Lakew v. Massachusetts Bay Transp. Auth.

• Decision Date: 22 March 2006
• Docket Number: No. 05-P-672.,05-P-672.
• Citation: 844 N.E.2d 263,65 Mass. App. Ct. 794
• Parties: Zewdu LAKEW v. MASSACHUSETTS BAY TRANSPORTATION AUTHORITY.
• Court: Appeals Court of Massachusetts

844 N.E.2d 263

65 Mass. App. Ct. 794

Zewdu LAKEW v. MASSACHUSETTS BAY TRANSPORTATION AUTHORITY.

No. 05-P-672.

Appeals Court of Massachusetts, Middlesex.

Argued February 6, 2006.

Decided March 22, 2006.

John J. Bonistalli, Boston, for the defendant.

Charles R. Capace, Boston (Phyllis Schacht, Sharon, with him) for the plaintiff.

Present: PERRETTA, KAFKER, & GREEN, JJ.

GREEN, J.

The plaintiff suffered injuries from an armed robbery, which occurred while he was on duty as a parking lot attendant in a parking garage owned by the defendant, the Massachusetts Bay Transportation Authority (MBTA), in Quincy. The plaintiff brought a complaint in the Superior Court seeking damages on theories of negligence and breach of contract.¹ A jury found for the plaintiff on both counts and awarded damages in the amount of $501,000. On appeal, the MBTA assigns error to the trial judge's denial of its request for instruction to the jury on comparative negligence, and asserts that the claim for breach of contract fails as matter of law because the plaintiff was not an intended beneficiary of the lease between the MBTA and the plaintiff's employer.² We agree that the plaintiff was not an intended beneficiary of the lease, and direct entry of judgment in the MBTA's favor on the contract claim. We also agree that the evidence sufficiently raised the question of comparative negligence to warrant a jury instruction on that topic, and accordingly reverse the judgment on the negligence claim and remand the matter for a new trial.

Background.³ On December 16, 1997, the plaintiff was working in a locked office at the MBTA's Quincy parking garage when an armed assailant gained entry to the booth and robbed him of a sum of money, severely injuring the plaintiff in the process. The plaintiff was employed by Kinney Parking of Suffolk County, Inc. (Kinney), which operated the garage pursuant to a lease agreement with the MBTA. The lease covered thirty-three separate parking garages and lots, and provided for payment of annual rent of $4,020,000, payable in weekly instalments over a term of three years.⁴ The lease also provided that the MBTA would supply security at fourteen transit facilities (of which the Quincy garage was one), and that Kinney would pay an additional $613,128 per year (in monthly instalments) as reimbursement for the cost of such security. Various other provisions of the lease addressed the parties' arrangement concerning security; as they are significant to our analysis of the plaintiff's contract claim, we discuss them in some detail.

The undertaking of the MBTA to supply security was set out in Exhibit E to the lease, captioned "PROFESSIONAL SECURITY"; we quote its provisions (excluding those addressing the amount and manner of payment) in their entirety in the margin.⁵ Paragraph 6.9 of the lease required Kinney to "provide uniformed attendants. . . who shall act as a deterrent against vandalism and theft as provided for in Exhibit B. MBTA acknowledges that MBTA provides all professional security services for the Premises, . . . and [Kinney] is not responsible for the provision of professional security in the Premises." Exhibit D generally specified (among other topics) "hours of staffing & security minimum requirements"; paragraph 2 of that exhibit specified that "[a]ttendant(s) not required for booth coverage shall be deployed for traffic control at rush hours and shall function as a roving trash/security patrol at other times. Such security patrol obligation shall impose no liability on [Kinney] except to seasonably report to MBTA incidents exposing parked vehicles to theft or vandalism." Paragraph II.6 of Exhibit B specified that Kinney was to "conduct surveillance" and to "report by telephone and in writing . . . to the MBTA Police any damage or injury to any person or property in [sic] identifying whenever possible the person or persons who caused the damage or injury." Paragraph 6.17 of the lease required Kinney quarterly to "submit to the MBTA Chief of Police information . . . regarding the location and general nature of the assignments of any employees working for [Kinney] in connection with [the lease]." Finally, the last subparagraph of paragraph 8 of the lease provided that the MBTA would indemnify Kinney "to the extent of any liability of [Kinney] for MBTA's negligent acts or negligent failure to act arising directly out of MBTA's obligation to provide professional security under the terms of this Lease."⁶

Kinney entered into the lease with the MBTA after submitting the winning bid in response to the latter's request for proposals; the variable term among the competing submissions was the rent Kinney (and other bidders) proposed to pay, and neither the amount paid toward security costs, nor the other terms and conditions of the lease (including those addressing security), were the subject of negotiation.

