GRENIER v. DELAWARE NORTH COMPANIES INC BOSTON (2019)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

In this premises liability action, the plaintiff, Yvonne Grenier, alleged that she was injured when she stepped on chewing gum and fell down a flight of stairs at the TD Garden. The complaint further alleged that the owner of TD Garden, Delaware North Companies, Inc. (Delaware North), and its cleaning service, DTZ Secure Services, Inc. (DTZ), were negligent in failing to inspect, clean, and maintain the stairwell where the injury occurred, and that the defendants' negligence caused the plaintiff's injuries. The defendants filed cross-claims against each other for contribution and common law indemnification, and Delaware North also asserted cross-claims against DTZ for contractual indemnification and breach of contract. After extensive discovery, a Superior Court judge allowed the defendants' motions for summary judgment on the negligence claims. She also (1) allowed DTZ's motion for summary judgment as to Delaware North's cross-claim for contractual indemnification, (2) denied DTZ's motion for summary judgment as to Delaware North's common law indemnification claim, and (3) allowed Delaware North's motion for summary judgment on its breach of contract claim. The judge concluded, however, that Delaware North could not recover defense costs on its breach of contract claim because it failed to provide timely notice of the plaintiff's claim to DTZ. A separate and final judgment entered as to these claims and cross-claims. See Mass. R. Civ. P. 54(b), 365 Mass. 820 (1974). Litigation of the remaining cross-claims was stayed pending the resolution of this appeal.

On appeal, the plaintiff claims error in the orders for summary judgment on the negligence claims. In a cross-appeal, Delaware North claims error in the order of summary judgment for DTZ on the express contractual indemnity claim, and in the order that Delaware North cannot recover the cost of defending the action. We vacate so much of the judgment as denied recovery of defense costs on Delaware North's cross-claim for breach of contract. Otherwise, we affirm the judgment.

Background. “We recite the material facts in the light most favorable to the plaintiff, the party who opposed the motion for summary judgment.” Sarkisian v. Concept Restaurants, Inc., 471 Mass. 679, 680 (2015). The plaintiff was employed by NBC Universal as an independent contractor and stage manager. Around midnight on June 9, 2011, after most fans had exited TD Garden following a Boston Bruins hockey game, the plaintiff departed the NBC broadcast studio at the arena. As she descended the stairs in one of the stairwells, her shoe stuck on a substance she later identified as chewing gum, causing her to fall down approximately ten stairs. When she climbed back up the stairs to retrieve her shoe, she observed “gray, black, dirty” gum stuck to its sole. The plaintiff sustained injuries to her knee, back, neck, and head.

The business relationship between Delaware North and DTZ was governed by a contract called a “services agreement” (agreement) which incorporated specifications included in Delaware North's July, 2008, request for proposal. Those specifications included “[r]emov[ing] tape, gum and other debris from floors.” Pursuant to the agreement, DTZ monitored and maintained the arena during an event, and cleaned it afterwards. Delaware North and DTZ managers monitored the facilities before, during, and after events, and notified DTZ staff if an area needed to be cleaned.

The cleaning shift that followed the June 9, 2011, hockey game began at 11 p.m. and involved cleaning the entire arena, including all stairwells. Three people were assigned to clean the stairwells. DTZ staff were trained to remove discarded gum with scrapers, but if the gum could not be removed, the cleaners would leave it, sweep, and mop the area. Some discarded gum could not be removed if “people had stepped on it or if something had ground it into the floor,” in which case it would be removed with a steam cleaner at a later time subject to Delaware North's approval for such a “special project.”

Discussion. We review a grant of summary judgment de novo, to determine “whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.” Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991).

1. Plaintiff's appeal. Property owners are liable for injuries occurring on their property if they (1) know or should know of a condition on the premises that creates an unreasonable risk of harm, (2) know or should know that invitees will not discover the condition or will fail to protect themselves from it, and (3) fail to protect invitees from the condition. See Sarkisian, 471 Mass. at 682. In slip and fall cases, “the first element is satisfied if the [business] operator ․ ‘caused [the] substance, matter, or item to be on the floor; the ․ operator had actual knowledge of its presence; or the substance, matter, or item had been on the floor so long that the ․ operator should have been aware of the condition.” Id., quoting Sheehan v. Roche Bros. Supermarkets, Inc., 448 Mass. 780, 782-783 (2007).

