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Richard Luchejko v. the City of Hoboken

July 27, 2011

RICHARD LUCHEJKO, PLAINTIFF-APPELLANT,
v.
THE CITY OF HOBOKEN, CM3 MANAGEMENT COMPANY AND SKYLINE CONDOMINIUM ASSOCIATION, DEFENDANTS-RESPONDENTS, AND D&D SNOW PLOWING COMPANY, DEFENDANT.



On certification to the Superior Court, Appellate Division, whose opinion is reported at The opinion of the court was delivered by: Opinion BY Justice LaVecchia

SYLLABUS

(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).

Richard Luchejko v. City of Hoboken (A-38-10) (066580)

Argued March 15, 2011 -- Decided July 27, 2011

LaVECCHIA, J., writing for a majority of the Court.

In this appeal, the Court considers whether a condominium complex is liable in tort for injury sustained by a pedestrian on its abutting sidewalk.

551 Observer Highway, Hoboken, New Jersey, is the site of a 104-unit condominium complex (the Building). Each unit is owned in fee simple by individual residents who have an undivided interest in the common elements. Every unit owner is a member of the Skyline at Hoboken Condominium Association, Inc. (Skyline), and only an owner may be a Skyline member. The Master Deed requires that the units be used as private residences and, subject to restrictions, owners can lease their units. There is no retail space in the Building and Skyline does not generate a profit. Skyline is operated by a board of trustees whose duties include collecting assessments from the members, making employment decisions, obtaining appropriate insurance, and maintaining the common elements of the property. The Master Deed also requires owners to pay an "Annual Common Expense" assessment, which is used for, among other things, maintaining the common elements and paying insurance premiums. The bylaws require Skyline to "maintain public liability insurance insuring the Association and its members against any claims arising from injuries or damages occurring on the common elements and facilities." According to the Master Deed, "common elements" include "[a]ll curbs, sidewalks, stoops, hallways, stairwells, porches and patios."

Skyline hired CM3 Management Company (CM3) to serve as the property manager for the Building. CM3 hired D&D Snow Plowing Company (D&D) to provide snow-clearing services for the property. D&D was to clear the property, including all sidewalks surrounding the building, whenever more than two inches of snow accumulated, and to inspect the premises to determine if ice melter was necessary when it anticipated icy conditions. On the morning of February 14, 2006, while walking on the sidewalk abutting the Building, plaintiff, Richard Luchejko, slipped on a sheet of ice and was injured. It had snowed between eighteen and twenty-seven inches on February 12, 2006, but had not snowed since. D&D serviced Skyline five times on February 12, clearing snow and spreading ice melter each time. D&D inspected the property on February 13, but did not re-inspect the premises prior to plaintiff's accident on February 14. In addition, although the Hoboken City Code mandates that private persons remove snow and ice from sidewalks abutting their property, and the city hires inspectors to ensure compliance, no inspection was performed on the day of plaintiff's accident.

Plaintiff sued Skyline, CM3, Hoboken, and D&D alleging negligence for an unsafe sidewalk. All defendants moved for summary judgment. The trial court granted summary judgment to Skyline, CM3, and Hoboken, but not to D&D. Plaintiff then settled his claim with D&D and unsuccessfully moved for reconsideration of the grant of summary judgment to the remaining defendants. Plaintiff appealed and the Appellate Division affirmed. Luchejko v. City of Hoboken, 414 N.J. Super. 302 (App. Div. 2010). The panel held that Hoboken was not responsible for the sidewalk and, without differentiating between Skyline and CM3, concluded that Skyline was not a commercial entity subject to liability under Stewart v. 104 Wallace Street, Inc., 87 N.J. 146 (1981). The Supreme Court granted plaintiff's petition for certification regarding Skyline and CM3 only. 205 N.J. 98 (2010).

HELD: The Appellate Division properly analyzed the facts of this case and concluded that the use of the condominium complex is residential and, therefore, no sidewalk liability attaches for the injury to plaintiff.

1. The following principles serve as the backdrop to this appeal: (1) an ordinance directing private persons to care for public property is remedial and does not grant individual citizens a right of action, (2) at common law, property owners had no duty to clear snow and ice from the public sidewalks abutting their land and, if a property owner decided to do so, he would not be liable unless his negligence created a new hazard, and (3) it is irrelevant that Skyline is a corporation rather than a natural person. (pp. 9-11)

2. Prior to Stewart v. 104 Wallace Street, Inc., 87 N.J. 146 (1981), absent active misconduct, property owners would not be liable for dangerous sidewalk conditions. Stewart held that commercial property owners are liable for injuries on the sidewalks abutting their property that are caused by their negligent failure to maintain the sidewalks in a reasonably good condition. Stewart identified multiple reasons for adopting a new rule for commercial property owners, including that commercial property owners could treat additional insurance premiums and maintenance expenses as one of the necessary costs of doing business. Stewart specifically did not decide whether the same duty should be imposed on owners of residential property. The Court, however, singled out apartment buildings as an example of property that should be treated as commercial under the new rule. (pp. 11-14)

