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Cain v. Contemporary Services Corporation

A-4322-00T2 (N.J. Super. App. Div. 2002) (Unpublished)

CONTRACTS; INDEMNITIES— In the absence of making a “broad form” indemnity, the indemnifying party is liable only if it has some “fault.”

A patron of an arena was injured while attending a concert and sued the arena and its affiliates to recover damages for his injuries. The arena demanded that its security provider indemnify the arena pursuant to an indemnification provision in the contract between them. The security provider refused to indemnify the arena because the contract required indemnification only if the security provider was negligent. The security provider was added as a defendant and it settled with the patron for a nominal sum. The arena then moved for summary judgment on its indemnification claim and sought reimbursement for its attorneys’ fees. The lower court ruled that the security provider had an obligation to indemnify and defend the arena, and did not have to await a jury verdict as to negligence before indemnifying the arena for its defense costs. Accordingly, it ruled in favor of the arena. The Appellate Division reversed, ruling that the contract did not contain “broad form” indemnity provisions, but rather required some fault of the security provider before it was required to indemnify the arena. Since, in this case, the security provider paid a nominal sum as a “nuisance” settlement, it was not clear that the security provider was negligent. Consequently, there was a material issue of fact. The Court concluded that the finder of fact must determine if the security provider breached its duty to the arena by some act or failure to act that contributed to the patron’s injury. If the security provider was blameless, it was not required to indemnify the arena.

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