MARGARITA SORIANO, ETC. VS. 70 HUDSON STREET REALTY, LLC (L-3086-15, HUDSON COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0490-17T3
MARGARITA SORIANO,
Individually and as Administratrix
Ad Prosequendum of the ESTATE
OF GUMERCINDO SORIANO,
Plaintiff-Appellant,
v.
70 HUDSON STREET REALTY, LLC,
DF 70 REALTY, LLC, MF 70
REALTY, LLC, LJC 70 REALTY, LLC,
HAZEL ROCK, INC., and HOUSTON
SPECIALTY INSURANCE COMPANY,
Defendants-Respondents.
_________________________________
Argued January 29, 2019 – Decided February 27, 2019
Before Judges Hoffman, Suter and Firko.
On appeal from Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-3086-15.
Richard M. Chisholm argued the cause for appellant.
Amy K. Papa argued the cause for respondent 70
Hudson Street Realty, LLC (Bolan Jahnsen Dacey,
attorneys; Terrence J. Bolan, on the brief).
Paul J. Soderman argued the cause for respondents DF
70 Realty, LLC, MF 70 Realty, LLC, and LJC 70
Realty, LLC.
Vincent J. La Paglia argued the cause for respondent
Hazel Rock, Inc. (Vincent La Paglia, attorney; Jeff E.
Thakker, of counsel; Vincent J. La Paglia, on the brief).
Daniel A. Schilling argued the cause for respondent
Houston Specialty Insurance Company (Kaufman
Borgeest & Ryan, LLP, attorneys; Brian M. Sher,
Elizabeth Butler and Daniel A. Schilling, on the brief).
PER CURIAM
Plaintiff, the widow of Gumercindo Soriano (decedent), appeals from Law
Division orders granting the summary judgment dismissal of her wrongful death
action and related claims, arising from the fatal injuries her husband sustained
in a work-related accident. We affirm in part, and reverse and remand in part.
I
We derive the following facts from evidence submitted by the parties in
support of, and in opposition to, the summary judgment motion, viewed in the
light most favorable to plaintiff, the non-moving party. Angland v. Mountain
Creek Resort, Inc., 213 N.J. 573, 577 (2013) (citing Brill v. Guardian Life Ins.
Co. of Am., 142 N.J. 520, 523 (1995)).
A-0490-17T3
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In August 2012, decedent – then fifty-nine years old – began working as
a cook at The Green Rock Tap & Grill (the restaurant), a bar-restaurant operated
by defendant Hazel Rock, Inc. (Hazel Rock). Hazel Rock leased the property
from defendant 70 Hudson Street Realty, LLC (Hudson).1
On August 4, 2013, decedent's co-worker found him unconscious in the
basement of the restaurant, at the bottom of a rudimentary hatch ladder system
extending down from the restaurant; two days later, decedent died at a local hospital
without regaining consciousness. Plaintiff contends decedent sustained fatal head
injuries when he either slipped or fell down the unsafe, illegally installed hatch
ladder system.
A hospital laboratory report after decedent's admission listed his blood
alcohol concentration (BAC) as 0.228.2 Despite this BAC reading, the record
1
Defendants DF 70 Realty, LLC; MF 70 Realty, LLC; and LJC 70 Realty, LLC
own Hudson. The record indicates the principal owners of these entities are
Mario Fini, a battalion chief with the Hoboken Fire Department, and Patrick
Cappiello, a retired captain with the same department.
2
Notably, at oral argument, counsel advised that the deposition of the nurse
who completed the blood draw had not been taken. In State v. Renshaw, we
noted the importance of the testimony of the nurse who completes the blood
draw to confirm that proper steps were followed. 390 N.J. Super. 456, 468 (App.
Div. 2007). For instance, "an error . . . in using an ethanol, rather than a betadine
swab, or in the drawing of blood from an artery rather than a vein . . . could . . .
falsely and unfairly [inflate] the BAC reading." Ibid.
