MACDONALD v. TPG HOTELS AND RESORTS, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

LAURA MACDONALD :

: CIVIL ACTION

v. :

:

TPG HOTELS & RESORTS, INC., : NO. 24-4830

et al., :

OPINION

I. Introduction

Before this Court are cross motions for summary judgment filed by the

defendants in this case, TPG Hotels & Resorts, Inc. (“TPG” or “Manager”) and ANZ

SPE Langhorne, LLC (“ANZ” or “Owner”). Manager seeks affirmative summary

judgment from this Court on its crossclaim, which would require Owner to indemnify

Manager in relation to this suit. Owner asks this Court to rule in the opposite

manner. Because the clear language of the agreement between the parties requires

indemnification in this case, and because the indemnification provision is enforceable

as a matter of law, the Court grants summary judgment in favor of Manager TPG on

its crossclaim and denies Owner ANZ’s motion for summary judgment.

II. Factual Background

In October 2023, TPG and ANZ (together, the “Parties”) entered into a Hotel

Management Agreement. (See: Dkt. #32-5 at ¶ 1). This agreement (Dkt. #32-4,

hereinafter the “Agreement”) was consummated because ANZ owned the Sheraton

Bucks County Hotel (the “Hotel”), and wished TPG to “manage, market, and operate”

the hotel on ANZ’s behalf. (Agreement at Preamble). The Agreement specified that

Manager would have “control of the operations of the Hotel,” including the

“unfettered right to determine operating policy, standards of operation, quality of

service and all other matters affecting the management and operations of the Hotel.”

(Agreement at ¶ 3(b)). Included among Manager’s general obligations is control over

hotel personnel as follows:

Manager shall, as agent for and at the expense of Owner, hire, supervise,

direct the work of, promote, discharge and determine the compensation

(including fringe benefits) of, and terms of employment of all personnel

working in the Hotel, as deemed necessary and desirable to the Manager

for the successful operation of the Hotel. Manager shall be the sole judge

of the fitness and qualifications of such personnel and is vested with

discretion in the hiring, discharging, supervision, and direction of

Owner's personnel.

(Agreement at §4(g)) (emphasis added).

Importantly, the Agreement contains several provisions which address when

Owner is required the indemnify Manager. Most relevantly, the section entitled

“Indemnity by Owner” provides:

[T]o the extent that Manager shall not be fully covered by insurance

required to be maintained pursuant to this Agreement, Gross Revenues

are not sufficient to pay all liabilities, and/or in the event Owner shall

not be fully covered by insurance required under this Agreement, Owner

shall indemnify, defend, and hold harmless Manager and its directors,

officers, employees and agents from and against any damages, loss,

liability, cost, action, cause, claim or expense, including reasonable

attorneys' fees, arising out of, or incurred in connection with the

management and operation of the Hotel. For the avoidance of doubt, if

the liabilities occurring during the Term are attributable to the fraud,

theft, or willful misconduct (defined to mean the conscious or intentional

disregard of the rights or safety of others) of the Manager, including the

Executive Personnel, the cost thereof shall be borne solely by Manager

and not paid out of Gross Revenues or indemnified by Owner.

(Agreement at § 11(c)). Specifically, as to claims involving employees and independent

contractors, the Agreement says:

Owner shall be solely responsible for and shall indemnify and hold

harmless, and when necessary, reimburse the Manager for any and all

reasonable personnel expenses, reasonable costs, liabilities and claims

which are or would be related or incidental to any personnel in the

employ of the Owner at the Hotel or, are employed by the Manager at

the Hotel, including by way of example only, all salaries, wages, other

compensation, and fringe benefits which are required to be paid by the

Manager hereunder.

(Agreement at § 5(c)). Finally, as to litigation for which Manager may incur expense

but which might involve Owner as a party but not Manager, the Agreement provides:

In the event, during the term of this Agreement, Owner becomes

involved in Litigation in which Manager is not named as a Party in the

Litigation, but Manager is compelled to appear at trial, a deposition, or

to produce certain documents, Owner shall reimburse Manager for all

reasonable litigation expenses Manager incurs.

(Agreement at §5(g)).

On September 12, 2024, Laura MacDonald, a former Director of Sales and

Marketing at the Hotel, brought this litigation against TPG and ANZ. Ms. MacDonald

alleges various claims for employment discrimination based upon age and disability

against TPG and ANZ. (Dkt. #31-3 at ¶ 2). On October 23, 2024, Manager wrote to

Owner demanding Owner provide a defense, indemnification, and insurance

coverage to Manager with respect to this case. (Dkt. #31-7 at 5). On December 20,

2024, Manager filed a crossclaim in this case against Owner for defense and

indemnification, based upon the Agreement. (Dkt. #31-3 at ¶ 5).

