lessee will quit and surrender the demised premises in as good state and condition as received." Testimony disclosed that PH&T considered that A&P had performed Section 24.

The plans and specifications for the building called for the creation of an opening in the sales floor of the building to accommodate a conveyor to facilitate the moving of stock from storage in the basement to the sales floor. The building was so constructed. A&P entered upon its tenancy with the building in that condition, and the condition remained when A&P vacated the building.

Upon A&P's vacating the premises, PH&T had the windows boarded up. A&P locked the building, delivered the keys to an agent designated by PH&T, and caused the utilities to be transferred to the account of PH&T. PH&T assumed control of the premises and commenced efforts to sell or lease the building. On February 14, 1973, a realtor, by prior agreement with and the consent of PH&T, undertook to show the building, unsupervised by any officer or agent of PH&T, to a group of prospective purchasers including Wilson. Unable to find and operate light switches, the group proceeded through the darkened building. Wilson fell into the conveyor opening and was injured.

ISSUE

A&P has preserved and argued six errors. Insomuch as we are reversing this case on its merits and ordering judgment to be entered for A&P, we are addressing only A&P's assertion that the trial court erred in overruling A& P's motion for judgment on the evidence in that A&P had no duty to Wilson.

The pivotal issue as stated in A&P's brief is this: A&P contends it was a lessee and, upon the termination of the lease, had surrendered possession to PH&T. At the time of the accident Wilson was not an invitee of A&P but was an invitee at PH&T's invitation and on PH&T's business while PH&T was in exclusive control of the premises; therefore, A&P owed no duty to Wilson.

The arguments of PH&T and Wilson in support of the judgment may be stated as follows: (1) A&P owed a duty to Wilson under general principles of tort law, (2) A&P is liable for an injury resulting from a defect it created which was imminently dangerous to third persons, (3) there was an implied warranty of fitness running from A&P to PH&T and its invitees, and (4) A&P is liable because the property was used by the public.

DISCUSSION

In Indiana the tort of negligence is comprised of three elements: (1) a duty on the part of the defendant in relation to the plaintiff, (2) a failure on the part of the defendant to conform its conduct to the requisite standard of care required by the relationship, and (3) an injury to the plaintiff resulting from that failure. Miller v. Griesel, (1974) 261 Ind. 604, 308 N.E.2d 701.

The liabilities of an owner or occupier of property are generally settled in Indiana and may be summarized as follows: The owner or occupier of real estate owes The question is whether any residual liability remains with a lessee after it quits possession and surrenders the premises to its lessor. According to the briefs, and confirmed by our own research, this is a case of first impression in Indiana, and only one case addressing this issue has been cited or reported in other jurisdictions.

an active duty to an invitee or business visitor to maintain his property in a reasonably safe condition for the invitee. The status of an invitee is created by entrance upon the premises at the express or implied invitation of the occupier for some mutual commercial advantage. No such duty is owed to trespassers or licensees; they enter the premises at their own risk and use the property subject to its concomitant perils, except that the owner or occupier must refrain from wilfully or intentionally harming them after discovery of their presence. Standard Oil Company of Indiana, Inc. v. Scoville, (1961) 132 Ind.App. 521, 175 N.E.2d 711. However, since A&P at the time of the accident was neither an owner nor occupier of the premises, nor was Wilson its invitee but an invitee of PH&T, this body of authority does not answer the question in issue.

In Brock v. Rogers & Babler, Inc., (1975 Alaska) 536 P.2d 778, a plaintiff was injured in a gravel pit created by a lessee who had surrendered its lease prior to the accident. The Alaska Supreme Court said, at 781-82:

"The general rule of law is that former possessors of land are not liable for injuries caused to others while upon the land by any dangerous condition, natural or artificial, which existed when the possession of the land was transferred. . .

While the principle here expressed refers to vendors of land, it is broad enough to cover a former lessee who had relinquished his possessory interest in the premises. The rationale is grounded in the general policy which seeks to limit liability to persons in possession and control of the land. One who lacks possession and control of property normally should not be held liable for injuries which he is no longer in a position to prevent. This principle applies with equal force to previous tenants, as well as to past owners of property." (Footnotes omitted.)

Examination of Indiana authorities involving the residual liability of lessors tends to confirm the statements in Brock, supra. Generally, a lessor cannot be held liable for negligence in failing to repair in the absence of a covenant requiring him to do so. Town of Kirklin v. Everman, (1940) 217 Ind. 683, 28 N.E.2d 73; Stover v. Fechtman, (1966) 140 Ind.App. 62, 222 N.E.2d 281; Walker v. Ellis, (1955) 126 Ind.App. 353, 129 N.E.2d 65. In Stover, supra, the rule was applied to defeat recovery by a guest of a lessee. In Walker, supra, the court made two exceptions to the general rule, where property was leased for a public purpose or where the lessor had created a nuisance. Chrysler Corporation v. M. Present Company, Inc., (1974 7th Cir.) 491 F.2d 320, a diversity case applying Indiana law, followed the public purpose rule in a suit against a warehouse, but did not disturb the general rule.

No authority exists in Indiana as to the residual liability of a vendor. Authorities from other jurisdictions confirm the rule stated in Brock, supra. A grantor of premises in defective condition is generally not liable for an injury due to the defect but occurring after execution of the deed and delivery of possession to the grantee unless the grantor misleads the grantee into believing the premises are safe. This is true regardless of whether the injured person is the grantee or a third person to whom a duty of care is owed by the grantee. The new owner, upon assuming control and possession, becomes responsible for the safety of structures erected by his predecessors. 65 C.J.S. Negligence § 93 (1966); W. Prosser, Handbook of the Law of Torts § 64 (4th ed. 1971); Anderson v. Cosmopolitan National Bank of Chicago, (1973) 54 Ill.2d 504, 301 N.E.2d 296. Generally, liability remains on the grantor for The Restatement (Second) of Torts (1965) has adopted the above stated positions in transfers involving sale or lease:

failure to disclose a known latent defect that he has reason to believe will not be discovered until such time as the grantee discovers it and has time to take precautions to prevent harm. 65 C.J.S. Negligence § 93; Prosser, supra, § 64; Anderson, supra.

" § 352. Dangerous Conditions Existing at Time Vendor Transfers Possession

Except as stated in § 353, a vendor of land is not subject to liability for physical harm caused to his vendee or others while upon the land after the vendee has taken possession by any dangerous condition, whether natural or artificial, which existed at the time that the vendee took possession."

" § 353. Undisclosed Dangerous Conditions Known to Vendor

(1) A vendor of land who conceals or fails to disclose to his vendee any condition, whether natural or artificial, which involves unreasonable risk to persons on the land, is subject to liability to the vendee and others upon the land with the consent of the vendee or his subvendee for physical harm caused by the condition after the vendee has taken...