Opinion ID: 2630788
Heading Depth: 3
Heading Rank: 2

Heading: RE/MAX's Motions for Summary Judgment and a Directed Verdict

Text: RE/MAX contends on cross-appeal that Kay's claims against it should never have reached the jury. [10] RE/MAX moved for summary judgment before trial and for directed verdicts at the close of Kay's evidence and at the end of the case. RE/MAX argues that Kay's claims against it should have been dismissed at each of these junctures because there was no evidence that RE/MAX owed or breached any legal duty to ensure Kay's safety or protect him from dangerous conditions at the duplex. RE/MAX first contends that it undertook no contractual duty toward Kay. It then argues that even if it owed Kay certain contractual duties as a manager of the property, these duties did not extend to protecting him from personal injury caused by dangerous conditions on the premises. Kay responds that (1) the lease agreement imposed a duty of care on RE/MAX, and (2) RE/MAX assumed a duty as a result of Kristan Cole and RE/MAX's undertaking of management responsibilities.
In reviewing a denial of a summary judgment motion, we apply de novo review and draw reasonable inferences of fact in favor of the non-moving party to determine whether any genuine issues of material fact exist and whether the moving party was entitled to judgment as a matter of law. [11] Summary judgment is appropriate if the only reasonable inference from the undisputed facts is that one party owed another no duty or owed a duty clearly and vastly narrower in scope than that asserted by the nonmoving party. [12] Questions about the scope of a duty are generally not susceptible to summary judgment if the scope of the duty poses a fact-specific question involving policy and circumstantial judgments better reserved for the jury. [13] When reviewing the denial of a motion for a directed verdict, we must `determine whether the evidence, when viewed in the light most favorable to the non-moving party,' is sufficient to allow reasonable jurors to `differ in their judgment as to the facts.' [14] If there is room for diversity of opinion among reasonable people, the question is one for the jury. [15]
When interpreting a contract, we give effect to the parties' intentions by looking to the words of the contract and any extrinsic evidence regarding intentions when they entered into the contract, including evidence of the parties' subsequent conduct. [16] But the words of the contract remain the most important evidence of intention [17] and, unless otherwise defined, are given their ordinary, contemporary, common meaning. [18] Although contract interpretation is usually a question of law, it becomes a question for the trier of fact when the parties present extrinsic evidence to clarify a contract's meaning, when this evidence points towards conflicting interpretations . . . and when the contract itself is reasonably susceptible of either meaning. [19] RE/MAX contends that it was not a party to the lease agreement drafted by the Tanner brothers; it insists that affidavits filed by the Tanner brothers and Kristan Cole in support of its summary judgment motion establish that the lease's references to RE/MAX resulted from the Tanner brothers' inadvertent failure to edit them out of a form agreement given to them by Cole. Cole's affidavit states that she had a Re/Max agency relationship with Danbar, Inc., an Alaska Corporation, d/b/a/ Re/Max of Wasilla, and that she supplied her stepsons with a RE/MAX rental agreement form on a floppy disk, instructing them to delete the references to RE/MAX. Cole testified to the same effect at trial. But it is undisputed that the lease agreement was executed with references to RE/MAX remaining intact. And RE/MAX presented no evidence that the Tanner brothers ever informed Kay of their subjective intent to exclude RE/MAX from the lease. [20] Moreover, many of the lease's references to RE/MAX could reasonably be read as deliberate. The most significant items include:  the heading of the rental agreement which states in large font, RE/MAX of Wasilla;  the first page which identifies RE/MAX of Wasilla (hereinafter called agent for Aaron & Jesse Tanner the Owner/Landlord);  the provision which states rent will be payable to Owner/Landlord's agent[']s address: RE/MAX of Wasilla 1590 E. Financial Dr. Suite 200, Wasilla, Alaska;  the reference to Kristan [Cole] at RE/MAX as the emergency contact for tenants; and  the signatory page which shows Kristan Cole's initials above the byline, RE/MAX of Wasilla and Agent/Broker for Landlord. [21] The lease agreement itself thus raised triable issues of fact as to the parties' reasonable expectations upon executing the lease. Furthermore, Kay presented additional evidence regarding the circumstances of contract formation. Kay testified that a RE/MAX agent (his mother) showed him the property; the duplex was listed as property managed by RE/MAX; and Kay applied and was accepted as a tenant through RE/MAX. As we explained in Sea Lion Corp. v. Air Logistics of Alaska, Inc ., when written or spoken words or any other conduct of the principal, if reasonably interpreted, cause third persons to believe the principal consents to having the act done on his behalf by the person purported to act for him, we recognize apparent authority sufficient to bind a principal. [22] Drawing all permissible inferences in favor of Kay, the superior court correctly determined that genuine issues of material fact existed as to Kay's contractual relationship with RE/MAX. Similarly, there was sufficient evidence at trial to allow a reasonable juror to conclude that the Tanner brothers had chosen to retain the lease agreement's references to RE/MAX because RE/MAX, through Kristan Cole, actually undertook to be the property manager of the duplex and intended to bind itself as a party to the contract. The superior court did not err in denying RE/MAX's motion for summary judgment or its motions for a directed verdict on this issue.