III. Legal Standard

Summary judgment is proper if there is no genuine issue of material fact and

if, viewing the facts in the light most favorable to the non-moving party, the moving

party is entitled to judgment as a matter of law. Tse v. Ventana Med. Sys., Inc., 297

F.3d 210, 218 (3d Cir. 2002). This Court “must view the facts in the light most

favorable to the non-moving party” and make every reasonable inference in that

party's favor. Hugh v. Butler Cty. Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005).

After drawing those inferences, the relevant inquiry is “if the evidence is such that a

reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). “Genuine issues of material fact refer to any

reasonable disagreement over an outcome-determinative fact.” In re Energy Future

Holdings Corp., 990 F.3d 728, 737 (3d Cir. 2021). “The mere existence of a scintilla of

evidence in support of the [non-movant's] position will be insufficient; there must be

evidence on which the jury could reasonably find for the [non-movant].” Liberty

Lobby, 477 U.S. at 252. “The same standards and burdens apply on cross-motions for

summary judgment.” Allah v. Ricci, 12–4095, 2013 WL 3816043 (3d Cir. July 24,

2013).1

1 As a formal matter, this Court must consider each motion on its own, granting

TPG all reasonable inferences as to ANZ’s motion, and vice versa, But in the case at

bar, the Parties seem to agree as to the crucial facts, and summary judgment will

hinge on this Court's resolution of questions of law as to interpretation of the

Agreement. For that reason, the Court's analysis of both motions can effectively be

handled at once.

Under Pennsylvania Law, “[t]he fundamental rule in interpreting the meaning

of a contract is to ascertain and give effect to the intent of the contracting parties.”

Indian Harbor Ins. Co. v. F & M Equip., Ltd., 804 F.3d 310, 313 (3d Cir.2015). The

United States Court of Appeals for the Third Circuit has well summarized this Courts

role in contract interpretation:

First, we must determine (as a matter of law) whether contractual

language is ambiguous.... Hutchison v. Sunbeam Coal Corp., 513 Pa.

192, 519 A.2d 385, 390 (1986). If we determine that the language is

unambiguous, we follow its plain meaning. If, however, we conclude that

the language is ambiguous, we leave it to a factfinder to decide its

meaning. See Ins. Adjustment Bureau, Inc. v. Allstate Ins., Inc., 588 Pa.

470, 905 A.2d 462, 469 (2006).

Pac. Employers Ins. Co. v. Glob. Reinsurance Corp. of Am., 693 F.3d 417, 426 (3d Cir.

2012) (interpreting Pennsylvania and New York law; references to New York law

omitted). A contract is ambiguous if it is reasonably susceptible of different

constructions and capable of being understood in more than one sense. Ins.

Adjustment Bureau, 905 A.2d 462, 468–69. The mere fact that the parties do not agree

on the proper construction does not make a contract ambiguous. See Metzger v.

Clifford Realty Corp., 476 A.2d 1, 5 (Pa. Super. 1984).

Indemnity provisions are generally enforceable under Pennsylvania law if they

meet certain standards.

First, the clause must not contravene public policy. Second, the contract

must relate solely to the private affairs of the contracting parties and

not include a matter of public interest. Third, each party must be a free

bargaining agent. In addition, an exculpatory or indemnity clause will

still not be enforced unless it is clear that the beneficiary of the clause

is being relieved of liability only for his/her own acts of negligence. The

clause must be construed strictly and the contract must state the

intention of the parties with the greatest particularity. Furthermore,

any ambiguity must be construed against the party seeking immunity,

and that party also has the burden of proving each of the prerequisites

to enforcement.

Valhal Corp. v. Sullivan Assocs., Inc., 44 F.3d 195, 202 (3d Cir. 1995).

IV. Analysis

Because the parties have agreed there is no genuine dispute of material fact,

what is left for the Court is to apply the law in interpreting the Agreement. The

Agreement specifies that the laws of the Commonwealth of Pennsylvania govern, and

this election of Pennsylvania law is not challenged by either party.

a. Section 11(c) of the Agreement requires indemnification.

