I’ve only recently drilled down into my thinking about the question as to whether or why a tenant should indemnify its landlord with respect to the activities of the tenant’s invitees. I’m not talking about the insurance or cost aspects of such an indemnification, but about the underlying theories. I can’t say that I’m fully settled on the issue. So, this is a work in progress and help from anyone reading this entry would be very much appreciated.
This got started when I was asked about a proposed set of indemnification provisions in an industrial lease. Essentially, the indemnifications from landlord to tenant and from tenant to landlord mirrored each other. No problem there. The relevant (to this posting) text said: “wholly or in part, any act or omission of [Landlord/Tenant], its agents, contractors, employees, servants, invitees, licensees or concessionaires … .” The landlord was insistent that these kinds of people be listed. What did I think?
To start with, I knew that an invitee was “a person who has an express or implied invitation to enter or use another’s premises, such as a business visitor or a member of the public to whom the premises are held open” [Thank You, Black’s Law Dictionary, Seventh Edition]. My knee jerk reaction, while wearing my tenant’s hat, was – heck no. The customer may be my invitee while in my store, but I’ll be darned if she is “my” invitee after she leaves the store. Why, however, wasn’t I disturbed when I looked at the same concept in the industrial lease? So, I noodled the issue.
Here’s where I came out. I really saw no problem when the invitee, whether a customer, salesperson, delivery driver or plumber, is inside the premises. The difference is what to call the person before entering and after leaving. For a single tenant complex, retail, industrial, office, whatever, whether the premises are defined to be the building or the entire complex, the invitee should be the “tenant’s.” After all, the ONLY reason the invitee is there in the first place, is to visit the tenant – “at the tenant’s express or implied invitation.” OK, someone the landlord tells to “go there and check something out” is the landlord’s invitee, but that’s a distraction for this Rumination.
What about a multi-tenant complex, however? The industrial lease was for a free-standing, single building site. The typical retail set-up, however, is a multi-tenant complex – think shopping center. Two thoughts are rattling in my head. The first is that “my” customer may have first visited, or may be going to visit, another store. Whose customer is that when in the parking lot? Does it matter whose store was first visited? Does it matter if the indemnified-for incident happened on the way into or on the way out of my store? Between stores? After visiting a couple of stores? After leaving my store with the intention of visiting the store next door, but before getting there?
This Ruminating opened a whole new thought for me. Why isn’t every customer or prospective customer visiting a shopping center really the landlord’s invitee? If the landlord has attracted retailers based on the synergy of a shopping center, open or enclosed, then isn’t that also saying that the landlord is inviting those people to its own shopping center and charging its tenants rent based on that implicit form of landlord marketing? Here’s a gross simplification. Teens are attracted to enclosed malls. It is a social meeting ground. So, one day, a particular teen visitor to the mall decides to have a frozen desert treat and spills it, whereupon a particularly fragile mall customer slips and is seriously injured. Whose guest? – is it the frozen desert’s purveyor’s invitee? Isn’t it the mall’s invitee?
Try an accident in the parking lot. Do you “grill” the driver? What stores were you going to visit? Answer – ABC Shoes and I’m going to look at some other shoe stores, but not all of them – whatever is in the mall attracts me. And, I might stop in at the book store – I’m not sure. Whose invitee is this? – ABC Shoes alone? ABC Shoes and all of the other shoe stores (collectively) and the book store? I’m now thinking this invitee is really the landlord’s invitee. If I’m right, then maybe the landlord doesn’t want to be liable for the acts of its invitees either.
The reader can extend this analysis to the overnight courier driver (after the incident, do you ask the driver for his or her deliver log – where were you going to deliver or pick-up packages, and then tag the driver as being the invitee of those stores?)
I don’t yet know where I come out on this. Help me and others with your thoughts. Should neither party indemnify the other for invitees, other than when inside of premises exclusively used by the landlord or the tenant, respectively? How would that work if a customer leaves a store and slips on frozen desert from another retailer that the landlord’s crew knew of and should have cleaned-up. Why not just look to the insurance company that covers the floor area in question. After all, the tenants are paying for their own liability as well as that of their landlord.
I like this Article: Defective Work of Subcontractor’s is Covered under Prime Contractor’s CGL Policy, June, 2011, by J. Kent Holland, Jr., Esq. Find it at: