Court Opinion

ID: 9376530
Source: CourtListenerOpinion
Date Created: 2023-03-02 22:00:34.032973+00
Date Added: 2024-06-11T17:17:07.452270
License: Public Domain

United States Court of Appeals
                      For the First Circuit

No. 21-1745

                           JOHN CARUSO,

                            Plaintiff,

                                v.

      OMNI HOTELS MANAGEMENT CORPORATION, d/b/a OMNI HOTEL,

                      Defendant, Appellant,

                      ULTIMATE PARKING, LLC,

                       Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF RHODE ISLAND

       [Hon. John J. McConnell, Jr., U.S. District Judge]

                              Before

                       Barron, Chief Judge,
                 Lipez and Gelpí, Circuit Judges.

     Eli Jason S. Mackey, with whom C. Stephen Setliff, Setliff
Law, P.C., Charles D. Blackman, and Levy & Blackman LLP were on
brief, for appellant.
     Nancy Kelly, with whom Benjamin O'Grady and Gordon Rees Scully
Mansukhani, LLP were on brief, for appellee.

                          March 2, 2023
            LIPEZ, Circuit Judge.           While staying at the Omni Hotel

in Providence, Rhode Island, John Caruso was injured when he

tripped and fell on the curb that separates the hotel's valet

driveway from its main entrance.                Caruso sued both the hotel's

valet operator, appellee Ultimate Parking, LLC ("Ultimate"), and

the     hotel's    owner,    appellant        Omni    Hotels   Management     Corp.

("Omni"),    blaming       his   accident     on     their   allegedly   negligent

maintenance of the premises and the allegedly dangerous driveway

curb.     After Ultimate settled the case with Caruso on behalf of

itself and Omni, Omni sought indemnification from Ultimate for its

attorney's fees.       The district court granted summary judgment for

Ultimate    on    Omni's    indemnification          crossclaims,   holding    that

neither the parties' contractual agreement nor Rhode Island common

law entitled Omni to such relief.                  Caruso v. Omni Hotels Mgmt.

Corp., 559 F. Supp. 3d 69, 72-73 (D.R.I. 2021).                 Disagreeing with

the district court's reading of the parties' contract and Rhode

Island law, we conclude that Omni is entitled to indemnification.

We therefore vacate the judgment for Ultimate and direct the

district court on remand to enter judgment for Omni.

                                         I.

A.    Background

            Caruso's accident occurred in May 2016 while he was

helping his niece carry luggage into the Omni Hotel from her car,

                                      - 2 -
which was parked in the valet circle.       In his complaint,1 Caruso

alleged, inter alia, that Omni had a duty to warn guests "of the

unreasonably dangerous and hidden step up/curb located within the

valet circle" of the hotel and failed to "color code" the curb or

otherwise    "clearly   demarcate"   it.   Caruso   also   alleged   that

Ultimate had "negligently parked vehicles within and up against

the curbing of the valet circle" and thereby caused, or contributed

to causing, him "to trip and fall and sustain serious personal

injuries."

            Ultimate operates the hotel's valet and parking services

pursuant to a contract with Omni, titled "Concession Agreement,"

that includes provisions in which the two companies agreed to

defend and indemnify each other in certain circumstances.            The

provision pertinent to this appeal states:

            Ultimate shall indemnify and hold harmless
            [Omni] from and against any and all liability,
            claims, liens, losses, expenses and judgments
            of every kind whatsoever, by whomsoever
            asserted, on account of claims or demands of
            every character occurring on or in any way
            incident to, or arising from or in connection
            with any act or failure to act by Ultimate or
            any of its agents, contractors, servants, or
            employees in the operation of the Business
            during the term of this Agreement, provided
            that no such claim arises from any set of
            negligence or intentional acts or misconduct

     1 Caruso filed his original complaint in Rhode Island state
court only against Omni, and Omni subsequently removed the action
to federal court based on diversity jurisdiction.     Caruso then
filed an amended complaint adding Ultimate as a defendant and
alleging an additional claim solely against it.

                                 - 3 -
                of   [Omni]   or  any   of   its  employees,
                subsidiaries, affiliates, officers, agents,
                contractors or parent company. In the event
                indemnification is proper, Ultimate, upon
                reasonable notice from [Omni], shall at
                Ultimate's expense, resist or defend such
                action or proceeding and employ counsel
                therefor reasonably satisfactory to [Omni]
                . . . .

(Emphasis added.)           Relying on this provision and Rhode Island

caselaw,        Omni   filed   crossclaims   against   Ultimate    in   Caruso's

action asserting rights to contractual and equitable, or common-

law, indemnification for its litigation costs.2

                Both defendants moved for summary judgment on Caruso's

claims, but the district court denied the motions on the ground

that       a   factfinder   needed   to   decide   "whether   either    or   both

[d]efendants were negligent and whether any negligence was a

proximate cause of the [p]laintiff's injuries."                The settlement

followed, and, upon Caruso's motion to dismiss his claims, the

district court dismissed the case in its entirety.                Omni objected

to the dismissal of its crossclaims against Ultimate, which the

district court reinstated but then rejected in a summary judgment

ruling in favor of Ultimate.

