Court Opinion

ID: 9397137
Source: CourtListenerOpinion
Date Created: 2023-05-24 16:09:16.033915+00
Date Added: 2024-06-11T17:19:21.686762
License: Public Domain

J-S02037-23

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    BASS PRO OUTDOOR WORLD LLC                 :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                       Appellant               :
                                               :
                                               :
                v.                             :
                                               :
                                               :
    HARRISBURG MALL LIMITED                    :   No. 1085 MDA 2022
    PARTNERSHIP                                :

                   Appeal from the Order Entered July 8, 2022
    In the Court of Common Pleas of Dauphin County Civil Division at No(s):
                              2018-CV-06921-CV

BEFORE: PANELLA, P.J., OLSON, J., and DUBOW, J.

DISSENTING MEMORANDUM BY OLSON, J.:                 FILED: MAY 24, 2023

       I respectfully dissent from the learned Majority, as I find that Harrisburg

Mall Limited Partnership (“Landlord”) was not required to reimburse Bass Pro

Outdoor World, LLC (“Tenant”) for the costs it incurred in defending against

the Johnson Action.1 As such, Landlord was entitled, as a matter of law, to

summary judgment. Therefore, I would affirm both the June 7, 2022 order

denying Tenant’s motion for summary judgment and the July 8, 2022 order

granting Landlord’s cross-motion for summary judgment.

       The Majority sets forth the standard of review this Court applies when

reviewing a trial court order granting, or denying, a motion for summary

judgment, as well as a claim involving the interpretation of a lease agreement.
____________________________________________

1The Majority sets forth a summary of the Johnson Action (see Majority at
*2-*3), and I incorporate that summary as if set forth herein.
J-S02037-23

See Majority at *5-*6. As such, I incorporate those portions of the Majority

memorandum herein.

       The Majority finds that “pursuant to the clear and unambiguous

language of the Lease, an allegation of Tenant’s negligence, without more, is

not sufficient to relieve Landlord of its” obligation to indemnify Tenant for the

cost of defense in the Johnson Action.           Id. at *7-*8.   In so holding, the

Majority conflates a party’s contractual duty to defend with its contractual duty

to indemnify.2

       Pursuant to the terms of the Lease, Landlord and Tenant agreed that

Landlord would indemnify and hold Tenant harmless for, inter alia, damages

awarded in a cause of action arising out of a third party’s use of the mall’s

common areas except when the damages are the result of Tenant’s negligent

act. Id. at *7, citing Lease § 6.1(c). By its clear and unambiguous terms,

the Lease contained only a duty to indemnify and did not specifically set forth

an agreement that Landlord would defend Tenant in such a cause of action

involving the common areas.           As such, I cannot agree that Landlord was

required to reimburse Tenant for the cost of defense in the underlying Johnson

Action, which ultimately concluded without an award for damages when the

____________________________________________

2 I would agree that an allegation of Tenant’s negligence, without more, is
insufficient to relieve Landlord of a duty to defend, if such a duty existed.
Nevertheless, as discussed infra, Landlord, pursuant to the clear and
unambiguous terms of the Lease, does not owe Tenant a duty to defend.

                                           -2-
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trial court granted Tenant’s motion for summary judgment and dismissed the

Johnsons’ complaint.

       In simplest terms, a “duty to defend is separate from and broader than

the duty to indemnify” and, therefore, each duty is distinct from the other.

Am. and Foreign Ins. Co. v. Jerry’s Sport Center, Inc., 2 A.3d 526,

543-544 (Pa. 2010). If a lease agreement requires a landlord to defend a

tenant in an action filed by a third party against the tenant, the landlord is

obligated to defend the tenant if the allegations contained in the third party’s

complaint might trigger the landlord’s liability.3 Selective Way, 119 A.3d at

1046 (stating that, “[t]he duty to defend is not limited to meritorious actions;

it even extends to actions that are groundless, false, or fraudulent as long as

there exists the possibility that the allegations implicate [liability]” (original

brackets omitted)). The duty to defend continues until the landlord can limit

the third-party claims such that, pursuant to the lease agreement, the

landlord’s liability is impossible. Id.