Here, the plaintiff does not claim that the defendants caused the gum to be discarded on the staircase, or even that they knew it was there. Rather, she argues that there is a genuine issue of material fact as to how long the gum had been on the staircase and whether it should have been discovered and removed by the defendants. Specifically, the plaintiff contends that evidence that the gum was discolored and flattened gave rise to a reasonable inference that it had been present on the staircase long enough for the defendants to be on constructive notice of the dangerous condition. The plaintiff relies entirely on her own description of the gum as “dark, and blackish grey” and “dirty and flatten[ed] out” to establish that the defendants had constructive notice of the gum's presence in the stairwell. It is undisputed, however, that the plaintiff's observation of the gum came only after she walked back up the stairs to retrieve her sneaker which had stuck to the gum and come off during the fall. In other words, the evidence of the gum in a discolored and flattened condition came after the plaintiff had stepped on it. The plaintiff acknowledged that, even after she had stepped on the gum, it still “had a stickiness to it” and the inside of the gum was a “lighter color.” These physical characteristics of the gum, without more, do not establish that it was on the stairs for any significant period of time. See Oliveri v. Massachusetts Bay Transp. Auth., 363 Mass. 165, 169 (1973) (“where the effect of time is not obvious or remains unproved, no inference is warranted that the substance has been on the ground long enough to have been seen and removed, despite the fact that it is described as dirty or black”). Accordingly, we discern no error in the judge's conclusion that “no inference is warranted that the gum had been on the stairs long enough to have been seen and removed by either a DTZ employee or a Delaware North employee.”

The plaintiff also claims that the defendants' “mode of operation” created an unreasonable risk of danger that put them on notice of the risk she encountered. Under this theory of premises liability, a business may be liable if its chosen method of operation creates a reasonably foreseeable risk of danger and proximately causes an accident that the business did not take reasonable steps to avoid. See Sheehan, 448 Mass. at 786. The mode of operation theory of premises liability is limited “to situations where a business should reasonably anticipate that its chosen method of operation will regularly invite third-party interference resulting in the creation of unsafe conditions.” Sarkisian, 471 Mass. at 684.

Even viewing the evidence in the light most favorable to the plaintiff, the summary judgment record does not establish that Delaware North's chosen method of operation invited patrons to discard chewing gum in the stairwells. There is no evidence that Delaware North sells gum at TD Garden, and the agreement requires its timely removal. While it is no doubt true that gum and other food, beverage, and paper waste are frequently discarded as fans depart TD Garden, the evidence does not support a reasonable inference that Delaware North encouraged or invited such littering by its method of operation. The plaintiff has failed to identify any operational decision that created an appreciable risk that guests would discard gum, or that discarded gum would remain for a long period. Accordingly, the judge did not err when she rejected the plaintiff's mode of operation theory of premises liability.

2. Delaware North's cross-appeal against DTZ. a. Contractual indemnity. The agreement contained an indemnification clause which required DTZ to “indemnify, defend, and hold harmless” Delaware North for any “liabilities, costs, and expenses resulting from claims and lawsuits brought against [Delaware North] in direct proportion to the amount of negligent performance or negligent non-performance ․ attributed to [DTZ] under this [a]greement.” In its cross-claim against DTZ, Delaware North alleged that DTZ breached its contractual obligation to indemnify Delaware North. Delaware North sought damages of “costs and attorney's fees incurred by defending against the plaintiff's actions and bringing the cross-claim.” DTZ responded that Delaware North's cross-claim for indemnification and defense was “null and void” because Delaware North failed to provide notice of a claim to DTZ within twenty-one days of receipt of the claim, as required by paragraph 17(b) of the agreement. Delaware North does not dispute its failure to give timely notice, and the judge concluded that this failure precluded Delaware North's cross-claim for indemnification and any claim for Delaware North's cost of defending against the plaintiff's action. Delaware North claims error arguing that, under the plain language of the agreement, its failure to notify bars only a claim for indemnity and not a claim for the cost of defense. We disagree.

