JAMES FULMORE v. WESTMOUNT-ARLINGTON PLAZA

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

JAMES FULMORE,

Plaintiff,

v.

WESTMOUNT-ARLINGTON PLAZA

JOINT VENTURE, WESTMOUNT

PLAZA ASSOCIATES, PET VALU,

INC., PET VALUE INTERNATIONAL,

INC., WESTMOUNT PLAZA, L.L.C.,

GARDEN COMMERCIAL PROPERTIES,

GARDEN COMMERCIAL PROPERTIES,

INC.,

Defendants,

and

WESTMOUNT-ARLINGTON PLAZA

JOINT VENTURE, WESTMOUNT

PLAZA, L.L.C., GARDEN COMMERCIAL

PROPERTIES and GARDEN COMMERCIAL

PROPERTIES, INC.,

Defendants/Third-Party

Plaintiffs-Appellants,

v.

PET VALU, INC., PET VALUE

INTERNATIONAL, INC.,

Defendants/Third-Party

Defendants-Respondents,

and

NATIONAL FIRE INSURANCE

COMPANY OF HARTFORD,

Third-Party Defendant.

__________________________________________________

November 21, 2014

Argued November 5, 2014 Decided

Before Judges Messano, Ostrer and Hayden.

On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-0463-11.

Sandra Calvert Nathans argued the cause for appellants Westmount-Arlington Plaza Joint Venture (Schenck, Price, Smith & King, L.L.P., attorneys; Michael J. Marotte, of counsel; James A. Kassis and Ms. Nathans, on the brief).

Joseph Carolan argued the cause for respondents Pet Valu, Inc. and Pet Valu International, Inc. (Law Offices of Joseph Carolan, attorneys; David J. McKenna and George H. Sly, Jr., on the brief).

PER CURIAM

In this appeal, we must construe various provisions of a commercial lease ("the Lease"), entered into on June 11, 1997, by defendant, third-party plaintiff, Westmount Plaza Associates, L.L.C. ("Westmount"), as landlord, and defendant, third-party defendant, PetValue International, Inc. ("PetValue") as tenant. The Lease was still in effect on February 12, 2009, when the wind blew shut an exterior door at the premises and plaintiff James Fulmore's hand was crushed. Plaintiff filed suit against PetValue and Westmount, claiming that both defendants were negligent for failing to install a hydraulic "closer" on the door that would have prevented it from slamming shut.1

Westmount and PetValue each answered and asserted cross claims seeking indemnification from the other. Discovery ensued. PetValue moved for summary judgment, arguing that plaintiff was its "special employee," and, therefore was barred from bringing suit under the Worker's Compensation Act ("the WCA"). See, e.g., Walrond v. Cnty. of Somerset, 382 N.J. Super. 227, 234-36 (App. Div. 2006) (setting forth the factors to consider in determining whether an employee is a "special employee" and therefore barred from filing a common law negligence suit against his employer). The motion judge, Robert J. Brennan, agreed and entered an order dismissing plaintiff's complaint against PetValue, as well as any "common-law cross[]claims." See Ramos v. Browning Ferris Industries, Inc., 103 N.J. 177, 188-89 (1986) (holding that the WCA bars third-party claims for common law indemnification). The order further provided that "[c]ontractual cross[]claims of Westmount . . . against PetValue [we]re not affected."

Westmount subsequently sought summary judgment against plaintiff, arguing that on the facts presented, Westmount was not negligent as a matter of law. Westmount also sought summary judgment on its cross claim against PetValue, arguing that it was entitled to indemnification under the Lease, and that PetValue was obligated to purchase liability insurance that included Westmount as an additional insured.

Plaintiff opposed the motion, as did PetValue, which also cross-moved for summary judgment. PetValue argued that Westmount was negligent because the Lease required the landlord to install the hardware on the door, and it had failed to do so. PetValue further argued that it was not required under the Lease to indemnify Westmount for Westmount's own negligence. Additionally, PetValue contended that it had purchased insurance adding Westmount as an additional insured through third-party defendant National Fire Insurance of Hartford ("Hartford"), although the policy only provided excess coverage to Westmount.2

In a thorough oral opinion, the judge concluded that factual issues remained as to Westmount's and PetValue's acts and omissions regarding the door closer. He therefore determined that Westmount was not entitled to summary judgment against plaintiff. Construing the Lease, the judge determined that both Westmount and PetValue "waive[d] all rights against each other for any injury to a person for which either one . . . [wa]s insured." He granted PetValue summary judgment dismissing Westmount's cross claim for indemnification, and, in a separate order, denied Westmount's motion for summary judgment.

