Lawrence Gregory v. La Posada Group, LLC

• Court: Court of Appeals of Iowa
• Decided: August 7, 2024
• Docket: 23-1519
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 23-1519 Filed August 7, 2024

LAWRENCE GREGORY, Plaintiff-Appellant,

vs.

LA POSADA GROUP, LLC, Defendant-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Pottawattamie County,

Jeffrey L. Larson, Judge.

Plaintiff appeals the district court’s grant of summary judgment. AFFIRMED.

Brody D. Swanson of Peters Law Firm, P.C., Council Bluffs, for appellant.

Courtney T. Wilson of Law Offices of John M. Guthrie, Des Moines, for

appellee.

Considered by Schumacher, P.J., and Ahlers and Langholz, JJ. 2

SCHUMACHER, Presiding Judge.

Lawrence Gregory appeals the district court ruling granting La Posada

Group, LLC’s (La Posada) motion for summary judgment in a negligence action.

Gregory argues that La Posada failed to show it was not a possessor of the

property in question.

I. Background Facts and Prior Proceedings

La Posada is the owner of Springhill Suites. In 2018, La Posada and BC

Lynd Hospitality, LLC (BC Lynd) entered into a ten-year management agreement

where BC Lynd would “direct, supervise, manage, and operate the Hotel.” BC

Lynd would “be exclusively responsible for directing the day-to-day activities of the

Hotel and establishing all policies and procedures relating to the management and

operation of the Hotel.”

Gregory alleges that while visiting the Springhill Suites, a hotel in Council

Bluffs, Iowa, he slipped and fell on a wet floor on September 7, 2020, after exiting

an elevator. He asserts there were no signs or cones marking the wet floor.

Because of the fall, Gregory claims he suffered serious injuries and filed this action

against La Posada on September 6, 2022.

La Posada denied any negligence and moved for summary judgment. La

Posada argued that because of the management agreement with BC Lynd, where

BC Lynd had sole control of the premises, it was not a possessor of the property

at Springhill Suites and owed no duty of care to Gregory. The district court agreed

and granted summary judgment, dismissing Gregory’s action. Gregory filed this

appeal. 3

II. Standard of Review

We review grants of summary judgment for correction of errors at law.

Banwart v. 50th St. Sports, L.L.C., 910 N.W.2d 540, 544 (Iowa 2018). Summary

judgment is appropriate when “there is no genuine issue as to any material fact

and . . . the moving party is entitled to a judgment as a matter of law.” Id. (quoting

Iowa R. Civ. P. 1.981(3)). “A genuine issue of fact exists if reasonable minds can

differ on how an issue should be resolved.” Id. (quoting Est. of Gottschalk v.

Pomeroy Dev., Inc., 893 N.W.2d 579, 584 (Iowa 2017)). And a fact is material if it

might affect the outcome of a lawsuit. Id. Additionally, the moving party bears the

burden of showing there is no genuine issue of material fact. Id. at 545.

III. Analysis

Gregory asserts that the district court erred in dismissing his action for

negligence “because there are material disputes of fact as to [La Posada’s]

liability.” He argues whether La Posada exercised sufficient control over the

property to be a possessor is a question of fact for the jury, in part because of an

agency relationship between La Posada and BC Lynd, and he argues the

insurance and liability provisions of the Management Agreement confer liability on

La Posada for the negligence of BC Lynd.

A. Control of the Property

Gregory asserts that La Posada exercised sufficient control over the

property to be a possessor. And for the first time on appeal, Gregory alleges an 4

agency relationship existed between La Posada and BC Lynd.1 La Posada argues

that Gregory did not preserve the agency-relationship issue as it was neither

argued to nor addressed by the district court.

“We will not review issues on appeal unless they were properly preserved

below.” Bill Grunder’s Sons Const., Inc. v. Ganzer, 686 N.W.2d 193, 197 (Iowa

2004). “[I]ssues must ordinarily be both raised and decided by the district court

before we will decide them on appeal.” Meier v. Senecaut, 641 N.W.2d 532, 537

(Iowa 2002). The context of summary judgment raises unique questions when it

comes to error preservation, but ultimately does not affect the outcome. See Bill

Grunder’s Sons Const., Inc., 686 N.W.2d at 197–98.