The first question this Court must answer is whether the Agreement requires

Owner to indemnify Manager. If it does, the Court will move on to examine whether

that provision is enforceable. As to that first question, the Court agrees with Manager

that the Agreement’s indemnification, defense, and hold harmless provisions apply

to Plaintiff’s claim. More specifically, §11(c) of the Agreement provides:

(c) Indemnity by Owner… Owner shall indemnify, defend, and hold

harmless Manager… from and against any damages, loss, liability, cost,

action, cause, claim or expense, including reasonable attorneys' fees,

arising out of, or incurred in connection with the management and

operation of the Hotel.

(Dkt. #30-3. Ex. A § 11(c)). The Parties and this Court all agree that this provision is

unambiguous. Rather than claiming ambiguity, Owner attempts to avoid the plain

meaning of this provision by calling into question whether it is applicable on the facts

alleged by Plaintiff in this case.

Owner’s argument in this respect is bit perplexing. Owner asserts that this

provision does not contemplate or provide indemnity to Manager in this case because

the accrual of attorney’s fees has resulted from the retention of counsel, not the day-

to-day operations of the Hotel. Therefore, Owner would be free from responsibility

because hiring an attorney is not “in connection with the management and operation

of the Hotel.” (Dkt. #31-2. at 14-15).

The truth of the matter is that employment discrimination lawsuits, both

meritorious and frivolous, are simply a fact of life in the business world. This

litigation, and therefore the appurtenant attorney fees, arose from an alleged

wrongful termination, discrimination, and a hostile work environment claim, which

itself clearly arose from the management of the Hotel. The plain meaning of

management is well understood as having a role in the hiring, discharging, and fair

treatment of employees. Nowhere is that self-evident conclusion better stated than in

the Agreement itself, which states:

Manager shall, as agent for and at the expense of Owner, hire, supervise,

direct the work of, promote, [and] discharge… all personnel working in

the Hotel, as deemed necessary and desirable to the Manager for the

successful operation of the Hotel. Manager shall be the sole judge of the

fitness and qualifications of such personnel and is vested with discretion

in the hiring, discharging, supervision, and direction of Owner's

personnel.

(Dkt. #30-3. Ex. A § 4(g)) (emphasis added). It is clear to the Court that §11(c) by its

plain meaning provides Manager defense, indemnity, and to be held harmless by

Owner in this case because this litigation arose in connection with the management

and operation of the Hotel. The Agreement vests total discretion in Manager with

respect to decisions regarding hiring and firing. To claim this action does not arise

out of its execution of its responsibility to manage and operate the Hotel strains

credulity.

Owner’s assertion that hiring an attorney in connection with this litigation is

not an action taken in connection with the operation of the Hotel is confounding and

circular. Were Owner’s reading to be accurate, the language which requires

indemnification for attorney’s fees would be entirely surplusage, a provision that

could never apply. Because how could someone ever accrue attorney’s fees except by

the retention of counsel?

Owner’s citation to Kolmar Korea Co. v. Process Techs. is easily

distinguishable. 3:19-cv-01561, 2020 WL 4783080 (M.D. Pa. Feb. 27, 2020). In

Kolmar, the question had nothing to do with an indemnity agreement or a contractor

relationship. Rather, the question was whether Lard-PT, a 50% owner of Process

Tech, LLC, could retain counsel for Process Tech and file responsive pleadings on its

behalf in a lawsuit brought by Kolmar, the other 50% owner of the LLC. Id. at *2.

Because Process Tech’s operating agreement did not define the day-to-day operations

of the LLC which were left to Lard-PT, the Court relied on long-settled principles of

Delaware LLC law which prohibit a deadlocked LLC from acting in litigation and

barred Lard-PT from obtaining counsel for Process Tech. Id. Here, in stark contrast,

the contract clearly contemplates personnel management as part of the operations of

the Hotel, and therefore obtaining counsel in this litigation is squarely within the

bounds of Section 11(c).

b. Section 5(c) of the Contract also supports indemnification.

The application of 11(c)’s general indemnification provision to this case is made

all the more plausible by Section 5(c), which states:

(c) Employees/Independent Contractors. Owner shall be solely

responsible for and shall indemnify and hold harmless, and when

necessary, reimburse the Manager for any and all reasonable personnel

expenses, reasonable costs, liabilities and claims which are or would be

related or incidental to any personnel in the employ of the Owner at the

Hotel or, are employed by the Manager at the Hotel, including by way

of example only, all salaries, wages, other compensation, and fringe

benefits which are required to be paid by the Manager hereunder.