Westmount settled the case with plaintiff and filed this appeal. It argues that the judge misconstrued relevant portions of the Lease, and under the facts of the case, it was not negligent as a matter of law. Westmount asks us to reverse the orders under review, find that PetValue was solely negligent and enter summary judgment in its favor on its cross claim for indemnification.

We have considered these arguments. In large part, we agree with Judge Brennan's analysis. However, because the record is unclear as to one critical issue, we remand the matter to the judge for further proceedings.

I.

When reviewing the grant of summary judgment, we are limited to the record that existed before the motion judge. Ji v. Palmer, 333 N.J. Super. 451, 463-64 (App. Div. 2000). In this case, it is undisputed that Westmount drafted the Lease.

Article III incorporated a list of "Landlord's Work," which clearly stated that Westmount was to install a "closer and panic hardware" on the door in question. It is undisputed that Westmount never installed this hardware on the door.

The Lease further provided, "Delivery of possession shall be deemed to have been made when the Premises shall have been completed by Landlord in compliance with the requirements of [Landlord's Work list] and possession of the completed Premises is delivered to the Tenant. . . ." Once it "open[ed] for business," PetValue had "no right to . . . assert any . . . contractual, legal or equitable remedy based either on a claim that [Westmount] failed to deliver possession in accordance with the terms of this lease or . . . construction of the Premises . . . w[as] not completed or furnished in accordance with the terms of this lease," unless PetValue specifically notified Westmount of the shortcoming. By opening for business, PetValue "certified . . . that the Premises ha[d] been delivered to it in accordance with the terms of th[e] Lease . . . ."

PetValue's construction manager completed a punch list prior to occupancy but failed to note the absence of a closer or panic bar on the rear door. Westmount claimed it was never notified of this omission by PetValue, and PetValue's records failed to show the lack of hardware was ever brought to Westmount's attention. Over the next thirteen years, the door required maintenance on several occasions; each time, PetValue paid for the labor and parts and never notified nor sought reimbursement from Westmount. In his report, plaintiff's expert concluded that both Westmount and PetValue were responsible for failing to provide the appropriate mechanism that would have kept the door from shutting on plaintiff's hand.

Westmount's claim for indemnification relied upon Section 5.5(A) of the Lease, which provided

Tenant agrees to indemnify and save Landlord . . . harmless from and against any and all claims and demands (except such that result from the act, omission or negligence of Landlord . . .) for, or in connection with, any accident, injury or damage whatsoever caused to any person . . . arising, directly or indirectly, out of the business conducted in or the use and/or occupancy of, the Premises or occurring in, on or about the Premises . . . or arising directly or indirectly, from any act or omission of Tenant . . . and from and against any and all reasonable cost, expenses and liabilities incurred in connection with any such claims and/or proceedings brought thereon. The comprehensive general liability coverage maintained by Tenant . . . shall specifically insure the contractual obligations of Tenant as set forth in this Section and/or as provided in this Lease.

[(Emphasis added).]

In Section 5.5(B), Westmount agreed to indemnify PetValue under certain circumstances

Landlord shall indemnify and hold harmless Tenant from . . . any and all claims for personal injury . . . occurring in the Common Area, unless caused by the act, omission or negligence of Tenant, its employees, contractors or agents. Landlord shall also indemnify and hold harmless Tenant from any claims or causes of action against Tenant by reason of any acts, omissions or negligence of Landlord . . . anywhere at the Shopping Center.

Pursuant to Section 6.1 of the Lease, PetValue was obligated to "provide and keep in full force for the benefit of [Westmount] as an additional insured . . . general public liability insurance . . . against any and all liability or claims of liability arising out of . . . any accident or otherwise in or about the leased premises, for injuries to any person."

Section 6.3 was entitled "Waiver of Subrogation," and it provided

The Tenant and Landlord each waive all rights of recovery against the Landlord and/or Tenant, as the case may be . . . for any loss, damages or injury of any nature whatsoever to property or persons for which the Tenant and/or Landlord is insured. The Tenant and Landlord shall obtain from the Tenant's and Landlord's respective insurance carriers and will deliver . . . waivers of the subrogation rights under the respective policies.

[(Emphasis added).]

Lastly, Section 8.7 of the Lease, entitled "Entire Agreement," said in relevant part, "All captions herein are solely for convenience and shall not be given any legal effect."

II.

In reviewing a grant of summary judgment we "'employ the same standard . . . that governs the trial court.'" W.J.A. v. D.A., 210 N.J. 229, 237 (2012) (quoting Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010)). We first determine whether the moving party demonstrated there were no genuine disputes as to material facts. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006).

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.

[Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).]

We then decide "whether the motion judge's application of the law was correct." Atl. Mut. Ins. Co., supra, 387 N.J. Super. at 231. In this regard, our review is plenary, owing no deference to the judge's legal conclusions. Manalapan Realty, L.P. v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995).

"The interpretation of contracts and their construction are matters of law for the court subject to de novo review." Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div. 2008) (citation omitted). We apply basic principles of contract interpretation to a lease. Town of Kearny v. Disc. City of Old Bridge, Inc., 205 N.J. 386, 411 (2011); N.J. Indus. Props., Inc. v. Y.C. & V.L., Inc., 100 N.J. 432, 456 (1985).

"Our function in interpreting a contract is to give meaning to the symbols of expression chosen by the parties." Disc. City, supra, 205 N.J. at 411. "Courts generally should not tinker with a finely drawn and precise contract entered into by experienced business people that regulates their financial affairs." Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 223 (2005). Therefore, "[i]n interpreting a lease agreement[,] the function of the court is to enforce the lease as written, not to write for the parties a different or better contract." Liqui-Box Corp. v. Estate of Elkman, 238 N.J. Super. 588, 600 (App. Div.) (citing Swisscraft Novelty Co. v. Alad Realty Corp., 113 N.J. Super. 416, 421 (App. Div. 1971)), certif. denied, 122 N.J. 142 (1990).

"To determine the meaning of the terms of an agreement by the objective manifestations of the parties' intent, the terms of the contract must be given their plain and ordinary meaning." Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (citation omitted); see also Renee Cleaners, Inc. v. Good Deal Super Mkts., Inc., 89 N.J. Super. 186, 190 (App. Div. 1965) ("In general, the polestar of construction is the intention of the parties as disclosed by the language used, taken in its entirety, and evidence of the attendant circumstances may be considered, not to change the agreement made but to secure light by which to measure its actual significance."), certif. denied, 46 N.J. 216 (1966).

Initially, we agree with Judge Brennan that material factual disputes existed that foreclosed summary judgment dismissing plaintiff's complaint against Westmount. We recognize that, as a general proposition, "'there is no landlord liability' for personal injuries suffered by a commercial tenant's employee on the leased premises 'due to a lack of proper maintenance or repair, when the lease unquestionably places responsibility for such maintenance or repair solely upon the tenant.'" Geringer v. Hartz Mountain Dev. Corp., 388 N.J. Super. 392, 401 (App. Div. 2006) (quoting McBride v. Port Auth. of N.Y. and N.J., 295 N.J. Super. 521, 522 (App. Div. 1996)). However, the lease in this case required Westmount to install the necessary hardware in the first instance, and it undisputedly did not do so.

To be sure, the years of occupancy by PetValue without complaint, and the numerous times that it repaired the door without objection or request for the hardware, may weigh heavily in any assessment of negligence. However, the allocation of risks as between Westmount and PetValue cannot serve to deny plaintiff his ability to bring suit against Westmount for its failure to install hardware that may have prevented his injury. In short, Judge Brennan correctly concluded that Westmount was not entitled to summary judgment dismissing plaintiff's complaint. Because on the record presented Westmount was not absolved of all negligence as a matter of law, it was not entitled to summary judgment against PetValue pursuant to the indemnification provisions of the Lease. See Azurak v. Corporate Prop. Investors, 175 N.J. 110, 112-13 (2003) (holding that "to bring a negligent indemnitee within an indemnification agreement, . . . the agreement must specifically reference the negligence or fault of the indemnitee"). In fact, under section 5.5(A) of the Lease, the tenant's duty to indemnify expressly excluded claims resulting from the landlord's negligence.

Having reached that conclusion, we move on to consider the grant of summary judgment to PetValue. At oral argument, Judge Brennan asked counsel for Westmount if his client had "liability insurance that [was] affording coverage for [plaintiff's] claims." Counsel responded without equivocation, "Yes, they do."

Judge Brennan then focused on Section 6.3 of the Lease, which provided "[t]he Tenant and Landlord each waive all rights of recovery against the Landlord and/or Tenant, as the case may be . . . for any loss, damages or injury of any nature whatsoever to property or persons for which the Tenant and/or Landlord is insured." The judge reasoned that, even though the title of the provision was "Waiver of Subrogation," "[a]ll captions . . . shall not be given any legal effect," pursuant to Section 8.7 of the Lease. The judge determined Section 6.3 was therefore not limited to subrogation claims.

