If a person slips in the icy parking lot of a strip mall, may the landlord be indemnified by one of the tenants’ insurance policies? In a recent decision, the Appellate Division of the Superior Court of New Jersey attempted to clarify that question. Cambria v. Two JFK Blvd, LLC, Superior Court of New Jersey, Appellate Division. A-0802-10T2 (2012).

The plaintiff, John Cambria (“Cambria”), slipped and was injured in an icy parking lot of a strip mall that was owned by the landlord and defendant Two JFK Blvd., LLC (“the landlord”). The landlord and a real estate manager, David Rubin (“Rubin”), sought a declaration that they were covered by the liability insurance policy that one of the mall’s tenants (“the tenant”) had obtained. The policy had been issued by Harleysville Insurance Company of New Jersey (“Harleysville”). A lower court determined that the tenant had failed to obtain the required coverage for the landlord by failing to name it as an additional insured. However, the lower court also held that the landlord did not have to consider whether the tenant was liable for breaching the lease because that court viewed Rubin as the tenant’s “real estate manager.” The (defendants) appealed.

The Appellate Court determined that Rubin was a real estate manager and was the landlord’s real estate manager, but said that the landlord and Rubin needed to provide evidence that Rubin was also the real estate manager for the tenant in order for them to succeed on their claim that Harleysville owed them indemnification. The Appellate Court held that the landlord and Rubin failed to meet that requirement.

In order to determine whether Rubin was acting as the real estate manager of the landlord or the tenant, the Court looked at whether the incident causing the injury occurred in the leased premises or some other area of property for which the tenant was responsible. The lease stated that the “leased premises” did not include any part of the parking lot where the plaintiff fell. Additionally, the landlord and Rubin argued that New Jersey courts have previously interpreted “real estate manager” expansively. However, the Court distinguished this case from previous interpretations, holding that here the landlord retained the sole responsibility for maintaining and caring for the parking lot. Consequently, Rubin again acted solely as the landlord’s – and not the tenants’ –  real estate manager.

Finally, the Court determined that contending Rubin was the tenant’s real estate manager would not be persuasive unless the lease saddled the tenant with a duty of care for the parking lot. The landlord and Rubin relied on a lease provision that imposed on the tenant “additional rent” for its “proportionate share” of the “operating costs,” which included, among others, that of “removing snow and debris.” However, the Court rejected this argument, stating that common law principles impose on the landlord a duty to maintain the parking lot and other common areas in a reasonably safe condition for the use of both tenants and guests. See Gonzalez v. Safe & Sound Sec. Corp., 185 N.J. 100, 121 (2005). The Court clarified that though this provision may have advised the tenant of the manner in which part of the rent would be applied, it did not shift the burden of caring for the common areas from landlord to tenant. “That a portion of the rent was devoted by the landlord to hire someone to care for the common areas, which were the landlord’s responsibility, does not alter the parties’ rights and obligations regarding the common areas or render that hired person the real estate manager for the tenant.” Id. “The obligation to care for the common areas remained with the owner absent a clear and unambiguous declaration to the contrary that cannot be found in the parties’ lease.” Id. 

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