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Gladyne Franchini v. Beverly Hills Terrace Condominium Association


August 27, 2012


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-219-06.

Per curiam.


Submitted May 9, 2012

Before Judges Lihotz and St. John.

Defendant Greenview Landscaping Contractors, Inc., (Greenview) appeals from a Superior Court order concluding Greenview was contractually obligated to indemnify defendant Beverly Hills Terrace Condominium Association (the Association) for counsel fees incurred by the Association to defend against a negligence action filed by plaintiff Gladyne Franchini, who slipped and fell on ice located on the Association's property. We reverse.

These facts are taken from the motion record. Plaintiff, an owner of a unit at the Beverly Hills Terrace Condominiums, alleged she sustained injures after she fell on an icy sidewalk in front of her condominium unit at approximately 7:00 a.m. on February 4, 2004. The one count complaint named the Association and Greenview as defendants, asserting defendants were negligent "in failing to adequately inspect and/or maintain" the sidewalk area. Specifically, plaintiff asserted the Association "owned, operated, maintained and/or controlled the property" and Greenview was "responsible for maintaining the exterior premises including the removal of snow and ice and/or salt and/or sand [from] said premises."

Plaintiff testified during the jury trial, stating her accident occurred early in the morning when it was "like dusk, there was no light out[,]" and the area had no streetlights.

Peering out her French doors, she noticed the sidewalk "looked wet, it looked like moisture was on the ground." As she headed toward her car parked in a nearby lot, she "veered" toward the grassy area, rather than walking on the sidewalk. As plaintiff "left the grass area [stepping back] onto the sidewalk," she immediately fell. Plaintiff testified she "felt the ice as [she] was gripping the sidewalk to level [her]self back up in a standing position," although she acknowledged she could not see any ice. Plaintiff suffered injuries to her left shoulder, neck, and elbow.

Following plaintiff's testimony, a colloquy occurred outside the presence of the jury. Plaintiff agreed to voluntarily dismiss the complaint against the Association, because any claim of liability "was derivative" and based on Greenview's alleged negligence. However, Greenview declined to dismiss its cross-claim against the Association. The Association's later filed motion for summary judgment as to liability on Greenview's cross-claim was denied. At the close of defendants' testimony, the Association renewed its motion for summary judgment, which again was denied, without prejudice.

Following deliberations, the jury issued a defense verdict, determining neither the Association nor Greenview were negligent and plaintiff had not supported a cause of action. Post-trial, the Association moved for indemnification, seeking Greenview's reimbursement of its attorney's fees and litigation costs incurred in defending against plaintiff's suit.

We pause to discuss the foundation for the Association's indemnification claim. Prior to plaintiff's fall, the Association executed a one-year contract with Greenview to perform snow removal and salting services. Attached to the November 1, 2003 contract, was a signed proposal setting forth the services Greenview would provide in the event of freezing rain, which included "[s]alt[ing] all lots, entrances and exits. . . . Clearing the sidewalks using just calcium chloride[.]" Greenview "expressly warrant[ed] full and complete compliance with the [s]pecifications and expressly warrant[ed] that all work done shall be completed in a workmanlike manner."

Section 13 of the contract contained an indemnification clause, which provided:

The Contractor hereby agrees to indemnify and save harmless the Association from liability for any damage or loss that occurs during or in connection with the Contractor's performance of the contract work, whether it be caused by the negligence or fault of the Contractor, its agents, employees, subcontractors or servants, or otherwise. It is the intent of the parties that the contractor's indemnification and save harmless obligations hereunder are not contingent upon contractor's fault.

The Contractor agrees to defend the Association against any claims brought or actions filed against the Association with respect to the subject of the indemnity contained in this agreement, whether such claims or actions are rightfully or wrongfully brought or filed. With respect to this obligation, the Association may select counsel in its defense.

If the Association, in enforcement of any part of the this indemnity contract, shall incur necessary expenses, or become obligated to pay attorney's fees or court costs, the Contractor agrees to reimburse the Association for such expenses, attorney's fees, or costs within 30 days after receiving written notice from the Association of the incurring of such expenses, costs, or obligations.

The Association relied on its characterization of the clause, as a "broad form contract" to support its motion for indemnification. Greenview responded, arguing plaintiff's complaint specifically alleged negligent acts by the Association, which the contractual indemnification clause did not cover. After considering these arguments, the trial judge granted the Association's request and, based on the Association's subsequently submitted affidavit of services, ultimately awarded $39,392 in attorney's fees and costs. Greenview filed a motion for reconsideration, which was denied.

On appeal, Greenview argues the indemnification award was error, as a matter of law. Greenview maintains the contractual provision for indemnification related solely to its own negligence and did not include a duty to indemnify the Association for its negligent acts.

The interpretation or construction of a contract is a legal question, reviewed de novo by this court. Driscoll Constr. Co. Inc. v. N.J. Dep't of Transp. 371 N.J. Super. 304, 313 (App. Div. 2004). See also Celanese Ltd. v. Essex Cnty. Improvement Auth., 404 N.J. Super. 514, 528 (App. Div. 2009) (holding that "unless the meaning is both unclear and dependent on conflicting testimony[,]" the court interprets the terms of a contract as a matter of law (internal quotation marks and citations omitted)). In our review, the "trial court's interpretation of the law and legal consequences that flow from" it are "not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

"The objective in construing a contractual indemnity provision is the same as in construing any other part of a contract - it is to determine the intent of the parties." Kieffer v. Best Buy, 205 N.J. 213, 223 (2011). Our task is interpretative. Ibid. We do not rewrite the parties' contract or provide a better or different agreement than the one they wrote themselves. Ibid.