Judge Brennan also rejected Westmount's argument that this interpretation rendered the indemnification provisions nugatory. He reasoned that the indemnification provisions would still apply if a claim was not covered at all by insurance.

Before us, Westmount reiterates the same arguments made in the Law Division. Initially, we have recognized that "[t]he purpose behind a mutual waiver of subrogation is to assure that, to the extent any loss is covered by a policy, the insurer should bear the risk of loss, regardless of any fault on the part of one or both of the parties." School Alliance Ins. Fund v. Fama Const. Co., 353 N.J. Super. 131, 140 (Law Div. 2001) (emphasis added), aff'd o.b., 353 N.J. Super. 1 (App. Div. 2002). In School Alliance, the Law Division strictly construed waivers contained in the "anti-subrogation" provision of a construction contract and found they were not inconsistent with the agreement's specific indemnification provisions. Id. at 140-41. So too here, the indemnification provisions of the Lease are not rendered nugatory by a broad, yet literal, reading of Section 6.3, because, as Judge Brennan noted, the indemnification provisions still applied to claims for damages that were not subject to insurance at all.

We reject Westmount's contention that Section 6.3 only applies to traditional subrogation claims. The express terms of the Lease, prepared by Westmount, included no such limitation. See Liqui-Box, supra, 238 N.J. Super. at 599 (rejecting the need to apply "special rules of construction," including favoring the "non-draftsman over the draftsman," when the provisions of the lease are non-ambiguous). More importantly, even though School Alliance involved a traditional subrogation claim, we endorsed the Law Division's salient observation regarding subrogation claims in general: "[W]here the insured had no pursuable rights against third parties neither did the insurer." School Alliance, supra, 353 N.J. Super. at 138.

In this case, pursuant to Section 6.3, Westmount "waive[d] all rights of recovery against . . . [PetValue] . . . for any loss, damages or injury of any nature whatsoever to . . . persons for which . . . [Westmount] [wa]s insured." The critical question, upon which Judge Brennan first trained his focus, was whether Westmount was indeed insured. The judge appropriately accepted Westmount's counsel's representation that his client was so insured.

However, the policy that insured Westmount was not part of the motion record, nor has it been supplied in the appellate record. We assume it is possible, albeit unlikely, that the landlord's general liability policy would provide insurance for claims of injury occasioned by its tenant's negligent acts and omissions within the demised premises. However, since the parties specifically contracted under Section 5.5(A) of the Lease for PetValue's general liability policy to insure PetValue's indemnification obligations, we doubt that Westmount's insurance policy actually provided coverage for claims arising from its tenant's negligence.

Since the question of whether either or both parties were negligent is unresolved, whether plaintiff's injury claim was a loss covered by Westmount's policy is similarly unresolved. Therefore, the waiver provision did not automatically apply so as to compel summary judgment in favor of PetValue on Westmount's cross claim.

Additionally, it is unclear if PetValue actually provided liability insurance that complied with its obligations under the Lease. Since the issue is not squarely before us, we do not address whether providing a policy naming Westmount as an additional insured, albeit only for excess coverage as opposed to primary coverage, complied with the terms of the Lease. However, it presents another reason why, on the record presented, we are unsure if Westmount was in fact "insured" for claims arising out of PetValue's negligence.

We therefore reverse the grant of summary judgment to PetValue and remand the matter to the Law Division for further proceedings to determine whether Westmount was "insured" under a policy that provided indemnification for the negligent acts or omissions of PetValue. If Westmount was, then summary judgment should appropriately be entered pursuant to Section 6.3 of the Lease. If Westmount was not so insured, then further proceedings must take place in order to apportion culpability for plaintiff's damages between tenant and landlord pursuant to Westmount's cross claim for contractual indemnification.

Affirmed in part; reversed in part; remanded. We do not retain jurisdiction.

1 Plaintiff's complaint named a number of entities related to Westmount and PetValue as defendants. To avoid confusion, we simply use the names of the actual parties to the lease throughout the balance of this opinion.

2 PetValue certified that Hartford had also filed a summary judgment motion, returnable the same day. We have not been provided with any of those motion papers or any order that resulted, and there is no mention of the motion in the transcript of the proceedings before Judge Brennan. At oral argument before us, neither counsel could provide us with information as to the disposition of Hartford's motion.