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Koch v. Monmouth Dental Center

A-3893-98T2 (N.J. Super. App. Div. 2000) (Unpublished)

LEASES; LIABILITY; INSURANCE—There must be a substantial nexus between the occurrence of an accident and the use of the leased premises for a tenant’s insurance to attach and protect the landlord.

On a cold, snowy, icy day, a person, looking for the entrance to a dental office, slipped and fell at the front door of another tenant within the building. The dentist owned the building. The lease between the tenant and the building owner required the tenant “to indemnify and save the Landlord harmless from all claims and liability for losses of or damage to property, or injuries to persons occurring in or about the demised premises.” In addition, the lease required the tenant to maintain liability insurance and name the landlord as a named insured. The tenant paid its pro-rata share of taxes, insurance and maintenance. The landlord, however, was responsible for the removal of snow and ice from the common parking lot. A jury found the landlord solely negligent, but the lower court required the tenant to indemnify the building owner. The tenant appealed and the Appellate Division reversed the finding of the lower court and held that the tenant was not liable to indemnify its landlord. The Court held that, in effect, the landlord was seeking indemnification from its tenant for the landlord’s negligence. “A contract or lease will not be construed to indemnify the indemnitee against loses [sic] resulting from its own negligence unless such an intention is expressed in clear and unequivocal terms.” The lease clause in question did not unequivocally purport to indemnify the landlord for damages against its own negligence. The Court then looked at the effect of the lease provision requiring the tenant to name its landlord as an additional insured. In the words of the Court, “[a] determination that [the dentist] is entitled to coverage under [the tenant’s] liability insurance policy would not be inconsistent with our determination that [the landlord] was not entitled to contractual indemnification under the lease.” What the Court did was point out that there must be a “substantial nexus” between the occurrence and the use of the leased premises for coverage to attach. Here, the record did not permit the Court to conclude with any degree of confidence whether the landlord was entitled to insurance coverage from the tenant’s insurance carrier. Therefore, it remanded the matter to the lower court for further proceedings aimed at making that determination.

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