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McCabe v. Great Pacific Century Corp.

Decided: February 1, 1988.

ROBERT MCCABE AND JOANNE MCCABE, HIS WIFE, PLAINTIFFS,
v.
GREAT PACIFIC CENTURY CORPORATION, ABLE CORPORATION AND PATENT SCAFFOLDING COMPANY, DEFENDANTS, AND HUBER, HUNT & NICHOLS CONSTRUCTION CO., DEFENDANT-THIRD-PARTY PLAINTIFF-APPELLANT, V. POWER ELECTRIC COMPANY, THIRD-PARTY DEFENDANT-RESPONDENT, AND MORLOT CARPENTERS, INC., ET AL., THIRD-PARTY DEFENDANTS



On appeal from Superior Court of New Jersey, Law Division, Bergen County.

Pressler, Bilder, and Skillman. The opinion of the court was delivered by Skillman, J.A.D.

Skillman

[222 NJSuper Page 398] Plaintiff, Robert McCabe, was employed by third-party defendant, Power Electric Company (Power), which was a subcontractor of defendant, Huber, Hunt & Nichols Construction Company (Huber), the general contractor on a major construction project. Plaintiff was injured on the job site when he was struck by a moving exterior elevator. He brought this action

against Huber and also the owner of the property, the manufacturer of the exterior elevator and the party who installed it. Huber's alleged negligence consisted of failing to provide a safe workplace for plaintiff. Huber filed a third-party complaint which, as amended, named all its subcontractors on the project as third-party defendants. The third-party complaint was based on an indemnification clause in Huber's contract with Power and the other subcontractors which provided:

Subcontractor further specifically obligates himself to Contractor in the following respects: . . . (b) to indemnify Contractor and save it harmless from any and all claims, suits or liability resulting from any act or omission of Subcontractor, or Contractor, or their officers, agents, employees or servants in any manner related to the subject matter of this Subcontract, including without implied limitation, claims, suits, or liability for injury to or death of persons, including the employees of either Contractor or Subcontractor, and for damage to property;

Power moved for summary judgment, contending that the contractual indemnification clause relied upon by Huber was invalid. In a letter opinion dated January 27, 1987, the trial court concluded that Huber's indemnification claim was governed by Indiana law and that under the law of that state the indemnification clause in the contract between Huber and Power was invalid.*fn1 Accordingly it entered summary judgment dismissing Huber's indemnification claim against Power.*fn2 We granted Huber's motion for leave to appeal from this order. We now reverse.

Unless the parties to a contract express a different intent, the law of the state which has the most significant contacts with a contract and the parties to that contract will be applied in determining its validity or interpretation. State Farm Mutual Automobile Ins. Co. v. Simmons Estate, 84 N.J. 28, 34-36 (1980); Winer Motors, Inc. v. Jaguar Rover Triumph, Inc., 208 N.J. Super. 666, 672-673 (App.Div.1986);

see also Restatement, Conflicts 2d, § 188 at 575 (1971). The contract between Huber and Power involved the construction of a high rise building in New Jersey. Thus, the contract, involving the rendition of substantial services, was to be fully performed in New Jersey. Moreover, a complex set of New Jersey regulations applicable to building construction had to be followed in performing the contract. Under these circumstances, New Jersey's contacts with the contract were clearly more significant than those of Indiana. See Restatement, Conflicts 2d, § 196 at 623 (1971).

Nevertheless, it was within the power of the parties to provide that the validity and interpretation of the contract would be governed by the laws of a state other than New Jersey. Kalman Floor Co., Inc. v. Joseph L. Muscarelle, Inc., 196 N.J. Super. 16, 21-22 (App.Div.1984), aff'd o.b. 98 N.J. 266 (1985); Crinnion v. The Great Atlantic & Pacific Tea Co., 156 N.J. Super. 479, 483 (App.Div.1978); Knollmeyer v. Rudco Industries, Inc., 154 N.J. Super. 309, 312-313 (App.Div.1977), certif. den. 77 N.J. 477 (1978); see also Restatement, Conflicts, 2d, § 187 at 561 (1971). The trial court concluded that an introductory recital of the contract constituted such an agreement. This recital reads as follows:

This Agreement, made this sixteenth day of July 1981, under Indiana law, by and between HUBER, HUNT & NICHOLS, INC., an Indiana Corporation (hereinafter called CONTRACTOR), and Power Electric Co., Inc. of 10-22 North Seventh Street, Belleville, N.J. 07109 (hereinafter called SUBCONTRACTOR). (201) 484-7300 Joseph Diaco, President.

This is the only reference to Indiana law in the contract.

We conclude that the introductory recital that it was "made . . . under Indiana law" cannot reasonably be construed as an agreement that the contract's validity and interpretation will be governed by Indiana law. Rather, this recital can be more reasonably construed as simply a statement that the basic contract elements which are needed to create an enforceable contract were taken ...


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