“To ascertain intent [when construing a contract], a court considers words used by the parties, the agreement taken as a whole, and surrounding facts and circumstances. (Citations omitted).” Twin Fires Inv., LLC v. Morgan Stanley Dean Witter & Co., 445 Mass. 411, 420 (2005), quoting Massachusetts Mun. Wholesale Elec. Co. v. Danvers, 411 Mass. 39, 45-46 (1991). Here, we need go no further than the language chosen by the parties. Under the section of the agreement titled “Indemnification,” paragraph 17(a) describes three separate obligations that DTZ has to Delaware North once notice of a claim is received -- “[DTZ] agrees to indemnify, defend and hold harmless.” Further in that same paragraph, those three obligations are referred to jointly as “the indemnity above.” Considering these words in this context, we think it is plain enough that paragraph 17(b)'s statement of “obligations to indemnify” refers back to the same obligations of “indemnify, defend and hold harmless” referenced in paragraph 17(a).

b. Breach of contract. We reach a different conclusion with respect to the claimed breach of paragraph 16 of the agreement. Paragraph 16(d) requires DTZ to maintain general liability insurance “with limits of not less than $ 1,000,000 for each occurrence,” and that insurance would “be primary with respect to [DTZ's] obligation under [the indemnification clause] and will name [Delaware North] as an additional insured.” As part of its cross-claim against DTZ, Delaware North alleged that DTZ breached the agreement by failing to secure the required insurance. DTZ concedes that it did not obtain the insurance required under the agreement. Consequently, the judge correctly ordered summary judgment in favor of Delaware North on the breach of contract claim for its failure to obtain insurance. However, apparently reasoning that DTZ's contractual obligation to obtain insurance described in paragraph 16 of the agreement was contingent upon Delaware North's obligation to provide timely notice of the plaintiff's claim as set forth in paragraph 17, the judge concluded that “Delaware North cannot recover defense costs related to that breach of contract because it failed to provide the required notice of Grenier's claim to DTZ.”³ This was error.

It is well-settled that “an indemnity provision [of a contract] imposes obligations that are separate and distinct from the obligations imposed by an insurance provision.” Norfolk & Dedham Mut. Fire Ins. Co. v. Morrison, 456 Mass. 463, 471 (2010). Here, paragraph 16 addresses DTZ's obligation to obtain insurance while paragraph 17 addresses DTZ's obligation to indemnify Delaware North, contingent upon Delaware North providing notice of the claim to DTZ within twenty-one days of its receipt of the claim. While it is clear that the insurance coverage required by paragraph 16 is intended to cover any liability referenced in paragraph 17, nothing in paragraph 16 states that DTZ's obligation to obtain insurance is limited by or contingent upon the notice provisions of paragraph 17. Instead, paragraph 16 provides that DTZ shall carry the insurance coverage “at all times during the term of this Agreement.” Since that contractual obligation is effective upon execution of the contract, we fail to see how performance of that obligation could be contingent upon Delaware North providing notice of a future claim. To the extent that there is ambiguity in the language describing the connection between paragraph 16's requirement that DTZ obtain insurance and paragraph 17's requirement that Delaware North provide timely notice of any claim, that language must be construed against DTZ, the drafter of the agreement.⁴ See James B. Nutter & Co. v. Estate of Murphy, 478 Mass. 664, 671-672 (2018). We decline DTZ's invitation to read such a contingency into the agreement and we conclude it was error for the judge to do so.

Conclusion. For all of these reasons, we affirm (1) the order for summary judgment in favor of the defendants on the negligence claims, (2) the order for summary judgment in favor of DTZ as to Delaware North's claim for contractual indemnification, and (3) the order for summary judgment in favor of Delaware North on its breach of contract claim for failure to obtain insurance. We vacate so much of the judgment as concludes that Delaware North cannot recover defense costs on its breach of contract claim. The case is remanded to the Superior Court for the purpose of assessing defense costs attributable to DTZ's failure to obtain the insurance required by paragraph 16 of the agreement.⁵

So ordered.

Vacated in part; affirmed in part.

FOOTNOTES

3.   This language was added to the original summary judgment decision after a hearing on Delaware North's motion for reconsideration.

4.   We have considered DTZ's argument that the agreement was the subject of negotiation between sophisticated business entities and, therefore, should not be construed against it. However, the summary judgment record shows that the modifications proposed during that negotiation did not change the relevant provisions of paragraphs 16 and 17 of the agreement.

5.   The parties do not address the scope of the defense costs directly attributable to DTZ's failure to obtain the requisite insurance. We leave that question for the further proceedings in the Superior Court.