June 25, 2012
CARMEN ESTRADA, PLAINTIFF-APPELLANT,
IMPACT REALTY, III, LLC, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-8249-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 12, 2012
Before Judges Axelrad and Parrillo.
In this negligence action, plaintiff Carmen Estrada appeals from the grant of summary judgment dismissing her complaint against defendant Impact Realty, III, LLC, the owner of the premises where she sustained injuries, and the landlord of her employer. She argues defendant owed her a duty primarily because it was an in-possession landlord who directly supervised the removal of ice on the parking lot where she fell, had actual notice of a prior slip and fall on the ice in the parking lot, and had unity of ownership with the tenant. We disagree and affirm.
The facts are not disputed. Plaintiff was employed by Impact Instrumentation, Inc. (Impact Instrumentation), a medical device manufacturer. Since approximately May 2006, Impact Instrumentation conducted its business operations out of a commercial building located at 19 Fairfield Place, West Caldwell, that it leased from defendant as its sole tenant. Leslie Sherman and Melvin Chettum jointly owned defendant, a real estate holding company, as general partners, and defendant had no employees other than its owners. Impact Instrumentation was wholly owned by defendant. Sherman was Impact Instrumentation's president while Chettum was its secretary/treasurer.
The lease agreement required Impact Instrumentation, the tenant, to obtain and maintain liability insurance for the building and, at its "own cost and expense," to "make all repairs" and "maintain the Premises in good condition and state of repair." The lease further required, in part, that Impact Instrumentation would "keep and maintain" the "sidewalks, driveways, yards, entrances, hallways and stairs . . . in a clean condition, free from debris, trash, refuse, snow and ice." Impact Instrumentation could not make "alterations, additions or improvements" to the property "without the written consent" of defendant, and defendant reserved the right to enter the premises to make "such repairs or alterations  as may be necessary for the safety and preservation thereof," without creating an obligation on defendant's part to make such repairs.
As testified to by Sherman in depositions, Impact Instrumentation had paid liability insurance and all expenses relative to the upkeep of the building since defendant's purchase of the property in May 2006. Defendant's sole obligation had been its monthly mortgage payment, which included local property taxes.
Chettum testified in depositions that he worked on site daily "simply  as an employee of Impact Instrumentation to unlock the building and to unset the alarm and make the building available for work" but he "never once went over there in the capacity of the landlord." Both principals explained that this arrangement was consistent with the intention of the lease, which was for Impact Instrumentation to conduct operations at the facility and for defendant to transfer all responsibility and expenses to the tenant. Impact Instrumentation had also entered into and paid for a contract with Tri-County Landscaping, Inc. to perform snow removal at the property, which was in effect at the time of the incident. Chettum also testified there was a maintenance person tasked with shoveling and salting the driveway but he had performed the task if he observed ice. Chettum was uncertain who had actually salted the area on the day in question.
On January 22, 2009, plaintiff was injured when she slipped on ice in the parking lot of the subject premises, just beyond the loading dock driveway, as she was walking towards the main entrance of the commercial building after arriving one morning for work. Chettum had actual notice that about a week before, another employee fell on ice in the same spot. In her suit, plaintiff alleged her injuries resulted from defendant's negligence in salting the parking lot and failure to repair a dangerous and defective condition there. Plaintiff presented an expert report that the driveway, as designed, could not withstand the weight of trucks parked on top of it, causing ruts to form where ice patches could freeze and creating the icy condition at the location where plaintiff slipped and fell. The expert further opined that "the defects in the asphalt pavement could not be repaired by simple patching of the pavement" but required a "complete replacement of the subgrade or subbase and asphalt pavement."
Plaintiff moved for summary judgment, asking the court to find as a matter of law that defendant owed her a duty of care based on its actual notice of the dangerous condition, active involvement with maintenance on the premises, and the common ownership of Impact Instrumentation and defendant. Defendant cross-moved for summary judgment seeking dismissal of plaintiff's complaint. Following oral argument, Judge Ned M. Rosenberg rendered an oral decision granting defendant's motion, memorialized in an order of the same date.