       Omni also sought contribution from Ultimate, but that claim
       2

became moot because Omni had no financial obligation to Caruso
under the settlement agreement. See Caruso, 559 F. Supp. 3d at 70
n.1.

                                      - 4 -
B.    The District Court's Indemnification Decision

             In     concluding   that      Omni     was    not   entitled    to

indemnification under the Concession Agreement, the district court

ruled that the contractual exclusion for a "claim [that] 'arises

from' Omni's negligence, intentional acts, or misconduct" was

triggered      by    Caruso's    allegation       that     Omni's   negligence

contributed to his fall and injuries.             Caruso, 559 F. Supp. 3d at

72.       The court rejected Omni's argument that the exception to

Ultimate's indemnification obligation, as stated in the Concession

Agreement, applies only if there is a finding of negligence by

Omni and not merely a claim of negligence.           Rather, the court held,

"[t]he fact that the claims brought in this suit overwhelmingly

charged negligence on the part of Omni3 is sufficient for finding

that the claims 'arose from' Omni's negligence -- precluding

indemnification."       Id.

             The district court found support for its conclusion in

Rhode Island cases involving indemnification clauses with language

it    read    as    "decidedly   distinct    from    the    language   of   the

[Concession] Agreement here."        Id.    The court explained:

             Specifically, in Walsh [v. Lend Lease (US)
             Constr., 155 A.3d 1201, 1205 (R.I. 2017)], the
             contract provided indemnification was not
             required "if such injury . . . is caused by

      3The court pointed out that Count I of Caruso's complaint
"contains multiple allegations of negligence solely against Omni"
and Count II "contains similar allegations against Ultimate and,
again, Omni." Caruso, 559 F. Supp. 3d at 72.

                                    - 5 -
          the sole negligence of a party indemnified
          hereunder."   In Manning [v. New Eng. Power
          Co., No. PC98-5091, 2004 WL 3190204, at *2
          (R.I. Super. Ct. Dec. 22, 2004)], the
          agreement stated indemnification was not
          required "if such claims . . . are caused by
          the   negligence   of   a  party    identified
          hereunder."     In contrast to the narrow
          language   of  "sole   negligence,"   or   the
          definitive requirement of "caused by," the
          instant Agreement precludes indemnification
          if the claim "arises from" Omni's negligence,
          intentional acts, or misconduct.

Id. (omissions in original) (citations omitted).             In other words,

the court concluded that, because "arising from" connotes a broader

scope of responsibility than "caused by," a claim "arises from"

negligence      if     it     is      premised      on      allegations   of

negligence -- "regardless of the[] actual veracity [of those

allegations], or what a factfinder might find were the claims to

go to trial."    Id.

          The        court     also      rejected        Omni's   common-law

indemnification claim.        It found that Omni had failed to satisfy

the requirements established through caselaw for such a claim,

specifically, the liability of both prospective indemnitor and

indemnitee to a third party.            See id. at 73; see also, e.g.,

Muldowney v. Weatherking Prods., Inc., 509 A.2d 441, 443 (R.I.

1986)   (reciting       the    three     requirements       for   common-law

indemnification).      The court reasoned that neither Ultimate nor

Omni had been found liable to a third party -- given the settlement

agreement reached with Caruso and subsequent dismissal of Caruso's

                                      - 6 -
claims -- and, hence, the required elements of a common-law claim

had not been met.   Caruso, 559 F. Supp. 3d at 73.

          On   appeal,   Omni    challenges   the   district   court's

indemnification rulings and the court's earlier denial of its

motion for summary judgment on Caruso's negligence claims.        Omni

asserts that the court incorrectly concluded that mere allegations

of negligence suffice to render the contractual indemnification

obligation inoperative. And, Omni argues, because the court should

have found an absence of negligence on its part as a matter of law

when Omni moved for summary judgment on Caruso's claims, it is

entitled to indemnification pursuant to the Concession Agreement.

Omni further claims that, even if it is not entitled to contractual

indemnification, common-law indemnification applies here because

"Caruso alleg[ed] active negligence on Ultimate's part and only

passive negligence on Omni's."

                                  II.

          As we shall explain, the district court's rejection of

Omni's right to contractual indemnification was premised on an

incorrect view of both Rhode Island law and the language of the

Concession Agreement.

