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LIG Insurance Co., Ltd. v. Bonanno Real Estate Group II, L.P.

Superior Court of New Jersey, Appellate Division

July 3, 2013

LIG INSURANCE CO., LTD. a/s/o TRIPLE SEVEN, INC., Plaintiff-Appellant,
v.
BONANNO REAL ESTATE GROUP II, L.P., Defendant-Respondent.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 15, 2013

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9821-11.

Fran J. Garb argued the cause for appellant (Law Office of Fran J. Garb, attorney; Ms. Garb, on the brief).

Jeffrey W. Mazzola argued the cause for defendant (Law Offices of William E. Staehle, attorney; Mr. Mazzola, on the brief).

Before Judges Graves and Ashrafi.

PER CURIAM

Plaintiff LIG Insurance Co. appeals from dismissal of its subrogation action arising out of payments it made to its insured, Triple Seven, Inc., for water damage to its inventory. LIG claims that the negligent failure of defendant-landlord Bonanno Real Estate Group II, L.P., to repair a public bathroom above Triple Seven's commercial premises was the cause of the damages. The Law Division dismissed the subrogation action on the ground that the terms of the lease between Bonanno and Triple Seven bar recovery for such damages. The lease expressly required that each party obtain its own insurance coverage for property damage, without the right of subrogation, and it waived all such claims between the lessor and lessee. We agree with the Law Division's understanding of the lease and affirm its judgment dismissing LIG's complaint.

Because judgment was entered pursuant to Rule 4:6-2(e), before any discovery was conducted in the litigation, we accept as true all the factual allegations contained in LIG's complaint and all reasonable inferences that can be drawn from those facts. Banco Popular N. Am. v. Gandi, 184 N.J. 161, 165 (2005); Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989). We also derive the relevant facts from documents that were presented to the Law Division on the motion to dismiss and not excluded by the court, thus treating the motion as one for summary judgment under Rule 4:46.

At a time when Triple Seven was known as 2000 Import and Export International, Inc., it entered into a lease with Bonanno to rent commercial premises on the ground floor at 1050 Slocum Avenue in Ridgefield, New Jersey. On February 3, 2008, a water leak in an upstairs bathroom caused damage to Triple Seven's inventory, and consequently its business operations. LIG had provided an insurance policy to Triple Seven that covered such property and consequential damages, and it paid more than $150, 000 on Triple Seven's claim. LIG then brought this action to recover from Bonanno the amount it paid to Triple Seven.

In the first count of its complaint, LIG alleged that Bonanno's negligent repair of the bathroom had caused the leak and the damages. The second count alleged that the same conduct also constituted a breach of the covenant of quiet enjoyment included in the lease between Bonanno and Triple Seven. Under the lease, Bonanno was responsible for the repair of "Common Facilities, " which include the leaky bathroom. According to LIG's complaint, Triple Seven repeatedly informed Bonanno that the bathroom was in need of repair, the last of the complaints occurring by telephone on January 31, 2008, just a few days before the water leak that damaged Triple Seven's inventory.

In lieu of an answer to LIG's complaint, Bonanno moved to dismiss the complaint based on sections 10 and 30 of the lease. Section 10 provides in relevant part:

DAMAGES TO BUILDING/WAIVER OF SUBROGATION.
Except as provided in Section 5 hereof, [1]notwithstanding the provisions of this Section or any other provision of this Lease, in the event of any loss or damage to the Building, the Premises and/or any contents (herein "property damage"), each party waives all claims against the other for any such loss or damage and each party shall look only to any insurance which it has obtained to protect against such loss (or in the case of Lessee [Triple Seven], waives all claims against any tenant of the Building that has similarly waived claims against such Lessee) and each party shall obtain, for each policy of such insurance, provisions waiving any claims against the ...

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