Lumber Mutual Insurance v. Zoltek Corp.

Nolan, J.

In this appeal the sole issue is whether the judge correctly ordered summary judgment for the defendant. We granted Zoltec’s application for direct appellate review of Lumber Mutual Insurance Company’s appeal. We affirm the judgment.

The trustees of Foundry Industrial Park Trust (Foundry), as lessor, brought this action against Zoltek Corporation, the lessee, to collect payment allegedly due under a commercial lease. These claims and counterclaims were dismissed by agreement. Lumber Mutual Insurance Company (Lumber), Foundry’s insurer, was permitted to intervene as Foundry’s subrogee with respect to an insurance claim it had paid arising out of an explosion at Zoltek’s premises. Lumber alleged Zoltek’s negligence as the cause of the explosion.

The material portions of the lease are set out in the margin.¹ A cover letter attached to the lease provided that Zoltek was not required to carry property insurance on the building. In paragraph 6 of the lease, quoted above, note 1, supra, Zoltek was required to pay a rent adjustment of fifty-six per cent of operating expenses of Foundry and these included hazard and liability insurance “on the whole of the premises of which the leased premises are a part.” Foundry in its letter acknowledged that separate property damage coverage on its equipment, furnishings, and inventory should be carried by Zoltek.

During the term of the lease, a pressurized tank on Zoltek’s premises exploded, causing substantial damage to Foundry’s property. Lumber paid Foundry’s claim under its commercial property hazard liability policy. Lumber, seeking to recover the amount paid to Foundry, then brought this subrogation action against Zoltek, alleging the negligence of Zoltek as the cause of the explosion and breach of contract. The parties filed a stipulation of facts. Summary judgment was entered for Zoltek.

Summary judgment lies when there is no genuine issue of material fact in dispute and when the moving party is entitled to judgment as a matter of law. See Mass. R. Civ. P. 56 (c), 365 Mass. 824 (1974); Smith v. Massimiano, 414 Mass. 81, 85 (1993).

As subrogee, Lumber has any right of action which Foundry might have had against Zoltek. New England Gas & Elec. Ass’n v. Ocean Accident & Guarantee Corp., 330 Mass. 640, 659 (1953). However, from the language of the lease in which Zoltek is required to contribute to the premium for the very policy under which Lumber paid Foundry and the accompanying letter in which Foundry advised Zoltek that, because of Zoltek’s contribution to the premium, it need not carry its own property hazard liability policy, it is clear that Foundry and Zoltek are coinsureds. Accordingly, Lumber has no more right against Zoltek than it has against Foundry because they are coinsureds.

Paragraph 11(a) requires the lessee (Zoltek) to maintain the leased premises in good condition, damage by fire and other casualty only excepted. Paragraph 21 of the lease provides that at the expiration of the lease, Zoltek deliver to Foundry the premises in good condition, damage by fire or other casualty excepted.

These provisions leave no room for the argument that the intent of the parties is a triable issue and therefore, summary judgment does not lie. The intent is clear from the language. See General Mills, Inc. v. Goldman, 184 F.2d 359 (8th Cir. 1950), cert. denied, 340 U.S. 947 (1951). The interpretation of a written contract or lease is a question of law, not of fact. Allstate Ins. Co. v. Bearce, 412 Mass. 442, 446-447 (1992). Because the intention is clear, this case is distinguishable from Aetna Ins. Co. v. Craftwall of Idaho, Inc., 757 F.2d 1030, 1031-1034 (9th Cir. 1985).

The plaintiffs argument based on contract fares no better because of the provisions of the lease noted above. See Slocum v. Natural Prods. Co., 292 Mass. 455, 456-457 (1935).

Cases cited by the plaintiff against the conclusion that Foundry and Zoltek are coinsured do not contain the explicit language of this lease and letter in support of the fact that they are coinsureds. In conclusion, the result that we reach is simply giving Zoltek the benefit of the insurance which it purchased.

Judgment affirmed.

1 The relevant provisions of the lease are as follows:

“6. RENT ADJUSTMENT. The LESSEE shall pay to the LESSOR as additional rent hereunder when and as designated by notice in writing by LESSOR, fifty-six percent (56 %) of Operating Expenses incurred during the calendar year.

“ ‘Operating Expenses’ are defined for the purposes of this agreement as: . . . hazard and liability insurance on the whole of the premises of which the leased premises are a part ....

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“10. FIRE INSURANCE. The LESSEE shall not permit any use of the leased premises which will make voidable any insurance on the property of which the leased premises are a part, or on the contents of said property .... The LESSEE shall on demand reimburse the LESSOR, and all other tenants, all extra insurance premiums caused by the LESSEE’S use of the premises.

“11. MAINTENANCE.

LESSEE’S OBLIGATION. The LESSEE agrees to maintain the leased premises in good condition, damage by fire and other casualty only excepted .... The LESSEE shall not permit the leased premises to be overloaded, damaged, stripped, or defaced, nor suffer any waste.

“18. FIRE CASUALTY — EMINENT DOMAIN. Should a substantial portion of the leased premises, or of the property of which they are a part, be substantially damaged by fire or other casualty, ... the LESSOR may elect to terminate this lease. When such fire, casualty, or taking renders the leased premises substantially unsuitable for their intended use, a just and proportionate abatement of rent shall be made, and the LESSEE may elect to terminate this lease if

“(a) The LESSOR fails to give written notice within thirty (30) days of intention to restore leased premises, or

“(b) The LESSOR fails to restore the leased premises to a condition substantially suitable for their intended use within ninety (90) days of said fire, casualty or taking.

“21. SURRENDER. The LESSEE shall at the expiration or other termination of this lease . . . deliver to the LESSOR the leased premises . . . in good condition, damage by fire or other casualty only excepted . . . .”