Lead Opinion
{¶ 1} Plaintiff-appellant, Cincinnati Insurance Company, appeals from the Butler County Common Pleas Court’s decision granting summary judgment in favor of defendants-appellees, Robert Getter, Administrator of the Estate of Joyce Getter, deceased, and Auto Owners Insurance Company, on Cincinnati Insurance’s subrogation action.
{¶ 2} Robert Getter and Joyce Getter leased an independent-living facility from Ohio Presbyterian Retirement Services (“OPRS”), which is run by Midwest Presbyterian Senior Services (“MPSS”). MPSS owned the premises that OPRS leased to the Getters and insured the premises through Cincinnati Insurance. In 2008, a fire broke out at the premises leased by the Getters, causing $169,719.75 in damages. Cincinnati Insurance reimbursed MPSS for the damages to the leased premises minus the $10,000 deductible.
{¶ 3} Cincinnati Insurance then brought an action in the Butler County Common Pleas Court against Robert Getter as the administrator of Joyce Getter’s estate and the Getters’ insurer, Auto Owners, alleging that the fire was caused by Joyce Getter’s negligence and therefore Cincinnati Insurance was entitled to subrogation against her estate for the amount it had been obligated to
{¶ 4} Robert Getter and Auto Owners moved for summary judgment on Cincinnati Insurance’s complaint, arguing that under United States Fire Ins. Co. v. Phil-Mar Corp. (1956),
{¶ 5} Cincinnati Insurance now appeals, raising the following as its sole assignment of error:
{¶ 6} The trial court erred to the prejudice of plaintiff-appellant in granting defendants-appellees’ motion for summary judgment.
{¶ 7} Cincinnati Insurance argues that the trial court erred in finding that the lease agreement between OPRS and the Getters relieved Joyce Getter from liability for her negligence in causing the fire that damaged the leased premises owned by MPSS, because the lease agreement contained neither a “surrender clause” stating that a lessee will not be held responsible at the lease’s termination for certain kinds of damage, nor a provision making it clear that the lessor’s insurance on the leased premises is intended to protect both the lessor and the lessee. Therefore, Cincinnati Insurance contends, the rule in Phil-Mar and its progeny does not apply to the Getters’ lease agreement and thus the lease agreement is subject to this state’s “general rules for contracts relieving a party from the consequences of their negligence,” which include the principle that such contracts are enforceable only if they are “clear and unequivocal.” Cincinnati Insurance asserts that there is no provision in the lease agreement that “clearly and unequivocally” released Joyce Getter from the consequences of her negligence. We find these arguments unpersuasive.
{¶ 8} A trial court’s decision to grant summary judgment is reviewed de novo. Doe v. Shaffer (2000),
{¶ 9} Because Cincinnati Insurance brings this action as the subrogee of its insured, MPSS, Cincinnati Insurance can claim no rights greater than those
{¶ 10} The “residency agreement” or lease agreement between OPRS and the Getters states:
{¶ 11} “D. YOUR RIGHTS AND OBLIGATIONS
{¶ 12} “ * * *
{¶ 13} “3. You shall have the sole responsibility of providing insurance coverage for loss, damage, or theft of your personal property that You maintain in the Community. Our liability shall be only for Our Own negligent acts or omissions, or those of Our employees within the scope of their jobs.
{¶ 14} “ * * *
{¶ 15} “E. ACCOMMODATIONS
{¶ 16} “ * * *
{¶ 17} “2. We will provide insurance on Your living unit (not Your personal possessions), building, grounds and equipment provided by Us. You are solely responsible for insuring Your personal possessions and furnishings.
{¶ 18} “ * * *
{¶ 19} “F. MANAGEMENT RIGHTS
{¶ 20} “ * * *
{¶ 21} “2. Any modifications or permanent additions requested by You to Your unit (interior or exterior) must be agreed to by both You and OPRS, and will be at Your expense. You will be charged the costs of returning the unit to its original condition when You permanently vacate the unit.”
{¶ 22} It has long been held in this state that a contract of indemnity purporting to relieve a party from the consequences of its negligence must be strictly construed and that the intention of the parties to provide such indemnification must be expressed in clear and unequivocal terms. See, e.g., Kay v. Pennsylvania RR. Co. (1952),
{¶ 23} In Philr-Mar, the court looked at the words expressed in the totality of the agreement to ascertain the intent of the parties. The court found that where a lease agreement contained (1) a surrender clause requiring the lessee to return possession of the leased premises to the lessor upon the expiration or termination of the lease, with said premises being “ ‘in as good condition and repair as the same shall be at the commencement of said term (loss by fire * * * excepted),’ ” and (2) a provision requiring the lessee to pay the lessor any additional premium charged for the fire insurance on the premises that resulted from the lessee’s occupancy, the lessor had relieved the lessee of liability for fire caused by the lessee’s negligence, and thus the lessor had no right of recovery against the lessee. Id. at syllabus. Continuing, the court found that the lessor’s insurers, being subrogated only to the lessor’s rights, also had no right of recovery against the lessee, even though the insurers had compensated the lessor for the losses it sustained as a result of the lessees’ negligence. Id.
{¶ 24} In support of its decision, the Phil-Mar court focused on the language in the lease agreement’s surrender clause, which, more fully stated, required the lessee to surrender possession of the leased premises “ ‘in as good condition and repair as the same shall be at the commencement of [the lease’s] term (loss by fire and ordinary wear and decay only excepted).’ ” (Emphasis sic.) Id.,
{¶ 25} The court also cited another provision in the lease that “clearly indicated” the purpose of the surrender clause was to relieve the lessee from liability for loss by fire, namely, the provision requiring the lessee to pay the lessor for any additional premium charged for the fire insurance on the premises that resulted from the lessee’s occupancy of the premises. Id. at 88-89. The court, after “considering the lease as a whole,” found that it was apparent under
(¶ 26} Phil-Mar was subsequently followed by the Tenth District Court of Appeals in Consolidated,
{¶ 27} The “repairs/surrender” clause provided that the lessee “ ‘shall, at its own sole cost and expense, make all repairs it deems necessary to the interior of the demised premises, including all windows, and at the end of [the lease’s] term or any extension thereof, shall surrender the demised premises to [lessor] in substantially the same condition as when received, ordinary wear and tear and loss or damage by fire, Acts of God, or other casualty excepted.’ ” (Emphasis sic.) Id. at 23. The lease agreement also contained an “insurance” clause requiring (1) the “ ‘[lessor] at its sole expense [to] keep the demised premises insured against loss by fire or other casualty customarily covered by a fire and extended coverage policy to the full replacement cost thereof’ ” and (2) the lessee “ ‘to carry comprehensive public liability insurance naming [lessor] as an additional named insured’ ” “to insure for liability to persons or nonstructure-related property.” (Emphasis sic.) Id. at 24.
{¶ 28} The Consolidated court, citing PhiV-Mar for support, found that the commonly accepted definition of the term “other casualty” is “an accident or event that results from an unusual or unexpected cause,” and that within the context of the lease agreement, culled from “reading the surrender and insurance clauses together,” the term' meant “any damage caused in any manner, including negligence, other than by [the lessee’s] own intentional or criminal acts.” (Emphasis sic.) Id.,
{¶ 29} In Control Serv. Technology, Inc.,
{¶ 30} The court of appeals disagreed, finding that the provision in question was ambiguous and “[did] not appear to be a waiver of negligence on the part of the lessee, or at least it is not the type of waiver ordinarily relied upon to excuse a party from the results of the party’s own negligence.” Id. at 805, citing Kay,
{¶ 31} While Phil-Mar and Consolidated are distinguishable from this case in that the lease agreement between OPRS and the Getters does not contain a surrender clause similar to the clauses in those eases or a provision requiring the Getters to share part of the costs of the fire insurance with the lessor, this case is similar to those cases in that, unlike the lease agreement in Control Serv. Technology, Inc., the lease agreement between the Getters and OPRS required OPRS to provide insurance on the Getters’ “living unit * * *, building, grounds and equipment provided by [OPRS.]” Under section E.2 of the parties’ lease agreement, OPRS was obligated to “provide insurance on [the Getters’] living unit (not [the Getter’s] personal possessions), building, grounds and equipment provided by [OPRS,]” and in the next sentence, the Getters are made “solely responsible for insuring [their] personal possessions and furnishings.” Any reasonable lessee in the Getters’ position would have interpreted this provision in
{¶ 32} Furthermore, we disagree with Cincinnati Insurance’s assertion that the language in the surrender clause contained in Section F.2 of the lease agreement stating “You will be charged the costs of returning the unit to its original condition when you permanently vacate the unit” demonstrates that the parties did not intend to relieve the Getters from common-law liability for their negligent acts. The sentence that immediately precedes the surrender clause states, “Any modifications or permanent additions requested by You to Your unit (interior or exterior) must be agreed to by both You and OPRS, and will be at Your expense.” When this sentence and the surrender clause are read together, the average lessee would have interpreted the surrender clause to mean that upon leaving the premises, the lessee would be responsible for undoing any modifications or “permanent additions” that he or she installed, and returning the property to its original condition. Moreover, for the reasons stated earlier, a reasonable lessee in the Getters’ position would have believed that under the lease agreement, it was OPRS’s responsibility as the lessor to provide fire insurance for the building, and nothing in the surrender clause or the sentence immediately preceding it would have altered that belief.
