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Tenant Agreed to Indemnify Shopping Center
by Ron Davis

An injury that occurred in the ice-covered parking lot of a Colorado shopping center has become the sole liability of one of the center’s tenants.

The shopping center is located in the Denver area. And the cause of the injury was a fall resulting from slippery conditions in the parking lot. The victim of the fall had attempted to walk from her car, which she had parked in the lot, to the center’s entrance, but fell en route.

She sued the shopping center’s owners, who in turn pointed out that they should not become the target of the lawsuit. That’s because, they explained, one of their tenants had agreed to “indemnify” the center in such a situation.

That tenant, who operates a flower shop at the center, had in fact consented to an unusual condition when signing her lease. In that document, she had agreed “to exonerate, hold harmless, protect and indemnify” the shopping center landlord “from and against any and all losses, damages, liability, claims, suits or actions, judgments, costs and expenses” that may arise during the lease term due to any bodily injury sustained in the shopping center “community area.”

Moreover, the tenant agreed to protect the shopping center’s owners from liability even when they were negligent—though not “grossly” negligent or when they committed “intentional” wrongful acts.

But the tenant’s lease noted that such liability depended on whether a person suffering an injury on shopping center property was there to visit her flower shop. Also, an express exception to such liability stated that she would have “no obligation to indemnify the shopping center’s owners against harm resulting from their own gross negligence or intentional wrongful acts.”

The lease further required the shopping center’s owners to keep all parking areas and driveways in “reasonably good order, condition and repair.” At the same time, however, the lease specified that the tenant’s “sole right and remedy” for the center’s owners’ failure to maintain the parking lot would be for her to maintain it herself and to deduct the expenses of that maintenance from her rent.

A Colorado court agreed with the tenant that the lease was unenforceable That’s because, the court explained, it made her responsible for shopping center areas exclusively controlled by the shopping center and because it failed to clearly define the injuries that would trigger her obligations.

But a Colorado appellate court reversed the lower court, concluding that the lease clearly reflected the mutual intent that the tenant indemnify the shopping center’s owners for injuries sustained in the community areas by her customers, “whether or not they exercised exclusive control over those areas and whether or not those injuries resulted from their own negligence.”

On appeal to the Supreme Court of Colorado, the justices agreed that the lease agreement contains a sufficiently clear expression of intent that the tenant would indemnify against liability, including even liability for the center owners own negligence.

(Constable v. Northglenn, LLC, 2011 WL 976587 [Colo.])

Decision: March 2011
Published: April 2011



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