A-0490-17T3
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contains no observations of impairment of decedent before he was found
unconscious in the basement. Dan Grey, a restaurant manager and the last
person to see decedent alive, testified that decedent appeared fine and not
impaired approximately one hour before he was found. Another co-worker,
Daniel Ordone, saw decedent thirty minutes earlier and decedent also appeared
fine to him.
At the time of decedent's fatal accident, restaurant employees had two ways
to access the basement of the restaurant. From an outside door on the street, they
could use stairs leading down to the basement. Alternatively, they could use the
hatch ladder system, consisting of a hole in the floor of a locked storage room. A
square, wooden hatch door covered the hole; when lifted, the hatch door revealed a
four foot, five inch mounted ladder, leading down to a small platform, and then an
unmounted aluminum ladder3 extending another five feet, eight and one-half inches
down from the platform to the cement floor of the basement. Thus, the total distance
from the trap door opening to the cement basement floor exceeds ten feet.
3
A "bungee cord" held the aluminum ladder in place.
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Although federal law required Hazel Rock to report decedent's accident to the
Occupational Safety and Health Administration (OSHA),4 Hazel Rock never
reported the accident or the fatality. As a result of Hazel Rock's failure to comply
with its OSHA reporting obligation, OSHA did not have the opportunity to
investigate the accident and issue citations for the accident.5 When OSHA ultimately
learned of decedent's fatal accident twenty-one months later, OSHA officials made
the decision "to investigate the establishment given that hazards which may have
contributed to an incident could still be present at the site." In fact, the hazards did
remain as the record indicates the hatch ladder system underwent no significant
change in the interim.
An OSHA compliance safety and health officer (CSHO) conducted an
investigation of the restaurant premises on May 12, 2015. The CSHO found five
"serious" violations regarding the hatch ladder system. Three of those violations
4
Applicable regulations require "all employers" to contact OSHA and report
"the in-patient hospitalization" of an employee within twenty-four hours of a
work-related incident, and to report "the death of any employee as a result of a
work-related incident" within eight hours. 29 C.F.R. § 1904.39 (a) (1) and (2).
5
29 U.S.C. § 658(c) specifically provides, "No citation may be issued under
this section after the expiration of six months following the occurrence of any
violation."
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listed "Death" as the possible "Injury/Illness (and Justification for Severity and
Probability)."
According to the OSHA violation worksheet following inspection of the hatch
ladder system,
Employees were exposed to falls of up to [ten] feet6 to
the basement below as the trapdoor floor opening was
secured in the open position. . . .
The entrance to the area of the trapdoor was a hinged
door which employees had to key in a code to open.
Once open, the trapdoor opening was directly in front
of the worker and storage items such as towels and
bleach used in the restaurant were stored on shelves
around the opening. Thus opening the door was like
going into a closet without the floor[,] given the
trapdoor was always open.
One could be standing by the open door in front of the
trapdoor and when the kitchen doors open, it could
strike a worker and send them down the opening in the
floor.
[Pa22]
According to Dr. David Gushue, plaintiff's biomechanical expert, decedent's
fatal head injuries "consisted of a severe comminuted fracture involving the left
frontal, perietal, and occipital bones with associated severe intracranial injuries and
6
An OSHA worksheet listed the exact measurement of "the distance from the
trap door opening to the basement floor as [ten] feet, [two] inches."
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hemorrhage." He concluded that decedent "fell from an elevated position on the
ladder(s) and/or platform and sustained multiple high-energy impacts during the fall
sequence that resulted in injuries to the left frontal aspect of his skull. . . ."
Michael Gallucci, one of the owners of Hazel Rock, testified that employees
typically used the hatch ladder system to access the basement because it was faster.
The basement contained Gallucci's office, a walk-in refrigerator, three ice machines,
and storage of beer, wine, and liquor. Barbacks7 went down to the basement most
often to retrieve ice or other items for the bar. The cooks only used the basement to
meet with Gallucci.
Hudson acquired the building that includes the restaurant leased to Hazel
Rock in 2003. When Hudson acquired the building, Hazel Rock was already a
tenant, renting just one floor for its restaurant. In July 2004, Hazel Rock contacted
Hudson, expressing interest in leasing the basement area below its restaurant space.
