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Mantilla v. Newport Centre Mall Associates

A-6339-97T5 (N.J. Super. App. Div. 2000) (Unpublished)

INDEMNIFICATION—A contract will not be construed to indemnify an indemnitee against loss resulting from its own negligence unless that intention is expressed in unequivocal terms, but the indemnitor may still be liable for costs of defense.

A shopper was injured when she slipped on water that had accumulated on the floor of a shopping center mall. The jury apportioned the negligence forty percent to the mall, fifty percent to the mall’s cleaning service, and ten percent to the injured shopper. Thereafter, the mall sought to enforce indemnity provisions in its contract with its cleaning service. The lower court ordered the cleaning service to indemnify and hold the mall harmless for the entire amount of the jury verdict and to reimburse the mall for all legal fees and costs incurred. On appeal, the Appellate Division thought differently. The contract between the two called for the cleaning service to be liable for injuries caused by performance of its work. Another clause required the service to indemnify and hold the mall harmless from incidents resulting from the work the service performed and the materials and equipment it installed. It further required the contractor to maintain a comprehensive general liability policy. The contractor maintained such a policy. It contained an additional insured endorsement which included the mall under the insurance, but only with respect to operations performed by the cleaning contractor. Another indemnification clause within the contract called for the cleaning contractor to indemnify and hold the mall harmless for incidents caused by or arising from the negligence of the cleaning service in connection with any matter dealt with by the agreement. The cleaning service contended that, under the contract, its indemnification liability was limited to losses caused by or arising from the service’s negligence and therefore it should only be required to indemnify the mall with respect to the fifty percent negligence found by the jury. The Appellate Division agreed. “A contract will not be construed to indemnify an indemnitee against loss resulting from its own negligence unless such an intention is expressed in unequivocal terms.” The Court found an indemnity agreement to be a mechanism for allocating financial risks. Here, the Court was satisfied that the agreement did not intend to indemnify the mall against the consequences of its negligence, but limited the liability indemnification to losses resulting from the cleaning service’s own negligence. With respect to the cost of defense, however, the Appellate Division believed that once a complaint was filed alleging liability on the part of the mall, a duty to defend arose and continued until every covered claim was eliminated. Therefore, the Court held the indemnification liability of the cleaning service encompassed all of the costs of defense.


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