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Rousseau v. Ramrattan

A-5985-00T2 (N.J. Super. App. Div. 2002) (Unpublished)

LEASES; EXCULPATION— A generalized provision of a lease purporting to exculpate a landlord from liability for water leaks will not relieve the landlord from its own negligence unless the provision expressly applies to negligence.

A landlord’s plumbers sought to repair a leak in a pipe over a retail store. They began the work one day and left the pipe completely open, but with the water main turned off. Over the weekend, the landlord entered “the basement to turn the heat on ... [and] somehow he turned the main water line on ... [and] [w]ater began to run out of those pipes [and] flood [the] store and went through three other stores… .” The written lease contained the following exculpatory clause: “It is expressly agreed and understood by and between the parties to this agreement, that the Landlord shall not be liable for any damage or injury to personal property caused by or resulting from steam, electricity, gas, water, ice or snow, or any leak or flow from or into any part of said building, or from any damage or injury resulting from or arising from any other cause or happening whatsoever.” The lower court accepted the landlord’s argument that the exculpatory clause barred the tenant’s negligence claims. The Appellate Division reversed the lower court’s grant of summary judgment and remanded the matter for trial “because we are satisfied that the exculpatory clause [did] not bar [the tenant’s] action against the landlord in the circumstances presented.” A prior New Jersey Supreme Court case held that “[i]n the context of a commercial lease, an exculpatory clause should not be construed to exculpate a landlord for his negligence unless the clause expressly so states, ... or the intent to do is evident from the arrangement of the parties.” The essential question “in determining whether an exculpatory clause is valid is whether at the time of its making, ‘[the parties] so clearly allocated the risk so that each party knew, or should have known, the existence of its contingent liability and was thus placed in a position where it could protect itself against such loss by adequate insurance coverage or otherwise.’” Here, the Appellate Division felt that “the exculpatory clause ... [did] not clearly advert to the landlord’s negligence[,] [and did] not plainly indicate that the parties did intend to immunize the landlord from liability for its own negligence… .”

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