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Claros v. Prologis Trust

A-3666-03T1 (N.J. Super. App. Div. 2005) (Unpublished)

LEASES; NEGLIGENCE; COMMON AREAS — A tenant does not have the obligation to indemnify a landlord for injuries occurring on common areas of the property that the landlord is responsible to maintaining, unless the lease agreement provides to the contrary.

A beverage company entered into a lease agreement to rent all of the space in an office building. The lease contained an indemnification clause under which the tenant was required to indemnify its landlord for personal injury claims brought by third parties. One of the beverage company’s employees was injured after her foot sank into a dirt island on the parking lot. The employee filed a negligence action against the landlord seeking compensatory damages for her injuries. The landlord, in turn, filed a third-party complaint against its tenant, the beverage company, and the landscape contractor who maintained the parking lot. The landlord asserted that its tenant was required to indemnify it pursuant to the lease. The woman eventually settled her claim, and the only remaining issue before the lower court was the landlord’s indemnification action. The landlord contended that, under the lease, its tenant was required to indemnify it for all actions not arising from the negligence of the landlord. In response, the tenant asserted that it was only required to indemnify the landlord for injuries arising out of its use and occupancy of the premises. The lower court held that, under the lease, the landlord retained control of the parking lot during the term and as a result, the landlord was responsible for all injuries occurring on the parking lot. The landlord appealed.

On appeal, the landlord argued that its tenant should have been held negligent because, as the only tenant in the building, it had exclusive control of the building. Conversely, the beverage company asserted that it did not have exclusive control of the building because pursuant to the lease, the landlord retained control of the parking lot and related landscaped areas. The Court reviewed the lease to understand the landlord’s maintenance duties. It found that the landlord agreed to maintain the parking area and other common areas in good condition, with the cost thereof to be reimbursed by the tenant. As to the indemnification clause, the Court held that it required the tenant to indemnify its landlord for injuries to third parties caused by the tenant’s acts or omissions during its use and occupancy of the premises. The clause did not require the tenant to indemnify its landlord for claims arising out of the landlord’s negligence or that of the landlord’s employees or agents. The Court held that because the landlord retained responsibility for the parking lot, its tenant’s obligation to indemnify the landlord did not extend to injuries occurring on the parking lot. The tenant’s indemnification duty did not extend beyond the leased premises and the areas for which it was expressly responsible to maintain under the lease.


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