Greyhound Lines, Inc. v. Utah Transit Auth.

Decision Date22 October 2020
Docket NumberNo. 20190523-CA,20190523-CA
Citation477 P.3d 472
Parties GREYHOUND LINES, INC., Appellant and Cross-appellee, v. UTAH TRANSIT AUTHORITY, Appellee and Cross-appellant.
CourtUtah Court of Appeals

Sarah E. Spencer, Attorney for Appellant and Cross-appellee

Scott M. Petersen, David N. Kelley, and Sarah C. Vaughn, Attorneys for Appellee and Cross-appellant

Judge Ryan M. Harris authored this Opinion, in which Judges Michele M. Christiansen Forster and Diana Hagen concurred.

Opinion

HARRIS, Judge:

¶1 Greyhound Lines, Inc. (Greyhound) and Utah Transit Authority (UTA) sued each other, each asserting that the other had breached the terms of a long-term lease agreement (the Lease Agreement). On cross-motions for summary judgment, the district court ruled in favor of UTA. Greyhound appeals that ruling. In a cross-appeal, UTA questions our appellate jurisdiction and, relatedly, seeks reversal of a subsequent order in which the district court construed its first summary judgment order as not fully disposing of UTA's claim for breach of the Lease Agreement. Because we affirm the subsequent order, at least insofar as it determined that the earlier orders did not completely resolve the case, we conclude that we have jurisdiction to consider Greyhound's appeal. On the merits of that appeal, we reverse the district court's summary judgment order, and remand for further proceedings.

BACKGROUND
The Lease Agreement

¶2 In 2005, Salt Lake City agreed to lease part of its downtown transport facility (the Intermodal Hub) to Greyhound for use as an interstate passenger bus terminal, and in 2007 UTA assumed all of Salt Lake City's rights and obligations under the Lease Agreement. The parties agreed that the term of the Lease Agreement would be forty years. Under the Lease Agreement, Greyhound agreed to purchase liability insurance that covered UTA against third-party claims, and UTA agreed to assume certain maintenance obligations, including the responsibility for snow removal at the Intermodal Hub.

¶3 Specifically, under a provision captioned "Third Party Liability," Greyhound agreed to "secure and maintain," "at its own cost and expense," a "[c]ommercial general liability insurance" policy "with [UTA] named as an additional insured, in the minimum amount of $1,000,000 per occurrence with a $5,000,000 general aggregate." The Lease Agreement is silent with regard to the permissible size of any deductible associated with the policy. But the agreement does specify that the policy is to cover "liabilities and claims for damages for personal injury, bodily injury," and "property damage that may arise from [Greyhound's] use" of the Intermodal Hub. In a previous case, our supreme court was asked to interpret this provision, and held that it obligated Greyhound to purchase a policy that "covered UTA's negligent acts." Utah Transit Auth. v. Greyhound Lines, Inc. (Greyhound I ), 2015 UT 53, ¶ 6, 355 P.3d 947.

¶4 The parties agreed to split responsibility for maintenance of the Intermodal Hub, with Greyhound generally assuming day-to-day obligations, including keeping the premises "in a clean, sanitary and orderly condition and free of dirt, debris, [and] weeds," and UTA generally assuming longer-term obligations, including "repair and replacement work required ... by virtue of ... reasonable wear and tear." However, snow removal obligations were clearly assigned to UTA, with the parties agreeing that UTA "shall be responsible for maintaining and removing snow from" the premises.

¶5 The parties also agreed to indemnify each other under various circumstances. Greyhound agreed to indemnify UTA for, among other things, damage caused to UTA by Greyhound's negligence or breach of the Lease Agreement. For its part, UTA agreed to indemnify Greyhound for damage "arising out of or by reason of [UTA]’s negligent or willful acts or omissions relating to any of its undertakings hereunder."

¶6 In addition, the parties agreed that if, after receiving written notice, either party refused to comply with its contractual obligations, the aggrieved party "may at its option ... make performance for the other and for such purposes advance such amount as may be necessary," and "[a]ny amount so advanced or expenses incurred ... shall be immediately due and payable by the defaulting [p]arty."

¶7 Finally, the parties agreed that, "[i]n the event either [p]arty enforces the terms" of the Lease Agreement "by suit or otherwise, the [p]arty found to be at fault by a court of competent jurisdiction shall pay the cost and expense incurred thereby, including reasonable attorney's fees."

Greyhound I

¶8 In 2008, a "Greyhound passenger ... fell from a concrete pedestrian ramp" at the Intermodal Hub. See Greyhound I , 2015 UT 53, ¶¶ 4, 8, 355 P.3d 947. "UTA admitted negligence in not installing a handrail on the pedestrian ramp." Id. ¶ 4. Claiming injury, the passenger submitted a claim to UTA, which settled the claim by paying the passenger $50,000. Id. UTA then asked Greyhound to "reimburse it for the cost of the claim," and Greyhound refused. Id. UTA filed suit against Greyhound, alleging that Greyhound had breached the Lease Agreement by failing to procure an insurance policy that would have covered the claim. Id. ¶ 3. Greyhound defended the case by asserting that, because the Lease Agreement's insurance provision did not specifically state that the policy had to cover UTA's negligent acts, the provision should be construed strictly so as not to contain any such requirement. Id. Our supreme court rejected that argument, declining Greyhound's invitation to construe the provision strictly, and holding that Greyhound's contractual obligation "included the duty to provide insurance that covered UTA's negligent acts." Id. ¶ 6 ; see also id. ¶ 37 (stating that "commercial general liability insurance is usually understood to cover the insured's negligence," and holding that, "[i]n refusing to either procure insurance or reimburse UTA for the money UTA paid in the settlement ..., Greyhound breached the Lease Agreement").

¶9 In reaching that conclusion, the court also rejected Greyhound's argument that the court's interpretation of the Lease Agreement would render superfluous UTA's indemnification and maintenance obligations. See id. ¶ 40. The court noted that, when the indemnification provision and the insurance provision are considered together, "the independent utility of both provisions becomes apparent." Id. ¶ 42. "Typically, the insurance coverage obtained through an insurance procurement agreement is narrower than a general indemnification," because "insurance may carry a deductible or have a maximum limit," while the "indemnity provision, by contrast, does not have limits or deductibles." Id. ¶¶ 42 –43. The court stated that "[a]ny amount not covered by insurance would fall under the indemnity provision." Id. ¶ 43.

¶10 In a separate paragraph, the court addressed Greyhound's argument that, "if UTA is insured for its own negligence, then it is essentially relieved from the non-negligent performance of" its contractual maintenance obligations, id . ¶ 46, including its obligation to remove snow. The court stated that "[t]his is not the case," explaining that "[i]f Greyhound provided insurance and UTA breached a duty detailed in the Lease Agreement, Greyhound could sue UTA for breach and recover any damages that resulted," including "any amount not covered by insurance, such as insurance deductibles , increases in insurance premiums, and attorney fees." Id. (emphasis added).

Greyhound's Insurance Policy

¶11 In 2010, Greyhound purchased from a third-party insurance carrier (Insurer) a commercial general liability policy (Fronting Policy) covering operations at the Intermodal Hub. Greyhound was the "insured" under the Fronting Policy, and UTA was an "additional insured." The Fronting Policy carried liability limits of $5 million for each occurrence and a $10 million general aggregate. However, the Fronting Policy also carried a $5 million deductible.

¶12 This type of policy is referred to as a "fronting policy," because the insurance carrier is obligated to pay the claim up front, even though it has the right to recover the claim amount back from the insured, in the form of a deductible equivalent to the policy's limit.1 Greyhound asserts—and UTA does not dispute—that, under the Fronting Policy, it is the responsibility of the insured—and not any additional named insured—to pay the deductible. The policy Greyhound obtained thus obligated Greyhound—and not UTA—to satisfy the deductible. Stated another way, under the Fronting Policy purchased by Greyhound, Insurer was responsible to defend and indemnify UTA against third-party claims, starting at dollar one, even if those claims were less than the deductible amount, and even if Insurer had the right to recover from Greyhound any amount it paid to defend or indemnify UTA.

¶13 The Fronting Policy was in effect for all of 2013, when the events giving rise to this case transpired.

The Present Case

¶14 In January 2013, a patron slipped and fell on snow-covered stairs at the Intermodal Hub. At her deposition, the patron stated that, on the day she fell, there was "a ton of snow" on the stairs, perhaps "five to seven" inches of it, with "a lot of ice underneath that [she could] not see," and it appeared that it had been "days" since the snow and ice had "been cleared." UTA did not dispute these facts during the summary judgment briefing, and there exists no evidence in the record that UTA conducted any snow removal operations in the time period prior to the patron's fall. Alleging injury, the patron submitted a claim to Greyhound. Even though, as described above, it had purchased the Fronting Policy, Greyhound did not submit the claim to Insurer; instead, Greyhound settled the claim by paying the patron $1,000 in exchange for a release of liability for both Greyhound and UTA.

¶15 Greyhound then sued UTA, seeking recovery of the $1,000 it had paid to the patron as...

To continue reading

Request your trial
5 cases
  • S.S. v. J.F. (In re E.M.F.)
    • United States
    • Utah Court of Appeals
    • March 31, 2022
    ...58A. "Whether appellate jurisdiction exists is a question of law." Greyhound Lines, Inc. v. Utah Transit Auth. , 2020 UT App 144, ¶ 22, 477 P.3d 472 (cleaned up). Likewise, the interpretation of a rule of civil procedure is a question of law. See Ghidotti v. Waldron , 2019 UT App 67, ¶ 8, 4......
  • R.O.A. Gen. Inc. v. Salt Lake City Corp.
    • United States
    • Utah Court of Appeals
    • December 15, 2022
    ...not treat Outfront Media as having resolved this point. See generally Greyhound Lines, Inc. v. Utah Transit Auth. , 2020 UT App 144, ¶ 50, 477 P.3d 472.7 "Stare decisis has the broadest application of all the relitigation doctrines, in the sense that it applies not only to the parties in th......
  • Bradsen v. Shellpoint Mortg. Servs.
    • United States
    • Utah Court of Appeals
    • January 21, 2022
    ...appeal, given its success on the statute of limitations issue. See Greyhound Lines, Inc. v. Utah Transit Auth. , 2020 UT App 144, ¶ 56, 477 P.3d 472 (remanding the case to the district court "for a reassessment of both parties’ competing claims ... to attorney fees," including "fees incurre......
  • Allen v. Allen
    • United States
    • Utah Court of Appeals
    • February 25, 2021
    ...fees are awardable only if authorized by statute or by contract." Greyhound Lines, Inc. v. Utah Transit Auth. , 2020 UT App 144, ¶ 55, 477 P.3d 472 (cleaned up). This court ordinarily will award appellate attorney fees "when a party was awarded fees and costs below and then prevails on appe......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT