August 23, 2007
PAUL GALE*FN1 AND SANDRA GALE, PLAINTIFFS,
NEW JERSEY IRON, INC., NORTHWOOD CONSTRUCTION COMPANY, INC., AND JACKSON PLAZA ASSOCIATES, LLC, DEFENDANTS, AND NORTHWOOD CONSTRUCTION COMPANY, INC., DEFENDANT-RESPONDENT/ THIRD-PARTY PLAINTIFF,
PRO-STEEL ERECTORS, INC., THIRD-PARTY DEFENDANT, AND JACKSON PLAZA ASSOCIATES, LLC, DEFENDANT-APPELLANT/ THIRD-PARTY PLAINTIFF,
CNA INSURANCE COMPANY, THIRD-PARTY DEFENDANT.
On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-2937-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 15, 2007
Before Judges Graves and Lihotz.
Plaintiff Paul Gale sustained personal injuries when he lost his balance and fell from a steel beam while working at a construction site on October 29, 2001. At the time of the accident, plaintiff was employed by Pro-Steel Erectors, Inc. (Pro-Steel). Prior to the accident, the property owner, defendant Jackson Plaza Associates, LLC (Jackson Plaza), entered into a contract with the general contractor, defendant Northwood Construction Company, Inc. (Northwood), for the construction of the Jackson Plaza Shopping Center. Thereafter, Northwood entered into a contract with defendant New Jersey Iron, Inc. (New Jersey Iron) for the necessary steel and iron work, and New Jersey Iron entered into a contract with plaintiff's employer, Pro-Steel, to "[e]rect [s]tructural [s]teel & [j]oist as per plans and specs." Plaintiff alleged his injuries resulted from the collective negligence of all three defendants (New Jersey Iron, Northwood, and Jackson Plaza). In answers to interrogatories, plaintiff stated he "was standing on a steel joist beam which began to shake, causing him to lose his balance and fall. There was no protection from fall hazards present at the time of this incident."
Although we have been provided with a transcript of oral argument on June 23, 2006, no order was entered as a result of that proceeding. Nevertheless, Northwood filed a motion to vacate the court's "decision rendered on June 23, 2006," and Jackson Plaza now appeals from an order dated September 8, 2006, granting Northwood's motion and vacating "the court's earlier decision" which, apparently required Northwood to defend, indemnify, and reimburse Jackson Plaza for counsel fees and costs incurred in its defense of the suit brought by plaintiff.
We have been advised all claims, except for "Jackson Plaza's cross[-]claim against Northwood, the subject of this appeal," have been settled, and we now affirm the order dated September 8, 2006.
The contract between the owner of the property (Jackson Plaza) and the general contractor (Northwood) required Northwood to obtain general liability insurance that named Jackson Plaza as an additional insured, and Northwood complied with this contractual obligation. Nevertheless, Jackson Plaza contends Northwood breached the contract when it failed to obtain insurance coverage that protected Jackson Plaza from its own negligence. The contractual language that Jackson Plaza relies on reads as follows:
Contractor shall provide minimum general liability insurance coverage of $1,000,000 per occurrence and $10,000,000 in the aggregate on behalf of Owner and any affiliated entities, agents, and Owner's Lender, subject to Owner's review and approval as to all aspects of the insurance including but not limited to the Issuer's financial rating, and the form, coverages, exclusions, etc. of the policies. Coverage shall be based on a per project aggregate endorsement to Contractor's General Liability Policy specifically providing coverage in the minimum amounts set forth above to Contractor for this Project exclusively, naming Owner, Owner's affiliates, agents and lenders as additional insureds. Certificates of insurance shall be issued to Owner and any other Additional Insured verifying all of Contractor's coverages. A full copy of the policy will be furnished to Owner upon request. In the event that Contractor's General Liability Policy shall expire during the time period of this Contract, Contractor shall renew or replace said policy with equivalent insurance in all respects to the required insurance, subject to Owner's review and approval as set forth above.
In rejecting Northwood's argument, the trial court noted the contract language did not specifically obligate Northwood to provide Jackson Plaza with insurance coverage that would protect it against a claim based on its own negligence:
This contract language was drafted by Jackson Plaza. It is a rider between the owner and the contractor. It is standard within the industry that when contractors provide liability insurance with the property owners, they do so to indemnify the property owner against any negligent acts of the contractor and/or subcontractor as the case may be.
Case law is clear and the Supreme Court has stated that unless there is clear and specific language that indicates that the contract of insurance is indemnifying the property owner or indemnifying the party to receive the benefit of the contract, that that cost sharing is envisioned to indemnify here Jackson Plaza's own negligence which contract of insurance would be provided by third party, here meaning Northwood; that that must be clear and specific and there must be a meeting of the minds as to the obligations of the contractor to absorb the cost of that additional insurance coverage.
The [c]court cannot come to [the] conclusion that the language on behalf of the owner is certainly consistent with the practice in the industry where contractors obtain liability coverage to indemnify property owners for any claim brought against the property owner due to the negligence of the contractor and/or its subcontractors, but certainly not the liability and negligence of the property owner itself.
Because of the fact that the language is ambiguous at best, the [c]court has determined that the motion for reconsideration was appropriately filed, that the [c]court did misconstrue, and that ultimately the argument on the breach of contract requires an analysis of the underlying provision which was breached and the provision that was breached was the provision requiring liability insurance to be provided covering the property owner's own negligent acts. That is not clear and specific and to the extent that the [c]court declared a breach of contract, the [c]court reverses that decision finding that that decision was fundamentally flawed, that while there may have been a . . . failure of the contractor to provide insurance to the property owner which would indemnify the property owner for its own acts of negligence, the contract language in and of itself does not clearly and specifically set that forth. Without that clear declaration, there can be no meeting of the minds, and without a meeting of the minds as to what the parties' obligations were, the [c]court finds that there was no breach and indicates that the prior order compelling essentially a violation of the contract agreement on behalf of the contractor is now reversed, vacated and deemed null and void.
After reviewing the record and the applicable law in light of the contentions advanced on appeal, we are in substantial agreement with the trial court's analysis. In addition, as noted in another section of the contract, Northwood agreed to indemnify Jackson Plaza "but only to the extent caused by the negligent acts or omissions of [Northwood], a Subcontractor, anyone directly or indirectly employed by them[,] or anyone for whose acts they may be liable." Thus, the trial court correctly concluded the contract between the parties failed to express in unequivocal terms that Northwood would indemnify Jackson Plaza for legal fees incurred in defending itself against claims of its own negligence. See Mantilla v. NC Mall Assoc., 167 N.J. 262, 275 (2001).