On certification to the Superior Court, Appellate Division, whose opinion is reported at 194 N.J. Super. 96 (1984).
For reversal and remandment -- Chief Justice Wilentz, and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Affirmed -- None. The opinion of the Court was delivered by Pollock, J. Justice Stein concurring in the result.
[103 NJ Page 180] On this appeal, we are asked to overturn the rule that an employer's liability for injuries sustained by an employee is restricted to the schedule of payments in the New Jersey Workers' Compensation Act, N.J.S.A. 34:15-1 to -127. The question is raised by a third-party tortfeasor that seeks contribution, common-law indemnification, or express indemnification
from the employer with respect to a judgment obtained by the employee against the tortfeasor.
While moving a drum of solid waste on the premises of his employer, Laminating Corporation of America (LCA), plaintiff Jose Ramos was injured when he tripped over a rut made by a solid waste hauler, Browning-Ferris Industries of South Jersey, Inc. (BFI). After recovering a workers' compensation award against LCA, Ramos sued BFI, which filed a third-party complaint against LCA.
On cross-motions by LCA and BFI, the Law Division granted summary judgment for LCA dismissing BFI's indemnification claim. Thereafter, the jury found BFI 75 percent and Ramos 25 percent negligent, and returned a verdict for $410,000 in favor of Ramos, which the court molded to $307,500.
The Appellate Division affirmed the judgment for Ramos, but reversed the summary judgment for LCA, and ordered LCA to indemnify BFI from liability for Ramos's injuries. 194 N.J. Super. 96 (1984).
We granted both LCA's petition for certification and BFI's cross-petition, 101 N.J. 211 (1985), which asserted that if BFI was not entitled to express indemnification, it was entitled to implied indemnification or contribution from LCA. We find that LCA did not agree to indemnify BFI for BFI's own negligence, and that BFI's claims against LCA for contribution and implied indemnification are barred by the Workers' Compensation Act, N.J.S.A. 34:15-8. Consequently, we reverse the judgment of the Appellate Division.
LCA and BFI executed a standard BFI "service agreement," pursuant to which BFI agreed to furnish LCA with certain equipment identified as a solid waste compactor, a large steel container for the deposit of solid waste.
The agreement between BFI and LCA provided, in relevant part:
Customer [LCA] acknowledges that it has care, custody and management of equipment owned by the Company [BFI] and accepts responsibility for the equipment and its contents except when it is being physically handled by employees of the Company. Therefore, Customer expressly agrees to defend, indemnify and hold harmless the Company from and against any and all claims for loss of or damage to property, or injury to or death of person or persons resulting from or arising in any manner out of Customer's use, operation or possession of the equipment furnished under this Agreement.
Customer acknowledges that Company shall not be liable for any damage to pavement or driving surface resulting from its trucks servicing an agreed upon area.
LCA's employees would place solid waste in the container and BFI's trucks would remove, empty, and return the container to LCA's premises. In the course of these activities, BFI gouged holes or ruts in the ground around the containers.
On January 11, 1979, Ramos was wheeling a cart with a 400-pound drum through LCA's yard to a compactor. The cart caught in a snow-covered hole, and the drum rolled onto his leg, thereby causing serious personal injuries.
Ramos sued BFI, which filed a third-party complaint against LCA. The Law Division found that the indemnity clause did not obligate LCA to indemnify BFI from BFI's own negligence and that BFI was not entitled to implied indemnification or contribution. The Appellate Division disagreed with the Law Division's interpretation of the indemnification clause, finding that LCA agreed to indemnify BFI in all instances except "when the [container] is being physically handled by the employees of [BFI]." Additionally, the court stated that the Workers' Compensation Act did not bar enforcement of such an express indemnification agreement against the employer. 194 N.J. Super. at 101-02. The court ruled further that BFI owed plaintiff a duty with respect to placing the containers on LCA's premises and that
[t]he jury could have found that BFI acted unreasonably in not insisting on a safer location for the container or in failing to reduce the risk of dangerous ruts by spreading and compacting or advising LCA to spread and compact 'quarry blend bluestone' over the soil near the container. Plaintiff's expert testified that bluestone is used for that purpose. [ Id. at 104.]
Finally, the Appellate Division rejected BFI's contention that the Law Division had erred in not submitting to the jury the issue of LCA's comparative negligence even though LCA is immune from liability to the plaintiff because of the bar of the Workers' Compensation Act. The court found that because the ...