3. The Court's decisions since Stewart consistently reflect that residential property owners stand on different footing than commercial owners who have the ability to spread the cost of the risk through the current activities of the owner. This matter provides no reason to corrode that distinction. The Appellate Division properly analyzed the facts of this case and concluded that the Building's use is residential and, therefore, no sidewalk liability attaches for the injury to plaintiff. Skyline is a non-profit corporation. Although fees are collected from the members, the funds are used solely for the upkeep of the property. This is different from a rental apartment building, which is considered commercial due to the owner's capacity to generate income from the property. In addition, units can only be used as private residences and no retail space exists in the Building. Although Skyline is required by its bylaws to maintain liability insurance, public sidewalks are not required to be covered under the Master Deed and are not a common element under the policy. Even if they were, the spreading of the cost of insurance among residential owners is not the sharing of risk originally presented in the commercial setting of Stewart, where the cost of the insurance could be shifted to patrons and other business endeavors of the entity as a cost of doing business. (pp. 14-21)

4. The commercial/residential dichotomy represents a fundamental choice not to impose sidewalk liability on homeowners that was established nearly three decades ago. Under the doctrine of stare decisis, departure from precedent must be supported by some special justification, such as when the passage of time illuminates that a ruling was poorly reasoned, when changed circumstances have eliminated the original rationale for a rule, when a rule creates unworkable distinctions, or when a standard defies consistent application by lower courts. No special justification is present here. Residential homeowners will not be liable unless they create or exacerbate a dangerous sidewalk condition. Commercial owners, defined in reference to their use of the property and its capacity to generate income, know that clearing their abutting sidewalks is a cost of doing business and that failure to do so can lead to liability. The rule proposed by plaintiff -- that a court should in each sidewalk injury case balance the equities to determine whether a tort duty exists -- would eliminate the clarity of the residential/commercial dichotomy and replace it with an unpredictable case-by-case balancing test that would be difficult to fairly and consistently administer. (pp. 21-25)

5. The development of the condominium form of home ownership has done nothing to undermine the principles that support the residential/commercial dichotomy that was recognized in Stewart. Skyline is residential and therefore is not subject to sidewalk liability. In addition, because CM3 was Skyline's agent, not its independent contractor, it owes no duty to plaintiff and is not separately liable. (pp. 25-27)

The judgment of the Appellate Division is AFFIRMED.

JUSTICE LONG, DISSENTING, joined by JUSTICE ALBIN, is of the view that Stewart did not establish a bright-line rule but rather engaged in the equitable balancing of tort law considerations to determine whether a duty existed; and that in this case, the condominium association should be liable because it should have foreseen the fall, was in the best position to have taken prophylactic measures to prevent it, and was better able to bear the risk of loss than the innocent pedestrian.

CHIEF JUSTICE RABNER and JUSTICES RIVERA-SOTO and HOENS join in JUSTICE LaVECCHIA's opinion. JUSTICE LONG filed a separate, dissenting opinion in which JUSTICE ALBIN joins.

066580

Argued March 15, 2011

JUSTICE LaVECCHIA delivered the opinion of the Court.

In this appeal we review whether a 104-unit condominium complex is liable in tort for injury sustained by a pedestrian on its abutting public sidewalk. An unbroken series of decisions by this Court has maintained a distinction between commercial and residential property owners for the purpose of imposing a duty to maintain sidewalks. In Stewart v. 104 Wallace Street, Inc., 87 N.J. 146 (1981), based on a balancing of relevant tort law considerations, we held that it would be fair for commercial landowners to be held responsible for maintaining abutting public sidewalks and to be required to recompense innocent pedestrians injured as a result of the negligent failure to do so. We did not then extend sidewalk liability to residential properties, id. at 159 n.6, and have not done so since. See, e.g., Dupree v. City of Clifton, 175 N.J. 449 (2003) (maintaining commercial/residential distinction).

In this matter, the Appellate Division affirmed the trial court's grant of summary judgment to the property owner, concluding that no reasonable trier of fact could find that this overwhelmingly owner-occupied 104-unit condominium complex was a commercial entity. Luchejko v. City of Hoboken, 414 N.J. Super. 302, 315 (App. Div. 2010). We granted certification, 205 N.J. 98 (2010), and now affirm. There is no call to upset the well- established and longstanding difference in the duties imposed on residential versus commercial property owners. Moreover, we agree with the courts that have considered this matter and have concluded that this condominium complex is residential.

I. A.

At approximately 6:40 a.m. on Tuesday, February 14, 2006, plaintiff Richard Luchejko was walking to work in Hoboken, New Jersey. It had snowed between eighteen and twenty-seven inches on Sunday, February 12, but had not snowed since. That morning, the sidewalks in Hoboken were generally clear of snow, but some patches of ice remained. While walking on the sidewalk abutting 551 Observer Highway, Luchejko slipped on a sheet of black ice and fell. As a result, he broke his left leg below the knee. According to him, the sidewalk had not been salted. The police officer who responded to the scene of the accident confirmed, in his report, that the area was icy.

B.