A.   Standard of Review and Applicable Law

          We review de novo the district court's grant of summary

judgment in favor of Ultimate.       See, e.g., Shea v. Millett, 36

F.4th 1, 6 (1st Cir. 2022).     Under Rhode Island law, which applies

                                 - 7 -
in this diversity case, we owe no deference to the district court

when construing unambiguous contract language, see, e.g., Furtado

v. Goncalves, 63 A.3d 533, 537 (R.I. 2013), and the determination

of whether contract language is ambiguous is               itself     a legal

question subject to de novo review, Mgmt. Cap., L.L.C. v. F.A.F.,

Inc., 209 A.3d 1162, 1173 (R.I. 2019).           Contract terms that are

"clear   and   unambiguous"   are   "given     their   usual   and   ordinary

meaning."      Id. (quoting Andrukiewicz v. Andrukiewicz, 860 A.2d

235, 238 (R.I. 2004)); see also Boschetto v. Boschetto, 224 A.3d

824, 829 (R.I. 2020).

            Rhode   Island    courts    have    long    treated      indemnity

provisions as "valid if sufficiently specific," but have directed

that such provisions "are to be 'strictly construed against the

party alleging a contractual right of indemnification.'"              Sansone

v. Morton Mach. Works, Inc., 957 A.2d 386, 393 (R.I. 2008) (quoting

Muldowney, 509 A.2d at 443).4          However, contract terms are not

     4   Rhode    Island's   strict   construction    policy    for
indemnification provisions appears to stem from a view that such
provisions are disfavored when they "negate liability for an
individual's own negligence." R.I. Hosp. Tr. Nat'l Bank v. Dudley
Serv. Corp., 605 A.2d 1325, 1327 (R.I. 1992) (emphasis added).
Indeed, Rhode Island courts adopted the "rule of strict
construction" in the context of a defendant landlord seeking to be
exempted from liability for damages resulting from his own
negligence. Dower v. Dower's Inc., 217 A.2d 437, 439 (R.I. 1966)
(discussing Railton v. Taylor, 38 A. 980, 982 (R.I. 1897)). Other
courts have explained that the purpose of such a rule is "to insure
that one agreeing to the extraordinary liability of indemnifying
another against his own negligence [is] fully aware of the extent
of his liability." Applied Indus. Materials Corp. v. Mallinckrodt,

                                    - 8 -
ambiguous simply because their meaning is disputed.      Young v.

Warwick Rollermagic Skating Ctr., Inc., 973 A.2d 553, 560 (R.I.

2009).   In the context of insurance policies -- which also are

strictly construed in Rhode Island in favor of one party -- the

Rhode Island Supreme Court has cautioned against "engaging in

mental gymnastics or . . . stretching the imagination to read

ambiguity into a [provision] where none is present."   New London

Cnty. Mut. Ins. Co. v. Fontaine, 45 A.3d 551, 557 (R.I. 2012)

(quoting Beacon Mut. Ins. Co. v. Spino Bros., Inc., 11 A.3d 645,

649 (R.I. 2011)).

B.   "Arises from" vs. "Caused by"

          The district court's finding that Omni is not entitled

to indemnification under the Concession Agreement rested on its

view that, in the context of an indemnification exclusion, a claim

Inc., 102 F. Supp. 2d 934, 943 (N.D. Ill. 2000) (quoting Duffy v.
Poulos Bros. Constr. Co., 587 N.E.2d 1038, 1041 (Ill. App. Ct.
1991) (alteration in original)).

     Consistent with this rationale for strictly construing
indemnity provisions, a Rhode Island statute expressly bars, on
public   policy   grounds,   provisions  in   construction-related
contracts that "purport to indemnify the promisee for personal
injury or property damage caused by or resulting from the
promisee's own negligence." Rodrigues v. DePasquale Bldg. & Realty
Co., 926 A.2d 616, 620 n.2 (R.I. 2007) (describing R.I. Gen. Laws
§ 6-34-1 (1956)).    We think it likely that Rhode Island courts
would closely scrutinize similar indemnity provisions in other
commercial contexts and would be less strict with provisions, like
the one at issue here, that do not indemnify a party for its own
negligence. In any event, our assessment of the disputed provision
in this case does not depend on the level of scrutiny applied.

                               - 9 -
that "arises from" negligence -- the terminology used in the

Concession Agreement -- materially differs from a claim that is

"caused by" negligence.    The former term, according to the court,

extends more broadly to encompass as-yet unproven allegations of

negligence.    Caruso, 559 F. Supp. 3d at 72.

          Relying   on   that   difference   in   meaning,   the   court

distinguished the two "analogous" Rhode Island cases cited in its

decision, Walsh and Manning, because they used the language of

"caused by."   Id. at 71-72.    Hence, the court deemed "inapposite"

the conclusions in Walsh and Manning that a finding of negligence

was necessary to foreclose indemnification.        See id. at 72; see

also Walsh, 155 A.3d at 1205-06 (stating that the reference to

injury "caused by the sole negligence" of the potential indemnitee

"predicates" indemnification on a "partially fact-based" finding

that "has yet to be made"); Manning, 2004 WL 3190204, at *3

(recognizing that an indemnification provision using "caused by"

language "expressly excludes from its terms those instances in

which the indemnitee is deemed to be negligent").5       The district

court thus rejected Omni's argument that "a judicial determination

     5 The Manning court also made clear that when a party is
"deemed negligent," there ordinarily would be a factual finding to
that effect. See 2004 WL 3190204, at *3 ("In general, an act or
omission is not deemed negligent until competent evidence
establishes a causal relationship between the act and an injury.").

