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Mercer v. Corporate Property Investors

A-1888-99T1 (N.J. Super. App. Div. 2001) (Unpublished)

CONTRACTS; INDEMNIFICATION—An indemnification obligation “relating to, arising out of or existing by reason of” performance or breach of a contract does not limit an indemnifying party to only its own negligence.

A customer slipped and fell on what appeared to be bleach on the floor of a shopping mall. After amending her complaint four times, she named the mall owner, its building and cleaning service, and a number of others as parties liable for her injuries. At the time of the incident, a contract between the mall owner and the cleaning service was in effect for janitorial services. It provided for indemnification by the cleaning contractor of the shopping mall owner for claims “relating to, arising out of or existing by reason of” the performance or breach of the janitorial service’s contract. There was no language which expressly or impliedly limited the indemnity to the negligence of the cleaning service. In the Court’s view, the indemnity clause was, therefore, a broad form indemnity which did not limit the duty to defend or to indemnify the shopping mall owner only from the cleaning service’s own negligence. The Court also noted that even though other parties may also have borne or retained some common area maintenance and clean up obligations, the finding of some percentage of negligence against those parties as well as against the cleaning service would not abrogate the contractual obligation on the part of the cleaning service to defend and indemnify the shopping mall owner. According to the Court, “[a]ny foreign substance on the common area floor is subject to being cleaned up under [its] contract regardless of how it got there or who, when or where it is identified and reported.”

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