Because the burden in summary judgment is on the moving party, “a party

faced with a motion for summary judgment can rely upon the district court to

correctly apply the law and deny summary judgment when the moving party fails

to establish it is entitled to judgment as a matter of law.” Otterberg v. Farm Bureau

Mut. Ins. Co., 696 N.W.2d 24, 27–28 (Iowa 2005). And “if the movant has failed

to establish its claim and the court nevertheless enters judgment, the nonmovant

must at least preserve error by filing a motion following entry of judgment, allowing

the district court to consider the claim of deficiency.” Bill Grunder’s Sons Const.,

Inc., 686 N.W.2d at 197–98.

Gregory did not raise the issue of an agency relationship in his resistance

to La Posada’s motion for summary judgment, and the district court did not address

1 Gregory argues this case is like Wiedmeyer v. Equitable Life Assurance Society

of the United States, 644 N.W.2d 31, 32 (Iowa 2002), which was decided on an agency theory and the specific provisions of an agency agreement. 5

an agency relationship in its ruling granting the summary judgment motion. And

following summary judgment, Gregory did not file a motion to reconsider pursuant

to Iowa Rule of Civil Procedure 1.904(2), seeking a ruling from the district court on

an agency issue. Because of this, Gregory’s agency argument is not preserved.

See id.

Gregory also challenges the district court’s determination that La Posada

was not a possessor. He asserts there remains a factual issue of whether La

Posada is a possessor because of the “hands-on-control regarding maintaining

and obtaining permits and licenses and ensuring a peaceful property, the financial

obligations, the insurance requirement . . . .”

“Land possessors have an affirmative duty of reasonable care to those who

come upon their land.” DeSousa v. Iowa Realty Co., Inc., 975 N.W.2d 416, 420

(Iowa 2022). To determine who is a possessor of land, Iowa has adopted the

Restatement (Third) of Torts:

A possessor of land is (a) a person who occupies the land and controls it; (b) a person entitled to immediate occupation and control of the land, if no other person is a possessor of the land under Subsection (a); or (c) a person who had occupied the land and controlled it, if no other person subsequently became a possessor under Subsection (a) or (b).

Id. at 421 (citation omitted). The duty of a possessor of property derives from their

control of that property. Id. Because of this, ownership alone is not enough to

impose liability. Van Essen v. McCormick Enters. Co., 599 N.W.2d 716, 719 (Iowa

1999). 6

BC Lynd was occupying Springhill Suites and in control of Springhill Suites.

See DeSousa, 975 N.W.2d at 420. The management agreement between La

Posada and BC Lynd reads: “The Management Company shall be exclusively

responsible for directing the day-to-day activities of the Hotel and establishing all

policies and procedures relating to the management and operation of the Hotel.”

The agreement further states, “Management Company shall select and purchase

all operating equipment for the Hotel,” and “Management Company shall select

and purchase all operating supplies for the Hotel.”

The language of the Management Agreement gives BC Lynd, not La

Posada, physical control over the property. And BC Lynd had the sole and

absolute right to hire and control employees of the hotel. Although the

Management Agreement does provide some responsibilities to La Posada, such

as providing operating funds for the hotel, these duties do not grant La Posada any

level of control over the property. Day-to-day physical control remained only with

BC Lynd. La Posada has no duty of care as a possessor of the property.

B. Liability Under the Management Agreement

Gregory also contends that the Management Agreement confers liability for

the negligence of BC Lynd to La Posada. Gregory highlights that the Management

Agreement provides that La Posada shall purchase and provide insurance unless

BC Lynd is instructed to do so. And the parties agreed to look to the appropriate

insurance for coverage of any liability expense. Gregory points to article 5 of the

Management Agreement, titled “Claims and Liability.” It states in part:

in the event that the insurance proceeds are insufficient or there is no insurance coverage to satisfy the demand, claim, action, loss, liability or expense and the same did not arise out of the gross 7

negligence or willful misconduct of [BC Lynd], [La Posada] agrees, at its expense, to indemnify and hold [BC Lynd], and its subsidiaries, affiliates, officers, directors, employees, agents or independent contractors harmless to the extent of the excess liability.

