SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0329-00T5
MARY AZURAK,
Plaintiff,
v.
CORPORATE PROPERTY INVESTORS,
t/a OCEAN COUNTY MALL,
Defendant-Respondent,
and
PLANNED BUILDING SERVICES,
Defendant-Appellant.
Argued November 14, 2001 - Decided February 7, 2002
Before Judges Skillman, Carchman and Wells.
On appeal from Superior Court of New Jersey, Law
Division, Ocean County, L-1109-98.
Theresa E. Mullen argued the cause for appellant
(Sachs, Maitlin, Fleming, Greene, Wilson & Marotte,
attorneys; Ms. Mullen, on the brief).
Lawrence M. Berkeley argued the cause for respondent
(Rubin & Fiorella, attorneys; Mr. Berkeley, on the
brief).
The opinion of the court was delivered by
CARCHMAN, J.A.D.
In a pre-trial motion, the motion judge determined that
defendant Planned Building Services (PBS) was required to
indemnify defendant Corporate Property Investors (the Mall) for
damages arising from the Mall's negligence as well as pay all
defense costs. We conclude that the Mall is not entitled to
indemnification for its own negligence under its indemnification
provision absent "explicit contractual language" required by
Mantilla v. NC Mall Assocs.,
167 N.J. 262 (2001). Accordingly,
we reverse.
After ordering indemnification and a defense, the judge then
certified the judgment as final and PBS appealed.See footnote 11 While this
appeal was pending, plaintiff's cause of action was tried
resulting in a judgment against the Mall and PBS. Negligence was
found as against all parties _ plaintiff-30%; the Mall-30%; and
PBS-40% _ and the jury awarded plaintiff $7,600.16, which was
then molded to reflect plaintiff's comparative negligence. After
computation of prejudgment interest, a judgment was entered in
plaintiff's favor for $6,131.02.
The contractual language in Doloughty, a construction case,
referred to claims "arising out of the performance" of the work.
Id. at 119. The judge identified the contrasting type of
indemnity provision as "one which is limited to risk of loss or
damage resulting from the negligence or fault of the indemnitor."
Id. at 118. Contractual language used to express this "limited"
type of indemnity includes "a specific reference to the
indemnitor's fault or negligence, . . . [or language such as]
arising from the indemnitor's 'acts or omissions.'" Ibid. The
judge then concluded that a court must determine:
[W]hether or not, considering all of the
relational circumstances, the indemnitee
reasonably expected as part of his bargain
with the indemnitor that the duty he failed
to perform and on which his liability to
plaintiff is predicated would be performed by
the indemnitor. Then, of course, as between
themselves, the indemnitee should be relieved
of responsibility for his breach of duty vis-
a-vis plaintiff since the indemnitor's
obligation to indemnify in that situation
would clearly have been within the parties'
contemplated bargain. If, on the other hand,
the duty to plaintiff breached by the
indemnitee was not originally or
independently that of the indemnitor and was
not otherwise shifted to him by the
relational circumstances between them, or if
the indemnitee's expectation of the
indemnitor's performance of that duty was not
otherwise reasonable, the indemnitee's
liability to plaintiff cannot be fairly
deemed to have been within the intended
coverage of an indemnity agreement limited to
the indemnitor's acts or omissions.
[Id. at 122-23.]
Subsequent to the decision in Doloughty, the Supreme Court
enunciated basic principles in the construction of
indemnification provisions by holding:
Indemnity contracts are interpreted in
accordance with the rules governing the
construction of contracts generally. When
the meaning of the clause is ambiguous,
however, the clause should be strictly
construed against the indemnitee. Thus, a
contract will not be construed to indemnify
the indemnitee against losses resulting from
its own negligence unless such an intention
is expressed in unequivocal terms.
[Ramos v. Browning Ferris Indus. of S.
Jersey, Inc.,
103 N.J. 177, 191 (1986)
(emphasis added) (citations omitted).]
We have construed Ramos as a modification of Doloughty and
in Gulf Oil Corp. v. ACF Indus., Inc.,
221 N.J. Super. 420, 428-
29 (App. Div. 1987), certif. denied,
111 N.J. 613 (1988),
observed:
Although Ramos was determined in a different
setting, the principle just quoted [i.e., see
emphasized language above] must be deemed to
modify the Doloughty formula which requires
that only a broad indemnification for all
work-related adverse consequences need be
shown for the indemnitor to provide
indemnification for the indemnitee's own
negligence. Under Ramos and the several
cases there cited, there must be language
unequivocally including the indemnitee's
negligence. We accept for the purpose of
this discussion that there need not be any
specific mention of the indemnitee's
negligence in the contract; sufficient other
all-encompassing language [i.e. broad form
language] ... and the contractual setting
should be able to constitute such an
expression in the "unequivocal terms"
required by Ramos.
We have adhered to the Ramos principle in subsequent analysis of
indemnification agreements. See, e.g., Meder v. Resorts Int'l
Hotel, Inc.,
240 N.J. Super. 470, 478-79 (App. Div. 1989),
certif. denied,
121 N.J. 608 (1990) (applying the Ramos
formulation where the contract did not state in "unequivocal
terms" that the duty to indemnify extended to the indemnitee's
negligence); McCabe v. Great Pac. Century Corp., 236 N.J. Super.
488, 492-93 (App. Div. 1989), certif. denied,
121 N.J. 611-12
(1990) (same).