While the record contains three letters exchanged on this issue, the record
inexplicably fails to contain any letters or emails confirming the agreement reached
between Hudson and Hazel Rock regarding the lease of the basement, nor any
addendum or amended lease addressing this issue.
7
According to Hazel Rock, the term "barbacks" refers to bartenders' assistants.
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At some point during the latter half of 2004, Hazel Rock began leasing the
basement below its restaurant. Because the only way to access the basement from
the restaurant was through an outside door, Gallucci wanted to install the hatch
ladder system at issue. According to Gallucci, when he informed Hudson regarding
the proposed installation, Hudson told him they had "permits out on the building,"
since "they were doing a lot of work on the building." As a result, Gallucci did not
obtain a construction permit for the hatch ladder work since Hudson told him no
permit was necessary. While Gallucci claimed he hired a contractor to install the
hatch ladder system, he could not recall the name of the contractor. Regardless, the
record clearly shows that Hazel Rock installed the hatch ladder system without a
construction permit, without design plans, and without any inspections by any
construction code officials.
According to Gallucci, Fini and Capiello were both aware of the hatch ladder
system. In contrast, Fini and Capiello both deny knowledge of any Hudson
representative granting permission for Hazel Rock to install the hatch ladder system
or seeing it in place before decedent's accident. Nevertheless, Capiello admitted he
was present in the basement "when [Gallucci] took the space," referring to the final
negotiation which expanded the leased premises to include the basement. Of note,
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it appears from the record that, at all relevant times, Hudson had its offices on the
seventh floor of the same building as the restaurant.
A May 19, 2010 lease8 between Hudson and Hazel Rock included a
"BUILD-OUT ADDENDUM," which placed strict conditions on all "tenant
improvements or alterations." In the addendum, Hudson required Hazel Rock
to "comply with all of the laws, orders, rules, and regulations of all governmental
authorities" and to procure all required "governmental permits and
authorizations." The addendum further required Hazel Rock to submit to
Hudson "all plans and specifications" for "prior written approval" before
commencing any work. The addendum also obligated Hazel Rock to use only
"fully licensed and insured contractors."
Shortly after decedent's accident, plaintiff filed a workers' compensation
claim. In its answer, Hazel Rock admitted decedent was employed "on date
alleged in petition," but denied the accident "[a]rose out of and in the course of
employment." Hazel Rock and plaintiff eventually reached a $60,000 Section
8
The record does not contain a copy of the lease that would have been in effect
when Hudson allegedly gave Hazel Rock permission to install the hatch ladder
system and advised that no building permit was required. It appears the trial
court and the parties assumed the lease in effect in 2004 had the same terms as
the May 19, 2010 lease.
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209 settlement. The settlement order states it is "pursuant to N.J.S.A. 34:15-
20[,] which has the effect of a dismissal with prejudice, being final as to all
rights and benefits of the petitioner and is a complete and absolute surrender and
release of all rights arising out of this/these claim petition(s)."
On July 22, 2015, plaintiff filed a complaint against Hudson. Plaintiff
later amended her complaint to add claims against Hazel Rock and defendant
Houston Specialty Insurance Company (Houston Specialty), Hazel Rock's
insurer.
In July 2017, each defendant filed a motion for summary judgment.
Following oral argument, the trial court delivered an oral opinion, addressing
the motion of each defendant in turn.
Regarding Hazel Rock, the trial court first found decedent was a Hazel Rock
employee. The court then noted plaintiff's failure to cite any authority to support the
argument that the Section 20 settlement should not bar plaintiff's tort action against
Hazel Rock. The court proceeded to make other findings, apparently on an
alternative basis, in the event the Section 20 settlement did not serve to bar plaintiff's
claim against Hazel Rock. The court then found "no evidence in the motion
9
N.J.S.A. 34:15-20.
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record . . . that would place Hazel Rock on notice that there was virtual certainty of
injury or death that would result from the use of a ladder access." The court also
found no evidence Hazel Rock knew of a danger to decedent and intentionally
disregarded that danger, and no evidence of any other injuries occurring near the
hatch ladder system. The court rejected as "speculation" plaintiff's argument that a
known hazard in the hatch ladder system caused decedent's accident, concluding,
"The record is completely devoid of any evidence that it did create a danger."
