1 

### I N THE COUR T OF APP EALS OF TE NN ES SE E

A T NASHV I LL E J ul y 8, 2003 S e s s i on CHAR T E R OAK F I RE I NS
. CO. v . L E X I NGT ON I NS
. CO.
Direc t Appeal from the Chancer y Court for Davidson Cou nty. No. 00-3559-I The Honorable Irvin H. Kilcre ase, Jr., Judge.

______________________________ 

### N O
. M 2002- 01752- C O A
- R 3- C V - F i l e d M ar c h 2, 2004

_____________________________ OnNo ve mbe r 1 6, 19 97 , a fi rede str oy e d a

Chi li’ s Re staur a nt ( “ Chi li’ s” ) i n Nashville, Tenne ssee. At the time of the fire , the pre mises wereowned and operated by RMR I nvestments and Gowe r Center , Ltd. (“RMR/Gower” ) and le ased to Chili’s. Under a 20-y ear lease ag ree ment, Chili ’s ag ree d to insure the improveme nts ag ainst loss or dama g e by

fi rea ndoth e r c a su a lti e s a ndto i ns ur e a g a ins t pr op e rty dama g e a ndpu bli c lia bil ity ari sin g ou t of

oc c ur re nc e s o n th e pr e mis e s. RMR/ Go we r w a s to be name d a s a loss pay ee or

additional insured under

the insuranc e policies obtaine d by Chili ’s. Acc ording to the lease , in the event the pr emises and/or the improvements wer e de str oy e d b y

fi reor oth e r c a su a lty , Ch ili ’s ha d th e op tio n to te rm inate thele a se , anda ll ins ur a nc e pr oc e e ds we reto b e paid t o RM R/G ow e r, e xce pt f or thepo rtionpay ableto Chili ’s for loss of pe rsonal prope rty . Pursuant to the lease ag ree ment, Chili ’s obtained insurancecover ag e throug h L exington I nsuranc e Company (“L exington”). The certificate of

insurancedated De cembe r 5, 1997 listed RMR/ Gower as ce rtificate holder a ndname d RM R/G ow e r a s a dd iti on a l in su re d. Af te r the fi re , Ch ili ’s e le c te d to te rm inate the leaseag ree ment due to the condition of the pr emises. L exington paid the proc eeds for the loss of the building to RMR/Gower, less amounts paid to Chili’s for loss of persona l property . RMR/ Gower submitt ed an a dditional claim for dama g es it incurre d for the loss of r ental income and other c harg es it would have othe rwise c ollected f rom Chi li’ s. Th is c la im w a s d e nie d b y L e xing ton . RM R/G ow e r the n s ub mitte d a c la im t o it s insurer Charter Oa

k FireI nsuranc e Company (“Charter Oa

k”) f or the loss of re ntal income, which Cha

rter O ak paid. Af

ter L exington ref

used to reimburse Charter Oak f or thea mou nts it p a id R MR/ Go we r f or thelos s o f r e ntal in c ome , Ch art e r O ak f ile d s uit ag ainst L exington for br eac h of contra ct under the theory

of third party

benef iciary

. Parties filed c ross motions for summary judgme nt. On J une 26, 2002, the tria l court g rante d L exington’s summary judgme nt motion and denied Charter Oak’ s motion. Notice of this appeal soon followe d. For the re asons set forth below, the orde r of the trial court is re verse d in part and a ffirme d in part.
Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court Re verse d in Par t and Af

fi rm ed in Par tT h e L e x ing to n p o licy a t i ssu e a p p lied to nu m e ro u s p ro p e rtie s a c ro ss th e c o u n try in w h ic h B rin k e r/C h ili ’s 1 had a n i nt er es t , not j us t t he N as hv i l l e l ocat i on at i s s ue. 2 D ON R. A SH , S P
. J ., delivere d the opinion of the court, in which HI GHERS, J ., and FARMER, J ., joined.
Bridge tt A. Wohl part, B rentwood, Te nnessee , for the a ppellant, Charter

Oak F ire In s u r a n c e C o m p a n y. Michae l Patrick McGove rn, Knoxvil le, Tenne ssee, f or the a ppellee, Lexington I nsuranc e C o m p a n y. OP IN ION
I.
This case arises out of a fire loss that occ urre d on November 16, 1997 at a Chili’s restaur ant in Nashville, Tenne ssee. At the time of the fire , Appellant Charte r Oak Fire I nsuranc e Company

(“Charter Oa

k”) insure d RMR I nvestments, I nc. and G ower Center, Ltd. (“RMR/Gower” ), the owne rs and lessor s of the prope rty on which the r estaurant was located. A ppellee Lexington I nsuranc e Company (“L exington”) insure d Chili ’s, a corpor ate subsidiary

of B rinker International (“B rinker” ), for “all risks of dire ct phy sical loss or damag e.” RMR/ Gower

and Chili’s entere d into a 20-y ear lease ag ree ment on Dec ember 5, 19 85 . T he le a se a g re e me nt p ro vid e d a s f oll ow s: a) Tenant shall insure the Improvements ag ainst loss or damag e by fire and o t h erca s u al t i es i n cl u d ed i n t h e s o -c al l ed “E x t en d ed C o v er age Endorseme nt” in an amount not less than eig hty per c ent (80%) of the repla ceme nt value ther eof, le ss the cost of excavations, foundation, footing s and under g round tanks, conduits, pipes, pilings and other un de rg ro un d it e ms. b) [requiring the tenant to sec ure liability insurance ]

c) It is ag ree d and under stood that the insurancecover ag e provide d for here in may

be maintained pur suant to master policies of insurance c ov e ri ng oth e r r e staur a nt l oc a tio ns of Te nant and

/or its c or po rate aff iliates. All insurance policies requir ed to be maintaine d by Tenant here in . . .shall evidencesuch insuranc e cove rag e by delivering to the L andlord, if r equeste d, a copy of all policies or, at Tenant’s option, certificates in lieu ther eof issued by the insuranc e companies underw riting such risks. (L easeAg ree ment, Ex hibit B, at pag es 11-12)

. 1P ar agr aph 19 of t he i ns ur anc e pol i cy gr ant s Sedgwi ck James of T exa s , I nc. per mi s s i on t o i s s ue evi dence s 2 of i ns ur anc e “ as an d wher e r equi r ed, addi ng Ad di t i onal N amed A s s ur eds , Loss P ay ees an d/ or M ort gag ees as t hei r i nt er es t may appear
. . . . ” I t was f ur t her ag r eed t hat Lex i ng t on wai ved t he i s s uan ce of formal p o licy e n d o rs e m e n ts w ith re sp e c t t o the a d d iti o n a l na m e d a ssu re d s, lo ss p a ye e s a n d /o r m o rtg a g e s. T he cl ai m su bm i t t ed by RM R / G ower for l oss of r ent al i ncome i ncl uded ex pens es for t axe s , i ns ur anc e, 3 and mai nt ena nce for t he perc ent age of s pace r ent ed by Chi l i ’ s i n pr op ort i on t o t he ent i r e a mo un t of l eas ed sp a c e in the R M R /G o w e r sh o p p ing c e n te r. A d d iti o n a lly, it w a s d e te rm ine d tha t re b u ild ing the C h ili ’s R e sta u ra n t wo u ld tak e a p p ro x im a te ly 1 5 4 d a ys. T h u s, R M R /G o w e r’s c la im fo r lo ss o f re n ta l i n c o m e w ith resp ec t t o C hil i ’ s wa s fo r 1 5 4 d ays. 3 Wit h respe ct to all losses and dama g e cove red by insurancepolicies, RMR/Gower and Chili’s ag ree d to mutuallywaive c laims ag ainst eac h other. The lease does not addre ss or prec lude the assig nment by way of subrog ation any

claim which e ither RMR/ Gower

or Chili’s may

have a g ainst some other pe rson or e ntitynot a party to the le a se a g re e me nt. P u rs u an tt o t h e l ea s e a gre em en t , C h i l i ’s o b t ai n ed i n s u ra n ce co v er age t h ro u gh L e xing ton . T he re a ft e r, B ri nk e r/ Chi li’ s in su ranc e re pr e se ntativ e , Se dg wi c k o f T e xas, I nc ., iss ue d e vid e nc e s o f i ns ur a nc e in the fo rm of a c e rtif ic a te of ins ur a nc e to RMR/ Gower

in which RMR/Gower wa s named a s additional insured. 2 O n N o v e mb e r

1 6 , 1 9 9 7 , f

i r e d e s tr o ye dt h e C h i l i ’ s r e s t au r a n t

. T h e f o l l o w i n g d a y, pu rs uant t o th e te rm s o f the le a se a g re e me nt, Chi li’ s e le c te d to te rm inate thele a se du e to the condition of the pre mises after the fire . When RMR /Gower submitt ed its initi al claim, L exington acknow ledg ed RMR/Gower’ s rig ht to pay ment of the proc eeds unde r theL e xing tonpo lic y

fo r the los s o f the bu ild ing . L e xing tonpaid this po rtionof thelos s, less amounts paid to Chili ’s for loss of pe rsonal prope rty . There afte r, RMR/Gower su bmi tte d a

se c on d c la im f

or its los s o f r e ntal in c omea ndoth e r c ha rg e s w hic h it

wo uld have othe rwise c ollected f rom Chili’s tot aling $62,991.38. L exington denied this claim. 3 RMR/ Gower

then submitted a claim to Charter Oak f or payment under the Charter Oak policy

for its loss of renta l income. Subject to the “Othe r Insuranc e” provision set forth in the Charte r Oak policy , Charter Oak paid RMR /Gower

$62,991.38 for this loss. Appellee L exington contends that c overa g e for RMR/ Gower

under the Chili ’s policy was limited to the actua l phy sical dama g e to the building, f or which pay ment had alre ady been ma de. L exington has re fused to re imburse appe llant Charter O ak for the amounts it paid under its policy for the loss of r ental income sustaine d by RMR/ Gower arg uing that neither the le ase a g ree ment nor the c ertificate of insurance e ntitled RMR/ Go we r t o s e e k r e ntal r e imb ur se me nt. OnNo ve mbe r 1 6, 20 00 , Ch art e r O ak f ile d s uit a g a ins t L e xing tona nda g a ins t Chili ’s to rec over damag es arising out of the f ire. Charter Oa

k subsequently

non-suited its claims ag ainst Chili ’s, and on De cembe r 7, 2001, filed an amende d complaint to add a c la im a g a ins t app e lle e L e xing tonfo r b re a c h o f c on tr a c t un de r the the ory of thi rd -p arty benef iciary . Parties then filed c ross-motions for summary judgme nt. The trial court g rante d L exington’s summary judgme nt motion and denied Charter Oak’ s motion. Cha rt e r O ak f ile d a tim e ly app e a l. T he iss ue fo r this c ou rt ’s c on sid e ratio n o n a pp e a l is wh e the r the tria l c ou rt

e rr e d ing ranti ng su mma ry jud g me nt t o L e xing tonon theba sis RMR/ Gower

was not an intende d third-party benef iciary of the policy

issued by L exington with respec t to loss of rental income.In t he p res ent s ui t , C hart er O ak i s “s t ep p i ng i nt o t he shoes” of i t s i nsur ed R M R / G o wer and s ui ng 4 L e x ing to n o n it s b e h a lf. 4 Cha rt e r O ak a rg ue s it is c le ar R MR/ Go we r w a s a n in te nd e d th ir d- pa rty benef iciary of the L exington policy

beca use the c ertificate of liability insurance specific ally

listed RMR /Gower

as the c ertificate holder, the reby ref lecting the intent of the principa l parties “that the insurancewas obtaine d, in part, for the bene fit of RMR/ Go we r C e nte r. ” Ad dition a lly , Ch art e r O ak p oin ts t o th e te rm s o f the le a se a g re e me nt b e tw e e n Ch ili ’s a ndRMR/ Go we r w hic h in dic a te Chi li’ s a g re e d to ob ta in ins ur a nc e lis tin g RMR/ Go we r a s a n a dd iti on a l in su re d. Cha rt e r O ak a rg ue s th is pr ov isi on se rv e d a s th e c on sid e ratio n f or RMR/ Go we r’ s a g re e me nt t o w a ivea ny c la im i t may have a g ainst Chili ’s bec ause it wa s intended to satisfy any obligation Chi li’s might have ha d for terminating the le ase a g ree ment. L exington, on the other hand, arg ues Charte r Oak’s third-party benef iciary theory of re covery

fails bec ause ne ither the lea se ag ree ment, the policy , or the c ertificate of ins ur a nc e dis c los e a n in te nt b y thepa rtie s to pr ov idethebe ne fi ts o f the re ntal in c ome extension t o RMR/ Gower

. II. A motion for summary judgme nt should be g rante d when the movant de mon str a te s th a t th e reareno g e nu ineiss ue s o f m a te ri a l f a c t a ndthat th e mov ing pa rty is entitled to a judg ment as a matter of law . Tenn. R. Civ. P. 56.04. Beca use summary judgme nt involves onlyquestions of law and not fac tual disputes, no presumption of corr ectne ss attache s to the trial court’s r uling on a motion for summary

judgme nt, and we re vie w the g rant o f s umm ary jud g me nt de novo

. M oo ne y v . Sne e d, 30 S.W .3d 304, 306 (Tenn. 2000) . The e vidence must be viewed " in the light most favor able to the n o n m o v i n g p ar t y , " an dal l re as o n ab l e i n fe re n ce s m u s tb e d ra wn i n t h e n o n m o v i n g p ar t y 's favor

. Staples v. CBL & Assocs, Inc., 15 S.W .3d 83, 89 (Tenn. 2000)

. The que stion of whether

a contr act wa s intended for the bene fit of a third pe rson is ge nera lly

reg arde d as one of

construction, and the asce rtainment of the intention of the parties to a w ritten contra ct is a question of law , rathe r than a question of fa ct. Ham blen Co unt y v . M or r ist own, 65 6 S. W.2 d 3 31 , 3 35 -3 6 ( Te nn . 1 98 3) ; Am South Er e c to r s, L.L.C. v. Sk aggs Iron Works, Inc., 2003 Tenn. App. L EXI S 551 at *8 (April 22, 2003). The que stion presented, the ref ore, is one suited f

or disposition vi a summary jud g me nt.
III

. Charter

Oak c laims it i s entitled to recove r ag ainst L exington for br eac h of contra ct bec ause RMR/Gower is a third party

benef iciary of the insurance policy

betwee n L e xing tona ndChi li’ s. As a g e ne ral rule , o nly

pa rtie s to a c on tr a c t aree nti tle d to su e to 4 enfor ce its provisions, and it is presumed the c ontrac t has bee n enter ed into for the be ne fi t of tho se pa rtie s. Ho we ve r, thela w r e c og nize s a n e xce pti on to the g e ne ral rule wh e rea pe rs on wh o is no t a

pa rty to the c on tr a c t c a n s ho w the pa rtie s in te nd e d h e be ne fi t from the c ontrac t. See, F irst Tennessee Bank Nat’l Ass’n v. Thorough bred Motor Cars, Inc., 93 2 S. W.2 d 9 28 , 9 30 (T e nn . Ct . A pp . 1 99 6) ; MooreConstr. Co. v. Clarksville Dep’t of Elec., 707 S.W .2d 1, 8-9 (Te nn. Ct. App. 1985). I f, howe ver, the5

be ne fi t f low ing to the thi rdpa

rty is n ot i nte nd e d, bu t me re ly inc ide ntal, the thi rdpa

rty acquir es no rig ht to enforc e the c ontrac t. Wil lar d v. Cl abo r n, 419 S.W .2d 168, 170 (Tenn. 1967)

. I n o rd e r t o maint a in an a c tio n a s a n in te nd e d b e ne fi c iary , a thi rdpa rty mus t f ir st show: (1) a

valid contra ct made upon suf ficient c onsideration betwe en the principal parties and (2) the c lear

intent to have the c ontrac t operate for the benef it of the third party

. F irst Tennessee, 932 S.W .2d at 930. In the pre sent ca se, Charte r Oak and L exington do not arg ue that ther e wa s not a valid contra ct betwe en the principal parties. L exington issued a valid insuranc e policy to Brinke r/Chili’s upon sufficient consider ation of pre miums paid. The arg ument arises a s to whether the re is a c lear intent in the policy to have the c ontrac t operate for the benef it of RMR/ Gower

. I n Ow ner-Oper ator Independent Driver s Ass’n v. Concord EFS, Inc., 59 S.W .3d 63 (Tenn. 2001) , the Tenne ssee Supre me Court restate d the ana ly sis for evaluating third-pa

rty benef iciary case s. There , a g roup of indepe ndent truck drivers claimed they

wer e third party

benef iciarie s of contra cts betwe en a bank that proce ssed cre dit card transactions and two truc k stop operator s. The contr acts at issue prohibited the truck stop oper ators fr om adding a surc harg e to purc hases of fuel madewith cre dit cards. Despite the f

act the plaintiffs werenot parties to the contr acts, they sued see king damag es and injunctive r elief, c ontending they wer e third-pa

rty benef iciarie s of the nosurcha rg e provision in the contra cts. The c ourt held the plaintiffs lac ked standing to sue and ther efor e could not pursue their contra ct claims. Id. at 65. Importantly , the court announce d a thre e-pr ong test to be used in determining whe ther a third party

is an int e nd e d th ir d- pa

rty be ne fi c iary

of a c on tr a c t e nti tle d to e nf

or c e thec on tr a c t’ s te rm s: A third party

is an intended third-pa

rty benef iciary of a c ontrac t, and thus is e nti tle d to e nf

or c e thec on tr a c t' s te rm s, if (1) The pa

rties to the contra ct have not otherwise a g ree d; (2 ) R e c og nitionof

a ri g ht t o p e rf

orma nc e in the be ne fi c iary is a pp ro priate to effe ctuate the intention of the parties; and (3) Theterms of the c ontrac t or the circ umstances surr ounding perf ormanc e indicate that either: (a ) t h e p er fo rm an ce o f t h e p ro m i s e w i l l s at i s fyan o b l i gat i o n o r d i s ch ar ge a duty owed by the promisee to the be nefic iary ; or (b) the pr omisee intends to g ive the bene ficiary the bene fit of the promised per formanc e. Id. at 70. Whe n d e te rm ini ng thi rd -p arty be ne fi c iary

status , c ou rt s mu st e xami ne thesp e c if ic promise which the third pa rties contend w as intended to be nefit them. Doram us v. Roger s Gr oup, I nc., 2001 Tenn. App. L EXI S 127 at *55 (Fe b. 28, 2001). Charte r Oak contends RMR/Gower is the third-pa rty benef iciary of the re ntal income extension in the insurancepolicy

.L e x ing to n a c k n o w le d g e s tha t t h e c e rtifi c a te o f i n su ra n c e a lso re fer s to ge n e ra l l ia b ili ty co v e ra g e , b u t t h is 5

c o v e ra g e is no t at issu e in this c a se
. C our t s s houl d cons t r ue i ns ur anc e pol i ci es as a w hol e t o gi ve ef fect t o t he part i es ’ i nt ent i ons as ex pres s ed 6 in th e p o licy itse lf. B la y lo c k v . B r o w n C o n st r ., In c . v . A IU In s. C o ., 7 9 6 S .W .2 d 1 4 6 , 1 4 9 (T e n n . C t. A pp
. 199 0). T hey s houl d cons t r ue t he po l i cy ’ s l ang uag e r eas onabl y an d s houl d not gi ve i t a f orce d
c o n stru c tio n tha t re n d e rs the p o licy in e ff e c tive o r e x te n d s c o v e ra g e b e yo n d it s inte n d e d sc o p e
. D e m o n tb r e u n v . C N A In s. C o s., 8 2 2 S .W .2 d 6 1 9 , 6 2 1 (T e n n . C t. A p p . 1 9 9 1 ). 6 Apply ing the test fromCon c or d , we f irst note the principa l parties did not e xpre ssl y a g re e that no thi rd -p arty

be ne fi c iari e s w e reint e nd e d. Th e reis n o e xplic it statement in the contra ct that the parties intended to rese rve to themselve s the bene fits of their ag ree ment. I n fac t, as Charter Oak points out, the ce rtificate of liabilityinsurance specific ally

listed RMR /Gower

as an a dditional insured, there by ref lecting the insuranc e was obtaine d, at least in part, for the be nefit of RMR/Gower. The ne x t question under Concord is whether r ecog nition of a rig ht to performance in RMR /Gower

is appropriate to eff

ectuate the intention of the pa rties to the contra ct. Ac c or din g to Concord, in apply ing pa rt (2) of the test, a third party

should not be deeme d an intended be nefic iary

if so doing w ould undermine the pa rties’ purpose s. Id. at 71. The pa rties to the contra ct of insurance a re L exington and B rinker/Chili’s. The policy e xpre ssl y pr ov ide s a

me c hanis m to g ov e rntho se ins ta nc e s w he reit w a s in te nd e d th a t a party other than B rinker/Chili’s was to re ceive any cover ag e under

the policy . The po lic y g rants pe rm iss ionto B ri nk e r/ Chi li’ s in su ranc e re pr e se ntativ e , Se dg wi c k o f T e xas, I nc., to issue evidenc es of insurance “ as and w hererequire d, adding Additional Named Assureds, L oss Pay ees and/or Mortg ag ees a s their intere sts may appea r . . . .” Pursuant to this provisi on, Sedg wick of Te x as, Inc. provide d RMR/ Gower with a ce rtificate of insurancein which it was name d an “a dditional insured” of policy number J7X0051. L e xing tonarg ue s th is c e rtif ic a te of ins ur a nc e e xten de d c a su a lty ins ur a nc e c ov e ra g e to RMR/ Go we r f

or on ly “AL

L RI SK OF PHYSI CAL

L OSS OR DAMAGE” with no ad d i t i o n al i n s u ra n ce co v er age s i n cl u d ed o n t h e c er t i fi ca t e o f i n s u ra n ce , s u ch as co v er age fo r l os s o f r e ntal in c ome
. Ho we ve r, thi s a rg ume nt i g no re s th e e ff

e c t of theplain 5 la ng ua g e fo un d o n th e c e rtif ic a te of lia bil ity ins ur a nc e wh ic h r e a ds : This certificate is issued as a matter of information onl y and conf

ers no rig hts upon the certificate holde r. This ce rtificate does not amend, exte nd, or alter the cove rage afforded by the policie s below

. (e mph a sis added)

. Be causethe ce rtificate has no ef fec t on the cover ag e af

forde d by the policy , we must look t o the policy

itself to determine w hether loss of rental income was an item i n c l u d e di n t h e s c o p e o f

c o v e r a g e
. A t t a c h e dt o t h e p arto f t h e p o l i c y

e n t i t l e d“ A LL 6 RI SK O FPHY SI CA L

L OSS ORDA MA GE ” is a pa g e e nti tle d “ REN TA L

INC OM E EXTENSI ON.” With this ex tension, the parties to the c ontrac t ag ree d that the policy was extended to cover

loss of rental income “re sulting fr om nece ssary untenantability , cause d by damag e to or de struction of the building (s) . . . .” The term “re ntal income” is then de fi ne d a s th e “ tot a l a nti c ipate d g ro ss c a shor e qu ivale nt i nc omefr om t e nant( s) , p lus a sim ila r v a luefo r that po rtionoc c up ie d b y theAs su re d. ” L e xing tonarg ue s th a t th isT h is c la u se in the lea se a p p lied if C h ili ’s ter m ina te d the lea se p u rs u a n t t o the c la u se a llo w ing it to d o so if 7 t he propert y was des t r oy ed by f i r e. Chi l i ’ s t er mi nat ed t he l eas e t he day af t er t he f i r e. 7 extension was included only for situations in which B rinker/Chili’s did not rece ive re nt from prope rties with respe ct to which it was landlord. Lexington reiter ates the policy applied to numerous pr operties a cross the c ountry in which B rinker/Chili’s had an interest, and the ref

ore c ould have include d properties in which Brinker/Chili’s, as owner, collecte d rent. Of

course , none of this supposed intent is evidenc ed in the policy itself. By the unambig uous lang uag e of the policy , the re ntal income extension ex tended the cover ag e of the policy

to cover economic loss in the form of lost rental income. A s an additional insured, this cover ag e would apply to RMR /Gower

as no attempts wer e made to limi t this coverag e for

the sole bene fit of B rinker/Chili’s. Pe rh aps if

theNa sh vil le loc a tio n Ch ili ’s ha d b e e n a c tin g a s a la nd lor d at th e tim e of the fir e, such that it would be entitled to lostrenta l income, we c ould find that rec og nizi ng RMR/ Gower as an intende d benef

iciary of the lost renta l income extension would undermine the parties’ purposes. B ut as it stands now, we c annot say that it does. I ns te a d, up on a

c are fu l e xami natio n o f the c on tr a c t a lon g wi th the c e rtif ic ate of lia bil ity ins ur a nc e , w e fi ndtheins ur a nc e po lic y re c og nize d a

ri g ht t o p e rf

orma nc e in RMR/ Gower

. The fina l question under Concord is whether theterms of the c ontrac t or the circ umstances surr ounding pe rformance indicate that e ither the pe rformance of the promise will satisfy

