DORIS KRAUSE v. PORT AUTHORITY OF NEW YORK AND NEW JERSEY and CONTINENTAL AIRLINES

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2626-04T12626-04T1

DORIS KRAUSE,

Plaintiff,

v.

PORT AUTHORITY OF NEW YORK

AND NEW JERSEY and CONTINENTAL

AIRLINES,

Defendants/Third-Party

Plaintiffs-Respondents,

v.

THE ART OF RESTORATION NUTERIORS,

LTD.,

Defendant/Third-Party

Plaintiff-Appellant,

and

MERCHANTS MUTUAL INSURANCE

COMPANY,

Third-Party Defendant-Appellant.

________________________________________________________________

 

Argued November 30, 2005 - Decided April 19, 2006

Before Judges Parker and Lihotz.

On appeal from the Superior Court of New

Jersey, Law Division, Essex County, Docket No.

L-11434-00.

Richard S. Nichols argued the cause for

appellants (Gennet, Kallmann, Antin & Robinson,

attorneys; Mr. Nichols, on the brief).

Douglas H. Amster argued the cause for

respondents (St. John & Wayne, attorneys;

Mr. Amster and Mary Hahn, on the brief).

PER CURIAM

Defendants The Art of Restoration Nuteriors, Ltd. (Nuteriors) and Merchants Mutual Insurance Company (Merchants) appeal from a judgment entered on January 3, 2005 after a bench trial. The trial judge found in favor of defendants Continental Airlines, Inc. (Continental) and The Port Authority of New York and New Jersey (Port Authority) on their claims for contractual indemnification and reimbursement of attorneys' fees, costs and settlement payments against Nuteriors and Merchants. The judgment assessed damages against Nuteriors and Merchants in the amount of $72,807.90 plus costs and post-judgment interest. We affirm in part and reverse and remand in part.

The facts pertinent to this appeal are as follows: On June 17, 1999, plaintiff was waiting for a flight at Gate 99 in Terminal C in Newark Airport. One seat was missing from a row of seats bolted to the floor (a "gang of seats") in the waiting area, but a metal bar connected the remaining seats across the open space. Plaintiff did not see the metal bar, tripped over it and was injured.

Continental leases Terminal C from the Port Authority. Nuteriors is an upholstery repair company that was under contract with Continental to repair all of the seating in Terminal C on an "as needed basis." Merchants is Nuteriors' insurance carrier.

On the day of trial, the judge was prepared to call a jury. During pretrial motions and discussions, however, Nuteriors raised a concern about the involvement of Merchants as the third-party defendant because Nuteriors did not want any mention of liability insurance during plaintiff's case. After some discussion, the judge suggested severing the claims, trying the indemnification claim first and then, with a new jury, the personal injury claim. Plaintiff's counsel objected on the ground that his client was from Germany and did not want to have the trial protracted. The judge then indicated that they could reverse the order and try the personal injury claim first. After further discussion, the judge asked counsel to brief the severance issue and appear the next day for a determination. The court then heard Nuteriors' motion in limine to preclude the testimony of Continental's contract administrator, Doug Colmery, and rule on the objections regarding his de bene esse deposition. She deferred ruling on the motion, however, indicating that she wanted to think about it overnight and that they would discuss it the next morning.

The next day, Nuteriors withdrew its objection to Colmery's testimony, which was based on parole evidence, but did not waive its right to reassert the objection later in the case. Nevertheless, the judge stated that she had read Colmery's testimony and denied the motion. With respect to the parole evidence rule, the judge found that Colmery's testimony was relevant to the interpretation of the contract.

On the severance issue, the judge decided to resolve the third-party contract claim by Continental against Nuteriors before proceeding with the jury trial on the personal injury case. Nuteriors continued to object to severance. Plaintiff then advised that she had settled with Continental and noted that if the court found in favor of Continental on the indemnification issue, the only question for the jury would be whether Nuteriors was negligent in the performance of its duties under the contract. Ultimately, the judge decided that the contract issue was a matter of law for the court to decide and indicated that Nuteriors would have a jury trial on the negligence issues. She then proceeded with a bench trial on the contract issue.