       Conversely, a landlord’s duty to indemnify a tenant in a third party’s

cause of action, where the lease agreement provides for indemnification, does

not accrue until there is a damage award entered against the tenant in the

third party’s action.     Id. at 1049.         Stated another way, if a third party is

____________________________________________

3 The determination of whether a landlord owes a duty to defend is determined
on a case-by-case basis by comparing the four corners of the lease agreement
to the four corners of the complaint. Selective Way Ins. v. Hospitality
Group, 119 A.3d 1035, 1046 (Pa. Super. 2015).

                                           -3-
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entitled to damages in a cause of action against a tenant and the damage

recovery triggers the landlord’s duty to indemnify under the terms of the lease

agreement, then the landlord is required to indemnify the tenant for the

damage award.

      In the instant matter, Section 6.1(c) of the Lease provided that,

      Notwithstanding anything to the contrary contained herein, except
      for negligent acts of Tenant, Landlord agrees to indemnify and
      hold Tenant harmless with respect to any and all claims, actions,
      injuries, damages, liability, costs[,] and expenses, including
      reasonable attorney[s’] fees, arising with respect to the
      possession, use, occupancy, management, repair, maintenance[,]
      or control of the Common Areas[.]

Lease, 9/30/03, at § 6.1(c). Thus, the clear and unambiguous language of

the Lease required Landlord “to indemnify and hold Tenant harmless” with

respect to a damage award stemming from injuries sustained by a third party

while using the common areas. The clear and unambiguous language of the

Lease also required Landlord to indemnify Tenant for the costs and expenses,

including reasonable attorneys’ fees, that Tenant incurred when the damage

award to the third party stemmed from injuries sustained through use of the

common areas. As such, if Mrs. Johnson were entitled to an award of damages

because of her fall and it was established that her fall was related to Tenant’s

use, occupancy, or possession of a common area, then Landlord would be

required to indemnify Tenant for the damage award, including Tenant’s

                                     -4-
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expenses in defending the underlying cause of action, so long as the

damage award was not predicated upon Tenant’s negligent conduct.4

       The Lease, however, did not contain a specific duty on the part of

Landlord to defend Tenant in the event of a third-party cause of action. See

id. Thus, Landlord, pursuant to the terms of the Lease, neither retained nor

assumed a duty to defend a third-party cause of action in which it might be

responsible for a damage award.5 Similarly, Tenant, pursuant to the terms of

the Lease, did not require Landlord to defend Tenant in a cause of action

arising from a third party’s use of a common area. Lastly, Landlord’s duty to

indemnify Tenant for the expenses Tenant incurred in defending against the

third-party cause of action was only triggered if the Johnsons had been

awarded damages for injuries Mrs. Johnson sustained while using a common

____________________________________________

4 Put differently, the reference to ‘reasonable attorney[s’] fees’ within the
indemnification clause of the Lease does not alter my conclusion. The
inclusion of this language within the indemnification clause is simply to make
clear that, if Landlord’s duty to indemnify Tenant has been triggered, then
Landlord’s indemnification obligation would extend to reasonable attorneys’
fees in addition to damages, costs, and other expenses incurred by Tenant in
satisfying any claim that involves a common area of the leased premises and
that is unrelated to Tenant’s negligent acts.

5 In assuming a duty to defend a cause of action in which it might become
responsible for the resulting damages, a party typically retains the rights, inter
alia, to receive notice of the claim, to select certain counsel to represent its
interests, and to settle the matter rather than proceed to trial. The plain
language of the contract and the absence of such features from the Lease in
the case sub judice strongly suggest that the parties did not seek to impose a
duty to defend upon Landlord. It is unreasonable, in my view, for the Majority
to infer that Landlord would forgo such significant rights but accept, in blind
peril, a duty to defend Tenant.

                                           -5-
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area and said damages did not arise from Tenant’s negligent acts. Because

the underlying cause of action did not result in a damage award to the

Johnsons, Landlord’s duty to indemnify Tenant for its legal expenses did not

accrue.

     As such, I would affirm the trial court orders granting Landlord’s

cross-motion for summary judgment and denying Tenant’s motion for

summary judgment.

                                   -6-