Fuller v. TLC Property Management, LLC , 402 S.W.3d 101 ( 2013 )

GARY W. LYNCH, J.

Lindsay Fuller brought a tort claim for personal injury against TLC Property Management, LLC (“TLC”). Her claim arose out of her slip and fall in the parking lot of Orchard Park Apartments, where she leased an apartment. Fuller alleged in her petition that “[a]t all times relevant hereto, Orchard Park Apartments was managed by [TLC].” In its answer, TLC admitted that it was the property manager as Fuller alleged and asserted an affirmative defense that the tort claim was contractually barred by paragraph 17 of the Lease Agreement Fuller had signed.¹

TLC filed a motion for summary judgment alleging, as its legal basis, that “the exculpatory clause in the Lease Agreement [Fuller] entered into is valid and enforceable. The exculpatory clause effectively notified [Fuller] that she was releasing [TLC] from its own negligence.” Fuller filed her response to TLC’s motion for summary judgment, which yielded the following uncontroverted facts:

1. Fuller entered into a Lease Agreement with Orchard Park Apartments, LLC, on May 22, 2010.

2. The term of the Lease Agreement was for thirteen (13) months commencing June 26, 2010, until July 29, 2011.

3. Fuller signed the Lease Agreement on May 22, 2010.

4. Fuller initialed after each numbered paragraph in the Lease Agreement.

5. Fuller initialed after paragraph 17 in the Lease Agreement.

6. Paragraph 17 of the Lease Agreement states:

Tenant(s) agrees that all owners, Landlord and property managers of the Premises, and all their agents, employees, servants, invitees, successors and assigns shall not be liable to Tenant(s) or their family members, guests, invitees, servants, or others for injury to or death of any person or pet, nor for loss of or damage to personal property occurring on or about the Premises from any cause whatsoever, even if said damages, injuries or deaths are alleged to be the fault of or caused or contributed to be caused by the negligence, carelessness or fault of any or all owners, Landlord or property managers of the Premises (regardless of who is designated as Landlord). Tenant hereby agrees to release, indemnify, save, defend and hold harmless, including payment of reasonable attorneys fees, court costs, expenses and expert witness fees, Landlord, all owners and property managers of the Premises from and against any and all lawsuits, liabilities, or claims for damages, personal injury, death or property damage made by Tenant(s) or any person on or near the Premises at the invitation or allowance of Tenant(s) arising from Tenant’s use of Premises, or from any activity, work or thing done, permitted or suffered by Tenant(s) on or about the Premises, even if such person injury, death or property damages are alleged to be caused or contributed to be caused by the fault of Landlord, property owner or manager. If Landlord furnishes smoke detectors it shall test same and provide initial batteries at Lease commencement, and thereafter Tenant shall pay for and replace smoke detector batteries, if any, as needed.

7. Fuller slipped and fell on ice in a parking lot at Orchard Park Apartments on February 7, 2011.

8. Fuller was a resident of Orchard Park Apartments on February 7, 2011.

9. As a result of Fuller’s fall, she injured her left ankle.

Fuller filed suggestions in opposition to TLC’s motion for summary judgment arguing that “the purported exculpatory language set forth in [TLC’s] Lease Agreement fails to meet the stringent standard set forth in Alack [²]” for three reasons: (1) the “waiver is expressly limited to incidents occurring inside Unit M303”; (2) “[t]he attempt at exculpatory language in the Lease Agreement is not clear, not conspicuous, and therefore cannot clearly and unmistakably waive [Fuller’s] claims [sic]”; and (3) “[TLC’s] exculpatory language attempts to waive any imaginable claim including intentional torts, and for that reason, is duplicitous, indistinct, uncertain and ambiguous, and therefore void under Missouri law.” Finally, Fuller argued that “[t]his exculpatory language, and attempted broad use in Apartment leases throughout the community, should be held void as against sound public policy.”

The trial court sustained TLC’s motion for summary judgment and entered a judgment in its favor on Fuller’s claim. This appeal timely followed.

Standard of Review

“Appellate review of summary judgment is de novo.” Roberts v. BJC Health Sys., 391 S.W.3d 433, 437 (Mo. banc 2013) (citing ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993)).

Discussion

While Fuller brings six points on appeal, her first point is dispositive. In it, she claims TLC was not entitled to judgment as a matter of law because the exculpatory clause in the Lease Agreement for injuries “occurring on or about the Premises” does not apply to her injury that occurred in the parking lot, in that the Lease Agreement defines “Premises” as her apartment unit M303, and her injury did not occur “on or about” that unit. We agree.

