Peerless Insurance Co. v. Alarm Security Protection Co. et al. (2012)

MEMORANDUM OF DECISION RE THIRD–PARTY PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT (# 159)

FACTS

On September 9, 2009, the plaintiff, Peerless Insurance Co., filed a two-count revised complaint against the defendants, Alarm Security Protection Co. (ASP) and U.S.A. Central Station Alarm Corp. (USA Alarm), sounding in negligence and alleging the following facts.   The plaintiff provided property insurance to Union Plaza Associates, LLP (Union Plaza).   Union Plaza owned a commercial building in New London, Connecticut, where the law firm of Suisman, Shapiro, Wool, Brennan, Gray & Greenburg, P.C. (Suisman) rented the second and third floors pursuant to a lease.   Prior to January 27, 2007, Suisman had contracted with ASP to install an alarm monitoring system in their offices.   The system included a temperature monitoring component designed to activate the alarm in the event of a heat loss in the building.   Suisman also contracted with USA Alarm to monitor the alarm system and notify the appropriate representatives in the event of an alarm signal.

On January 27, 2007, a water pipe on the fourth floor of the premises broke, causing a water leak.   The alarm system activated and signaled ASP and/or USA Alarm, but neither defendant notified anyone of the alarm.   This allowed water to continue to leak throughout the premises until the next day.   As a result of the burst pipe and subsequent water damage, the plaintiff was obligated to reimburse Union Plaza for its losses.   The plaintiff is subrogated to the rights of its insured and seeks damages from the defendants for negligently failing to install an alarm that would ensure prompt and adequate notification of emergency services.   The plaintiff also seeks damages for failing to notify anyone of the alarm within a proper and reasonable length of time to prevent further damage to the premises.

On October 8, 2009, the defendants filed a motion to implead Suisman and to serve a third-party complaint against it, which was granted on October 19, 2009.   In the third-party complaint, the defendants allege that they entered into two contracts with Suisman for the installation and monitoring of the alarm system.   Under the contracts, Suisman “agreed to indemnify and hold both ASP and USA [Alarm] harmless from and against all claims, lawsuits and losses alleged to be caused by the equipment and/or [USA Alarm's] negligent performance to any degree or failure to perform under the written Agreement.”   The defendants allege that if the plaintiff obtains a verdict against either of them, Suisman is obligated to indemnify them for the amount of the judgment or verdict as well as all costs and fees.   On January 27, 2012, Suisman filed an amended answer and special defenses to the third-party complaint.

On November 4, 2011, the defendants filed a motion for summary judgment against Suisman on the ground that there is no genuine issue of material fact that Suisman agreed to indemnify the defendants.   The motion is accompanied by a memorandum of law and supporting evidence, including the alarm installation and alarm monitoring service agreements.   Suisman filed a memorandum in opposition to the motion on February 2, 2012.   This matter was heard at short calendar on February 6, 2012.

DISCUSSION

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Brooks v. Sweeney, 299 Conn. 196, 210, 9 A.3d 347 (2010).  “In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.”  (Internal quotation marks omitted.)  Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10–11, 938 A.2d 576 (2008).  “[A]ny party may move for summary judgment upon any counterclaim or cross complaint as if it were an independent action ․” Practice Book § 17–44.

The defendants argue that the clear and unambiguous language of the relevant contracts provide that Suisman agreed to indemnify and hold the defendants harmless from any claims arising from their alleged negligence in carrying out their contractual responsibilities.   The provisions are valid and enforceable, the defendants argue, because the contracts were entered into by commercial entities with the intention of allocating risk.   Suisman counters that the defendants' contractual claim that they are to be held harmless is void as against public policy pursuant to General Statutes § 52–572k.   Additionally, Suisman argues that the issue of whether an exculpatory clause is enforceable or unenforceable as a matter of public policy is not appropriate for summary judgment.

“Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact ․ [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law ․ [T]he interpretation and construction of a written contract present only questions of law, within the province of the court ․ so long as the contract is unambiguous and the intent of the parties can be determined from the agreement's face ․ [T]he construction and legal effect of the contract [is] a question of law for the court.”  (Internal quotation marks omitted.)  Dow–Westbrook, Inc. v. Candlewood Equine Practice, LLC, 119 Conn.App. 703, 711–12, 989 A.2d 1075 (2010).

“Connecticut courts generally disfavor hold harmless provisions as against public policy.  [T]he law does not favor contract provisions which relieve a person from his own negligence ․ Our courts are careful not to allow hold harmless provisions to preclude recovery where there is unequal bargaining power between contracting parties ․ Nonetheless, our courts have recognized the enforceability of hold harmless provisions releasing a defendant from liability for his own negligence where the parties to the contract are both commercial entities ․ In modern commerce, indemnity clauses are no longer so unusual as to require such specific mention of the indemnitee's conduct as being within the scope of the indemnifying obligation ․ Indemnity clauses in contracts entered into by businesses ․ should be viewed realistically as methods of allocating the cost of the risk of accidents apt to arise from the performance of the contract.”  (Citations omitted;  internal quotation marks omitted.)  Id., 712.

Suisman's installation contract with ASP provides, in relevant part:  “In the event any person, not a party to this agreement, shall make any claim or file any lawsuit against [ASP] for any reason whatsoever, including but not limited to the installation, maintenance, operation or non-operation of the alarm system, [Suisman] agrees to indemnify, defend or hold [ASP] harmless from any and all claims and lawsuits including the payment of all damages, expenses, cost and attorneys fees whether these claims be based upon ․ active or passive negligence ․ on the part of [ASP], its agents, servants, or employees.”   Additionally, Suisman's alarm monitoring service contract with USA Alarm provides that Suisman “agree[s] to indemnify and hold [USA Alarm] harmless, including reasonable attorneys fees, from and against all claims, lawsuits and losses alleged to be caused by [USA Alarm's] negligent performance to any degree or failure to perform under this agreement.”

Suisman does not dispute that it entered into the contracts quoted above.   Instead, Suisman argues that the indemnity provisions are void under § 52–572k(a), which provides, in relevant part:  “Any covenant, promise, agreement or understanding entered into in connection with or collateral to a contract or agreement relative to the construction, alteration, repair or maintenance of any building, structure or appurtenances thereto ․ that purports to indemnify or hold harmless the promisee against liability for damage arising out of bodily injury to persons or damage to property caused by or resulting from the negligence of such promisee, such promisee's agents or employees, is against public policy and void ․” Suisman argues that the installation and monitoring of the alarm systems is equivalent to “maintenance” of “appurtenances” to a building under the statute.

“The purpose of [§ 52–572k] is to nullify any provision in construction contracts which grants immunity to either party for acts of negligence ․ Thus, the statute seeks to declare void and against policy any agreement entered into in connection with a construction contract which relieves a person from liability ․ resulting from his negligence.”  (Internal quotation marks omitted.)   Monge v. Classic Roofing, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 09 5012022 (March 22, 2011, Jennings, J.T.R.) (51 Conn. L. Rptr. 635, 640).  “The legislature, in specifically outlawing hold harmless agreements in the construction industry, showed an intention that such a practice not be deemed against public policy in, other situations, for had the legislature intended to outlaw all such provisions as against public policy, it could have said so.”  Burkle v. Car & Truck Leasing Co., 1 Conn.App. 54, 58, 467 A.2d 1255 (1983).

Suisman relies on Travelers Indemnity Co. of America v. Sonitrol Security of Hartford, Superior Court, judicial district of Hartford, Docket No. CV 04 4001676 (March 24, 2006, Keller, J.) (41 Conn. L. Rptr. 39), in arguing that summary judgment is inappropriate in the present case.   Travelers Indemnity involved a defendant's installation and monitoring of a sprinkler alarm system.  Id., 39.   Subsequent to the installation, a fire occurred on the premises that activated the sprinkler alarm system and sent an electronic alarm signal to the defendant.  Id. The defendant failed to notify the fire department and, as a result, the sprinklers discharged water for four hours, causing extensive damage.  Id. After an action was brought against the defendant, the defendant sued the property owner as an apportionment defendant and filed a cross claim against it, arguing that a contract entered into between the defendant and the property owner contained an indemnification provision.  Id. The property owner filed a motion for summary judgment on the ground that the indemnification provision was void as against public policy under § 52–572k.  Id. The property owner argued that the contract related to the “maintenance” of “appurtenances” of a building, which includes equipment attached to the building, such as the sprinkler system and the alarm system itself.  Id., 40.   The defendant countered that the contract related to the alarm system monitoring the sprinklers, not to the installation and maintenance of the sprinkler system itself.  Id.