(Agreement at § 5(c)). Manager argues that the plain meaning of this provision

provides Owner “shall indemnify and hold harmless TPG, the Manager, in liabilities

and claims in addition to indemnification for reasonable personnel expenses,

reasonable costs.” (Dkt. #32-2. at 6).

Owner contends that the litigation does not fall within the scope of “reasonable

personnel expenses, reasonable costs, liabilities, and claims.” Owner argues that “a

personnel expense, cost, liability or claim is easily interpreted here as a charge or cost

involved or required for the employment of personnel.” (Dkt. #31-2. at 10). Its reply

brief provides further clarification stating “[l]iability can arise in all the examples set

forth in this provision for example, late payment, incorrect payment, mismanagement

of benefits/401(k), and issues with qualifying events are all claims and liabilities that

could arise as related or incidental to any personnel.” (Dkt. #33. at 13) (cleaned up).

Owner attempts to narrow what this provision might mean by pointing to the

examples listed. In this way, Owner asks the Court to interpret the Agreement in its

favor by way of the expressio unius canon of construction.2

The Court finds this argument unavailing. Defining a personnel expense, cost,

liability or claim as a prospective employee filing an action against them for late

payment, while, in the same breath, arguing that an employee filing an employment

discrimination action against them simply does not add up. The plain meaning of §

5(c) provides that Owner shall indemnify and hold harmless TPG, the Manager, in

liabilities and claims in addition to indemnification for reasonable personnel

expenses and reasonable costs. While pending, this litigation is a “claim” related to

personnel, by any definition of that word. If found responsible for discrimination, the

verdict would obviously be a liability until it is paid. The plain language begins and

ends this inquiry.

Owner’s attempt to use the examples as a narrowing principle must also be

rejected. The examples through which Owner attempts to seek safe harbor are

explicitly given “by way of example only.” (Agreement at § 5(c) (emphasis added).

Without that phrase, Owner’s argument might be more appealing. But in light of how

the plain meaning of the words “liabilities and claims” applies to the present lawsuit,

this Court cannot be heavily influenced by a list of examples that the Parties

expressly chose to deemphasize.

2 Expressio unius est exclusio alterius is a Latin term used in law that means "to

express or include one thing implies the exclusion of the other, or of the alternative."

This means that if a law or contract explicitly mentions one thing, it is assumed that

other things are not included or allowed.

Owner also seems to argue that the word “reasonable” should be understood to

modify “liability” and “claim.” If that is its argument, that, too, must be rejected. The

word “reasonable” appearing twice in the sentence precludes the Court from reading

it to be a qualifier term also attached to liabilities and claims. If the intention was for

the word “reasonable” to modify the entire list, there would be no grammatical sense

to repeating it before “costs” as well. Owner’s strained reading of this provision cannot

prevail.

c. Section 5(g) of the Agreement does not weigh against

indemnification in these proceedings.

By its own terms, § 5(g) only actively applies when Owner is sued, Manager is

not, and Manager incurs resultant litigation expenses. Presumably, this provision is

designed to account for a situation where Manager is subpoenaed for documents or

must find representation for an employee who is going to be deposed. §5(g) provides:

5(g) Litigation Expenses. In the event, during the term of this

Agreement, Owner becomes involved in Litigation in which Manager is

not named as a Party in the Litigation, but Manager is compelled to

appear at trial, a deposition, or to produce certain documents, Owner

shall reimburse Manager for all reasonable litigation expenses Manager

incurs.

(Dkt. #30-3. Ex. A § 5(g)). Of course, this is not the case here, as both ANZ and TPG

are defendants, and therefore § 5(g) is not directly relevant to this litigation.

In its final attempt to avoid the plain reading of the aforementioned provisions,

Owner calls the Courts attention to this provision by way of again utilizing an

expressio unius argument. Owner asserts by the existence of this provision, the

Agreement implicitly did not intend to extend coverage of litigation expenses to

Manager in all other circumstances. On the other side of that interpretive coin is

Pennsylvania’s longstanding canon of contract interpretation that the specific

controls over the general, which would counsel in favor of cabining this provision to

its own circumstances and applying the more naturally-applicable language of § 11(c)

and particularly § 5(c) to the case at bar. Nitardy v. Chabot, 195 A.3d 941, 952 (Pa.

Super. 2018) (noting that the specific controls over the general in contract

interpretation). As will be explained infra, Owner’s argument also creates tension

with Pennsylvania’s rule that contracts should be interpreted to avoid surplusage.