“Releases of future negligence are not void as against public policy, though they are disfavored and strictly construed.” Warren v. Paragon Techs. Grp., Inc., 950 S.W.2d 844, 845 (Mo. banc 1997) (citing Alack v. Vic Tanny Int’l of Missouri, Inc., 923 S.W.2d 330, 334 (Mo. banc 1996)). “ ‘[C]lear and explicit language in the contract is required to absolve a person from such liability.’ ” Alack, 923 S.W.2d at 334 (quoting Hornbeck v. All American Indoor Sports, Inc., 898 S.W.2d 717, 721 (Mo.App. W.D.1995)); see Vergano v. Facility Mgmt. of Missouri, Inc., 895 S.W.2d 126, 128 (Mo.App. E.D.1995) (enforced release where “its terms were simple and clear”). In addition, the language in an exculpatory clause must be unambiguous, unmistakable, and conspicuo6us. Alack, 923 S.W.2d at 337. “ ‘An ambiguity arises when there is duplicity, indistinctness, or uncertainty in the meaning of the words used in the contract.’ ” Id. (quoting Rodriguez v. Gen. Accident Ins. Co. of America, 808 S.W.2d 379, 382 (Mo. banc 1991)); accord Ritchie v. Allied Prop. & Cos. Ins. Co., 307 S.W.3d 132, 135 (Mo. banc 2009). “ ‘Language is ambiguous if it is reasonably open to different constructions.’ ” Ritchie, 307 S.W.3d at 135 (quoting Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007)). “The exculpatory language must effectively notify a party that he or she is releasing the other party from claims arising from the other party’s own negligence.” Alack, 923 S.W.2d at 337. “The determination of the sufficiency and validity of an exculpatory agreement on the basis of the clarity and simplicity of its terms is a question of law[.]” Id. at 338.

“A lease in Missouri acts as both a conveyance and a contract[.]” Campus Lodge of Columbia, Ltd. v. Jacobson, 319 S.W.3d 549, 552 (Mo.App. W.D.2010). “‘[A] contract must be construed as a whole. It must be viewed from end to end and corner to corner.’ ” Id. (quoting Parker v. Pulitzer Publ’g Co., 882 S.W.2d 245, 249 (Mo.App. E.D.1994)); accord Alack, 923 S.W.2d at 343.

The Lease Agreement here expressly defines the term “Premises” as apartment unit “M303.”³ Therefore, by definition, the word “premises” as used every place in the Lease Agreement, in and of itself, cannot include any geographical area other than that occupied by apartment unit M303.

The Lease Agreement then proceeds to use that defined term thirty-eight times, almost exclusively in the context of describing Fuller’s duties and obligations under the Lease Agreement. While most instances refer to “the Premises,” “of the Premises,” or “to the Premises[,]” other qualifying terms are used. For example, Fuller was required to give the landlord written notice “when any portion of the Premises is out of repair”; Fuller was required to service, maintain, and repair all electrical and mechanical equipment “which is apart of the Premises”; Fuller was required to pay “all utilities used in or about Premises”; Fuller could have no pets “on the Premises” without a separate pet agreement; in addition to a separate pet agreement, Fuller had to obtain written permission from the office before the pet could “be in or around the Premises”; any vehicles Fuller had “on or near the Premises” had to “be in good condition and working order, properly licensed and roadworthy, must not have significant oil or fluid leaks”; and, Fuller was “allowed to park one vehicle per bedroom in the Premises^]” (Emphasis added).

In contrast, the Lease Agreement refers to one of the Landlord’s duties as “common area maintenance!)]” (Emphasis added.) Similarly, in mandating Fuller’s compliance with the current “Community Policies” by incorporating that document by reference, the Lease Agreement refers to the entire apartment complex as the “apartment community!)]”

It is in this context that we now turn to paragraph 17 — the exculpatory clause — in the Lease Agreement. As relevant here, this paragraph releases “all owners, Landlord and property managers of the Premises” from liability for future negligence on any claim by Fuller for personal injury “occurring on or about the Premises!)]” (Emphasis added).⁴ The question for our resolution is whether the description of the geographical area identifying the location of the injury of those released claims— “occurring on or about the Premises”— clearly, explicitly, unambiguously, and unmistakably includes the parking lot, where Fuller’s injury occurred. We find that it does not.

Under the plain and ordinary language used in the exculpatory clause, the prepositional phrase “on or about the Premises” modifies the word “occurring” by describing the geographical area within which the injuries must have occurred giving rise to the released claims. Because the prepositions in that phrase are used in the disjunctive, the only claims released by Fuller were those for injuries occurring either “on ... the Premises” or “about the Premises.” By defining the word “premises” as “M303,” the former phrase — “on ... the Premises” — clearly references only the geographical area described as M303, the apartment unit leased by Fuller. See Moore v. Commercial Union Ins. Co., 754 S.W.2d 16, 18 (Mo.App. E.D.1988) (petition alleged negligence of plaintiff regarding a breach of duty by acts done only on the adjoining premises, not on the insured premises ). Therefore, “on ... the Premises” does not clearly, explicitly, unambiguously, and unmistakably include the parking lot.

“When viewed in the context of the law governing exculpatory clauses,” Alack, 923 S.W.2d at 337, neither does the geographical area descriptor, “about the Premises.” We reach this conclusion for three reasons. First, when used as a preposition, as here, “about” has two geographical meanings— “in a circle around: on every side: around” and “in the immediate neighborhood of: near.”⁵ MeRriam-Webster Dictionary (11th Ed.). The first meaning — “in a circle around: on every side: around[,]” when applied to the Premises, defined as M303, clearly includes the outermost perimeter around unit M303; it does not clearly and explicitly include a parking lot located some unknown distance from unit M303.

Whether the parties intended for “about” to have the second meaning — “in the immediate neighborhood of: near” — is not clear in the context of the exculpatory clause itself and the whole of the Lease Agreement because of the use of the phrase “near the Premises.” That phrase is used within the exculpatory clause by imposing upon Fuller the indemnification obligation for claims made by “any person on or near the Premises at the invitation or allowance” of Fuller. (Emphasis added). It is also used in paragraph 21, which requires any vehicles Fuller had “on or near the Premises ” to “be in good condition and working order, properly licensed and roadworthy, must not have significant oil or fluid leaks[.]” (Emphasis added). The specific and express use of the phrase “near the Premises” in the exculpatory clause and elsewhere in the Lease Agreement could reasonably indicate that it has a distinct and different meaning than the phrase “about the Premises,” which is used in close proximity to it. This would support the reasonable construction that “about the Premises” was used to convey the more narrow first meaning of “about” — “in a circle around: on every side: around” — and that “near the Premises” was used when the broader second meaning of “about” — “in the immediate neighborhood of: near” — was intended. On the other hand, the similarity of the second meaning of “about” and the word “near” could also support the reasonable construction that the two different phrases mean the same thing. The existence of these two reasonable constructions creates an ambiguity in the exculpatory clause. See Ritchie, 307 S.W.3d at 135.

Second, “about” the premises is used in another place in the Lease Agreement, and the context of that usage strongly suggests it denotes a very limited and narrower geographical scope. In paragraph 13, the Lease Agreement requires Fuller to pay “all utilities used in or about Premises[.]” (Emphasis added). As used here, “about” the premises indicates a very close geographical relationship to the Premises— apartment M308 — such as an outside light that protrudes from the unit or that hangs over an adjoining common area lighting an entry to that unit. Nothing in this language requires Fuller to pay the utilities for the parking lot.

Third, the Lease Agreement uses the terms “common area” and “apartment community” elsewhere to refer, respectively, to the geographical location of the common areas, such as parking lots, and to the geographical location of the entire apartment complex, which includes all common areas and apartment units located therein. This explicit use of broader, more inclusive terms elsewhere in the Lease Agreement coupled with the omission of those terms in the exculpatory clause and its explicit use of a term — “Premises”—that by its definition is not a common area, implies the intentional omission, rather than the inclusion, of the common areas in that clause. In other words, if the common areas had been intended to be included, that specific term — “common areas”— would have been used just as it was used elsewhere in the Lease Agreement. At the very least, its omission creates a substantial indistinctness and uncertainty as to the words used in the exculpatory clause and, therefore, an ambiguity as to whether the parking lot, which is a common area, is included. See Alack, 923 S.W.2d at 337 (ambiguity arises when there is duplicity, indistinctness, or uncertainty in the meaning of the words used in the contract.); accord Ritchie, 307 S.W.3d at 135.

TLC, referring to Abbott v. Epic Landscape Prods., L.C., 361 S.W.3d 13 (Mo.App.W.D.2011), claims that “[t]he most recent appellate decision regarding the validity of exculpatory clauses rejects Plaintiffs argument that the injuries must occur within the leased premises.” In Abbott, the tenant brought a personal-injury negligence action against the landlord and snow maintenance contractor after a slip and fall on ice in the parking lot that resulted in injuries to the tenant’s leg and eventually led to amputation. Id. at 14-15. What TLC fails to mention or take into account, however, is that the exculpatory clause upheld and enforced in Abbott specifically and explicitly included the “common areas,” id. at 17-18, unlike the exculpatory clause in the Lease Agreement TLC relies upon here.

Finally, TLC argues that the heading of paragraph 21 of the Lease Agreement— “Vehicles on or about Premises” — provides clarity. It does not. This heading, in and of itself, imposes no right, duty, or obligation upon either Fuller or Landlord; it merely serves a non-substantive function to generally describe the contents of the paragraph that follows it. The operative part of paragraph 21 is in the language used in its body, and that language does not employ the phrase at issue.⁶ Therefore, this heading has no bearing upon the use of a similar phrase in the exculpatory clause that operates to substantially shift the rights and obligations between the parties.

“There must be no doubt that a reasonable person agreeing to an exculpatory clause actually understands what future claims he or she is waiving.” Alack, 923 S.W.2d at 337-38. From the above and foregoing, we conclude that a reasonable person would not understand that the exculpatory clause in the Lease Agreement, when the Lease Agreement is strictly construed from end to end and within its corners, clearly, explicitly, and unmistakably waives claims for injuries occurring in the parking lot. For this reason, the exculpatory clause does not apply to Fuller’s claim, as a matter of law, and the trial court erroneously applied it to grant summary judgment to TLC. Fuller’s first point is granted.

Finding the exculpatory clause is not applicable by its own terms under Fuller’s first point, we need not address any other reasons it may not apply as raised in her other points.

Decision

The trial court’s judgment granting summary judgment in favor of TLC is reversed, and the case is remanded to the trial court for further proceedings consistent with this opinion.

DON E. BURRELL, C.J. — concurs in majority opinion. NANCY STEFFEN RAHMEYER, J.— concurs in majority opinion and writes separate concurring opinion. JEFFREY W. BATES, J. — concurs in majority opinion; concurs in J. RAHMEYER’S separate concurring opinion; concurs in J. FRANCIS’ separate concurring opinion. DANIEL E. SCOTT, J. — concurs in result and writes separate opinion concurring in result. WILLIAM W. FRANCIS, JR., J.— concurs in majority opinion; concurs in J.

RAHMEYER’S separate concurring opinion and writes separate concurring opinion.

MARY W. SHEFFIELD, J. — concurs in majority opinion.

1 . In the Lease Agreement, Orchard Park Apartments, LLC, is referred to as “Landlord.” This opinion will use that same reference.

2 . Alack v. Vic Tanny Int’l of Missouri, Inc., 923 S.W.2d 330 (Mo. banc 1996).

3 . The Lease Agreement uses both "Premises” and "premises,” sometimes with a preceding definite article "the” and sometimes without. Neither party draws any distinction between these inconsistencies, so we draw none.

4 . Paragraph 17 also obligates Fuller to indemnify Landlord, all owners, and property managers of the Premises for any claims brought by "any person on or near the Premises at the invitation or allowance” of Fuller. (Emphasis added).

5 . The complete definition for "about,” when used as a preposition, is:

1: in a circle around: on every side of: around

2 a: in the immediate neighborhood of: near

b: on or near the person of

c: in the makeup of <a mature wisdom about him>

d: at the command of <has his wits about him>

3: engaged in <act as if they know what they’re about — T.S. Matthews>

4 a: with regard to: concerning <spoke about his past>

b: concerned with

c: fundamentally concerned with or directed toward <poker is about money— David Mamet>

5: over or in different parts of

Merriam Webster Dictionary (11th Ed.).

6 . Paragraph 21 of the Lease Agreement reads:

21. Vehicles on or about Premises

Any vehicles on or near the Premises must be in good condition and working order, properly licensed and roadworthy, must not have significant oil or fluid leaks, and Tenant(s) are allowed to park one vehicle per bedroom in the Premises, except that one room or studio apartments or Tenant(s) with children of driving age may be granted a waiver of this provision based on need and hardship, at Landlord’s sole discretion.