Hancock Fabrics, Inc. sued Alterman Real Estate I, Inc., Alterman Real Estate, Ltd., and Market Square Associates, L. P. collectively, Alterman for property damage and business losses allegedly resulting from two instances of water leaks in the roof of the retail space Hancock leased from Alterman. Alterman filed a motion for summary judgment and Hancock filed a motion for partial summary judgment, both of which the trial court initially denied. On reconsideration, the court granted Alterman’s motion. Hancock appeals the latter order, claiming that the trial court erroneously construed certain lease provisions. We agree and therefore reverse the grant of Alterman’s motion for summary judgment. On appeal from the grant of summary judgment an appellate court conducts a de novo review of the evidence to determine whether there is a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.1 The lease at issue required the landlord, at its expense, to maintain “the roof, including its supporting members, the foundations and the outside walls and all other outside portions of the building of which the demised premises are a part . . . in good condition and repair throughout the term of the lease, and do anything necessary to protect the interior against rain or weather. . . .” The lease also obligated the landlord to make and pay for “all such necessary repairs” upon receiving written notice of the necessity thereof from the tenant. Hancock alleged that Alterman breached this duty to maintain and repair the roof, resulting in substantial property damage and subsequent business loss in two different years. In its motion for summary judgment, Alterman argued that the lease’s waiver of subrogation clause precluded Hancock from recovering damages from Alterman because it required Hancock to look solely to its own insurance for any property damage claim. That clause pertinently provided that each party to the lease mutually releases the other from liability, and waives all right of recovery against the other, for any loss of or damage to the property of each . . ., including earnings derived therefrom, caused by or resulting from . . . perils insured against under any insurance policies maintained by the parties hereto, regardless of the cause of such loss or damage even though it results from some act or negligence of a party hereto, its agents or representatives; provided, however, that this provision shall be inapplicable if it would have the effect, but only to the extent that it would have the effect, of invalidating any insurance coverage of the parties hereto. Hancock admittedly had obtained property insurance, although the lease did not require it to do so.2 The property insurance was subject to an annual aggregate deductible of $750,000 and a $25,000 deductible for each individual property loss. Hancock did not meet the annual aggregate deductible in the years for which it sought damages from Alterman, and it had received no insurance payments for any losses described in its complaint against Alterman. Hancock claimed that because insurance did not cover the property losses at issue, the waiver of subrogation clause was inapplicable.
The trial court denied Hancock’s motion for partial summary judgment, concluding that the insurance procured by Hancock covered the perils at issue and that the waiver of subrogation clause applied even though no insurance proceeds had been paid on the losses at issue in this case. The trial court initially denied Alterman’s motion for summary judgment because it did not address the express condition within the waiver of subrogation clause “provided, however, that this provision shall be inapplicable if it would have the effect, but only to the extent that it would have the effect, of invalidating any insurance coverage of the parties hereto.” In response to Alterman’s motion for reconsideration, Hancock admitted that a “valid subrogation waiver by itself would not invalidate any policy of insurance relevant to this case.” In light of that concession, the court granted Alterman’s motion.
