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Jimenez v. Hartz Mountain Industries, Inc.

A-2008-98T3 (N.J. Super. App. Div. 1999) (Unpublished)

LEASES; INSURANCE; INDEMNIFICATION—Where a lease unambiguously assigns liability to one party, the insurance indemnification provisions in the lease will not be read to expand the scope of the other party’s responsibility.

An individual slipped and fell on a snow covered sidewalk in front of a building. He was leaving a tenant’s premises in that building and was on his way to buy coffee when he fell. The claim was settled, but the landlord and tenant disagreed as to whether the tenant was required to indemnify its landlord for the accident. One key paragraph of the lease required the landlord to “indemnify and hold harmless the tenant against claims resulting from landlord’s negligence in its operational or maintenance of the Demised Premises, the Building and the Common Areas.” The lease provided that the sidewalks formed part of the “Common Areas,” and the definition of “Demised Premises” was “[t]he space that is or will be located within the Building… .” The tenant was required to maintain comprehensive general liability insurance in respect of the Demised Premises and the conduct and operation of its business within those premises. It further was required to indemnify and hold its landlord harmless from all claims “arising from or in connection with ... the Demised Premises… .” The landlord agreed to indemnify and hold the Tenant harmless in respect to claims arising from the fault or negligence of the landlord in its operation or maintenance of the Demised Premises, the Building and the Area. Despite all of that apparently clear language, the landlord pointed to the section of its tenant’s lease that required the tenant to name the landlord as an additional insured. It then attempted to argue a series of “insurance” cases for the proposition that naming a party as an additional insured provided broad indemnity coverage. The Court, however, pointed out that the principles which apply to traditional interpretations of indemnification agreements in a lease differ from those applicable to construing an insurer’s obligations under an insurance policy. Nothing in the lease was ambiguous. The accident occurred in the Common Areas, and the landlord had agreed to indemnify and hold its tenant harmless with respect to accidents occurring there. The fact that the tenant failed to obtain the required insurance coverage had no negative effect upon the landlord because “the accident indisputably occurred in a common area outside the demised premises committed to landlord’s obligations under the lease to maintain, and also to save harmless [tenant].”


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