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Kane v. Hartz Mountain Industries

New Jersey Supreme Court


January 22, 1996

JOHN KANE, PLAINTIFF-RESPONDENT,
v.
HARTZ MOUNTAIN INDUSTRIES, INC., HARTZ MOUNTAIN DEVELOPMENT CORP., HARTZ-CLAIBORNE LIMITED PARTNERSHIP, JOSEPH ROMEO, NACAMULI ASSOCIATES, KENNETH CARL BONTE, KEITH A. MICHELS AND JOHN DOES 1-9, DEFENDANTS-APPELLANTS, AND LIZ CLAIBORNE INC., DEFENDANT, AND HOWELL STEEL, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLANT, V. EASTERN STEEL ERECTORS, INC., THIRD-PARTY DEFENDANT-APPELLANT.

On certification to the Superior Court, Appellate Division, whose opinion is reported at 278 N.J. Super. 129 (1994).

Chief Justice Wilentz and Justices Handler, Pollock, O'hern, Garibaldi, Stein and Coleman join in this opinion.

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

JOHN KANE V. HARTZ MOUNTAIN INDUSTRIES, INC., ET AL. (A-47/48/49/50)

(NOTE: The Court wrote no full opinion in this case. Rather, the Court affirms substantially for the reasons expressed by Judge Shebell's written opinion below.)

Argued November 27, 1995 - Decided January 22, 1996

PER CURIAM

On December 20, 1995, John Kane was severely and permanently injured when he fell from a beam while working as an iron worker. The beam was part of a structural steel frame being erected by his employer, Eastern Steel Erectors (Eastern), for a warehouse being constructed by Hartz-Claiborne Limited Partnerships (Hartz-Claiborne) in North Bergen.

On March 9, 1987, Kane filed a personal-injury complaint against Hartz Mountain Industries, Inc. (Hartz Mountain), the general contractor; Hartz Mountain's construction superintendent; and other defendants, alleging that defendants failed to keep the premises reasonably safe and failed to comply with applicable federal and state safety codes. Kane filed an amended complaint naming other defendants, including Howell Steel, Inc. (Howell) and Nacamuli Associates (Nacamuli).

The facility was being built by Hartz-Claiborne, a limited partnership comprised of Liz Claiborne, an apparel manufacturer, Hartz Mountain, a major developer, and Harz Development, the owner of the land. Hartz-Claiborne had no employees of its own and Hartz Mountain acted as the general contractor in its role as a partner. Hartz-Claiborne entered into an agreement with Howell Steel Corporation, a South Carolina corporation, whereby Howell agreed to furnish all labor, materials and equipment necessary to complete the structural steel work on the project. The contract specified that Howell was responsible for full compliance with safety standards. Howell subcontracted with Eastern, Kane's employer, for the erection of the structural steel. In the contract between Eastern and Howell, there was a provision whereby Eastern agreed to be solely responsible for complying with OSHA and all other applicable safety regulations. Eastern agreed to indemnify and hold Howell and the "owner" of the project harmless from any losses or claims arising out of Eastern's work on the project.

Howell joined Eastern as a third-party defendant in Kane's lawsuit, alleging that Eastern's negligence had caused Kane's injury and that Eastern should indemnify Howell for any monetary damages arising out of Eastern's performance of its subcontract with Howell. In February 1989, Eastern answered, maintaining that its indemnification agreement with Howell was against public policy. On September 26, 1990, summary judgment was granted to Eastern on the grounds that the indemnification agreement was void. In June 1991, Howell's motion to vacate the summary judgment in favor of Eastern was granted by the trial court based on the Appellate Division holding in Secallus v. Muscarelle that indemnification was invalid under N.J.S.A. 2A:40A-1 only where a party to be indemnified was the only negligent party.

The matter was tried. The court did not permit Kane's experts to state the law, or opine as to whom OSHA regulations were applicable but did permit the presentation of evidence of Kane's comparative negligence and the participation of Eastern trial. At the Conclusion of trial the court instructed the jury, the that, as a matter of law, construction of the project was subject to OSHA legal standards. The Judge summarized the competing provisions in the OSHA regulations and told the jurors that it was their function to determine which regulation was applicable. The Judge also instructed that Hartz-Claiborne and Howell had joint responsibility for any OSHA violation, since OSHA makes a prime contractor and all tiers of subcontractors responsible for complying with its standards. The court told the jurors that OSHA's regulations did not pertain to Nacamuli, the structural engineer hired to perform construction inspections, and that they were to evaluate Nacamuli's responsibilities in accordance with the standards pertaining to professional engineers, of which conflicting testimony was presented.

At the Conclusion of trial, the court granted summary judgment for Eastern on the ground that the indemnification agreement was void. The court returned a verdict of no cause of action as to the other defendants. Kane appealed. The Appellate Division reversed the decision of the trial court, finding that the trial Judge had erroneously charged the jury that it could only find negligence on the part of defendants if it found an OSHA violation. The court reasoned that the Judge's charge was a hybrid between a general negligence charge and required a finding of a regulatory violation, which may have prohibited the jury from considering evidence regarding industry-recognized safety standards unless they were embodied in the OSHA regulations. The Appellate Division held that compliance with an OSHA regulation does not in and of itself preclude a finding of negligence. Because Hartz Mountain and Howell both had a non-delegable duty to maintain a safe workplace, the trial Judge erred in conditioning liability on a finding of an OSHA violation, rather than basing liability on general negligence standards. Moreover, an OSHA violation does not constitute negligence per se.

The Appellate Division also found error in the trial Judge's failure to provide adequate guidance to the jury regarding the proper interpretation of OSHA regulations, and to instruct the jury as to which of the regulations should apply depending on the possible alternative factual findings of the jury. According to the appellate panel, the trial Judge left what is clearly a judicial function to the unbridled discretion of the jury. The Appellate Division also found that it was neither necessary nor appropriate to permit Eastern to participate in the presentation of Kane's case. Eastern would not have been prejudiced by a separate trial on the indemnification issue. According to the panel, any liability as to Howell is not so independent of the failure of Eastern to abide by safety standards as to result in Howell being held liable and not Eastern. Moreover, Eastern, merely by reason of its status as indemnitor of Howell, should not have been given the opportunity to participate at trial. A bare agreement to indemnify does not carry with it an obligation to defend and does not provide a right to control the litigation.

The Appellate Division also held that the trial Judge's exclusion of evidence as to the subsequent use of safety nets did not constitute an abuse of discretion. Even where subsequent remedial conduct evidence has relevance to some fact in issue other than negligence, it may be excluded if the prejudicial effect outweighs the probative value.

Lastly, the Appellate Division noted that an employee's contributory negligence is generally available as a defense when the employee sues a third person in an ordinary negligence action. The court found no compelling reason to extend the limits of the Suter rule absent a legislative mandate.

The Supreme Court granted certification.

HELD: Judgment of the Appellate Division is AFFIRMED for the reasons expressed in Judge Shebell's written opinion below. Conditioning defendants' liability on a finding of Occupational Safety and Health Administration (OSHA) violations, rather than basing liability on general negligence standards, is reversible error. In addition, failing to provide adequate guidance to the jury regarding the proper interpretation of OSHA regulations and failing to instruct the jury as to which regulations applied depending on possible alternative factual findings was reversible error.

CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN and COLEMAN join in this opinion.

PER CURIAM

The judgment is affirmed, substantially for the reasons expressed in the opinion of Judge Shebell of the Appellate Division, reported at 278 N.J. Super. 129 (1994).

CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN and COLEMAN join in this opinion.

19960122


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