This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
A restaurant patron sustained injuries after stepping into a hole or defect in the paving near or within the parking lot of a restaurant leased by the Defendant. The Defendant, the building owner, sought indemnification and defense from the restaurant operator and its insurer under the lease agreement, which included indemnity and insurance provisions. Both the operator and insurer denied the request, leading the Defendant to settle the patron's claim and file a third-party complaint against them (paras 2-3).
Procedural History
- District Court of Colfax County: The court granted summary judgment in favor of the insurer, Allstate, and dismissed the claims against the restaurant operator, Barbara Stevens, reasoning that the lease did not extend liability to the parking lot and that the Defendant was not an insured under the policy at the time of the accident (paras 3-4).
Parties' Submissions
- Defendant and Third-Party Plaintiff-Appellant (Wilson Corporation): Argued that the lease required the restaurant operator to indemnify it for claims arising from injuries to patrons and to procure insurance naming it as an additional insured. It also contended that the insurer was obligated to provide coverage under the policy's "insured contract" provisions (paras 6, 27, 31-32).
- Third-Party Defendant-Appellee (Barbara Stevens): Asserted that the lease did not extend indemnity obligations to injuries occurring outside the restaurant premises and that the indemnity clause did not cover the Defendant's own negligence (paras 10, 18).
- Third-Party Defendant-Appellee (Allstate Insurance Company): Claimed that the Defendant was not an insured under the policy at the time of the accident and that the policy did not cover off-premises injuries (paras 3, 37-38).
Legal Issues
- Whether the lease's indemnity provision required the restaurant operator to indemnify the Defendant for injuries occurring in the parking lot (paras 10-12).
- Whether the restaurant operator breached the lease by failing to procure insurance naming the Defendant as an additional insured (paras 22-23).
- Whether the insurer was obligated to provide coverage to the Defendant under the policy's "insured contract" provisions (paras 31-32).
Disposition
- The Court of Appeals affirmed in part and reversed in part, remanding the case for further proceedings (para 48).
Reasons
Per Bustamante CJ. (Alarid and Sutin JJ. concurring):
Indemnity Provision: The court found that the lease's indemnity clause was broad enough to potentially cover injuries occurring in the parking lot. The language was not so clear as to preclude all reasonable interpretations favoring the Defendant. The district court erred in dismissing the indemnity claim without further factual development (paras 12-20).
Breach of Contract: The court held that the restaurant operator's failure to procure insurance naming the Defendant as an additional insured was actionable. The district court erred in denying the Defendant's motion to amend its complaint to clarify this claim (paras 22-28).
Insurer's Obligations: The court determined that the insurer's policy, which included coverage for "insured contracts," could potentially obligate it to defend and indemnify the Defendant. The district court's grant of summary judgment in favor of the insurer was premature, as factual issues regarding the scope of coverage and the lease's indemnity provision remained unresolved (paras 31-47).
Control and Liability: The court emphasized that liability for off-premises injuries depends on the degree of control exercised over the area. The record lacked sufficient evidence to determine control over the parking lot, necessitating further factual inquiry (paras 39-41).
The case was remanded for further proceedings to resolve these factual and legal issues.