Norfolk & Dedham Mut. Fire Ins. Co. v. Others, SJC-10513

• Decision Date: 08 April 2010
• Docket Number: SJC-10513
• Citation: 456 Mass. 463,924 N.E.2d 260
• Parties: NORFOLK & DEDHAM MUTUAL FIRE INSURANCE COMPANYv.Ellen MORRISON & others.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

456 Mass. 463

924 N.E.2d 260

NORFOLK & DEDHAM MUTUAL FIRE INSURANCE COMPANYv.Ellen MORRISON & others.¹

SJC-10513

Supreme Judicial Court of Massachusetts,

Essex.

Argued Jan. 5, 2010.

Decided April 8, 2010.

COPYRIGHT MATERIAL OMITTED

Peter G. Hermes, Boston (Adam J. Combies & Jeffrey P. Hermes with him) for the defendants.

Robert F. Feeney, Plymouth (Jenny I. Tibbetts with him) for the plaintiff.

The following submitted briefs for amici curiae:

Christopher A. Kenney, David R. Kerrigan, Boston, & Brian A. O'Connell, Westwood, for Massachusetts Defense Lawyers Association.

John Pagliaro & Martin J. Newhouse, Boston, for New England Legal Foundation & others.

Myles W. McDonough, Anthony J. Antonellis, Boston, & Nicholas W. Schieffelin for Frozen Four, LLC.

Present: MARSHALL, C.J., IRELAND, SPINA, COWIN, CORDY, & GANTS, JJ.

CORDY, J.

The appeal in this declaratory judgment action requires us to determine whether two provisions in a commercial lease violate G.L. c. 186, § 15, a statute which, essentially, voids lease provisions that require tenants to indemnify landlords or exonerate them from liability for their own negligence. One of the provisions (liability provision) provides that as between the tenant and the landlord, the tenant is responsible for all injuries arising out of the use, control, condition, or occupancy of the leased premises, except those resulting from the “sole” negligence of the landlord. The other provision (insurance provision) requires the tenant to purchase general liability insurance for the benefit of the landlord with respect to injuries arising out of the condition of the leased premises or their use by the tenant. We conclude that the liability provision is void in part, and that the insurance provision does not violate the prohibitions in the statute. ²

The case comes to us on appeal from the ruling of a Superior Court judge granting summary judgment to the tenant's insurer, essentially voiding the insurance provision and declaring that the insurer did not have a duty to defend, indemnify, or insure the landlord. The judge declined to void the liability provision ruling instead that it did not apply because the landlord was solely responsible for the area where the injury occurred, and any negligence would therefore be the “sole” negligence of the landlord. The landlord and its insurer appealed and we granted their application for direct appellate review. We reverse and remand to the Superior Court for proceedings consistent with this opinion.

1. Background. The following are undisputed facts from the summary judgment record.

Cummings Properties, LLC (Cummings), owns an office park in Beverly (complex). Dr. Beverly Shafer (Shafer) leases a suite for her medical office at the complex. Shafer and Cummings entered into a commercial lease for the medical office premises on July 1, 2006. Per the terms of the lease, the leased premises consist of approximately 3,996 square feet, plus a 15.4% share of the common areas. Shafer's liability insurer is Norfolk & Dedham Mutual Fire Insurance Company (Norfolk). Cummings's liability insurer is OneBeacon Insurance Group (OneBeacon).

On July 19, 2007, Ellen Morrison (Morrison), Shafer's patient, arrived at the complex for an appointment with Shafer. She parked her vehicle in the parking lot located on the east side of the complex, near the main entrance. The entrance to Shafer's office, where there is also a parking lot, is located on the west side of the complex. After getting out of her automobile and approaching the complex, Morrison alleges that she tripped and fell on a newly-constructed cement curb. Morrison brought a personal injury law suit in the Peabody Division of the District Court Department on February 15, 2008, alleging negligence on the part of Cummings and Shafer.³ That lawsuit remains pending.

Thereafter, Cummings demanded that Shafer and Norfolk defend and indemnify Cummings in accordance with the provisions of the commercial lease agreement between Cummings and Shafer. Norfolk brought this action seeking a judgment declaring that the liability and insurance provisions of the commercial lease were void, and that it did not have a duty to defend or indemnify Cummings in the underlying matter.⁴

a The commercial lease between Cummings and Shafer. Paragraph 16 of the lease, the liability provision, and par. 17, the insurance provision, relate to the allocation of risk through indemnification and insurance:

“16. LIABILITY. LESSEE shall be solely responsible as between LESSOR and LESSEE for deaths or personal injuries to all persons and damage to any property, ... occurring in or on the leased premises (including any common areas as described below) and arising out of the use, control, condition or occupancy of the leased premises by LESSEE, except for death, personal injuries or property damage directly resulting from the sole negligence of LESSOR. LESSEE agrees to indemnify and hold harmless LESSOR and OWNER (as defined below) from any and all liability, including but not limited to costs, expenses, damages, causes of action, claims, judgments and attorney's fees caused by or in any way arising out of any of the aforesaid matters, except for death, personal injuries or property damage directly resulting from the negligence of LESSOR. All common areas, including but not limited to any parking areas, stairs, corridors, roofs, walkways and elevators (herein collectively called the common areas) shall be considered a part of the leased premises for liability and insurance purposes when they are used by LESSEE or LESSEE's employees, agents, callers or invitees.

“17. INSURANCE. LESSEE shall secure and carry at its own expense a commercial general liability policy insuring LESSEE, LESSOR and OWNER against any claims based on bodily injury (including death) or property damage arising out of the condition of the leased premises (including any common areas as described above) or their use by LESSEE, including damage by fire or other casualty, such policy to insure LESSEE, LESSOR and OWNER against any claim up to $1,000,000 for each occurrence involving bodily injury (including death), and $1,000,000 for each occurrence involving damage to property. This insurance shall be primary to and not contributory with any insurance carried by LESSOR, whose insurance shall

be considered excess. LESSOR and OWNER shall be included in each such policy as additional insureds ... and each such policy shall be written by or with a company or companies satisfactory to LESSOR....”

b The Norfolk insurance policy. Norfolk issued a business owners policy to Shafer as a named insured. The policy contains an indorsement and schedule that adds Cummings as an additional insured under the policy and states that the scope of the coverage is “only with respect to liability arising out of your ongoing operations or premises owned by or rented to you.” ^{5, 6}

2. Discussion. a. Standard of review. This case presents questions of law regarding statutory and contract interpretation. “We review questions of statutory interpretation de novo.” Commerce Ins. Co. v. Commissioner of Ins., 447 Mass. 478, 481, 852 N.E.2d 1061 (2006). Where there is “no dispute as to the facts to be applied to the terms of the contract the interpretation of the contract ... is to be treated as a question of law for the judge.” Ober v. National Cas. Co., 318 Mass. 27, 30, 60 N.E.2d 90 (1945).

b. Applicability of G.L. c. 186, § 15, to commercial lease. As a preliminary matter, we must decide whether § 15 applies to provisions contained in commercial, rather than only residential leases. Section 15 provides:

“Any provision of a lease or other rental agreement relating to real property whereby a lessee or tenant enters into a covenant, agreement or contract, by the use of any words whatsoever, the effect of which is to indemnify the lessor or landlord or hold the lessor or landlord harmless, or preclude or exonerate the lessor or landlord from any or all liability to the lessee or tenant, or to any other person, for any injury, loss, damage or liability arising from any omission, fault, negligence or other misconduct of the lessor or landlord on or about the leased or rented premises or on or about any elevators, stairways, hallways or other appurtenance used in connection therewith, shall be deemed to be against public policy and void.”

“We interpret a statute according to the intent of the Legislature,” Commissioner of Correction v. Superior Court Dep't of the Trial Court for the County of Worcester, 446 Mass. 123, 124, 842 N.E.2d 926 (2006), looking first to the statutory language because it “is the principal source of insight into legislative purpose.” O'Sullivan v. Secretary of Human Servs., 402 Mass. 190, 194, 521 N.E.2d 997 (1988), quoting Bronstein v. Prudential Ins. Co., 390 Mass. 701, 704, 459 N.E.2d 772 (1984). We will not expand or limit the meaning of a statute unless such is required by the “object and plain meaning” of the statute. Canton v. Commissioner of the Mass. Highway Dep't, 455 Mass. 783, 789, 919 N.E.2d 1278 (2010), quoting Rambert v. Commonwealth, 389 Mass. 771, 773, 452 N.E.2d 222 (1983).

There is nothing in the words of the statute or its context that would suggest that its reach was intended to be less than all leases relating to real property. See G.L. c. 186, § 15. Indeed, we alluded to its applicability to commercial leases in Young v. Garwacki, 380 Mass. 162, 171-172 n. 12, 402 N.E.2d 1045 (1980) (statute “not limited by [its] terms to residential properties”),⁷ but did not have occasion then to decide the question.

The purpose of the statute is to preclude a landlord from shifting responsibility for its own negligence to its tenants. See, e.g. Young v. Garwacki, supra at 171, 402 N.E.2d 1045 (statute prohibits landlord from “exculpat[ing] himself from liability for negligent maintenance of the rented premises”). That purpose is not limited in its applicability to...