See Riverside Sch. Dist. v. Career Tech. Ctr. of Lackawanna Cnty., 104 A.3d 73, 76

(Pa. Commw. Ct. 2014).

As the Honorable Judge McHugh recently observed, these canons of

interpretation are often afforded too much weight, despite their limited utility. KMS

Dev. Partners LP v. Fed. Ins. Co., 763 F. Supp. 3d 691, 696-97 (E.D. Pa. 2025).

Frequently, as here and in KMS, these canons of interpretation point in opposite

directions. See id. As Judge McHugh observed, that means “the solution is not to try

and choose between them.” Id. at 697.

Starting, therefore, from first principles, this Court finds that § 5(g) provides

little to no support for Owner’s reading of this provision. The problem with Owner’s

argument of implication, of course, is that the Agreement explicitly require Owner to

cover Manager’s legal fees and expenses in the relevant sections discussed supra. So,

in a matter of speaking, the contract already “expressed” both concepts. The contract

explicitly creates a broad right of indemnification in § 11(c), which cannot be upset by

the implication Owner seeks.

Concededly, this reading of the Agreement appears at first glance to create a

surplusage issue. After all, reading § 11(c) literally and broadly, would seem to apply

equally to Manager in both the present situation or another hypothetical situation

where the suit is just against Owner and Manager is involved merely by way of third-

party discovery. If § 11(c) renders § 5(g) surplusage in all situations, that at least

arguably cuts against the reading of § 11(c) articulated above and lends credence to

the expressio unius argument.

But the surplusage create by § 11(c) is situational, not total. Imagine a scenario

where Owner is being sued with respect to another project it takes on, and the Hotel’s

financials become implicated as part of a damages calculation. Or maybe Owner’s sole

proprietor is being sued personally and the plaintiff in that case seeks to pierce the

corporate veil to go after Owner’s assets. In that case, Manager’s legal expenses would

(at least arguably) not be incurred “in connection with the management and operation

of the Hotel.” See § 11(c). Perhaps sensing that ambiguity, the Parties drafted § 5(g),

which closes that loop and makes it clear that even when Manager is not a party to

the suit, Owner is still on the hook for its expenses.

It is Owner’s reading, on the other hand, which would actually create

impermissible surplusage. If the Court were to buy Owner’s expressio unius

argument, it would effectively void § 11(c) and § 5(c)’s express grant of attorney’s fees

in all but the rarest occasion where Manager is not sued but Owner is. To read § 5(g)

to more or less deprive § 11(c) and § 5(c) of their meaning would lead to an absurd

result the parties simply could not have intended when they drafted those provisions.

As this somewhat-tortured analysis shows, Manager offers the Court a

common sense reading of the Agreement, which gives life to all the implicated

provisions. Conversely, Owner offers the Court a webbed maze of Latin maxims and

provisions in conflict with each other. Based upon Pennsylvania law, this Court reads

the provisions of the Agreement the simple way Manager does.

d. The indemnification provisions are enforceable.

It is clear to the Court that by the unambiguous meaning of the Agreement,

Manager is owed defense, indemnity, and to be held harmless by Owner. The Court

will now address if the indemnification clauses of the Agreement are enforceable. As

to the first element (discussed supra), this Court finds no basis from which it could

conclude the indemnification clauses contravene public policy. These are garden

variety indemnification clauses which do not appear to implicate any public policy

concerns. Second, the clauses do indeed relate solely to the relationship between the

parties. The clauses do not attempt to bind third parties or somehow limit what a

third party could collect in a suit. It merely requires Owner to reimburse Manager if

Manager is forced to litigate and/or incurs a liability. Third, there is nothing before

this Court would suggest that Manager and Owner are not free bargaining agents.

Fourth, the provisions relieve liability for Manager only for its own negligence.

Further, the Court finds that the indemnification clauses referenced above

apply, even construing the provision narrowly and against Manager. Manager and

the Court’s common interpretation of the Agreement is unambiguously the only

reasonable interpretation of it, and Owner's strained arguments to the contrary do

not suggest the existence of ambiguity. For that reason, the indemnity provisions are

both implicated and enforceable.

V. Conclusion

For the reasons explained above, this Court will grant summary judgment in

favor of Manager and permit it to reap the very clear benefit of the bargain it reached

with Owner. Owner is ordered to indemnify Manager in the fullest manner required

by the Agreement.

DATED: August 20, 2025 BY THE COURT:

GAIL WEILHEIMER _—idd..

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