Hogeland v. Sibley, Lindsay & Curr Co.

• Decision Date: 16 June 1977
• Citation: 42 N.Y.2d 153,397 N.Y.S.2d 602,366 N.E.2d 263
• Parties: , 366 N.E.2d 263, 4 A.L.R.4th 790 Martha HOGELAND et al., Plaintiffs, v. SIBLEY, LINDSAY & CURR CO., Respondent, and The Berenson Corporation, Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 602

397 N.Y.S.2d 602

42 N.Y.2d 153, 366 N.E.2d 263, 4

A.L.R.4th 790

Martha HOGELAND et al., Plaintiffs, v. SIBLEY, LINDSAY & CURR CO., Respondent and The Berenson Corporation, Appellant.

Court of Appeals of New York.

June 16, 1977.

William D. Eggers and John B. McCrory, Rochester, for appellants.

Michael J. Tobin, Rochester, for respondent.

FUCHSBERG, Judge.

The main issue on this appeal is whether the defendant-appellant The Berenson Corporation is entitled to recover on its cross claim for contractual indemnity against its lessee, the codefendant Sibley, Lindsay & Curr Co., pursuant to certain clauses of the lease between these parties. Since they were landlord and tenant, a subsidiary issue involves in the effect, if any, of section 5-321 ¹ of the General Obligations Law on the enforceability of the lease's indemnity provisions.

Berenson owns the Irondequoit Shopping Center; Sibley, which operates a large department store in the center, is the major tenant. The underlying actions, in which both Berenson and Sibley were named as defendants, arose out of personal injuries sustained by the plaintiff Martha Hogeland, a customer of Sibley, when, in the course of leaving the store, she fell over a low-lying concrete planter box whose presence was obscured by unremoved snow and slush. The box was located about 20 feet from a Sibley entrance on a canopied sidewalk which ran along one side of the Sibley store.

While the sidewalk was not part of the leased premises, it and the planter box had been constructed by Berenson's contractors pursuant to plans and specifications drawn by Sibley's architects. There was also evidence at trial that, under their mutual arrangements for snow removal, employees of each defendant were separately charged with that task during certain intervals of the time period during which it had accumulated on this occasion and that both would see to the care of the shrubs and plants grown in the box in question.

The jury having found both defendants negligent and jointly liable to Mrs. Hogeland and her husband, it thereafter, in accordance with the practice emanating from Dole v. Dow Chem. Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288, proceeded to allocate proportionate responsibility as between the two defendants at 60% for Berenson and 40% for Sibley. Berenson's contractual cross claim having been submitted by stipulation of the defendants for determination by the court alone, ² the trial court then granted judgment over for indemnification in favor of Berenson against Sibley for $16,440.80, the sum which it was agreed represented 60% of the Hogeland judgment plus the expenses incurred by Berenson in its defense of the negligence action. ³ However, on Sibley's appeal from that determination, the Appellate Division reversed and dismissed the cross claim 51 A.D.2d 886, 380 N.Y.S.2d 176. The present appeal to us by Berenson followed.

The lease, insofar as pertinent here, provided:

"article ix.

Indemnity and Public Liability Insurance

"Section 1. The Tenant agrees to indemnify and save harmless the Landlord from and against all claims of whatever nature arising from any act, omission or negligence of the Tenant, or Tenant's contractors, licensees, agents, servants or employees, or rising from any accident * * * whatsoever caused to any person * * * in or about the Tenant's demised premises, or * * * occurring outside of the demised premises but within the Shopping Center development * * * where such accident * * * results * * * from an act or omission on the part of Tenant * * * This * * * agreement shall include indemnity against all costs, expenses and liabilities incurred in or in connection with any such claim or proceeding brought thereon, and the defense thereof.

"Section 2. The Tenant agrees upon written request of the Landlord * * * to maintain * * * a policy of public liability and property damage insurance under which the Landlord * * * and the Tenant are named as insureds, and under which the insurer agrees to indemnify and hold the Landlord * * * harmless from and against all cost, expense and/or liability arising out of or based upon any and all claims, accidents, injuries and damages mentioned in Section 1 of this article ix * * * The minimum limits of liability of such insurance shall be one hundred thousand dollars ($100,000) for injury (or death) to any one person * * * (T)he Landlord will reimburse the Tenant for any extra premium paid by the Tenant on account thereof. In any event the Tenant will without cost to the Landlord maintain during the term hereof such a policy in effect wherein it will be named as the insured * * *

"Section 5. Anything in this article to the contrary notwithstanding, nothing in this lease shall be construed to relieve the Landlord from responsibility to the Tenant for any loss or damage caused the Tenant wholly or in part by the negligent acts or omissions of the Landlord; except, however, that the Landlord shall not be responsible for such portion of such loss or damage which is recovered or recoverable by the Tenant from insurance covering such loss or damage or for such portion of such loss or damage against which the Tenant is indemnified or insured".

Analysis of section 1 of the foregoing provisions readily discloses that it contemplates three sets of circumstances: (a) claims against Berenson arising from the negligence of Sibley, its contractors or licensees, (b) claims against Berenson arising from any accident occurring "in or about" the Sibley premises and (c) claims arising out of negligence of Sibley anywhere in the shopping center.

To sustain the Appellate Division's dismissal, Sibley, while agreeing that the second eventuality, (b), could be interpreted as intended to indemnify Berenson against its own negligence, here contends that the clause nevertheless does not apply because the Hogeland accident did not occur "in or about" its premises. Insofar as the other two eventualities, (a) and (c), are concerned, it argues that they are not to be deemed to include indemnification for injuries caused, as they were here, in part by reason of Berenson's own negligence. Further, it takes the position, as had the Appellate Division, that indemnity is also to be denied to Berenson because of section 5 of article IX's language that the landlord was not to be relieved from "responsibility to the Tenant for any loss or damage caused the Tenant wholly or in part by the negligent acts or omissions of the Landlord."

Berenson, on the other hand, urges that the provisions in question manifest an unmistakable intent to indemnify under all three parts of section 1 of article IX, irrespective of Berenson's own negligence, that Sibley's exemption from liability to Berenson under section 5 was not applicable to claims arising out of injuries to third parties such as Mr. and Mrs. Hogeland and that section 5-321 of the General Obligations Law does not bar indemnity in this case.

We hold that Berenson was entitled to indemnification. Our reasons follow:

At the very outset, we remark on the fact that the lengthy lease before us obviously was one negotiated at arm's length between the representatives of two sophisticated business entities, one a large department store company and the other the real estate corporation which organized, owned, constructed and managed the shopping center. The tenant had tailored the construction to its special needs. And the mutual nature of the arrangements for the maintenance of appurtenances such as those involved in this very case is tell-tale evidence that the lease was not one whose making dominated by either party.

A lease or other contract entered into under such circumstances by parties so situated is no longer to be construed as not intending indemnification of a party for its own negligence unless that intention is set forth in specific and "unequivocal terms" (see Thompson-Starrett Co. v. Otis Elevator Co., 271 N.Y. 36, 41, 2 N.E.2d 35, 37.) Instead, in such cases we now look to the "unmistakable intent of the parties" rather than the semantic stereotypes with which an agreement may be phrased (Levine v. Shell Oil Co., 28 N.Y.2d 205, 212, 321 N.Y.S.2d 81, 85, 269 N.E.2d 799, 801). It suffices that the agreement between the parties connotes an "intention to indemnify (which) can be clearly implied...