Gregory argues these provisions place liability directly on La Posada for the

negligence of BC Lynd. But this provision is a typical indemnification agreement.

“An indemnification agreement is created when the words used express an

intention by one party to reimburse or hold the other party harmless for any loss,

damage, or liability.” McNally & Nimergood v. Neumann-Kiewit Constructors, Inc.,

648 N.W.2d 564, 570 (Iowa 2002). An indemnification agreement allows one

party, the indemnitee, to recover from another, the indemnitor, based on a promise

to “indemnify . . . [the] indemnitee against liability of [the] indemnitee to a third

person, or against loss resulting from [the] liability.” Id. (quoting 42 C.J.S.

Indemnity § 2, at 72 (1991)).

Typically, the indemnitee pursues the indemnitor for indemnification. See

id. at 569; Maxim Techs., Inc. v. City of Dubuque, 690 N.W.2d 896, 899 (Iowa

2005); Iowa Wine & Beverage, Inc. v. Martens, No. 01-1587, 2002 WL 1973924,

at *1 (Iowa Ct. App. Aug. 28, 2002). BC Lynd could potentially recover from La

Posada for damages assessed against it. Yet Gregory asserts that the

indemnification clause in the Management Agreement, along with the insurance

provisions, directly confer liability on La Posada for BC Lynd’s actions. In

considering this, courts have been skeptical of efforts by individuals to foist liability

for their negligence onto another. Iowa Wine & Beverage, Inc., 2002 WL 1973924,

at *1 (“An agreement relieving an indemnitee from its own negligence, however, is

looked on with some disfavor.”); McNally & Nimergood, 648 N.W.2d at 571 (“The 8

traditional reluctance of courts to allow the burden of one who is negligent to be

transferred to another who is not at fault . . . can be traced to public policy

considerations.”). Further, courts in other jurisdictions have clarified the way

indemnification agreements operate:

An agreement to indemnify against liability for the breach of a duty is clearly not the equivalent of delegating that duty to another. . . . [The] indemnitor merely agrees to hold the indemnitee harmless from such loss or damage as may be specified in their contract. Significantly, an agreement to indemnify, by definition, does not (and could not, without becoming something more than an agreement to indemnify) purport to substitute an indemnitor for an indemnitee.

Constable v. Northglenn, LLC, 248 P.3d 714, 718 (Colo. 2011).

The cause of action for indemnity is not the same as the directly injured third party’s action; it is not brought in any representative capacity on behalf of such party nor does it seek to recover that party’s damages; it is instead the assertion by the passive tortfeasor of his own right of recovery of the breach of an alleged independent duty or obligation owed to him by the active wrong-doer as indemnitor.

Arthur Venneri Co. v. Cent. Heating & Plumbing Co., 242 N.Y.S.2d 812, 816 (N.Y.

Sup. Ct. 1963). And this is consistent with the rule that only intended beneficiaries

of a contract can enforce that contract. See Midwest Dredging Co. v. McAninch

Corp., 424 N.W.2d 216, 223–25 (Iowa 1988); Olney v. Hutt, 105 N.W.2d 515, 519

(Iowa 1960) (“It is a rule of law, familiar to the profession, that a privity of contract

must exist between the parties to an action upon a contract. One whom the law

regards as a stranger to the contract cannot maintain an action thereon.”).

Gregory’s argument that La Posada is directly liable to him for BC Lynd’s

negligence is not supported by the Management Agreement, which merely

provides for the indemnification of BC Lynd by La Posada, as it does not allow

Gregory to maintain a suit directly against La Posada. 9

IV. Conclusion

La Posada was not a possessor in control of the property in 2020 and

therefore could not be negligent for failing to maintain the facility. Gregory did not

preserve the argument that La Posada is liable for BC Lynd’s negligence because

of an agency relationship. The indemnification clause of the Management

Agreement did not give Gregory a direct right of action against La Posada for BC

Lynd’s negligence. Accordingly, we affirm the district court’s grant of summary

judgment for La Posada.

AFFIRMED.