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American Wholesale Products v. Allstate Insurance Co.

Court of Appeals of Oregon

October 25, 2017

AMERICAN WHOLESALE PRODUCTS, Plaintiff-Appellant,
v.
ALLSTATE INSURANCE COMPANY, Defendant, and ELPRO INVESTMENTS, Defendant-Respondent.

          Argued and Submitted December 1, 2016

         Lane County Circuit Court 161418610; R. Curtis Conover, Judge.

          Clinton L. Tapper argued the cause for appellant. With him on the briefs was Taylor & Tapper Insurance Attorneys.

          Michael H. Long argued the cause for respondent. With him on the brief was Gaydos, Churnside & Balthrop, P. C.

          Before DeVore, Presiding Judge, and Garrett, Judge, and Wollheim, Senior Judge.

         Case Summary:

         Plaintiff, which leased warehouse space from defendant, appeals the trial court's grant of defendant's motion for summary judgment, arguing that the trial court erred in concluding that a provision of the parties' lease agreement released defendant from liability for its own negligence. Plaintiff first contends that the provision in question was not expressed in "clear and unequivocal terms" and, further, was not "conspicuous" so as to immunize defendant from the consequences of its own negligence. Plaintiff alternatively argues that the lease is ambiguous regarding defendant's liability for its own negligence because two other lease provisions conflict with the liability provision. Held: The court did not err in granting defendant's motion for summary judgment. Plaintiff's first argument fails because the language of the liability disclaimer is unequivocal and does not cause undue hardship to the parties, see Estey v. MacKenzie Engineering Inc., 324 Or. 372, 378-79, 927 P.2d 86 (1996), and is conspicuous because it is logically placed in a short paragraph about risk allocation, set off in sufficiently readable lettering. Plaintiff's second argument [288 Or. 419] also fails because the provision in question is particular and the other provisions are general.

         Affirmed.

         [288 Or. 420]GARRETT, J.

         Plaintiff, which leased warehouse space from defendant, brought this action alleging that defendant's negligent failure to maintain the premises resulted in water intrusion that damaged plaintiff's personal property. The trial court granted defendant's motion for summary judgment on the ground that the lease agreement precludes defendant's liability "for any loss or damage caused by water damage." On appeal, plaintiff argues that the trial court erred because the lease does not release defendant from liability for its own negligence in unequivocal and conspicuous terms, and because the lease contains conflicting provisions that create ambiguity regarding defendant's liability for its own negligence. For the reasons explained below, we reject plaintiff's arguments and affirm the judgment.

         We review the trial court's grant of summary judgment for legal error. Johnson v. State Board of Higher Education. 272 Or.App. 710, 714, 358 P.3d 307, rev den, 358 Or. 527 (2015). Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to prevail as a matter of law. ORCP 47 C. In reviewing the trial court's grant of summary judgment, we view the facts in the light most favorable to the nonmoving party. Morehouse v. Havnes. 350 Or. 318, 320, 253 P.3d 1068 (2011).

         We state the facts in accordance with that standard. Plaintiff, a distributor of automotive parts, entered into an agreement in 2013 to lease warehouse space from defendant. The lease was drafted by defendant's agent. In 2014, plaintiff's property suffered damage from rust and corrosion that was caused, according to plaintiff, by moisture that entered the warehouse due to defendant's failure to adequately maintain the structure. Plaintiff brought this action for breach of contract against defendant's insurer, Allstate, and for breach of contract and negligence against defendant. Only the claims against defendant are at issue on appeal.

         Defendant moved for summary judgment based on the following provision in the lease agreement:

[288 Or. 421]"SECTION 7. INSURANCE "7.1 Insurance Required. Lessor shall be responsible for insuring the premises, and Lessee for insuring its personal property and trade fixtures located on the premises. Neither party shall be liable to the other for any loss or damage caused by water damage, sprinkler leakage, or any of the risks covered by a standard fire insurance policy with an extended coverage endorsement, and there shall be no ...

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