Whit Shaw Associates v. Wardwell
| Decision Date | 05 July 1985 |
| Citation | 494 A.2d 1385 |
| Parties | WHIT SHAW ASSOCIATES v. Madelyn WARDWELL. |
| Court | Maine Supreme Court |
Ralph A. Dyer (orally), Portland, for plaintiff.
Cope, Cope & Carlisle, Gerald S. Cope (orally), Portland, for defendant.
Before McKUSICK, C.J., and NICHOLS, ROBERTS, VIOLETTE, WATHEN and SCOLNIK, JJ.
Plaintiff Whit Shaw Associates appeals the dismissal by the Superior Court (Cumberland County) of its complaint seeking indemnification from Madelyn Wardwell, individually, under a brokerage agreement she executed with plaintiff to promote the sale of a bakery business. The Superior Court in granting Wardwell's motion under M.R.Civ.P. 12(b)(6), construed the brokerage agreement to bind Wardwell's corporation, and not Wardwell individually. On appeal, we find that the brokerage agreement is ambiguous as to whether Wardwell assumed any obligation to indemnify Whit Shaw Associates (Whit Shaw), and we hold that the pleadings do not foreclose plaintiff from proving that fact at trial. Accordingly, we vacate the dismissal.
On November 12, 1980, Madelyn Wardwell signed a brokerage agreement with Whit Shaw, a business brokerage firm, granting it an exclusive right to sell "Eith's Enterprises, Inc." (Eith's), a bakery and variety business owned by Wardwell and her husband and daughter. Through the efforts of Whit Shaw, Nichols Enterprises bought the capital stock of Eith's on June 18, 1981. Some two and a half years later, Nichols commenced a Chapter 11 proceeding in the United States Bankruptcy Court. During the pendency of that proceeding, Nichols sued both Wardwell and Whit Shaw, alleging that the brochure prepared by Whit Shaw to promote the sale contained material misrepresentations of fact. Nichols later voluntarily dismissed its lawsuit. On July 16, 1984, Whit Shaw filed the present suit against Wardwell, seeking indemnification for the costs and attorney's fees it had incurred as a result of the Nichols suit. Whit Shaw based its claim on the indemnity provision appearing in paragraph 4 of the brokerage agreement:
4. Brochure. Broker agrees to prepare for Owner a brochure describing the business being offered for sale. Owner shall review, make corrections as needed and give his written approval to the final version of said brochure. Owner shall indemnify and hold harmless the Broker for any loss, injury or damage suffered by Broker by reason of any claim arising out of or by reason of an error, misleading statement or misrepresentation contained in said brochure.
(Emphasis added)
The Superior Court dismissed Whit Shaw's complaint against Wardwell under M.R.Civ.P. 12(b)(6) because it held as a matter of law that the corporation Eith's, and not Madelyn Wardwell individually, was the "Owner" liable under the indemnity clause. We disagree. The term "Owner" was defined in the first sentence of the brokerage agreement:
Agreement made as of November 12, 1980, by and between Ms. Madeline [sic] Wardwell, President, EITH'S ENTERPRISES, INC., 25 Hampshire Street, Auburn, Maine (hereinafter called the "Owner") and Whit Shaw Associates, 56 Exchange Street, Portland, Maine, (hereinafter called the "Broker").
(Emphasis added) We have carefully reviewed the written brokerage agreement at issue in this controversy and find that its definition of "Owner," for purposes of identifying who undertook to indemnify Whit Shaw, is ambiguous. Who the "Owner" is cannot be determined without the consideration of extrinsic...
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