{¶ 33} Cincinnati Insurance also argues the language in Section D.3 of the lease agreement stating “[OPRS’s] liability shall be only for [OPRS’s] Own negligent acts or omissions, or those of [OPRS’s] employees within the scope of their jobs” proves that the parties did not intend for the Getters to be released from liability for their negligent acts. However, this language, also must be read in context with the sentence that immediately precedes it, which states, “You shall have the sole responsibility of providing insurance coverage for loss, damage, or theft of your personal property that You maintain in the Community.” When these sentences are read together as they must be, see, e.g., Saunders v. Mortensen,
{¶ 34} The trial court stated in its decision that it was not “persuaded by [Cincinnati Insurance’s] contention that the [lease agreement] does not dearly
{¶ 35} Cincinnati Insurance has also recognized this fact in its appellate brief, and thus has framed its argument on appeal by first contending that the rule in Phil-Mar and its progeny does not apply in this case and then asserting that the Getters’ lease agreement is therefore subject to the “general rules for contracts relieving a party from the consequences of their negligence,” including the principle that such contracts are enforceable only if they are “clear and unequivocal.” However, we have found that the lease agreement in this case does fall under the rule set forth in Phil-Mar and its progeny, even though the lease agreement between the Getters and OPRS differs from the one in those cases. Additionally, while the Phil-Mar court may not have used the term “clear and unequivocal,” the court’s decision stands for the proposition that it must be clear and apparent from the terms of the lease agreement, looked at as a whole, that the parties intended to relieve the lessee from its common-law liability to the lessor for negligence. Id.,
{¶ 36} When the Getters’ lease agreement is considered as a whole, taking into account all of the agreement’s terms and the circumstances of this case, we conclude that it is clear and apparent that the parties intended to relieve Joyce Getter from her common-law liability to the lessor for negligently causing a fire that damages MPSS’s property. See Phil-Mar at 89 and Consolidated,
{¶ 37} The dissent appears critical of the “great lengths” to which we have gone to construe the agreement as a whole in order to determine the clear intent of the parties. However, such task is often our responsibility in determining if a material question of fact truly exists. Here, it does not.
{¶ 38} Courts in this country have developed three approaches to dealing with the question whether a lessor’s insurer can bring a subrogation claim against a
{¶ 39} By virtue of the Ohio Supreme Court’s decision in Phil-Mar,
{¶ 40} In this case, the parties’ lease agreement expressly states that OPRS “will provide insurance on [the Getters’] living unit (not [the Getters’] personal possessions), building, grounds and equipment provided by [OPRS,]” and in the next sentence, makes the Getters “solely responsible for insuring [their] personal possessions and furnishings.” As we have previously stated, any reasonable lessee in the Getters’ position would have interpreted the parties’ lease agreement to mean that OPRS was assuming responsibility for providing insurance on the building for risks such as accidental fires, while the lessee would be responsible for obtaining insurance coverage for his or her personal possessions and furnishings.
{¶ 42} Accordingly, Cincinnati Insurance’s sole assignment of error is overruled.
Judgment affirmed.
Notes
. Pursuant to Loc.R. 6(A), we have sua sponte removed this appeal from the accelerated calendar.
Dissenting Opinion
dissenting.
{¶ 43} I respectfully dissent from the majority’s decision for a question of fact remains as to whether the parties intended to relieve the Getters from their common-law liability.
{¶ 44} As can be seen, the majority, although finding that the parties’ intent must be “clear and apparent,” goes to great lengths in order to construe the agreement as establishing the parties’ intent to relieve the Getters from their common-law liability. However, regardless of whether the parties’ intent must be “clear and unequivocal,” or simply “clear” and “apparent,” terms which I find virtually synonymous, nothing in the majority’s decision, nor anything in the lease agreement itself, indicates that the parties intended to relieve the Getters from liability as a matter of law. Therefore, because the parties’ intent cannot be established as a matter of law, a question of fact remains as to whether the parties intended to relieve the Getters from their common-law liability in the case at bar. Accordingly, I respectfully dissent from the majority’s decision and would find that the trial court erred in granting summary judgment to Getter and Auto Owners.