                                - 10 -
of     negligence    on   the    part   of     Omni   [is   required]    before

indemnification is precluded."          Caruso, 559 F. Supp. 3d at 72.

               We disagree that Rhode Island law draws the distinction

in terminology on which the district court relied.                Although Walsh

and Manning both involved indemnification provisions using the

"caused by" language, neither case considered whether "arises

from"     is    equivalent      to   "caused    by"    in   the     context   of

indemnification provisions.          They simply construed provisions that

used the "caused by" language.           See Walsh, 155 A.3d at 1205-06;

Manning, 2004 WL 3190204, at *3.             Meanwhile, other Rhode Island

cases reveal that the state's courts would view "arising from" as

used in the Concession Agreement as largely synonymous with "caused

by."

               For example, in Sansone, the indemnification provision

at issue excluded a manufacturer's liability "for any damage to

person or property at any time arising from Purchaser's misuse and

operation of [certain] machinery or equipment."               957 A.2d at 392

(emphasis added).         Despite the "arising from" language in the

contract, the Rhode Island Supreme Court repeatedly used the

language of "cause" when assessing the indemnification obligation.

See, e.g., id. at 394 ("[I]f a buyer purchased [equipment] subject

to an indemnity agreement mirroring that at issue here, the

manufacturer would have a claim of indemnity against the buyer for

damages    caused    by   the   latter's     misuse   and   operation    of   the

                                     - 11 -
[equipment]." (emphasis added)); id. (describing an interpretation

of the agreement that would provide indemnification "regardless of

whether the misuse and operation of the [equipment] itself was the

cause of injury" (emphasis added)).             The court also used another

variation of "caused by" -- i.e., another alternative to "arising

from" -- when it noted that "we now must decide if there is a

genuine issue of material fact as to whether 'misuse and operation'

of that component resulted in plaintiff's injuries."                  Id. at 395

(emphasis added).

           The view that "arising from" may be used synonymously

with   "caused    by"    also    is     reflected    in    cases      addressing

indemnification     provisions    in     insurance    policies        --   another

context in which one party (the insurer) typically is assigned the

obligation to defend and indemnify the other party (the insured)

based on an underlying negligence claim.            See, e.g., Am. Com. Ins.

Co. v. Porto, 811 A.2d 1185, 1189 (R.I. 2002).            In Porto, the Rhode

Island Supreme Court construed a provision in an insurance policy

that excluded from coverage "bodily harm, sickness, disease or

death that arises out of" specified occurrences.                   Id. at 1191

(emphasis added).       The court repeatedly equated "arises out of"

with   causation,   at    several      points    referencing     an    insurance

treatise for the proposition that "'arising out of' means only

that 'a causal connection' exists between the alleged injuries and

the excluded subject matter." See, e.g., id. at 1195 (citing Couch

                                      - 12 -
on Insurance); see also id. at 1196 ("[T]he relevant inquiry for

determining potential coverage under an insurance policy of this

type is not the theories of relief in the complaint, but whether

the injuries alleged by plaintiff have a causal connection with

whatever type of conduct or situation that the policy has excluded

from coverage."); id. at 1197 ("[i]nterpreting 'arising out of'

. . .   to   mean   having   'a   causal    connection   to'   the   excluded

matter").

             To be clear, we are not suggesting that the meaning of

"arises from" is entirely identical to that of "caused by."                  The

district court here reasonably concluded that "arises from" may

connote a broader range of triggering conduct.           See Caruso, 559 F.

Supp. 3d at 72; see also, e.g., Porto, 811 A.2d at 1194 n.5 (noting

the understanding in some jurisdictions "that the phrase 'arising

out of,' as used in exclusionary clauses of insurance policies,

'must   be   read   expansively,    incorporating    a   greater     range    of

causation than that encompassed by proximate cause'" (quoting

Bagley v. Monticello Ins. Co., 720 N.E.2d 813, 816 (Mass. 1999));

Rischitelli v. Safety Ins. Co., 671 N.E.2d 1243, 1245 (Mass. 1996)

("The expression 'arising out of' indicates a wider range of

causation than the concept of proximate causation in tort law.").