an oblig ation or dischar g e a duty owed by the promisee to the benef iciary or that the promiseeintends to give the bene ficiary the bene fit of the promised per formanc e. Id. at 70. Chili’s named RMR/Gower as a dditional insured un de r the L e xing tonpo lic y be c aus e it w a s r e qu ir e d to do so by thele a se a g re e me nt i t signe d with RMR /Gower . We find in the lease a g ree ment an expression of intent on the part of Chili’s to g ive RMR/Gower the be nefit of the pr omised perf ormanc e. Unde r the lease , Chili ’s ag ree d “all insuranc e proc eeds” pay able unde r insuranc e policies ma int a ine d “ by

re a so n o f the oc c ur

re nc e of su c h f ir e or oth e r c a su a lty

” wo uldbe paid t o the RMR/Gower except for a portion to be paid to Chi li’s for loss of its personal property

. Chili ’s re ceive d from L exington insuranceproce eds to cove r the loss of

7 Chili ’s per sonal property . Acc ording to the lease , Chili ’s ag ree d any other proc eeds that would be pay able unde r the policy was to g o to RMR /Gower

. Be causeRMR/ Gower

satisfies ea ch prong of the Concord test, we hold that RMR/ Gower

is an intended third-pa

rty benef iciary of the L exington insurancepolicy with respec t to the loss of rental income pr ovision, and reve rse the g rant of summary judgme nt to L exington on that basis.
I V. We now turn to the question of whe ther the tria l court should have g rante d summary judgme nt to Charter Oa

k based on f

inding RMR/Gower w as an intende d thirdpa rty be ne fi c iary

of theL e xing tonpo lic y . O n a pp e a l, Le xing tonarg ue s e ve n if RMR/ Gower

could re cover

under the L exington policy ’s loss of renta l income cove rag e, a ny c ov e ra g e pr ov ide d u nd e r the po lic y wo uldbe e xce ss t o th e c ov e ra g e a ff or de d to RMR/ Gower

in its pol icy

with Charter O ak. The provision in the L exington policy e nti tle d “ Othe r Ins ur a nc e ” state s:C har t er O ak has cl ai med i t made pay ment t o R M R / G ower for i t s l oss of r ent al i ncome s ubj ect t o a s i mi l ar 8 “O the r In su ra n c e ” p ro v isio n se t f o rth in the C h a rte r O a k p o licy.

8 [The L exington] pol icy

shall only

apply excess of:

a
. An y

oth e r i ns ur a nc e wi th r e sp e c t to a ny los s o r d a ma g e wh ic h at the time of happe ning of

such loss or damag e is insured by , or would, but for the e x istence of this P olicy , be insured by any other insurancepolicy

or policies . . . .
As demonstrate d by

the fa ct that Charter

Oak paid RMR /Gower ’s claim for loss of rental income, the Charter Oa

k policy provided c overa g e for

such a loss. L exington arg ues

8 that beca use RMR/Gower wa s fully compensated for loss re ntal income by Charter Oak, any cover ag e the L exington policy might provide RMR/ Gower would be excess to the cover ag e under

the Charter

Oak policy

. Th e “ Othe r Ins ur a nc e ” c laus e g oe s o n to a ddthat th is p ro vis ionwi ll no t app ly to “policies spec ifically

purcha sed by

the Assure d in excess of this Pol icy . . . , and in such event this Policy

shall act a s primary

there to.” This raises the question of whethe r the Cha rt e r O ak p oli c y

wa s p ur c ha se d b y

RMR/ Go we r i n e xce ss o f the L e xing tonpo lic y in which ca se the L exington policy would act a s the primary policy , or whe ther the L exington policy

was the e x cess policy

to the Charter

Oak policy . I f the latter

wer e true , it would appear

Charter Oak c ould not recove r fr om L exington. Be causeL exington has established a g enuine issue of materia l fac t in this reg ard, w e af firm the trial c ourt’s decision to deny

Charter Oak summary

judgme nt.
V.
Acc ording ly , for the r easons se t out above, the or der of the trial court is rever sed in part and a ffirme d in part. The g rant of summary judgme nt in favor of

appellee L e xing tonis r e ve rs e d, a ndthede nial of su mma ry jud g me nt t o a

pp e llant C ha

rt e r O ak is aff irmed. This matter is re manded to the tria l court for further proce eding s consistent with this opi nion. Costs of this appea l shall be share d betwee n Charter Oak and L exington equally

.

______________________________ DON R. ASH, SPECI AL J UDGE