Court Opinion

ID: 6450612
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:33:09.585005+00
Date Added: 2024-06-11T15:52:54.145584
License: Public Domain

O’Connor, J.
(dissenting). I agree with the court that “[a]s subrogee, Lumber [insurer] has any right of action which Foundry [lessor] might have had against Zoltek [lessee].” Ante at 706. I do not agree, however, that, from the language of par. 6 of the lease and the cover letter attached thereto, Foundry waived or otherwise relinquished its right to maintain a tort action against Zoltek to recover for the fire damage to Foundry’s building caused by Zoltek’s negligence. It of course follows that I also do not agree with the court’s conclusion that “it is clear that Foundry and Zoltek are coinsureds [and] [accordingly, Lumber has no more right against Zoltek than it has against Foundry be*708cause they are coinsureds.” Ante at 706. Furthermore, to the extent that the court claims that pars. 11 (a) and 21 of the lease also make clear, or even suggest, that Foundry and Zoltek are coinsureds or that Zoltek was otherwise exempt from tort liability to Foundry, I do not agree. One thing that is abundantly clear, however, is that the court’s opinion is bereft of any stated rationale for its conclusion that the lease provisions evidence beyond reasonable dispute the parties’ intent to exempt Zoltek from liability to Foundry for negligently burning Foundry’s building.
Paragraph 6 of the lease provides:
“RENT ADJUSTMENT. The LESSEE shall pay to the LESSOR as additional rent hereunder when and as designated by notice in writing by LESSOR, fifty-six percent (56%) of Operating Expenses incurred during the calendar year.
“ ‘Operating Expenses’ are defined for the purposes of this Agreement as: Taxes and betterments assessed against the whole premises of which the leased premises are a part; hazard and liability insurance on the whole of the premises of which the leased premises are a part; and snowplowing.”
There are two relevant letters. By letter dated November 1, 1988, Foundry’s counsel’s letter informed the tenant: “5. You are not required to carry property insurance (fire with extended coverage) on the building. You should, and I am sure you do, carry property damage insurance on your equipment, furnishings and inventory. The insurance referred to in paragraph 17 of the lease is comprehensive public liability insurance.” In addition, there was a cover letter attached to the lease, dated November 10, 1988, in which Foundry informed Zoltek that Zoltek “shall not be required to carry property insurance on the building.” Thus, it was made clear that Zoltek was not responsible for making sure that Foundry’s building was insured against fire damage. Contrary to the court’s assertion (supra at 706), however, *709neither letter told Zoltek that, “because of Zoltek’s contribution to the premium, it need not carry its own property hazard liability policy.” Neither letter mentioned “Zoltek’s contribution to the premium.” Significantly, neither letter even implied that, because the amount of Zoltek’s rent would be contingent to a degree on the amount of expenses Foundry would incur for premiums for whatever hazard and liability insurance Foundry might choose to purchase, Zoltek could assume that, as to any fire insurance that Foundry might obtain, Zoltek would be a coinsured with Foundry or would otherwise be exempt from liability for fire damage to Foundry’s building caused by Zoltek’s negligence.
The lease’s provisions as to rent are for the benefit of Foundry, the lessor, not Zoltek, the lessee. Paragraph 6 does not obligate Foundry to purchase insurance for Zoltek’s benefit. Paragraph 6 does not even oblige Foundry to purchase insurance for its own benefit. Paragraph 6 does not oblige Foundry to do anything. It simply requires Zoltek to pay Foundry a fixed sum plus a variable sum in return for which Zoltek will be entitled to benefits, such as occupancy, for which provision is made in other paragraphs of the lease. None of those provisions explicitly or implicitly suggests that the tenant will be a coinsured or will be exempt from liability for its negligence in causing damage to Foundry’s building by fire. The court should not construe a contract provision as exempting a party from liability for its own negligence, see New York, N.H. & H.R.R. v. Walworth Co., 340 Mass. 1, 5 (1959), unless failure to do so would render the provision meaningless or would manifestly contravene the contracting parties’ intentions. See Rathbun v. Western Mass. Elec. Co., 395 Mass. 361, 363 (1985); Shea v. Bay State Gas Co., 383 Mass. 218, 223-225 (1981) (“The general rule is that there must be express language creating an obligation to indemnify one against his own negligence”). Perhaps, if the lessor had contractually bound itself to obtain fire insurance on the lessor’s building, a situation that has obtained in other cases throughout the country, it reasonably could be argued that that provision must have been designed to benefit the lessee *710by exempting the lessee from liability for its own negligence in causing fire damage to the lessor’s property. However, there is no need to speculate about that in this case because, here, there is no provision in the relevant lease, or in accompanying letters, requiring the lessor, Foundry, to purchase fire insurance.
That brings me to a discussion of pars. 11 (a) and 21, on which the court perhaps relies. Paragraph 11 (a), in relevant part, is as follows:
“11. MAINTENANCE. LESSEE’S OBLIGATION. The LESSEE agrees to maintain the leased premises in good condition, damage by fire and other casualty excepted. . . .”
The relevant portion of paragraph 21 states the following:
“21. SURRENDER. The LESSEE shall at the expiration or other termination of this lease . , . deliver to the LESSOR the leased premises ... in good condition, damage by fire or other casualty only excepted. . . .”
The court appears to rely on Slocum v. Natural Prods. Co., 292 Mass. 455, 456-457 (1935), for the proposition that a provision such as par. 21, sometimes referred to as a “yield-up” clause, is intended by the parties to exempt the tenant from liability in tort for the tenant’s negligence in damaging the landlord’s building by fire. The court’s reliance on Slocum is misplaced. The questions before the court in Slocum “ar[o]se out of a count in contract wherein the plaintiffs as lessors declare [d] for breach by the defendant as lessee of a covenant in a lease ‘to make all repairs, both outside and inside usual or necessary to keep the demised premises in good repair and condition in every respect during the term of this lease, damage by fire or unavoidable casualty only excepted.’ ” Id. at 456. The court concluded that the exception for “damage by fire or unavoidable casualty” “includes fires resulting from negligence of the lessee,” id. at *711457, with the result that the lessors were held not to have a meritorious contract claim.
It is fairly arguable here, too, that, in view of pars. 11 (a) and 21, Foundry would not have a cause of action sounding in contract against Zoltek. It does not follow, however, from the fact (if indeed it be a fact) that Foundry would not have a meritorious contract claim against Zoltek based on Zoltek’s failure to rectify the fire damage resulting from its negligence, that Foundry would not have a meritorious tort claim sounding in negligence. Indeed, this court in Slocum was careful to say, “It does not necessarily follow that the lessors would have no action in tort for the damage sustained.” Id. Tortious acts are “breaches of duty arising by operation of law, Scandura v. Trombly Motor Coach Serv., Inc., 370 Mass. 612, 618 (1976), rather than by operation of contract.” Monadnock Display Fireworks, Inc., 388 Mass. 153, 156 (1983). The exceptions set forth in pars. 11 (a) and 21 clearly are focused on duties arising by operation of contract and not on duties arising by operation of law.
I am satisfied that there is no sound reason for concluding that, pursuant to Foundry and Zoltek’s lease and Foundry’s letters to Zoltek, fulfilment of the parties’ intentions or other considerations of justice call for exemption of Zoltek from liability for negligent causation of fire damage to Foundry’s building. I would reverse the judgment below and remand the case for trial.