But such variations in the breadth of causation play no role in

this case, where the debate concerns the need for a finding of

negligence versus allegations of negligence.             On that question,

                                   - 13 -
cases such as Sansone and Porto make clear that the Rhode Island

Supreme Court would treat the Concession Agreement's reference to

an injury that "arises from" a negligent act no differently from

a provision referring to an injury that is "caused by" a negligent

act.       We reach that conclusion as a matter of law, having found,

as explained above, that the equivalence in terminology is clear

under the relevant Rhode Island precedent.            See, e.g., Young, 973

A.2d at 558.

              We thus hold that "arises from" in the pertinent phrase

of the Concession Agreement carries materially the same meaning as

"caused by."       Hence, the question we must now consider is whether,

with       that   equivalence,   the     provision   eliminates   Ultimate's

obligation to indemnify Omni for claims related to Ultimate's

business activities when a third party merely alleges negligence

by Omni, without regard for whether it was in fact negligent.6

      Ultimate argues that, because Omni advanced a different view
       6

of the contract language when Ultimate attempted to add counter-
crossclaims against it, Omni is foreclosed by the principle of
judicial estoppel from now arguing that the exception to Ultimate's
indemnification obligation depends on a factual finding that Omni
was negligent. Specifically, and in relevant part, Omni asserted
in its opposition to Ultimate's motion that "Plaintiff's Amended
Complaint alleges a claim against Ultimate for Ultimate's own
alleged negligence. . . . The plain language of the Agreement
overtly disclaims any indemnification obligation by Omni where, as
here, the claim against Ultimate arises from its own negligence."
Caruso v. Omni Hotels Mgmt. Corp., No. 18-00277-JJM-LDA (D.R.I.
Oct. 13, 2020) (Memorandum, at 12) (emphasis added and omitted).

     We reject the applicability of judicial estoppel here. We
see no basis for concluding that the district court relied on an

                                       - 14 -
C.   The Indemnification Obligation

           Reduced to its relevant content, the indemnification

provision states that Ultimate will indemnify Omni "against any

and all liability, claims, . . . [and] expenses . . . on account

of claims or demands of every character . . . arising from or in

connection with any act or failure to act by Ultimate . . . in the

operation of the Business . . . provided that no such claim arises

from any set of negligence or intentional acts or misconduct of

[Omni]."   (Emphasis added.)    This formulation describes Ultimate's

indemnification obligation broadly: it covers claims stemming from

"any act or failure to act by Ultimate," regardless of fault.

(Emphasis added.)      The exclusion, however, covers only claims for

which   Omni   bears   responsibility     because   of   its   negligence,

intentional acts, or misconduct.        In our view, that limitation is

reasonably construed to withhold indemnification only when the

claims at issue in fact arise from culpable conduct or inaction by

Omni.   Indeed, it would make no sense for the Concession Agreement

to excuse Ultimate from its contractual responsibility for its own

argument concerning the contract language in denying Ultimate's
attempt to add the counter-crossclaims. See, e.g., Perry v. Blum,
629 F.3d 1, 11 (1st Cir. 2010) ("The party proposing an application
of judicial estoppel must show that the relevant court actually
accepted the other party's earlier representation."). The court
stated that it denied Ultimate's motion because of its late timing
and the resulting "expense and delay that [Omni] would likely
face." Caruso v. Omni Hotels Mgmt. Corp., No. 18-00277-JJM-LDA
(D.R.I. Nov. 12, 2020) (order denying motion to amend, at 5).

                                 - 15 -
actions based on third-party allegations against Omni that, as a

factual matter, are meritless.          See generally Muldowney, 509 A.2d

at 443 ("The concept of indemnity is based upon the theory that

one who has been exposed to liability solely as the result of a

wrongful act of another should be able to recover from that

party.").

               Walsh confirms the correctness of that common-sense

conclusion.       The contract in Walsh also broadly described the

indemnification obligation to cover all claims and costs "caused

by, arising out of, resulting from, or occurring in connection

with"    the    potential   indemnitor's    work   performance   --   without

regard to fault -- and excluded only liabilities "caused by the

sole negligence of" the indemnitee.             155 A.3d at 1205 (emphases

omitted).       The Rhode Island Supreme Court observed that "[t]he

last clause plainly predicates [the indemnification] obligations

under the contract on a finding that [the indemnitee] was not the

only negligent party.       Such a finding is partially fact-based and

has yet to be made in the instant case."           Id. at 1205-06 (footnote

omitted).         In   other   words,      as   here,   the   exception   to

indemnification was fault-based and, hence, required a finding of

fact.7

     7 Manning, an unpublished lower court decision, is less apt
here   as   precedent   because   it   considered  whether   the
indemnification obligation itself depended upon a finding of
negligence by the indemnitor.   See 2004 WL 3190204, at *3.   In

                                   - 16 -
             We see no basis in the language of the Concession

Agreement for departing from the understanding in Walsh that an

indemnification         obligation       contingent        on        the     potential

indemnitee's lack of negligence requires factfinding.                         Although