As a general rule, an indemnity "contract will not be construed to indemnify the indemnitee against losses resulting from its own negligence unless such an intention is expressed in unequivocal terms" in the agreement. Ramos v. Browning Ferris Indus., Inc., 103 N.J. 177, 191 (1986). The Supreme Court has squarely addressed this issue in Mantilla v. NC Mall Associates, 167 N.J. 262 (2001) and Azurak v. Corporate Property Investors, 175 N.J. 110 (2003).

In Mantilla, supra, the Court examined whether the parties' contractual indemnification clause obligated the contractor to indemnify the property owner for legal costs incurred by the owner in defending itself against a negligence claim. 167 N.J. at 267. The Court concluded that as a matter of public policy, "absent explicit contractual language to the contrary, an indemnitee who has defended against allegations of its own independent fault may not recover the costs of its defense from an indemnitor." Id. at 275. The court also adopted the "after-the-fact" approach first articulated in Central Motor Parts Corporation v. E.I. duPont deNemours & Co., 251 N.J. Super. 5, 11 (App. Div. 1991), "which permits an indemnitee to recover counsel fees if the indemnitee is adjudicated to be free from active wrongdoing regarding the plaintiff's injury, and has tendered the defense to the indemnitor at the start of the litigation." Mantilla, supra, 167 N.J. at 273.

The Court's per curiam opinion in Azurak, supra, 175 N.J. at 111-12, reinforced the principles set forth in Mantilla, and eliminated all doubt, holding a "broad form" indemnification clause, which attempted "to include an indemnitee's negligence within an indemnification agreement[,] without explicitly referring to the indemnitee's 'negligence' or 'fault,' . . . is no longer good law." Citing this court's opinion, the Court affirmed per curiam, adopting the rationale expressed by Judge Carchman, which stated:

"Significantly, the Court's analysis in Mantilla, by omission, eschewed the consideration of a 'broad' or 'limited' form of indemnification -- a critical element in the analytical framework that had dominated consideration of these issues in [prior authority]. We read Mantilla as a reiteration of Ramos and its 'bright line' rule requiring 'explicit language' that indemnification and defense shall include the indemnitee's own negligence. We note that nowhere in Mantilla is there any mention of the significance of broad form or limited form indemnification provisions[.]"

[Id. at 112 (quoting Azurak v. Corp. Prop. Inves., 347 N.J. Super. 516, 523 (App. Div. 2002)).]

Most recently, the Court considered the terms of indemnification presented in the parties' agreement in Kieffer, where the building owner sought payment from a cleaning contractor for its costs in defending a slip and fall action. Supra, 205 N.J. at 216-17. The trial on the plaintiff's negligence claims resulted in a no cause verdict favoring the cleaning sub-contractor, the contractor, and the building's owner. Ibid. The Court reversed the trial judge's finding, apparently based on the indemnification clause in the agreement between the owner and contractor, rather than the clause in the subcontractor's agreement, concluding the indemnification agreement executed by the subcontractor did not impose a contractual obligation to reimburse either the contractor or the owner for their legal costs "in the absence of a legal determination that the [subcontractor] caused - by its 'negligence, omission, or conduct' - the injuries suffered by [the plaintiff]." Id. at 217.

Guided by this authority, we examine the indemnification clause under review, giving the words of the contract "their plain and ordinary meaning." M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171 N.J. 378, 396 (2002).

The scope of the indemnification is stated in its first paragraph of Section 13 in the contract. While broad, the clause is confined to "liability for any damage or loss that occurs "during or in connection with the Contractor's performance of the contract work[.]" (emphasis added). The focus of the clause is directed to the contractor's performance of its work, not third party acts. The provision expands the covered negligent acts to include "the negligence or fault of the Contractor, its agents, employees, subcontractors or servants, or otherwise." Nevertheless, the focus remains on the conduct of the contractor and its agents, not the Association's negligence. The final sentence, provides: "It is the intent of the parties that the Contractor's indemnification and save harmless obligations hereunder are not contingent upon contractor's fault[,]" relates to the prior statement regarding the conduct of the contractor, "its agents, employees, subcontractors or servants." This does not mention the negligent acts of the Association and we reject the notion that it can be construed as an unequivocally and explicit statement assuming indemnification responsibility for the Association's acts of negligence, as required by Mantilla, supra, 167 N.J. at 275.

The balance of the contractual indemnification clause does reference the Association. However, the content of the statements are limited to "the indemnity contained in this agreement." The statements do not further expand the scope of the agreed liability. They too, do not express an assumption of liability for the Association's independent negligent acts.

At trial, plaintiff articulated separate acts by the Association and Greenview as encompassing her claims for negligence "in failing to adequately inspect and/or maintain the . . area." In her opening statements and her direct testimony, plaintiff referenced the Association's duty to maintain the property, stating: "she's not responsible to maintain any of the outside portions of the property. There's a condominium association that has that responsibility; it's called the Beverly Hills Terrace Condominium Association." Plaintiff explained the Association did not have "an obligation to get out there and physically do any work in terms of salting . . . [but t]heir job was to see that it got done[.]" Greenview's separate negligent conduct was articulated as "failing to salt in a timely manner"; a duty distinctly different from that of the Association. The jury's conclusion that plaintiff's proofs were deficient in each regard, does not redefine the arguments as pointing solely to Greenview.

The trial record reflects plaintiff sought to prove each defendant -- the Association and Greenview -- breached their respective duties regarding the maintenance of the common area condominium walkways, requiring defendants to defend these separate claims. We conclude the language of the parties' contractual indemnification clause lacks Greenview's clear and explicit assumption of indemnification responsibility for the Association's negligent conduct.

In light of our conclusion, we need not address the alternative argument advanced by Greenview, challenging the timing of the Association's indemnification request.



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