Gym-N-I Playgrounds, Inc v. Snider

220 S.W.3d 905 (2007)

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Nature of the Case

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Facts

D founded P and subsequently constructed a 20,075-square-foot building for the business. By the late 1980s, Gym-N-I employed about twenty people, including Bonnie Caddell and Patrick Finn, to whom D later sold the business. Caddell was P's bookkeeper; Finn performed miscellaneous jobs including assembling and installing playgrounds, maintaining machinery, purchasing supplies, and managing human resources. The City fire code requires owners to install sprinkler systems for any building exceeding 20,000 square feet if the building contains certain combustible materials. P's building exceeded that threshold, and the fire marshal recommended but did not require, that the building have a sprinkler system. Finn and Caddell purchased the business, and D leased them the building. Each party was represented by counsel during the lease negotiations. Finn and Caddell decided not to inspect the premises before leasing because, as Caddell testified, they 'knew more about the building' than anyone else. Under the lease, P (1) accepted the building 'as is,' expressly waiving all warranties; (2) obtained insurance on the building to cover fire-related loss; and (3) performed maintenance and repairs. The lease also contained a holdover provision. The original term expired in September of 1996. The parties did not execute a new instrument, but P continued to pay and D continued to accept monthly rent checks. On August 10, 2000, a fire destroyed the building. D's insurer, American Economy Insurance Company, paid him approximately $400,000 for the loss of the building. P received nearly $1,000,000 under its insurance policy covering the building's contents and business interruption. American Economy brought a subrogation suit against P, which filed cross-claims against American Economy and third-party claims against D. All parties other than P and D were dismissed. D moves for summary judgment against P as its claims were barred by the 'as is' clause and warranty disclaimer, in the lease. The court granted summary judgment to D and the appeals court affirmed. P appealed.