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Hartz Mountain Industries, Inc. v. Preserver Insurance Co.

February 11, 2008


On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Bergen County, L-13423-04.

Per curiam.


Argued: January 7, 2008

Before Judges Stern, Collester and C.L. Miniman.

Plaintiffs Hartz Mountain Industries, Inc., H-Cranford Conduit Limited Partnership and H-Cranford Credit Limited Partnership (collectively Hartz) appeal from a January 8, 2007, judgment following a bench trial dismissing the complaint on the ground that the slip-and-fall injuries suffered by defendant Ainslie Gage (Gage) were not caused by the negligence of B. Hirth Paving Company (Hirth), which contracted to provide snow and ice removal services on the property of Hartz. As a consequence, the judge concluded that Gage's injuries did not arise out of the work contemplated by the policy issued by defendant Preserver Insurance Company (Preserver) to Hirth and, thus, Hartz was not entitled to defense and indemnification from Preserver. Because Hartz was an additional insured under the Preserver policy and the accident occurred while Hirth was in the process of salting the property, we reverse and remand for further proceedings.

The facts giving rise to this claim for coverage occurred on January 7, 2003. At that time, Hirth was under contract to perform snow and ice removal from the property of Hartz located at 750 Walnut Avenue, Cranford. The contract required Hirth to remove snow and ice from all roads, parking lots and driveways on the property and prioritized the work. First, roads were to have top priority and to "be addressed first and continually as necessary." Second, driveways into parking lots and access roads around the buildings were to be plowed and sanded. Third, Hirth was to address the parking areas near the building entrances and the spots most frequently used. Fourth and last, the remote parking areas were to be plowed and sanded. The property contained 142,275 square feet of roadways and driveways and 393,628 square feet of parking stalls and aisles, some of which were below buildings. Even without the parking stalls and aisles under buildings, the square footage of parking areas to be plowed and salted was more than the square footage of roadways and driveways.

Under the contract, Hirth was required to indemnify Hartz from all claims and losses arising from or out of the work even if Hartz was wholly or partly at fault. The indemnity clause provided in pertinent part:

[Hirth] hereby agrees to save harmless and indemnify [Hartz] . . . from any and all claims, suits, demands, damages, charges, liabilities, losses, costs and expenses including attorneys' fees arising from or out of (a) the work incidental to or resulting from any and all operations performed by [Hirth] under or pursuant to any of the provisions of this Order whether or not any acts, of [Hartz] . . . contributed thereto in whole or in part, (b) any injury to, or death of, any person or persons, or damage to or destruction of property, occurring wholly or in part in conjunction with or resulting from the work or by reason of any act, omission or negligence of [Hirth] . . . whether or not any acts, errors, omissions or negligence of [Hartz] contributed thereto in whole or in part . . . .

Additionally, Hirth was required to maintain certain types and levels of insurance and, as to all general liability policies, was to name Hartz as an additional injured. Compliance with this requirement was to be proven by delivery of a certificate of insurance prior to commencement of work containing the following language: "Hartz Mountain Industries, Inc., and its respective subsidiaries, affiliates, partnerships, successors and assigns are included as additional insureds. This Insurance is primary and non-contributing with any insurance carried by Hartz." Hirth complied with this requirement by delivering a certificate of liability insurance dated December 6, 2002, adding Hartz as an additional insured under the blanket additional insured endorsement of the Preserver policy. Hartz had no other insurance applicable to this loss.

On January 7, 2003, at about 5:00 a.m. Hartz advised Hirth of icy conditions existing at 750 Walnut Avenue. Hirth arrived at the site at about 6:00 a.m. and began salting the premises. It took two truck loads to salt the entire premises. With only a portion of the premises salted, Hirth ran out of salt and left the site to reload its truck. While it was gone Gage, an employee of Fleet Bank, a Hartz tenant, slipped and fell on black ice on an unsalted roadway as she was walking from a parking lot to the entrance to Fleet Bank. Hartz' building supervisor walked over to Gage and saw that she was lying on icy pavement in a driveway leading to the parking lot. Hirth returned to the site and saw that an ambulance was near the entrance to the bank.

Hirth's principal acknowledged Gage was lying in a roadway that Hirth was obliged to salt. In the statement he gave to Preserver's adjuster and at his deposition, Hirth's principal stated that he ran out of salt after salting the perimeter road and the portion of the parking lot near the entrance to Public Service Electric & Gas Co., although at trial he denied salting any portion of the parking lot before he ran out of salt. Hirth's principal also admitted that after he reloaded he returned to the parking lot near the entrance to Public Service and finished salting all of the parking areas open to the sky. He did not salt under the buildings because his truck was too tall to fit. He admitted at trial that he had not salted any of the secondary roads before he reloaded.

After Gage sued, Hartz tendered its defense to Preserver, which refused to defend and indemnify Hartz under its policy. The injured employee sued both Hirth and Hartz and her action was settled by both defendants sharing fifty percent of the settlement amount, subject to a declaration of the rights of Hartz under Preserver's policy.

Hartz sued Preserver under the policy. It did not join Hirth under its contractual indemnification undertaking and, as a consequence, Hartz relies solely on the terms of the policy. The certificate of insurance issued to Hartz in the "Schedule of DESCRIBED PREMISES and LIMITS OF INSURANCE" describes "OPTIONAL COVERAGES" included in the policy "only for the Prm/Bldg/Occ(s) as specified below." The included location was for one snowplowing truck for one building, one occupant described as "ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS AUTOMATIC STATUS."

The standard "Business Advantage Special Form Business Insurance Policy" contains various amendments and endorsements. The policy defines an "insured" as "[a]n organization other than a partnership, joint venture or limited liability company" designated in the ...

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