Regarding Hudson, the trial court found there was a "triple net lease that
places the responsibility for maintenance and repairs upon the tenant." The court
also found Hazel Rock constructed the hatch ladder system without the approval of
Hudson. Ultimately, the court found Hudson had no "actual knowledge" of a
"hazard" that "caused the accident."
Regarding Hazel Rock's insurer, the trial court granted summary judgment
because it found "the insurance policy. . . was not intended to provide a benefit
to [decedent]." The court further concluded any damages from decedent's
accident would have been excluded under the policy in any event, under three
different exclusions. First, the trial court found the employer's liability
exclusion applied. Second, the trial court found the workers' compensation
A-0490-17T3
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exclusion applied. Third, the trial court found the expected or intended injury
exclusion applied.
The trial court then entered orders dismissing all counts of plaintiff's
complaint. This appeal followed.
II
In reviewing a grant of summary judgment we "'employ the same standard
. . . that governs the trial court.'" W.J.A. v. D.A., 210 N.J. 229, 237 (2012)
(quoting Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010)). We
first determine whether the moving party demonstrated there were no genuine
disputes as to material facts. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387
N.J. Super. 224, 230 (App. Div. 2006). A determination whether there exists a
"genuine issue" of material fact that precludes summary judgment requires the
motion judge to consider whether the competent evidential materials presented,
when viewed in the light most favorable to the non-moving party, are sufficient
to permit a rational factfinder to resolve the alleged disputed issue in favor of
the non-moving party. Brill, 142 N.J. at 540. We then decide "whether the
motion judge's application of the law was correct." Atl. Mut. Ins. Co., 387 N.J.
Super. at 231. In this regard, our review is plenary, owing no deference to the
judge's legal conclusions. Manalapan Realty, L.P. v. Manalapan Twp. Comm.,
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140 N.J. 366, 378 (1995). "The interpretation of contracts and their construction
are matters of law for the court subject to de novo review." Sealed Air Corp. v.
Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div. 2008) (citing Fastenberg
v. Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998)). We
apply basic principles of contract interpretation to a lease. Town of Kearny v.
Disc. City of Old Bridge, Inc., 205 N.J. 386, 411 (2011).
When viewed in the light most favorable to plaintiff, the relevant facts do
not warrant the entry of summary judgment in favor of Hudson; however, the
record does support the summary judgment dismissal of plaintiff's complaint
against Hazel Rock and Houston Specialty. We address the claims against
defendants in turn.
A. Hazel Rock
Plaintiff argues the workers' compensation settlement was essentially a
dismissal and therefore does not bar an action at law, at least for an intentional tort
claim. We disagree and affirm the trial court's conclusion that the Section 20
settlement here bars plaintiff's claim against Hazel Rock.
Workers' compensation laws "provide an expeditious and certain remedy for
employees who sustain work injuries by the statutory imposition of absolute but
limited and determinate liability upon the employer." Wilson v. Faull, 27 N.J. 105,
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116 (1958) (citing Cardillo v. Liberty Mutual Ins. Co., 330 U.S. 469 (1947)). The
statutory scheme represents a compromise whereby "[t]he employee surrenders his
right to seek damages in an action at law in return for swift recovery independent of
proof of fault." Ibid. Pursuant to N.J.S.A. 34:15-8:
If an injury or death is compensable under this article,
a person shall not be liable to anyone at common law or
otherwise on account of such injury or death for any act
or omission occurring while such person was in the
same employ as the person injured or killed, except for
intentional wrong.
While the statute grants absolute immunity to employers from common law
negligence suits by employees, Cellucci v. Bronstein, 277 N.J. Super. 506, 518 (App.
Div. 1994), it does not preclude an action based on intentional wrongful conduct.
