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Spina v. Scanel

A-895-99T5 (N.J. Super. App. Div. 2001) (Unpublished)

LEASES; LIABILITY—Exculpatory clauses must be closely examined and if there is any ambiguity, a court must determine the intention of the parties based upon all of the facts and circumstances surrounding the creation of the lease containing the clause.

A chiropractor tripped and fell in a parking lot of a building in which he rented a professional office. The lease contained an exculpatory clause in favor of the landlord stating, in part, that the landlord was not liable for any damage or injury which may be sustained by the tenant “resulting from the carelessness, negligence or improper conduct on the part of any other Tenant or of the Landlord or the Landlord’s or this or any other Tenant’s agents, employees, guests, licensees, invitees, subtenants, assignees, or successors… .” In addition, the lease required the tenant to keep and maintain general public liability insurance for claims resulting from an accident on or about the leased premises. It further contained an indemnification provision by which the tenant agreed to indemnify and hold its landlord harmless from claims “arising out of or by reason of the occupancy by the Tenant and the conduct of the Tenant’s business.” The lease was accompanied by a rider that required the landlord to maintain outside lighting. The landlord contended that an addendum gave its tenant the right to use an overflow parking lot and, “therefore, the lease contemplated exculpation of claims with respect to the parking lot and the office.” The lower court granted summary judgment in favor of the landlord, holding that the exculpatory clause was “global” in scope, and rejected the tenant’s argument that the exculpatory clause did not mention the parking lot and that the lease placed the responsibility on the landlord to maintain proper lighting in the parking lot. The Appellate Division began by pointing out that “exculpatory clauses in commercial leases are enforceable so long as the language is unambiguous and there is no public policy issue or unequal bargaining power.” On the other hand, “[a]n exculpatory clause should not exculpate a landlord from his own negligence unless the clause specifically so states.” Further, “exculpatory clauses which seek to insulate a landlord from liability based upon its own fault are strictly construed by our courts.” As a result, the Court felt it necessary to determine whether, at the time of its making, “[the parties] so clearly allocated the risks 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.” Based upon the “scant record,” before it, the Court was unable to answer that question with certainty and remanded the matter to the lower court for determination with the following principles (which were quoted from an earlier case). “Accordingly, whether the clause under consideration is regarded as clear and certain, or ambiguous and uncertain, if the intention of the parties is not to be gleaned from a reading of the instrument as a whole, the plaintiff should have had the opportunity of presenting evidence of the facts and circumstances surrounding the execution of the lease.”

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