W.Va. SC: Strip mall tenant doesn't owe indemnity to owners

CHARLESTON - The West Virginia Supreme Court of Appeals ruled last month that a strip mall tenant does not owe indemnity to the mall's owners, pursuant to their lease agreement, in a case over an employee's injuries.

The ruling stems from a separate but related lawsuit, filed by one of the tenant's employees in 2009.

On Jan. 24, 2008, Goin' Postal employee Debra Stover was walking on the Lakeview Plaza Strip Mall's sidewalk when she slipped and fell on snow and ice that had accumulated on the walkway outside another business in the strip mall, according to a complaint filed Dec. 22, 2009 in Putnam County Circuit Court.

The Lakeview Plaza Strip Mall is owned by Ray and Betty Kesling.

Stover claimed the defendants were aware of the condition of the sidewalk -- that it had not been cleared or salted -- but failed to fix the problem.

In addition to her lawsuit, Stover sought and received workers' compensation benefits for her injuries.

Stover eventually settled her claims with the Keslings; however, the strip mall owners filed a third-party complaint against Stover's employer and one of their tenants, Sonshine LLC d/b/a Goin' Postal.

The Keslings and Sonshine filed cross-motions for summary judgment against each other.

The Keslings argued that Sonshine owed indemnity to them, pursuant to their lease agreement.

At issue was whether where Stover fell was considered part of Sonshine's "demised premises" to trigger the indemnity clause.

Sonshine argued that its demised premises only included the four walls of its suite that it leased from the Keslings and, therefore, the sidewalk where Stover fell was not part of its demised premises and did not trigger the clause.

The Putnam Circuit Court agreed, granting summary judgment to Sonshine. The court found that the sidewalk where Stover fell and sustained her injury was considered a common area.

The Keslings appealed.

They argue the circuit court made two errors in its ruling.

In particular, they claim it erroneously relied on the Keslings' duty to maintain common areas and as such it erred in construing the language of the parties' agreement, rather than simply applying its language.

They also contend that the terms of the lease agreement are "clear," and that their responsibility and/or control over the common areas is irrelevant to the terms of the indemnity clause.

The state's high court, in its March 12 memorandum decision, affirmed the lower court's ruling.

"It is clear in the instant case that the parties intended for the respondent (Sonshine) to be responsible for incidents occurring within its premises and only its premises," the justices wrote.

"Further, both parties were fully aware that the petitioners (the Keslings) would maintain all common areas for the use and enjoyment of all tenants, indicated by the petitioners hiring Mr. (Charlie) Johnson as the landlord and manager to take care of the premises for the tenants. Mr. Johnson also hired outside contractors to take care of snow and ice removal."

The Court explained that the "crux" of the matter is what the language of the indemnification clause reads and intends -- not the degree of control, if any, either party exercised over Stover when she was injured or where she was injured.

"The clause specifies that the tenant shall indemnify the landlord from any claims of injury, howsoever caused, that arise 'out of the use, occupation and control of the demised premises, including those resulting from any work in connection with any alterations or changes,'" the Court wrote in its seven-page ruling.

"The clause does not contain a provision that the tenant shall also indemnify the landlord from any claims of injury that arise out of the building of which the demised premises form a part. Nor does the clause refer to claims that arise from actions that occur outside of the demised premises's physical area, but in connection to the tenant's work."

Simply put, Stover's accident did not occur on the demised premises but rather on property not included in the parties' lease agreement, the Court said.

"The respondent (Sonshine) did not have control or responsibility for the area of the plaintiff's accident. Accordingly, the indemnification clause was inapplicable to the respondent (the Keslings) here and summary judgment was proper," it wrote.