Once Upon A Time, LLC v. Chappelle Props., LLC
Decision Date | 27 May 2016 |
Docket Number | 1141052. |
Citation | 209 So.3d 1094 |
Parties | ONCE UPON A TIME, LLC v. CHAPPELLE PROPERTIES, LLC, and Sara Boehme. |
Court | Alabama Supreme Court |
James C. Gray III and Anthony L. Watkins, Jr., of Lloyd, Gray, Whitehead & Monroe, P.C., Birmingham, for appellant.
Jennifer Dewees Hale, Birmingham, for appellees.
Pursuant to Rule 5, Ala. R.App. P., Once Upon a Time, LLC ("OUAT"), appeals by permission the decision of the Jefferson Circuit Court ("the circuit court") denying OUAT's motion seeking a summary judgment on the third-party complaint filed against it by Chappelle Properties, LLC ("Chappelle"). We reverse and remand.
The following undisputed facts are pertinent to our review of this case. On May 5, 2011, Chappelle owned a building located at 2900 18th Street South in Birmingham ("the building"). The building contained at least two commercial retail spaces.
On May 5, 2011, Chappelle and OUAT entered into a commercial lease agreement ("the agreement"), in which Chappelle agreed to lease one of the commercial retail spaces ("the OUAT retail space") in the building to OUAT. The agreement contained the following indemnity clause ("the indemnity clause"):
Deborah Anderson had been working for OUAT as a sales clerk since March 2011. On December 16, 2011, the OUAT retail space was flooded with contaminated water. Subsequently, certain items of OUAT's inventory were moved from the OUAT retail space to a vacant commercial retail space ("the vacant retail space") in the building. Chappelle owned the vacant retail space and had not leased the vacant retail space to OUAT as part of the agreement. Although Anderson was not working on the day of the incident, in the days following she counted inventory that had been moved to the vacant retail space.
The proximity of the OUAT retail space to the vacant retail space is pertinent to our review. Within the building, an interior hallway separated the OUAT retail space from the vacant retail space. The interior hallway was not directly accessible from the OUAT retail space; instead, to access the interior hallway from the OUAT retail space, a person would have to first access a room adjacent to the OUAT retail space, and then access the interior hallway from that room. No doorway within the building provided direct access from the OUAT retail space to the vacant retail space.
On December 20, 2013, Anderson filed a complaint alleging that she had suffered a bacterial infection caused by her handling the allegedly contaminated OUAT inventory stored in the vacant retail space following the flood of the OUAT retail space. In her complaint, Anderson asserted negligence, negligence per se, gross-negligence, and wantonness claims against Chappelle, Sara Boehme,1 and other unnamed parties. Subsequently, on July 9, 2014, Chappelle filed a third-party complaint against OUAT, Linda Flaherty, and Matthew Flaherty2 that sought, among other things, indemnification pursuant to the indemnity clause in the agreement.
On January 16, 2015, OUAT filed a summary-judgment motion on Chappelle's July 9, 2014, third-party complaint. OUAT alleged that the indemnity clause in the agreement did not cover the claims asserted by Anderson in her complaint. On April 13, 2015, Chappelle filed a response to OUAT's summary-judgment motion. On May 11, 2015, the circuit court denied OUAT's summary-judgment motion.
On May 14, 2015, OUAT filed a motion styled "Third–Party Defendant Once Upon A Time, LLC's Motion to Reconsider Or, in the Alternative, Motion for Certification For Interlocutory Appeal." On June 8, 2015, the circuit court held a hearing on OUAT's May 14, 2015, motion. On June 23, 2015, the circuit court certified for permissive appeal under Rule 5, Ala. R.App. P., its interlocutory order denying OUAT's summary-judgment motion, identifying the following as the controlling question of law:
"Whether the expression, ‘in, on or about [the OUAT retail space]’ as used in the [indemnity clause], should be interpreted to extend beyond the four walls of [the OUAT retail space] to include incidents occurring in [the vacant retail space]."
On June 29, 2015, pursuant to Rule 5, OUAT filed a petition for permission to appeal the circuit court's order denying OUAT's summary-judgment motion in this Court, which this Court granted.
In conducting our de novo review of the question of law presented on a permissive appeal, BE&K, Inc. v. Baker, 875 So.2d 1185, 1189 (Ala.2003). Therefore, the only issue before this Court is the issue presented by the question of law identified by the circuit court in its Rule 5 certification.
The sole issue before this Court is the construction of the phrase "in, on or about [the OUAT retail space]" that appears in the indemnity clause. When construing an indemnity agreement, this Court has applied general rules of contract interpretation. See, e.g., Holcim (US), Inc. v. Ohio Cas. Ins. Co., 38 So.3d 722, 728 (Ala.2009) ; Doster Constr. Co. v. Marathon Elec. Contractors, Inc., 32 So.3d 1277, 1283 (Ala.2009) ; Extermitech, Inc. v. Glasscock, Inc., 951 So.2d 689, 695 (Ala.2006) ; and Pyle v. Pizitz, 215 Ala. 398, 401, 110 So. 822, 824 (1926).
Homes of Legend, Inc. v. McCollough, 776 So.2d 741, 746 (Ala.2000) (some citations omitted). Furthermore, as we noted in Pyle, an indemnity agreement "cannot be extended to losses or damages neither expressly within its terms, nor of such character that it may reasonably be inferred that the parties intended to covenant against them." 215 Ala. at 401, 110 So. at 824 ; see also Doster Constr. Co., 32 So.3d at 1283 (Murdock, J., concurring in part and dissenting in part (quoting Pyle, supra)); Walker v. Bailey, 686 So.2d 304, 307 (Ala.Civ.App.1996) (quoting Pyle, supra).
The part of the indemnity clause the circuit court has asked this Court to construe is the phrase: "in, on or about the [the OUAT retail space]." That phrase is not defined in the agreement.
Twin City Fire Ins. Co. v. Alfa Mut. Ins. Co., 817 So.2d 687, 692 (Ala.2001). Furthermore, " ‘[p]arties to a contract will not be imputed with using language that is meaningless or without effect.’ " Black Warrior Minerals, Inc. v. Fay, 82 So.3d 650, 653 (Ala.2011) (quoting Black Diamond Dev., Inc. v. Thompson, 979 So.2d 47, 51 (Ala.2007) ). Accordingly, in determining whether the phrase "in, on or about [the OUAT retail space]" extends coverage under the indemnity clause to incidents occurring beyond the four walls of the OUAT retail space to the vacant retail space, we must give the words "in," "on," and "about" their plain, ordinary, and natural meaning.
"In" has been defined, in part, as "contained or enclosed by, inside; within; as, in the room, in the envelope." Webster's New Universal Unabridged Dictionary 918 (2d ed.1983). "On" has been defined, in part, as:
"1. upon; in a position above, but in contact with, as the surface or upper part of a thing, and supported by; placed or lying in contact with; as, my book is on the table; the table stands on the floor; the house rests on its foundation .... 5. at or near; by; indicating situation, place, or position; as, a ship is on the coast; on each side stands an armed man."
Webster's New Universal Unabridged Dictionary 1249. "About" has been defined, in part, as: Webster's New Universal Unabridged Dictionary 5.
Pursuant to McCollough, supra, the question then becomes whether the ordinary, plain, and natural meaning of...
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