Ultimate     attempts    to    distinguish     Walsh       by    highlighting      the

reference in the provision at issue there to "the sole negligence"

of   the   party   to   be    indemnified,     155   A.3d       at   1205    (emphasis

partially     omitted),       that   limitation       simply         gives     broader

indemnification     coverage      than    is   provided         by   the    Concession

Agreement.      That is, the indemnification obligation in Walsh

remained intact even if the party entitled to indemnification was

itself     partially     negligent.        Only      the    indemnitee's        "sole

negligence" would negate indemnification.              Here, by contrast, the

obligation to indemnify is undone if the third-party's claims

involve "any" negligent or intentional behavior or misconduct by

Omni.      See Caruso, 559 F. Supp. 3d at 71.               A "sole negligence"

limitation does not speak to whether indemnification turns on

allegations or factfinding.

             Nor are we persuaded that the Concession Agreement's

language on the duty to defend requires a different understanding

of   the    indemnification      obligation.         Ultimate        highlights   the

rejecting that contention, the court observed, as quoted above,
that "an act or omission is [generally] not deemed negligent until
competent evidence establishes a causal relationship between the
act and an injury." Id.

                                     - 17 -
statement in the indemnification provision imposing a duty to

defend "[i]n the event indemnification is proper" and argues that

whether "indemnification is proper" cannot depend on a finding

concerning Omni's negligence because findings would not be made

until after a defense is needed.         Hence, the argument goes, Omni's

right to indemnification -- along with Ultimate's duty to defend

-- must be based on the third party's allegations.

            Ultimate's argument has some force given that duty-to-

defend provisions typically aim to relieve the beneficiary of more

than just the expenses of litigation, as evidenced here by the

contractual language requiring Ultimate to "resist or defend"

actions against Omni and "employ counsel therefor."                     In the

insurance   context,      Rhode   Island     recognizes   as   a    background

principle that "the duty to defend is broader in its scope than

the duty . . . to indemnify," Emps. Fire Ins. Co. v. Beals, 240

A.2d 397, 403 (R.I. 1968), and Rhode Island courts provide that

breadth   through   use     of    "the   common   'pleadings       test'"   when

construing an insurer's duty to defend, Travelers Cas. & Sur. Co.

v. Providence Wash. Ins. Co., 685 F.3d 22, 25 (1st Cir. 2012)

(applying Rhode Island law) (quoting Progressive Cas. Ins. Co. v.

Narragansett Auto Sales, 764 A.2d 722, 724 (R.I. 2001)).                    Under

the pleadings test, an insurer's duty to defend its insured against

third-party claims is based on the allegations in the complaint

                                    - 18 -
without regard for whether the insured will ultimately be found

responsible for the third-party plaintiff's injuries.                   Id.

              The   insurance    context,        however,    differs    from     the

commercial setting of this case.            As one court has observed, the

pleadings test reflects the fact that "an insurance company's

agreement to defend actions against the insured is one of the

'fundamental obligations' of the insurance contract."                    Ervin v.

Sears, Roebuck & Co., 469 N.E.2d 243, 249 (Ill. App. Ct. 1984)

(quoting Kinnan v. Hurst Co., 148 N.E. 12, 14 (Ill. 1925)); see

also id. at 249-50 (noting the "unique position of an insurance

company as a professional 'seller' of protection against loss").

By contrast, in a business contract, "the agreement to defend and

indemnify     . . .   is   incidental       to    the   main   purpose    of     the

agreement." Id. at 249. The pleadings test for insurance coverage

also recognizes the unequal bargaining power that often exists in

that context, another contrast with commercial agreements executed

between two business entities.        See generally Siebe, Inc. v. Louis

M. Gerson Co., 908 N.E.2d 819, 829 (Mass. App. Ct. 2009) (observing

that "there may be factors underlying the development of insurance

law that are not present in an arm's-length negotiated contract

between two commercial actors, which would make the application of

insurance principles inappropriate in a commercial setting"); cf.

Johnson v. Mod. Cont'l Constr. Co., 731 N.E.2d 96, 99 (Mass. App.

Ct.   2000)    ("We   do   not   consider    coverage       questions    under    an

                                    - 19 -
insurance      contract     analogous    to    coverage     under    an    indemnity

provision of a construction contract.").

            In Walsh, involving a commercial contract related to a

construction project, the Rhode Island Supreme Court did not

expressly consider whether, or how, the pleadings test applies to

duty-to-defend provisions in business agreements.                   There, the text

stated that the indemnitor had duties "to defend, indemnify and

save harmless [the indemnitee]" and made those duties all subject

to the same exclusion: that any injury not be caused "by the sole

negligence of [the indemnitee]."              Walsh, 155 A.3d at 1205.              The

Walsh court construed the "sole negligence" exclusion to require

a    finding    of   negligence,    and       it    therefore     held     that     the

determination of whether the indemnitor had a duty to indemnify

and to defend was contingent on such a finding.                  See id. at 1205–

06 ("[The indemnitor] must defend and indemnify [the indemnitee]

. . . predicate[d] . . . on a finding that [the indemnitee] was

not the only negligent party." (emphases added)).                       Hence, even

accepting Ultimate's contention that a duty to defend loses much

of   its   force     when   contingent    in       this   way,   that     outcome   is

consistent with Walsh and not in itself reason to construe the

indemnification exception at issue here to rest on allegations

rather than a finding.

