Recently, two different panels of judges on the New Jersey Appellate Division reached opposite conclusions on the issue of the duty of a commercial tenant to inspect and make safe a parking lot it neither leases nor is responsible for under the lease. It is important to be aware of these cases and the different conclusions they reached if you are (1) an insurer, commercial landlord or tenant or (2) responsible for drafting leases or indemnification agreements or simply serving as defense counsel.

Kandrac v. Marrazzo’s Market at Robbinsiville, 429 N.J. Super. 79 (App. Div. 2012)

In Kandrac, plaintiff was injured when she fell in the parking lot of a shopping center after leaving defendant’s store, an “anchor store” of the shopping center. Defendant’s lease with the landlord provided that the landlord, whom plaintiff also sued, was responsible for maintaining the customer parking lot and other common areas and did not obligate defendant to do anything regarding the parking lot. The Court held “as a general rule, when a commercial tenant in a multi-tenant shopping center has no control or contractual obligation to maintain a parking lot shared with other tenants, the common law does not impose a duty upon the tenant to do so.”

Defendant won summary judgment in the Law Division, and the Appellate Division affirmed after considering the issue of law under a de novo standard of review. Recounting the history of case law regarding liability for injuries on commercial property, the Court noted that, ultimately, the issue of duty is one of basic fairness and public policy. Cases that placed liability on a commercial landowner did not apply here, where defendant had no “control or maintenance responsibilities for a common area and … no contractual obligation to maintain such areas.” While the lease provision did not relieve defendant of all responsibility for the safe ingress and egress of its customers, the injury did not occur “in a location necessary to such ingress and egress.”

As such, the Court concluded that since the landlord was responsible for the parking lot, plaintiff was not without a remedy. From a fairness and public policy perspective, allowing suit against the store would encourage “shotgun litigation,” with injured plaintiffs suing every store in a shopping center in which they might have browsed. Moreover, imposing liability on each store might lead to conflicts and inefficiencies in overall maintenance, as each store would seek to take actions that might interfere with the landlord’s maintenance. Accordingly, the summary judgment for defendant was affirmed.

Nielsen v. Wal-Mart Store No. 2171, 429 N.J. Super. 251 (App. Div. 2013)

In Nielsen, the Appellate Division held that despite a developer’s contractual responsibility for the maintenance and repair of an area outside a commercial condominium unit, the owner of that unit still owed a duty of care to the employee of an independent contractor with regard to a hazardous condition in that same location. The Court balanced a number of factors in concluding that the lack of ownership or control of the area did not absolve Wal-Mart of liability, including the relationship of the parties, the attendant risks, the nature of the risks and, ultimately, fairness to the innocent plaintiff.

Plaintiff was injured when he slipped and fell in a shopping plaza while in the course of his employment with Ecolab, Inc., which had been hired by Wal-Mart to exterminate pests. He had been instructed by the store to access various entrances from the exterior of the unit owned by Wal-Mart. The perimeter of the store where plaintiff fell was owned by the developer who, pursuant to the master deed, agreed to “supervise, administer, operate, manage, insure, repair, replace and maintain” the common elements. Plaintiff subsequently filed suit against Wal-Mart, and unsuccessfully attempted to amend the complaint to name the developer as a defendant more than two years after the action’s accrual (at which point the statute of limitations had run). At trial, a jury found Wal-Mart 80 percent negligent and awarded plaintiff damages of $400,000. Wal-Mart’s motion for a new trial was denied.

On appeal, Wal-Mart argued that the trial court erred in failing to distinguish between the duty owed by a business owner on and off its premises. The Appellate Division stated that case law supports the imposition of liability beyond the boundaries of a commercial land occupier’s property (i.e., to abutting sidewalks and adjacent public roadways). Likewise, while a lack of ownership or control of an area has relevance in determining the existence of a duty of care, the Court noted this factor is not dispositive. The Court also indicated that the private contractual arrangement of duties between a commercial unit owner and developer is not dispositive but rather simply another factor to be considered in the analysis.

Ultimately, the Court affirmed the trial judge’s decision based on foreseeability and fairness grounds. Wal-Mart directed plaintiff to use the unit’s perimeter to perform extermination work, and therefore was aware that its invitees and passersby might foreseeably traverse the area outside the unit. The Court also suggested that, despite no contractual obligation to maintain an area, a business owner, such as Wal-Mart, would be encouraged to alert the responsible entity of a hazardous condition if a duty of care were imposed on that unit owner.

Definitive Ruling Likely in 2013–2014

In light of the seemingly conflicting decisions, it is likely that the New Jersey Supreme Court will take up the issue, with a definitive ruling likely in 2013–2014. We anticipate that the Wal-Mart decision will be the anomaly and distinguishable on its facts due to the Kandrac decision's application of established common law.