The court stated that “[a]n appurtenance is defined as [a]n article adapted to the use of the property to which it is connected and which was intended to be a permanent accession to the freehold ․ There is no Connecticut authority holding that an alarm system is an appurtenance within the meaning of § 52–572k.”  (Citations omitted;  internal quotation marks omitted.)  Id. The court noted that a New York law similar to § 52–572k provides that contracts for installing and maintaining alarm systems are not in connection with construction, maintenance and repair of real property.  Id.¹ In contrast, the court cited Lodge v. Arett Sales Corp., Superior Court, judicial district of Waterbury, Docket No. CV 90 0098122 (October 11, 1996, Sullivan, J.), rev'd on other grounds, 246 Conn. 563, 717 A.2d 215 (1998), where the trial court held that the “activity of installing [a] ‘supervisory sprinkler supervision service’ and the fact that the water pipes, indisputably fixtures, were altered by having new switches affixed to them might be considered a ‘construction, alteration, repair or maintenance of a building, structure or appurtenance thereto.’  “ Id. Under the facts presented, the court in Travelers Indemnity could not determine whether the sprinkler and alarm system was an appurtenance and, therefore, it held that there was a genuine issue of material fact as to whether § 52–572k applied.  Id., 40–41.

The present case is factually distinguishable from Travelers Indemnity, which turned on the nature of the specific alarm system at issue.   The alarm system in that case included a sprinkler which, as reasoned in Lodge, could qualify as an “appurtenance” under § 52–572k in certain circumstances.   Here, the pleadings as well as the evidence presented do not raise a genuine issue with respect to whether the alarm system was intended to be a permanent part of the real property.   Thus, there is no genuine issue as to whether the alarm system qualifies as an “appurtenance” within the meaning of § 52–572k.   See, e.g., Albany Ins. Co. v. United Alarm Services, Inc., 194 F.Sup.2d 87, 96 (D.Conn.2002) (“[E]ven assuming that a sprinkler system is an appurtenance, the contracts at issue here concern an alarm system, not a sprinkler system ․ [T]he alarm system was not intended to be a permanent part of the real property, and is not an appurtenance”).

Accordingly, because the defendants have met their burden of proving that Suisman is liable for indemnification and Suisman has not established that § 52–572k renders the indemnification provisions void, summary judgment is granted in favor of the defendants.

CONCLUSION

For the foregoing reasons, the defendants' motion for summary judgment is hereby granted with respect to their third-party complaint against Suisman.

Martin, J.

FOOTNOTES

FN1. See Antical Chemicals, Inc. v. Westinghouse Security Systems, Inc., 86 A.D.2d 768, 448 N.Y.S.2d 279, 282, appeal dismissed, 56 N.Y.2d 645 (1982) (stating that “[s]prinkler systems may legitimately be considered appurtenances of real property ․ whereas it has been held that contracts for installing and maintaining alarm systems are not contracts affecting real property or for services rendered in connection with the construction, maintenance and repair of real property” under the New York statute)..  FN1. See Antical Chemicals, Inc. v. Westinghouse Security Systems, Inc., 86 A.D.2d 768, 448 N.Y.S.2d 279, 282, appeal dismissed, 56 N.Y.2d 645 (1982) (stating that “[s]prinkler systems may legitimately be considered appurtenances of real property ․ whereas it has been held that contracts for installing and maintaining alarm systems are not contracts affecting real property or for services rendered in connection with the construction, maintenance and repair of real property” under the New York statute).

Martin, Robert A., J.