COA: Tenant does not have obligation to indemnify landlord

June 27, 2016

The Indiana Court of Appeals ruled a tenant did not have to indemnify a landlord against a woman’s personal injury claims after she filed suit against both of them.

Angelica Magallanes was injured after she tripped over a rod sticking out a of a cement bumper in the parking lot of BC Osaka restaurant in Merrillville. She filed an amended complaint against BC Osaka and City Inn, the tenants, and Kainan Investment Groups Inc., the landlord, claiming they owed a duty of care to her.

Shortly after Magallanes’ filing, Kainan filed a cross-claim against City Inn, alleging the tenant owed them a contractual obligation to hold harmless and indemnify Kainan against the claims. After a hearing, the trial court granted Kainan’s cross-claim, and City Inn appealed.

In a decision written by Judge Paul Mathias, the COA did a two-step analysis to determine if the tenant had accepted indemnification. The COA ruled negligence is an area in which City Inn agreed to indemnify the landlord, but the lease agreement does not specify whether that indemnification extends to the landlord’s own negligence.

The Kainan as landlord reserved the right to control and maintain the parking areas at the restaurant, according to the lease agreement, and establish rules related to its use. “At the very least, these provisions create an issue of material fact as to whether Tenant had full control and possession of the leased premises. As such, the issue of Landlord’s liability to Magallanes should not be disposed of on summary judgment,” Mathias wrote.

The court reversed the trial court’s decision and remanded it for further proceedings.

The case is BC Osaka, Inc. and City Inn, Inc. v. Kainan Investment Groups, Inc., 45A03-1510-CT-1587


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