While plaintiff's Law Division complaint alleged intentional wrongful
conduct against Hazel Rock, in October 2016 plaintiff and Hazel Rock entered into
a Section 20 settlement pursuant to N.J.S.A. 34:15-20, which provides, in relevant
part:
[A] judge of compensation may with the consent of the
parties, after considering the testimony of the petitioner
and other witnesses, together with any stipulation of the
parties, and after such judge of compensation has
determined that such settlement is fair and just under
all the circumstances, enter "an order approving
settlement." Such settlement, when so approved,
notwithstanding any other provisions of this chapter,
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shall have the force and effect of a dismissal of the
claim petition and shall be final and conclusive upon
the employee and the employee's dependents, and shall
be a complete surrender of any right to compensation
or other benefits arising out of such claim under the
statute.
"Receipt of a lump sum settlement under N.J.S.A. 34:15-20 constitutes an
implied acknowledgment that the claimant's disability was work-related and
compensable under the Workers' Compensation Act." Sperling v. Bd. of Review,
301 N.J. Super. 1, 5 (App. Div. 1997). In Hawksby v. DePietro, 165 N.J. 58, 66
(2000), our Supreme Court held that a Section 20 settlement barred a subsequent
medical malpractice claim against a co-employee doctor. The Court reasoned it
would be unfair to hold the employer liable for both common law damages and
workers' compensation liability. Id. at 66-67. A Section 20 settlement "is designed
to achieve a complete settlement of all issues for all of the parties concerned." Univ.
of Mass. Mem'l Med. Ctr., Inc. v. Christodoulou, 360 N.J. Super. 313, 320 (App.
Div. 2003), rev'd on other grounds, 180 N.J. 334, 349 (2004). We are satisfied that
the trial court correctly determined that plaintiff's Section 20 settlement bars plaintiff
from seeking damages from Hazel Rock in an action at law.
B. Houston Specialty Insurance Company
The trial court granted summary judgment to the insurer because it found "the
insurance policy . . . was not intended to provide a benefit to [decedent]." We agree.
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"[I]t is well recognized that an injured person possesses no direct cause of
action against the insurer of the tortfeasor prior to recovery of judgment against the
latter." President v. Jenkins, 357 N.J. Super. 288, 312 (App. Div. 2003), rev'd in part
on other grounds, 180 N.J. 550 (2004); see also Cruz-Mendez v. ISU/Ins. Servs.,
156 N.J. 556, 566-67 (1999) ("Generally, plaintiffs in tort actions may not directly
sue insurers.").
Plaintiff argues the trial court was precluded from granting summary
judgment on standing grounds because the court already rejected that argument on a
motion to dismiss. This argument lacks merit. As the trial court explained, a motion
to dismiss requires a more stringent standard than a summary judgment motion, and
the court decided the motion to dismiss before discovery was complete. Thus, the
rejection of the standing argument on Houston Specialty's motion to dismiss did not
preclude it from again raising the issue of standing in support of its summary
judgment motion. Here, plaintiff did not recover a judgment against Hazel Rock;
therefore, we agree plaintiff lacks standing to bring a claim against Hazel Rock's
insurer.
The trial court further concluded any damages from decedent's accident would
have been excluded under the policy anyway under three different exclusions.
Interpretation of an insurance contract is generally a matter of law subject to de novo
A-0490-17T3
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review. Sealed Air Corp., 404 N.J. Super. at 375. "An insurance policy is a contract
that will be enforced as written when its terms are clear in order that the expectations
of the parties will be fulfilled." Flomerfelt v. Cardiello, 202 N.J. 432, 441 (2010)
(citing Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960); Scarfi v. Aetna Cas.
& Sur. Co., 233 N.J. Super. 509, 514 (App. Div. 1989)). Exclusions are generally
narrowly construed, and the burden is on the insurer to bring the claim within the
exclusionary language. Id. at 442. Nevertheless, "[e]xclusionary clauses are
presumptively valid and are enforced if they are 'specific, plain, clear, prominent,
and not contrary to public policy.'" Id. at 441 (quoting Princeton Ins. Co. v.
Chunmuang, 151 N.J. 80, 95 (1997)).
