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Davis v. Johnson Controls, Inc.

Court of Appeals of Missouri, Eastern District, First Division

April 17, 2018

ALLEN J. DAVIS, Plaintiff,
v.
JOHNSON CONTROLS, INC., Defendant/Respondent, and REALTY ASSOCIATES ADVISORS, LLC, & THE REALTY ASSOCIATES FUND VII, L.P., Defendants/ Appellants, and SANDSONE GROUP/DDR LLC & SANDSONE GROUP, INC., Defendants, and FULL CARE, INC., Third-Party Defendant.

          Appeal from the Circuit Court of St. Louis County Honorable Michael T. Jamison, J.

          KURT S. ODENWALD, Judge

         Introduction

         Realty Associates Advisors, LLC and the Realty Associates Fund VII, L.P. (collectively, "Realty") appeal from the trial court's judgment awarding Johnson Controls, Inc. ("Johnson Controls") $608, 936.48 on Johnson Controls's cross-claim seeking indemnification for its legal expenses. Johnson Controls sought recovery pursuant to an indemnity clause in a lease agreement ("the Lease Agreement") between Realty and Johnson Controls. Realty raises two points on appeal. In Point One, Realty contends that the trial court erred in awarding Johnson Controls damages because Realty did not owe a duty to indemnify Johnson Controls against the plaintiffs claims under the Lease Agreement. In Point Two, Realty argues that the trial court erred by including in its award of attorneys' fees to Johnson Controls those attorneys' fees incurred by Johnson Controls in enforcing its right to indemnity against Realty. Because Realty did not provide this Court with an adequate record from which we may properly consider Realty's liability for indemnity, we dismiss Realty's Point One. Because the Lease Agreement expressly authorized the trial court to award Johnson Controls those attorneys' fees it incurred as a result of enforcing its right to indemnity against Realty, we deny Point Two and affirm the trial court's judgment.

         Factual and Procedural History

         Allen J, Davis ("Davis") sued Realty, Johnson Controls, and Sandsone Group/DDR LLC and Sandsone Group, Inc. (collectively, "Sandsone"), seeking damages for personal injury after Davis slipped and fell at a property owned by Realty, leased by Johnson Controls, and managed by Sandsone.[1] Pursuant to the terms of the Lease Agreement, Johnson Controls tendered the defense of the lawsuit to Realty and sought indemnification against Davis's claim from Realty. The Lease Agreement provided, in part, the following:

15. Indemnity
B. [Realty] shall indemnify and hold [Johnson Controls] harmless from and against all Damages, which may be imposed upon or incurred by or asserted against [Johnson Controls] arising from [Realty's] use of or the condition of the Property, or from [Realty's] action or inaction taken thereto or thereon, or from the breach by [Realty] of any of its obligations hereunder, whether or not, in any case, attributable to [Realty] or [Realty's] employees, customers, agents, invitees, licensees, or guests (collectively, "[Realty's] Representatives"), provided, such Damages do not arise from the acts, omissions or the negligence of [Johnson Controls] or [Johnson Controls's] Representatives. In the event that any action or proceeding shall be brought against [Johnson Controls] by reason of any claim above referred to, [Realty], upon written notice from [Johnson Controls], shall at [Realty's] sole cost and expense defend the same, in which event, [Realty] may select the attorneys to be used[.]

         Section 15(A) of the Lease Agreement included a similar provision requiring Johnson Controls to defend claims brought against Realty and to indemnify Realty from damages under certain conditions. Section 15(A) also defined "Damages" as "all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, charges, and expenses, including attorneys' fees[.]"

         Realty refused Johnson Controls's tender of the defense of Davis's claims and indemnification request. Johnson Controls and Realty then filed opposing cross-claims, each alleging that the other was obligated to defend and indemnify against Davis's claims under the Lease Agreement. Davis ultimately settled his claims with all of the defendants and dismissed his claims with prejudice. Upon the dismissal of Davis's claims, only the opposing cross-claims of Realty and Johnson Controls remained pending before the trial court.

         Johnson Controls moved for partial summary judgment on its cross-claim, asking the trial court to establish Realty's liability for damages incurred by it as a result of Realty's failure to defend and indemnify against Davis's claims as required under the Lease Agreement. Johnson Controls reserved the issue of the amount of damages. The trial court granted partial summary judgment in favor of Johnson Controls, finding that Realty owed Johnson Controls a duty to defend and indemnify against Davis's claims. Realty similarly moved for summary judgment on its cross-claim seeking damages for Johnson Controls's failure to indemnify Realty. The trial court denied Realty's motion, and concluded that "the sole issue" remaining between Johnson Controls and Realty was the amount of Johnson Controls's damages.

         Subsequently, Johnson Controls moved for an award of attorneys' fees and costs it incurred due to Realty's refusal to defend and indemnify it against Davis's claims. In its motion, Johnson Controls requested not only the attorneys' fees and costs expended in defending against Davis's suit, but also the attorneys' fees and costs Johnson Controls incurred in litigating its indemnification cross-claim against Realty. The trial court held an evidentiary hearing, received expert testimony on the issue of damages, and considered the exhibits submitted with Johnson Controls's motion. The trial court then awarded Johnson Controls $608, 936.48 in attorneys' fees, costs, and other damages. This appeal follows.

         Points on Appeal

         Realty raises two points on appeal. Point One asserts that the trial court erred in awarding Johnson Controls damages because Realty was not obligated to indemnify Johnson Controls under the Lease Agreement; rather, Johnson Controls was obligated to indemnify Realty under the Lease Agreement. Point Two claims that the trial court erred when it included in its attorneys' fees award, those fees and costs incurred by Johnson Controls to establish its right to indemnity from Realty.

         Discussion

         I.Point One-Realty's Failure to Provide an ...


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