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Baboghlian v. Swift Electrical Supply.

May 24, 2007

ELIZABETH BABOGHLIAN, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF VARTKES O. BABOGHLIAN, VARTKES BABOGHLIAN SHELTER TRUST, VIGEN BABOGHLIAN, VARTKES K. BABOGHLIAN, ESTATE OF RAHILE BABOGHLIAN, AND ARTISTIC FURNITURE & LIGHTING CO., INC. AND/OR VARTKES O. BABOGHLIAN AND ELIZABETH BABOGHLIAN T/A ARTISTIC FURNITURE & LIGHTING COMPANY, PLAINTIFFS-APPELLANTS,
v.
SWIFT ELECTRICAL SUPPLY., A CORPORATION, A/K/A SWIFT ELECTRICAL SUPPLY CO., INC., SWIFT ELECTRIC SUPPLY CO., A CORPORATION, SWIFT ELECTRIC SUPPLY CO., AS SUCCESSOR-IN INTEREST TO SWIFT ELECTRICAL SUPPLY CO., AUGUST SADORA, INDIVIDUALLY AND T/A SWIFT ELECTRICAL SUPPLY CO. AND/OR SWIFT ELECTRIC SUPPLY CO., AND AUGUST SADORA, JR., INDIVIDUALLY AND T/A SWIFT ELECTRICAL SUPPLY CO. AND/OR SWIFT ELECTRIC SUPPLY CO., DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS,
v.
JMG ELECTRICAL CONTRACTORS, INC., THIRD-PARTY DEFENDANT-RESPONDENT, AND ELECTRO SIGNAL LABS, INC., THIRD-PARTY DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5260-01.

The opinion of the court was delivered by: Lihotz, J.T.C. (temporarily assigned).

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued January 30, 2007

Before Judges Kestin, Payne and Lihotz.

This case involves a dispute between adjacent property owners whose buildings were damaged by fire and subsequently demolished. The fire began in Swift Electric's building. Plaintiffs assert that Swift had a non-delegable duty under New Jersey's Uniform Fire Code (Code), to apply for a permit and conduct annual inspections in connection with the installation of their fire alarm system, and that the failure to do so breached that duty, causing a delay in the system's activation, which allowed the fire to spread to and destroy plaintiffs' property. We examine the question of whether the duties imposed on property owners by the Code are non-delegable.

I.

Elizabeth Baboghlian and her late husband, Vartkes, owned and operated Artistic Furniture (Artistic), a business engaged in the sale of "high-end furniture and accessories." Artistic occupied a three-story commercial building located at 4401-03 Bergenline Avenue in Union City. Artistic's showroom was on the first floor and inventory was kept in the basement and on the first, second, and third floors of the building.

The Baboghlians, their sons, and Elizabeth's mother resided in an adjoining two-story residential building, which contained several apartments and the business's workshop. The two buildings had separate entrances but were connected internally. The properties were equipped with fire extinguishers and smoke detectors, but not a fire alarm system.

Defendants August Sadora and August Sadora, Jr. owned and operated defendant Swift Electrical Supply Co., Inc. (Swift), which was located in a two-story building adjacent to plaintiffs' property, at 4405-09 Bergenline Avenue. When Swift renovated its property to create a light fixture showroom in 1987, it hired JMG Electrical Contractors, Inc. (JMG) to install a fire alarm system. JMG installed a system manufactured by Electro Signal Labs, Inc. (ESL), with the assistance of an ESL representative. The system consisted of smoke detectors placed throughout the two floors and heat detectors placed in a "peak" or attic area, as well as a fire alarm panel with a telephone line connected to a central station. JMG serviced the system when requested, including checking and cleaning the smoke detectors on January 19, 1990, replacing a water-damaged smoke detector on November 20, 1990, and servicing the fire alarm system on March 19, 1993. JMG never tested any of the heat detectors, and was never requested to do so.

On August 22, 1995, plaintiffs' store was closed. At approximately 4:50 p.m., Elizabeth and Vartkes returned home. At about 5:15 p.m., Elizabeth heard a sound "like a clock ticking." She looked out a window and saw a faintly flashing light. When Elizabeth looked out of her bedroom window, she saw "white billowing smoke," and then observed black smoke from the kitchen window. At 5:25 p.m., Elizabeth called her son and telephoned the Union City Fire Department. Elizabeth's son had briefly left his apartment with a friend around 5:00 p.m., and at that time, had smelled smoke but did not hear a fire alarm. The Baboghlians evacuated their building at 5:30 p.m.

Sadora, Jr. testified he was working at his desk after his father and the employees had finished work at 5:00 p.m. He noticed smoke in the lunchroom and called the operator to report a fire in Swift's building. Sadora, Jr. heard the building's fire alarm sound around 5:30 p.m.

Firemen arrived at approximately 6:00 p.m. According to police reports, the fire officials viewed a "heavy fire condition" upon arriving at Swift's building. One fire captain wrote that he saw "low level smoke near the floor in the [Swift] supply sales area" and when he climbed the stairs to the second floor, he "observed fire at the ceiling level, to the right of the stairs." The fire quickly spread to plaintiffs' property and finally, was brought under control by 11:00 p.m.

The next morning the buildings were inspected by Nicholas C. Recanati, who was the Union City building inspector, the police and fire department inspectors, and at least three private investigators who were allowed to view the property to reconstruct the circumstances of the fire and evaluate the damage. The investigation failed to reveal the fire's exact onset, cause, or point of origin; however, the various examiners concluded that the fire was not intentionally set and that it originated, generally, in the area between the second-floor ceiling and the roof-line near the rear of Swift's building.

After consulting with the municipal engineer and other building officials, Recanati declared plaintiffs' property unsafe and an imminent hazard. Recanati issued a written notification ordering plaintiffs to obtain the necessary permits, pursuant to N.J.S.A. 52:27D-132 and N.J.A.C. 5:23-2.32, to demolish their buildings by August 24, 1995.

On the morning of August 24, plaintiffs and their movers were permitted to enter the first floor of the three-story building to remove inventory. Elizabeth's sons and a videographer videotaped some of the damage on the second and third floors before police ordered them to leave. By evening, plaintiffs salvaged approximately ten to fifteen percent of their business inventory from the showroom but had lost all of their personal property. Plaintiffs' buildings were demolished that evening, and the business never recovered.

Plaintiffs' complaint, filed August 20, 2001, alleged that plaintiffs sustained damages as a "direct and proximate result of defendants' negligence in permitting a hazardous condition to exist, and in failing to provide for sufficient fire-fighting equipment, devices, and other measures to prevent the spread of the fire" that occurred on August 22, 1995. Defendants added JMG and ESL as third-party defendants.*fn1

During the fourteen-day jury trial, the legal relationship between Swift and JMG became an important issue. Plaintiffs urged the application of a principal/agent relationship and/or that the obligation to comply with the provisions of the Code was not delegable to its hired contractor, JMG. Plaintiffs' theory of the case was that any negligence of JMG must be deemed the negligence of Swift. The trial court declined to adopt plaintiffs' proposed jury instructions on agency and ...


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