Our more recent analysis of the scope of indemnification
provisions as applied to an indemnitee's negligence applies these
two basis principles: indemnification provisions will be
construed in accordance with general rules for construction of
contracts, and no indemnification for a party's own negligence
will be found absent an unequivocal expression of an intention to
so indemnify. See, e.g., Pepe v. Township of Plainsboro,
337 N.J. Super. 209 (App. Div. 2001) (finding that the language "any
injury . . . on account of any act of omission or commission of
any contractor" did not provide indemnification for an agent of
indemnitee); Leitao v. Damon G. Douglas Co.,
301 N.J. Super. 187
(App. Div.), certif. denied,
151 N.J. 466 (1997) (finding
indemnification where the indemnification provision provided for
indemnification for injury caused by "anyone directly or
indirectly employed by [it], . . . regardless of whether it is
caused in part by a party indemnified. . . ."); Mautz v. J.P.
Patti Co.,
298 N.J. Super. 13 (App. Div.), certif. denied,
151 N.J. 472 (1997) (finding the language "arising out of or
resulting from the performance of the [indemnitor's] work . . .
to the extent caused . . . by any negligent act or omission of
the [indemnitor]" did not require indemnification); Vitty v.
D.C.P. Corp.,
268 N.J. Super. 447 (App. Div. 1993) (finding that
language precluding indemnification where the "sole active
negligence" of the indemnitee caused the loss did not preclude
indemnification for losses arising out of the underlying
contract).
We apply these principles here and restate the language of
the indemnification provision:
Contractor [PBS] shall indemnify, defend and
hold harmless each Indemnitee [the Mall] from
and against any claim (including any claim
brought by employees of Contractor),
liability, damage or expense (including
attorney's fees) that such Indemnitee may
incur relating to, arising out of or existing
by reason of (i) Contractor's performance of
this Agreement or the conditions created
thereby (including the use, misuse or failure
of any equipment used by Contractor or its
subcontractors, servants or employees) or
(ii) Contractor's breach of this Agreement or
the inadequate or improper performance of
this Agreement by Contractor or its
subcontractors, servants or employees.
[emphasis added.]
The focus of the provision is on the conduct of "the Contractor"
with no reference to either the indemnitee or its negligence.
The language of this indemnification provision does not meet the
"unequivocal" or "explicit" test enunciated in Ramos and restated
in Mantilla. We conclude that the indemnification agreement does
not provide for indemnification of the Mall.
We recognize that other panels of this court have reached
conflicting results in the interpretation of this indemnification
provision. See Mercer v. Corporate Property Investors, No. A-
1888-99T1 (App. Div. April 6, 2001) (relying on Doloughty and
concluding that the indemnification provision applied to the
Mall's negligence); Dafeldecker v. Ocean County Mall, No. A-6366-
98T1 (App. Div. November 13, 2000) (same); but see Cicoski v.
Corporate Prop. Invest., No. 4495-97T3 (App. Div. April 29, 1999)
(holding that "[t]he clause would not require PBS to indemnify
Corporate Property against liability for its own negligence").
Although these opinions are unpublished, the Mall argues that
they are binding on PBS under the doctrine of collateral
estoppel. See R. 1:36-3; Mantilla, supra, 167 N.J. at 267-68
n.1. However, these cases contain conflicting suggestions as to
the proper interpretation of the indemnification clause in issue
and, in any event, application of the collateral estoppel
doctrine is discretionary and "must be applied equitably, not
mechanically." Pivnick v. Beck,
326 N.J. Super. 474, 485 (App.
Div. 1999) aff'd o.b.,
165 N.J. 670 (2000) (quoting In re
Tanelli,
194 N.J. Super. 492, 497 (App. Div.), certif. denied,
99 N.J. 181 (1984)); see also Barker v. Brinegar, N.J. Super.
, (App. Div. 2002) (slip op. at 7).
As we have stated, we reject the Mall's argument and
reliance on Doloughty and conclude that the Court's analysis in
Ramos and the reaffirmation of the Ramos principle in Mantilla
compels the conclusion that absent the required language mandated
by those cases, the indemnification provision does not extend to
the Mall's negligence.
Significantly, the Court's analysis in Mantilla, by
omission, eschewed the consideration of a "broad" or "limited"
form of indemnification _ a critical element in the analytical
framework that had dominated consideration of these issues in
Doloughty. We read Mantilla as a reiteration of Ramos and its
"bright line" rule requiring "explicit language" that
indemnification and defense shall include the indemnitee's own
negligence. We note that nowhere in Mantilla is there any
mention of the significance of broad form or limited form
indemnification provisions or any significant reference to
Doloughty.
The Ramos and Mantilla rule imposes no significant burden on
contracting parties to express in "explicit terms" that the
indemnification includes the negligence of the indemnitee. The
parties need only draft contracts to reflect this intention in a
manner consistent with the Court's dictates.
In sum, we accept the Court's clear and explicit language as
meaning what it says and conclude that the absence of clear and
explicit language addressing indemnification for the Mall's
negligence precludes recovery for its portion of the judgment or
defense costs.
Reversed.
Footnote: 1 1 PBS acknowledged at oral argument that the certification of the judgment was in error. We nevertheless treat the appeal as a motion for leave to appeal, grant the application nunc pro tunc and address the issues on the merits. See Taylor v. General Elec. Co., 208 N.J. Super. 207, 211 (App. Div.), certif. denied, 104 N.J. 379 (1986).