            The      indemnification      provision         in    the     Concession

Agreement is hardly a model of clear drafting, but, taken as a

                                    - 20 -
whole, it is not reasonably read as Ultimate proposes.                       See

generally Family Dollar Stores of R.I., Inc. v. Araujo, 272 A.3d

582, 588 (R.I. 2022) (stating that a contract's meaning must be

ascertained    by   "view[ing]     the   agreement    'in    its    entirety'"

(quoting Sturbridge Home Builders, Inc. v. Downing Seaport, Inc.,

890 A.2d 58, 63 (R.I. 2005)).          The provision first broadly states

Ultimate's     obligation   to    indemnify    Omni    for    "expenses     and

judgments of every kind whatsoever" -- with the exception for

claims   involving    Omni's     own   negligence     --    and    then   refers

specifically to the obligation to employ counsel and provide a

defense.     Ultimate's argument that indemnification must be linked

to allegations, not facts, relies on isolating the duty-to-defend

statement and disregarding the broadly stated purpose of the

provision to hold Omni harmless when it bears no responsibility

for the injuries claimed by a third party.            Viewed in the context

of the parties' reciprocal indemnification promises, however, the

duty-to-defend statement is only reasonably understood to make

explicit     that   the   indemnification     owed    includes      litigation

expenses once it is determined that "indemnification is proper."

           Moreover, a duty-to-defend clause that is contingent on

a factual finding of negligence is not wholly ineffectual.                    In

this case, for example, the parties might have agreed from the

outset that the undisputed facts surrounding Caruso's trip and

fall triggered Ultimate's defense obligation.              Nor is the promise

                                   - 21 -
of   a       defense   meaningless   if    there   is   a   dispute   concerning

indemnification that requires factual findings.               It is common for

parties        to   seek   reimbursement    after-the-fact     for    litigation

expenses incurred when an opponent has denied its duty to defend.

See, e.g., Vt. Mut. Ins. Co. v. Maguire, 662 F.3d 51, 51, 59 (1st

Cir. 2011); Narragansett Jewelry Co. v. St. Paul Fire & Marine

Ins. Co., 526 F. Supp. 2d 245, 246 (D.R.I. 2007).8

                Importantly, the question in this case is not the scope

of the indemnitor's obligation but the scope of an exception to

that obligation.           When two sophisticated business entities agree

to indemnify each other for the consequences of their own conduct,

common sense dictates that any exception be narrowly construed.

Cf., e.g., Jackson v. Quincy Mut. Fire Ins. Co., 159 A.3d 610, 614

(R.I. 2007) ("[T]he guidepost in determining whether to apply a

broad and liberal view of the terms in an insurance policy or

whether a strict interpretation of the language is more appropriate

       It is also common for a party that disputes its duty to
         8

defend to provide a defense subject to a "reservation of rights"
-- as Ultimate's insurer, Lexington Insurance Co., did in this
case.   Lexington (through its claims administrator, AIG Claims
Inc.) said it would take over the defense of Caruso's claims after
Ultimate exhausted its self-insured limit of $25,000. However,
the insurer "reserve[d] its rights to refuse to indemnify Omni
Hotel against any judgment . . . or settlement amount that does
not fall within the scope of the contract's indemnification
provisions." The insurer also "reserve[d] its rights to withdraw
the defense being provided." According to Omni, the insurer never
assumed Omni's defense because Ultimate did not reach its self-
insurance limit.

                                     - 22 -
is whether the language relates to inclusion of persons within the

policy   or    exclusion      of    the    insured   from    protection.").       As

explained      above,   to    negate       indemnification     based   solely    on

allegations of negligence against Omni -- regardless of their merit

-- would render Ultimate's indemnification promise nugatory.                    That

is not a reasonable interpretation of the parties' promises to

protect each other from "expenses . . . of every kind whatsoever"

when the potential indemnitee was not negligent. See, e.g., Family

Dollar Stores of R.I., Inc., 272 A.3d at 588 (stating that the

question in determining whether a contract is ambiguous is "whether

the language has only one reasonable meaning when construed . . .

in an ordinary common sense [sic] manner" (quoting Sturbridge Home

Builders, Inc., 890 A.2d at 63 (omission in original) (emphasis

omitted)).