Third party beneficiary. In order to prevail on a claim of breach of contract as a third party beneficiary, "the plaintiff must show that the defendant and the lessor intended to give [him] the benefit of the promised performance." Anderson v. Fox Hill Village Homeowners Corp., 424 Mass. 365, 366, 676 N.E.2d 821 (1997). Massachusetts has adopted the Restatement (Second) of Contracts § 302 (1981).⁷ See Rae v. Air-Speed, Inc., 386 Mass. 187, 195, 435 N.E.2d 628 (1982). To ascertain the intention of the parties, "[w]e look at the language and circumstances of the contract. . . . The intent must be clear and definite" (citations omitted). Anderson v. Fox Hill Village Homeowners Corp., supra at 366-367, 676 N.E.2d 821.

Like the present case, Anderson involved a lease that imposed obligations on a party to the lease, and a third party claiming that injury resulted from the failure of the party properly to perform such obligations.⁸ The Supreme Judicial Court concluded without particular difficulty that the third party was no more than an incidental beneficiary and consequently could not recover under the lease. See id. at 367, 676 N.E.2d 821. We take the same view of the present case.

The plaintiff urges us to distinguish Anderson on the ground that the present lease designated separate consideration for the security services furnished by the MBTA, suggesting that "it is self-evident" that Kinney sought security services for the benefit of its employees. The distinction is unpersuasive. In light of the manner in which the lease terms were reached between the parties, it is evident that the payment for security services was separately stated because (unlike rent) it was a fixed sum, subject neither to variation among submissions by competing bidders nor to adjustment based on changes in revenues or other aspects of parking lot operation. Far from being "self-evident that Kinney was retaining the professional security services of the MBTA for the purpose of protecting its interests," as matter of law we consider it clear from the language of the lease and the circumstances of its execution that the MBTA reserved to itself the responsibility for security services in order to control the parties' risk due to potential claims by third parties for loss resulting from property damage or personal injury at the leased facilities. While such a purpose necessarily anticipates the interests of such third parties in avoiding loss, the purpose of the arrangement is not to confer on such parties a right to enforce the contract but instead to allocate between the direct contracting parties the risk of loss, and control over factors affecting such risk.⁹ Viewed in that manner, third parties who suffer a loss as a result of deficient security are not "intended beneficiaries" within the terms of the Restatement (Second), which looks in the first instance to whether "recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties." Restatement (Second) of Contracts § 302, supra. See also Restatement (Second) of Contracts § 307 (1981) ("Where specific performance is otherwise an appropriate remedy, either the promisee or the beneficiary may maintain a suit for specific enforcement of a duty owed to an intended beneficiary").¹⁰

Our conclusion, that the plaintiff is not an intended beneficiary of the provisions of the lease between Kinney and the MBTA concerning security, is also consistent with the results reached in similar cases in the vast majority of those jurisdictions that have had occasion to consider them. See Bizien v. Port Authy. of N.Y. & N.J., 577 F.Supp. 1093 (E.D.N.Y.1983) (airline employees injured during protest not intended beneficiaries of agreement between port authority and security company); Storts v. Hardee's Food Sys., Inc., 919 F.Supp. 1513 (D.Kan.1996) (restaurant patron abducted from parking lot not intended beneficiary of contract between restaurant and security company); Tackett v. Merchant's Security Patrol, 73 Ark.App. 358, 44 S.W.3d 349 (2001) (victim of automobile accident not an intended beneficiary of agreement between bar and security company); Armor Elevator Co. v. Hinton, 213 Ga.App. 27, 443 S.E.2d 670 (1994) (person injured in high-rise building not an intended beneficiary of contract between building operator and security company); Hoisington v. ZT-Winston-Salem Assocs., 133 N.C.App. 485, 516 S.E.2d 176 (1999) (employee of shopping mall tenant injured while working not an intended beneficiary of agreement between mall owner and security company); Hill v. Sonitrol of S.W. Ohio, Inc., 36 Ohio St.3d 36, 521 N.E.2d 780 (1988) (injured employee not an intended beneficiary of agreement between employer and security company); Rodriguez v. Philadelphia, 657 A.2d 105 (Pa. Commw.Ct.1995) (person murdered at YWCA not an intended beneficiary of lease requiring YWCA not to allow its guests to engage in improper conduct); Esquivel v. Murray Guard, Inc., 992 S.W.2d 536 (Tex. Ct.App.1999) (hotel patron whose car was stolen not an intended...