The court relied primarily on McBride v. Port Authority of New York and New Jersey, 295 N.J. Super. 521, 522 (App. Div. 1996), in which we held that "an employee of a commercial tenant in exclusive possession may [not] hold the tenant's landlord responsible for personal injuries suffered on the leased premises, due to a lack of proper maintenance or repair, when the lease unquestionably places responsibility for such maintenance or repair solely upon the tenant." The court found that, "while in possession of the subject premises," Chettum and Sherman were "at all times acting in their capacity as tenants and not as landlords" and Impact Instrumentation, as the tenant, "was in exclusive possession of the premises and was responsible for all maintenance and repairs, pursuant to the triple net lease." The court also found the provision requiring the landlord to approve alterations did not alter the unquestionable delegation of responsibility because the tenant was still obligated to perform the work at its expense. Accordingly, consistent with the case law, defendant owed plaintiff no duty of care and had no liability for her injuries. This appeal ensued.
On appeal, plaintiff asserts error by the trial court in:
(l) misapplying the law and extending McBride to a commercial landlord who retained possession and control of the premises and by failing to consider the four fairness factors of Geringer v. Hartz Mountain Development Corp., 388 N.J. Super. 392, 400 (App. Div. 2006) to determine if defendant owed a duty to plaintiff;
(2) mistakenly finding the tenant had "exclusive control and possession" as a matter of law where the lease did not grant that exclusivity and the undisputed facts show defendant retained some control over the premises; (3) finding the landlord did not owe a duty to remedy the dangerous condition when only the landlord had the ability to do so because it would obstruct the driveway and it would be an alteration; and (4) allowing an on-site commercial landlord to escape liability as a matter of policy when the landlord had actual knowledge of a danger and an opportunity to repair. Plaintiff urges us to reverse the trial court and find, as a matter of law, that defendant owed her a duty of care. Alternatively, plaintiff argues there were material issues of fact precluding summary judgment and requests we reverse and remand for trial.
When reviewing a grant of summary judgment, we employ the same standards used by the motion judge under Rule 4:46-2. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). First, we determine whether the moving party has demonstrated there were no genuine disputes as to material facts, and then we decide whether the motion judge's application of the law was correct. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 230-31 (App. Div.), certif. denied, 189 N.J. 104 (2006). In so doing, we view the evidence in the light most favorable to the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). We accord no deference to the motion judge's conclusions on issues of law, Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382-83 (2010); Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), which we review de novo. Dep't of Envtl. Prot. v. Kafil, 395 N.J. Super. 597, 601 (App. Div. 2007).
Based on our review of the record and applicable law, we are satisfied summary judgment was appropriate, and Judge Rosenberg correctly interpreted and applied the law in granting summary judgment in favor of defendant. We affirm substantially for the reasons articulated in Judge Rosenberg's oral decision. We add the following brief comments.
The root of plaintiff's premise for imposing a duty on defendant is the commonality of ownership of the landlord and tenant. This fact, standing alone, is insufficient to alter the acknowledged legal principle expressed in McBride. With all favorable inferences to plaintiff, Brill v. Guardian Life Ins. Co. of Am., supra, 142 N.J. at 540, the terms of the lease and the actual practices of the two corporations and Chettum and Sherman clearly demonstrate that Impact Instrumentation and defendant operated as separate legal entities. Defendant's sole obligation as landlord of the subject premises was to write monthly mortgage payments and, throughout the tenancy, defendant paid for no other expenses. In contrast, under the unambiguous terms of the lease, plaintiff's employer, the tenant, assumed exclusive responsibility for the property and the cost of insuring, maintaining and repairing the property, including keeping the area where plaintiff fell free from snow and ice. This obligation included making alterations or improvements to the property, although they required prior approval by the landlord.
In addition, the reservation clause in the lease does not impose on defendant a non-delegable duty to a third party. In Geringer, supra, 388 N.J. Super. at 401, we re-iterated that "a commercial landlord's reservation of a right to re-enter the premises to perform repairs does not suffice as a matter of law to make the landlord liable for the unrepaired condition of the leased premises."
Impact Instrumentation was the sole tenant of the building at the time of the incident and physically and legally had exclusive possession and control of the premises. The mere presence of Chettum on site performing tasks at all times in his capacity as an employee and officer of the tenant does not render him an on-site employee of the landlord. He always viewed himself as a tenant and plaintiff presented no evidence that he held himself out as, or was regarded by Impact Instrumentation employees as, a representative of the landlord. Under the circumstances of this case, Chettum's actual knowledge of the other employee's fall the week before and his participation in shoveling and salting of the driveway on the morning plaintiff fell are relevant to the tenant's liability, not the landlord's, and would have been viable arguments had plaintiff not been an employee of Impact Instrumentation.
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