551 Observer Highway is the site of a 104-unit condominium complex (the Building). Each of the 104 units is owned in fee simple by individual residents who have an undivided interest in the common elements. Any person who owns a condominium in the Building is a member of the Skyline at Hoboken Condominium Association, Inc. (Skyline),*fn1 and only an owner may be a member of Skyline. Pursuant to the Condominium Act, N.J.S.A. 46:8B-1 to -38, Skyline is "responsible for the administration and management of the condominium and condominium property, including but not limited to the conduct of all activities of common interest to the unit owners." N.J.S.A. 46:8B-12.

Non-owners are not permitted in the Building without permission from an owner or Skyline. The Master Deed for the property specifically states, "No Unit . . . shall be used for any purpose other than as a private residence." Owners are permitted to lease their units, but may not do so for any period shorter than thirty days (i.e., they cannot rent their units "for transient or hotel purposes"). Although no competent proofs were tendered on the point, Skyline's counsel estimated that approximately ten percent of the units are rented out.

There is no retail space in the Building and Skyline does not generate a profit.

Skyline is operated by a five-person Board of Trustees (Board) whose duties, according to its bylaws, include, among other things, collecting assessments from the members to pay expenses, preparing budgets and financial statements, making employment decisions, paying taxes levied upon the Building, obtaining appropriate insurance, and maintaining the "common elements" of the property. According to the Master Deed, those "common elements" include, but are not limited to, "[a]ll curbs, sidewalks, stoops, hallways, stairwells, porches and patios."*fn2

The Master Deed requires the owners to pay an "Annual Common Expense" assessment, which shall be used exclusively for promoting the health, safety, pleasure and welfare of the members of the Association including, but without limitation; . . . maintenance, repair and replacement of the Common Elements or any other improvements on the Property; payment of insurance premiums; all costs and expenses incidental to the operation and administration of the Association; and, such other items as may from time to time be deemed appropriate by the Board of Trustees.

The Master Deed also requires Skyline to carry "amounts of blanket property insurance" as required by Skyline's bylaws. The bylaws, in turn, require Skyline to "maintain public liability insurance insuring the Association and its members against any claims arising from injuries or damages occurring on the common elements and facilities."

C.

CM3 Management Company (CM3) was hired by Skyline to serve as the property manager for the Building. CM3 collected assessments from the owners, kept Skyline's books and budgets, hired personnel, paid Skyline's bills, and attended Board meetings. Skyline paid CM3 a flat, monthly fee for work performed.

On October 1, 2005, CM3 hired D&D Snow Plowing Company (D&D) to provide snow-clearing services for the property through April 2006. Pursuant to the contract, D&D agreed to service "the main parking lots, main entrances to the lots, and the lot's front sidewalk. . . . Also all sidewalks surrounding the building and the building main entrance will be shoveled and cleared. Ice melt shall be provided to the areas plowed and/or shoveled." D&D was to clear the property whenever more than two inches of snow accumulated and to inspect the premises to determine if salt was necessary when it anticipated icy conditions, such as a refreeze. CM3 was not required to call D&D to initiate snow removal and CM3 did not actively supervise D&D's work, although occasionally it did inspect the sidewalks, through the doorkeeper, after D&D's servicing.

D&D serviced Skyline five times on February 12, 2006, clearing snow and spreading ice melter each time. According to D&D, the sidewalks were clear after the last service. D&D visited the property again on February 13, to ensure that it was still clear. D&D did not re-inspect the premises again prior to Luchejko's accident on February 14.

In addition to the services provided by D&D, the doorkeepers hired by Skyline would occasionally spread salt on the sidewalks. They generally inspected the sidewalks at the beginning and end of their shifts. The first doorkeeper on duty on the morning of February 14 (there was no doorkeeper overnight) arrived at 7:00 a.m., shortly after Luchejko's fall.

D.

The Code of the City of Hoboken (Hoboken City Code) is the applicable municipal law. Pursuant to authority granted by N.J.S.A. 40:65-12, the Hoboken City Code mandates that private persons remove snow and ice from sidewalks abutting their property:

The owner or occupant or person having charge of any dwelling house, store or other building or lot of ground in the city shall, within the first six (6) hours after every fall of snow or hail, or after the formation of any ice upon the sidewalks, unless the ice is covered with sand or ashes, cause the snow and ice to be removed from the sidewalk abutting such dwelling house, store, building or lot of land and piled not more than eighteen (18) inches from the curbline into the public street or roadway. [City of Hoboken, N.J., Code § 168-8(A) (2010).]

Hoboken hires inspectors to check the main streets approximately six hours after any snowfall to ensure compliance with that ordinance; however, no inspection was performed on the day of Luchejko's accident. Hoboken has no record of a complaint being filed or a citation being issued for failure to clear the snow from Skyline's abutting sidewalks on February 14.

E.

Luchejko sued Skyline, CM3, Hoboken, and D&D. His complaint generally alleged negligence for an unsafe sidewalk and (as against Hoboken) violations of the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 to 59:12-3.

All defendants moved for summary judgment. The trial court granted summary judgment to Skyline, CM3, and Hoboken, but not to D&D. Luchejko then settled his claim with D&D and moved for reconsideration of the grant of summary ...


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