              Hence, whatever rationale prompted the specific language

in the reciprocal indemnification provisions, we cannot conclude

that Ultimate and Omni intended to withdraw their mutual promises

of indemnification based on possibly unfounded allegations from a

third party against the indemnitee.                  The Concession Agreement

excuses Ultimate from indemnifying Omni for costs associated with

Ultimate's actions or inaction only if those costs stem from claims

that "arise[] from any set of negligence or intentional acts or

misconduct"      by   Omni.         Reading    the   exception    to   Ultimate's

obligation     narrowly,      and    consistently     with    Walsh,   Ultimate's

                                          - 23 -
commitment to indemnify Omni is negated only if Omni in fact bears

some culpability for the third party's alleged harm -- a finding

that to this point in the litigation has not been made.          See Walsh,

155 A.3d at 1205-06.

D. The Negligence Question

          The     district   court's   erroneous    construction      of    the

Concession   Agreement    rendered     the   question   of   Omni's    actual

negligence irrelevant to its decision to grant summary judgment

for   Ultimate    on   Omni's   indemnification     crossclaim,       and    it

therefore did not reach that issue.          On appeal, Omni asserts that

we should find as a matter of law that it was not negligent and,

hence, that it is entitled to indemnification under the Concession

Agreement.       Omni makes that argument in the context of both

district court orders that it challenges on appeal: (1) the denial

of Omni's motion for summary judgment on Caruso's negligence

claims, and (2) the grant of summary judgment for Ultimate on

Omni's indemnification crossclaim.           Omni asserts that it should

have been found not negligent when it moved for summary judgment

against Caruso, establishing the prerequisite for indemnification,

and that it therefore should have prevailed on its contractual

crossclaim against Ultimate.9

      9Omni seeks alternative forms of relief based on its
challenges to the two orders. As we construe its requests, Omni's
preferred outcome from this appeal is the entry of "final judgment
in [its] favor on its contractual-indemnification and/or its

                                 - 24 -
           At oral argument before this court, Ultimate stated that

it took no position, either in the district court or on appeal, on

Omni's assertion that it should be found not negligent as a matter

of law.    However, it has offered multiple reasons why we should

not reverse the district court's denial of summary judgment on

Caruso's claims against Omni.      First, Ultimate asserts that the

ruling on Caruso's claims is moot because Caruso released Omni

under the settlement agreement.      Second, Ultimate contends that

the district court's ruling on Caruso's claims "is irrelevant to

Omni's [c]ross-claims under the Concession Agreement" because "the

relevant   question" is   not   Omni's   actual   negligence   but   only

whether Caruso alleged negligence.

           These contentions ignore the possibility that we would

read the Concession Agreement and Rhode Island law differently

from the district court and, hence, would need to confront Omni's

argument that the record and law foreclose a finding of negligence.

As to Ultimate's first contention, although the issue of Omni's

negligence may be moot as to Caruso, the settlement did not

common-law    indemnification     claims     against    Ultimate."
Alternatively, if we conclude that a factual finding on negligence
is necessary and that Omni's negligence is "reasonably subject to
dispute," Omni asks that we vacate the district court's judgment
and remand for further proceedings on its crossclaims. Omni also
argues that the outcome it seeks -- "final judgment in [its] favor
on all matters raised on appeal" -- could be achieved by reversing
the district court's denial of its motion for summary judgment on
Caruso's claims.

                                - 25 -
eliminate the relevance of Omni's responsibility for Caruso's fall

in determining Ultimate's indemnification obligation to Omni.

Ultimate's second assertion -- concerning "the relevant question"

-- is merely a rehashing of its contract-interpretation argument,

which we have rejected.

           Given Ultimate's silence on Omni's negligence, we see no

reason to prolong this litigation by remanding the case to the

district court for further proceedings to address that issue.         In

other words, we deem Ultimate to have waived any argument against

Omni's theory that it is entitled to indemnification because no

factfinder could attribute Caruso's fall to negligence by Omni.10

                                  III.

            For the reasons explained above, we vacate the summary

judgment   for   Ultimate   on   Omni's   contractual   crossclaim   for

indemnification and remand the case to the district court with

instructions to enter judgment for Omni on that claim after

whatever proceedings the court deems appropriate to determine the

amount due to Omni.     We see no reason to address the district

court's earlier ruling denying Omni's motion for summary judgment

     10 Ultimate also has not argued that we should reject Omni's
entitlement to indemnification because Caruso's claims did not
arise from any act or failure to act on its part "in the operation
of [its] Business."     Indeed, it is undisputed that Caruso's
accident occurred when he was walking from a vehicle parked in the
valet circle -- a location managed by Ultimate -- to the sidewalk.

                                 - 26 -
on Caruso's claims, which were dismissed following the settlement.

Our disposition of the contractual indemnification claim also

makes   it    unnecessary   for   us   to   consider   Omni's   equitable

indemnification claim.

             Vacated and remanded.     Costs to appellant.

                                  - 27 -