RE/MAX further argues that even if it became a party to the rental agreement by contractually undertaking to manage the rental, there was no basis for the jury to find that it owed and breached a duty to protect Kay from personal injuries caused by dangerous conditions on the rental property. We have long recognized that duties may be voluntarily assumed. [23] For example, we held in Adams v. State that when the state undertakes a fire inspection, it has the further duty to exercise reasonable care in conducting the inspection. [24] In LaMoureaux v. Totem Ocean Trailer Express, Inc. the question was whether a union owed a duty of care to a victim of a truck collision to ensure that union members dispatched to drive were qualified drivers. [25] The agreement between a trucking company and the union provided only that the union would dispatch regular and experienced longshoremen. [26] Based on testimony that the union had actually undertaken the responsibility to supply competent and licensed drivers, we concluded that a genuine issue of fact existed about whether the union had voluntarily assumed a duty of care to ensure that members dispatched as drivers could lawfully drive even though the contract did not explicitly require the union to check its members' driving qualifications. [27] Here, the rental agreement seemingly designated RE/MAX as the property manager and assigned several specific responsibilities to the management. First, the section entitled Rules specified that the rules for the premises are set by management. Second, the subsection entitled Cleanliness and Trash required the tenant to assist management in keeping outside areas and common areas clean. Third, a subsection entitled Maintenance, Repairs, and Alterations required the tenant to assist management in keeping walkways clear and salted in winter monthsa duty usually belonging to the owner or occupier of the land. [28] This subsection also prohibited any alterations without the written consent of management, and required the tenant to inform the management, not the owners, in writing of any items needing repairincluding electrical and plumbing fixtures and smoke detectors. In the event of an emergency, the lease demanded immediate notice and insisted that all service requests be made only to the property manager. The lease further identified Kristan Tanner at RE/MAX as the emergency contact. Additional evidence at trial suggested that RE/MAX had undertaken an even broader range of duties than the management responsibilities explicitly mentioned in the rental agreement. Kay testified at his deposition that RE/MAX's responsibilities included listing the duplex in RE/MAX's property management division, providing one of its agents the keys for showing the duplex to Kay, providing a standard RE/MAX residential agreement form to Kristan Cole for her use, processing Kay's rental application in RE/MAX's office, giving Kay his set of keys, and accepting Kay's rent at RE/MAX's office. Kay also testified that he notified RE/MAX of a sewer system problem and that Kristan relayed this information to the Tanner brothers. Moreover, the rental agreement identified RE/MAX as agent for Aaron & Jesse Tanner the Owner/Landlord. Finally, Daniel Crozier, the owner of RE/MAX's Wasilla branch, testified that RE/MAX acted as landlord on this property and that it would be correct to say that as far as Mr. Kay [was] concerned . . . Re/Max stood in the shoes of the Tannersthe property owners. In closing arguments RE/MAX acknowledged that it is not a huge leap to come to a conclusion about whether an owner of a premises has a duty to take care of the premises, to inspect it and so forth.  (Emphasis added.) In sending the case to the jury, the superior court submitted numerous jury instructions on the issue of duty, including the following instruction based on Restatement (Second) of Torts § 324A (1965), which allowed RE/MAX to be held liable if the jury found that it undertook and breached a duty to protect Kay from physical harm: One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other's person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if (a) his failure to exercise reasonable care increases the risk of such harm, or (b) the harm is suffered because of the other's reliance upon the undertaking. RE/MAX does not challenge this instruction as such; it argues only that the evidence was insufficient to justify submitting it to the jury. But we think that a reasonable juror viewing the totality of evidence in the light most favorable to Kay could logically find, under this instruction, that RE/MAX had assumed significant property management responsibilities on behalf of the Tanner brothers. We note that other jurisdictions applying Restatement § 324A in analogous cases have found that property managers assume at least a limited duty to protect tenants, even if the managers have not taken over the entire charge of the land or the building. For example, in Kirschbaum v. WRGSB Associates, a property management agreement obliged the property manager to maintain the building in good condition and to make repairs. [29] Applying Pennsylvania laws similar to the Restatement, the court affirmed a judgment holding that the property manager was responsible for injuries stemming from its failure to repair a defective handrail, but had no duty to fix structural defects in the staircase. [30] In the present case, we think that a reasonable juror could similarly conclude that the management responsibilities RE/MAX assumed encompassed a duty of due care to inform itself of the condition of the premises and to take reasonable steps to protect the tenants against non-obvious dangers, either by arranging for repairs of non-structural problems or by giving the tenants adequate warnings. We recognize that section 387 of the Restatement (Second) of Torts limits the circumstances under which a property manager's duties would be as broad as a landlord's: An independent contractor or servant to whom the owner or possessor of land turns over the entire charge of the land is subject to the same liability for harm caused to others, upon or outside of the land, by his failure to exercise reasonable care to maintain the land in safe repair as though he were the possessor of the land. [31] Comment a to this section goes on to say that the contractor must have taken over the entire charge of the land or building. It is not enough to create liability . . . that he has undertaken to make specific repairs, or even to inspect the land or building and from time to time to make such repairs as he should discover to be necessary. [32] Here, we doubt that the evidence could reasonably support a finding that RE/MAX undertook complete control and responsibility for the Tanner brothers' duplex, so as to make it responsible for curing major structural defects. But we need not resolve that issue. For present purposes, it suffices to observe that the evidence in this case would have allowed the jury to find that RE/MAX undertook and breached the considerably more modest duty to exercise due care by using its expertise as a property manager to take reasonable steps in inspecting the premises and warning Kay about dangers that might not be obvious to an ordinary tenant. As noted above, comment a to the Restatement § 387 states that liability to remedy structural defects should not be imposed against a property manager unless the manager takes over the entire charge of the property, even if it has undertaken to . . . inspect the land or building.  [33] The comment thus implicitly recognizes that a property manager who undertakes broad duties without taking over the entire charge might be held liable for assuming, and then breaching, more modest duties to inspect, make minor repairs, and warn tenants of non-obvious dangers. Because the evidence at trial was at least minimally sufficient to allow a jury to find that RE/MAX undertook limited responsibilities to protect Kay from personal injury and thus owed and violated a duty to take reasonable steps to protect Kay from unobvious dangers on the premises, we conclude that the superior court did not err in submitting the case to the jury.