In the course of rooting around online, I encountered this 2007 analysis by Morris, Manning & Martin of a Georgia Court of Appeals case, Covington Square Associates, LLC v. Ingles Markets, Inc., 283 Ga.App. 307, 641 S.E.2d 266 (Ga. Ct. App. 2007) [pdf]. Better late than never, let’s look at this case.
It involves a dispute over a shopping-center lease between Covington (the landlord) and Ingles (the tenant). Under the lease, the landlord could bill the tenant for costs associated with maintaining the common area of the shopping center. At issue was whether under that provision the landlord could bill the tenant for part of the cost of hiring a security guard.
Here’s the relevant parts of the contract (I added the bold italics):
6.3 Maintenance. Landlord shall maintain, in keeping with the highest standards of shopping center practice, the Common Areas in clean condition and good repair, including but not limited to: (i) maintaining all signs, landscaped areas, and parking areas and access roads … ; (ii) adequately illuminating the parking areas … ; and (iii) providing adequate security lighting and fire protection for the Shopping Center as required by applicable code or ordinance.
6.4 Tenant’s Contribution. Tenant shall pay to the Landlord, as additional rent during the term hereof, Tenant’s proportionate share of Landlord’s costs of operating the Shopping Center and maintaining the Common Areas (the “Common Area Costs”) during the term hereof. … As used herein, “ Common Area Costs ” shall mean the costs and expenses incurred by Landlord in the operation and maintenance of the Shopping Center and the Common Areas, and shall include repairs to the parking areas or other Common Areas, lighting, removal of snow and ice, trash, rubbish and other refuse, general comprehensive liability insurance covering the Common Areas; fire, casualty and extended coverage on the Premises and the Shopping Center … ; and the cost of leasing or the depreciation on any equipment used to implement the foregoing maintenance, but shall not include: any Shopping Center administrative or management fees or the like; the cost of any item for which Landlord is reimbursed by insurance or otherwise; the cost of any additions to the Common Areas pursuant to an expansion of the Shopping Center’s leasable square footage; the cost of any alterations … and other items … properly classified as capital expenditures or which are made in order to prepare space for occupancy by a new tenant; the cost of any initial installations …; legal, accounting and other professional fees; interest or amortization payments … ; leasing commissions, advertising expenses and other costs incurred in leasing or attempting to lease any portion of the Shopping Center; the cost of any services performed specifically for certain tenants of the Shopping Center; the cost of correcting defects in the construction of the buildings … ; reserves for … repair … ; the cost of Landlord’s membership[s] … ; and any political or charitable contributions.
The lower court held that the tenant wasn’t required to pay part of the cost of hiring a security guard, and the landlord appealed.
In an opinion by Judge G. Alan Blackburn, the Georgia Court of Appeals affirmed the lower court’s ruling, reasoning as follows (citations omitted):
[The landlord] argues that the phrase “and shall include” is not limiting, and the omission of security guard costs from the list of particular items that shall be included is not dispositive. [The tenant] argues, and the trial court held, that the maxim “[e]xpressio unius est exclusio alterius [, t]he express mention of one thing implies the exclusion of another,” applies here. Such application would mean that security guard costs were not included in the costs to be calculated by the “Common Area Costs” formula, because they were not enumerated in the list of items that “shall include.” This interpretation is arguably tenuous in light of the fact that, in the same sentence, a separate list of excluded items is given. However, looking to similar language in Section 6.3, addressing maintenance, the lease uses the following terminology: “Landlord shall maintain … the Common Areas in clean condition and good repair, including but not limited to: (i) maintaining all signs, landscaped areas, [etc.]” The use of the phrase “but not limited to” in Section 6.3, and its absence in Section 6.4, implies a different operation of the word “include” as used in Section 6.4, in that it may be read in that context to be a limiting term, similar to “shall consist of.” … If the parties had intended the term “shall include” to mean otherwise, they could have qualified it as they did “including” in Section 6.3.
This reasoning is problematic, as it’s pure magic-wordery to suggest that drafters use including (or includes) in one part of a contract to convey a limited meaning and including (or includes) but not limited to in another part to convey a meaning that isn’t limited. That notion certainly has no bearing on everyday usage, as including is generally regarded as introducing that which is illustrative, rendering redundant but not limited to (and without limitation).
Consistent with that, the only explanation I’ve ever encountered for tacking on but not limited to or without limitation is that it serves to preclude judicial mischief by reinforcing that the list that follows isn’t limited. I’ve never heard a drafter suggest that they use including (or includes) on its own to limit the scope of a preceding class.
It’s utterly routine for contracts to contain both including (or includes) on its own as well as with but not limited to or without limitation tacked on. For example, of the contracts filed as “material contracts” on the SEC’s EDGAR system, the ten most recent that use the word including each use the word in those two ways. It’s a safe bet that anyone who drafted one of those contracts (1) hadn’t noticed that including was used in those two ways in that contract and (2) would have attributed negligible or no significance to those alternative usages.
The contract language at issue in this case shows just how divorced from reality is the distinction embraced by the Georgia Court of Appeals. In section 6.4 of the contract, the core definition of “Common Area Costs” is followed by a list introduced by “shall include,” which is in turn followed by another list introduced by “but shall not include.” If, as the court says, the list beginning “shall include” limits Common Area Costs to the items so listed, that would render pointless the list introduced by “but shall not include.” The latter list makes sense only if the “shall include” list is illustrative!
The court alludes to that awkward fact by saying that regarding “shall include” as limiting “is arguably tenuous in light of the fact that, in the same sentence, a separate list of excluded items is given.” But that’s all the court has to say on this issue—it allows itself to be distracted by the red herring that is inconsistent use of “but not limited to.”
A sensible approach to including doesn’t involve pitting my it’s-always-illustrative analysis against those who think like the court in Covington. Instead, your goal should be to avoid any possibility of a fight.
With including, you accomplish that by not using including to introduce a laundry list of obvious member of the class in question. In other words, don’t say fruit, including oranges, lemons, and grapefruit—because there’s no question that oranges, lemons, and grapefruit are all fruit, listing them simply invites a judge to contemplate whether fruit in fact means citrus fruit. Instead, use including to bring within the class in question something that’s lurking on the gray edges—fruit, including tomatoes.
For more on including, see chapter 12 of MSCD or this April 2007 blog post.
[Updated noon April 14, 2010: Mark Anderson's comment below reminded me that I forgot to mention the one obvious lesson of general application that you can draw from the Covington case: if in a contract you use different words to state the same meaning, don't be surprised if a judge uses that to make mischief.]