After hearing the videotaped de bene esse deposition of Colmery, part of the deposition testimony of Continental's facilities supervisor, George Keeler, and the testimony of Barry Marvin, President of Nuteriors, Continental moved for a directed verdict. The judge considered all of the testimony, heard the arguments of counsel and determined that under the contract, Nuteriors was responsible for replacing the missing seat. Based upon Continental's settlement with plaintiff, the court found no need for a jury trial on the negligence issue and entered judgment in favor of Continental and against Nuteriors for the amount of the settlement Continental had entered into with plaintiff.

In this appeal, Nuteriors and Mutual argue that (1) the trial court improperly deprived Nuteriors of its right to a jury trial; (2) the trial judge incorrectly interpreted the contract; (3) the trial judge relied on inadmissible lay opinion to construe the contract; and (4) the court improperly entered judgment against Merchants without looking at the insurance policy.

The trial judge was correct in that contract interpretation is an issue for the court. Ackerman v. Citron, 55 N.J. Super. 122, 129 (App. Div. 1959). After construing the contract in favor of Continental, however, the negligence issue should have been submitted to a jury. Azurak v. Corporate Prop. Investors, 347 N.J. Super. 516 (App. Div. 2002), aff'd, 175 N.J. 110 (2003); Manetti v. Prudential Prop. & Cas. Ins. Co., 196 N.J. Super. 317, 320 (App. Div. 1984). Moreover, the court entered judgment on the carrier's liability without even considering the policy.

Nuteriors next argues that the court misinterpreted the contract because it was silent as to Nuteriors' duty to look for and replace missing seats. Nuteriors maintains that its duty was limited to inspection and repair of upholstery problems, such as rips and burns.

Attachment A to the contract outlines Nuteriors' scope of work as follows:

CONTRACTOR shall furnish all labor, supervision, parts, materials, equipment, tools, transportation, insurance, overhead and any other items of expense necessary to provide gate lounge seating repair and maintenance service for Continental's Terminal "C".

1.1 All seating upholstery will be repaired on an as needed basis when tears, rips, burns, etc. develop.

1.2 All seating will be cleaned and reconditioned as needed to maintain the appearance and extend the life.

1.3 All seating which is beyond repair will be replaced from the stock which is maintained.

1.4 All replacement stock (up to thirty seats per year) will be reupholstered with like material and the inventory maintained.

Our review of the contract indicates that paragraph 1.3 specifically requires Nuteriors to replace "[a]ll seating which is beyond repair." Obviously, a missing seat is beyond repair and subject to replacement under the contract.

Nuteriors next argues that the trial court improperly relied on inadmissible lay opinion to construe the contract. We disagree. After deciding the contract issue, the court proceeded to hear the de bene esse deposition testimony of Colmery, who testified as to his understanding of Nuteriors' duties under the contract. He stated that he understood paragraph 1.3 of Attachment A to require Nuteriors to "repair or replace as needed, and in the event of something being altogether missing, that would be obvious replacement." The court relied on Colmery's testimony, along with that of Keeler, when it concluded "that Continental hired Nuteriors to perform all seating repair and maintenance services which the Court finds includes the replacement of seating that was beyond repair."

Although Colmery did not testify as an expert, he had first-hand knowledge of the contract and had interacted directly with Nuteriors with respect to its obligations under the contract. Consequently, he testified as a lay witness from his personal knowledge. N.J.R.E. 602 provides that a witness may testify if "evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter." Moreover, lay witnesses may testify as to their opinions pursuant to N.J.R.E. 701 if the opinion "(a) is rationally based on the perception of the witness and (b) will assist in understanding the witnesses' testimony or in determining a fact in issue." Colmery's opinion that Nuteriors' duties included replacement of missing seats was consistent with the contract language and his understanding of Nuteriors' duties.

Finally, Merchants argues that the trial court improperly entered judgment against it without looking at the insurance policy. We agree. Without considering the policy, the court could not have made an informed determination as to the extent of coverage or Merchants' obligations under the policy.

Although we are satisfied that the trial court properly determined that Nuteriors was obligated to replace missing seats under the contract, the court erred in failing to grant Nuteriors a jury trial on the negligence issue. The error was compounded by the court's failure to consider the insurance policy before entering judgment on Merchants' liability. We, therefore, vacate the judgment entered on January 3, 2005 and remand the matter for trial consistent with this opinion.

Affirmed in part; reversed and remanded in part.

 

 

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A-2626-04T1

April 19, 2006