The trial court first found the employer's liability exclusion applied. The
policy excludes "'[b]odily injury' to . . . [a]n 'employee' of the insured arising out of
and in the course of . . . [e]mployment by the insured; or . . . [p]erforming duties
related to the conduct of the insured's business . . . ." Decedent worked for Hazel
Rock at the restaurant as a cook for approximately one year before the accident. Two
of decedent's co-workers testified that decedent was working at the time of the
accident. Furthermore, a co-worker found decedent in the basement, an area
restricted to employees only. Because both Hazel Rock and plaintiff agree decedent
was an employee of Hazel Rock and the record clearly shows decedent was working
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at the time of the accident, we affirm the trial court's finding that the employer's
liability exclusion applies.
Plaintiff further argues the insurer is precluded under judicial estoppel from
arguing the decedent was injured in the course of employment because Hazel Rock
argued the opposite during the workers' compensation proceeding. We disagree
judicial estoppel applies here since Hazel Rock did not successfully maintain that
argument. Accordingly, we reject plaintiff's argument that judicial estoppel prevents
Hazel Rock or its insurer from arguing decedent was in the course of employment at
the time of his accident. In light of our affirmance of the trial court's conclusion that
the employer's liability exclusion applied, we need not address the additional
exclusions cited by the court as providing alternative bases for granting summary
judgment to Houston Specialty.
C. Hudson
As previously noted, the record does not contain a copy of the lease that
was in effect in 2004 when Hazel Rock installed the hatch ladder system at issue
in this case. Since we acknowledge the possibility that the lease in effect in
2004 contained the identical material terms as the 2010, we will address the
issues presented on this assumption. Nevertheless, if the 2004 lease should
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surface on remand, the court should address the issues presented by the
installation of the hatch ladder system under that lease.
We recognize that, as a general proposition, "'there is no landlord liability'
for personal injuries suffered by a commercial tenant's employee on the leased
premises 'due to a lack of proper maintenance or repair, when the lease
unquestionably places responsibility for such maintenance or repair solely upon
the tenant.'" Geringer v. Hartz Mountain Dev. Corp., 388 N.J. Super. 392, 401
(App. Div. 2006) (quoting McBride v. Port Auth. of N.Y. and N.J., 295 N.J.
Super. 521, 522 (App. Div. 1996)).
In Geringer, an employee of the tenant was injured after falling on an interior
stairway within an office building. 388 N.J. Super. at 394. The tenant leased the
entire seventh floor of the building via a "triple net" lease, which delegated the duty
of maintenance and repairs to the tenant. Id. at 400. We found the property owner
had no duty to maintain or repair the stairway. Id. at 402. We further found
knowledge of a hazard is not sufficient to impose a duty upon the owner to repair.
See Id. at 401 (declining to find "the deposition statements of [the] property
manager . . . acknowledging hypothetically that he or she might alert [the tenant]
upon noticing a loose handrail, a hole in the floor or some other similar problem
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while walking through the seventh floor, as sufficient to confer an ongoing duty upon
[the owner] to inspect, maintain or repair the stairway.").
However, we found the owner in Geringer did have a duty to design the
stairway free of defects in the first place. Id. at 402. We found that because the
owner reviewed construction plans, inspected during construction, and
communicated with the tenant regarding construction, the owner owed "a duty of
care in the design and construction of the stairway . . . ." Id. at 403. We therefore
reversed summary judgment on the limited issue of whether the owner breached its
duty of reasonable care in designing the stairway. Id. at 404-05.
Plaintiff argues the trial court erred in finding the owners had no actual
knowledge of the hazard that caused decedent's accident, and therefore erred in
granting summary judgment. In support of this argument, plaintiff cites Gallucci's
deposition testimony that Hudson granted Hazel Rock permission to install the hatch
ladder system at issue, and told Hazel Rock that construction could proceed without
securing a building permit because they had "permits out on the building." As a
result, Gallucci claims he understood that no permit was required and proceeded to
install the hatch ladder system without a construction permit, without design plans,
and without any inspections by any construction code officials. Gallucci further
A-0490-17T3
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testified that the owners of Hudson were aware of the hatch ladder system because
"they've been down there."
From our review, the record does not support the trial court's finding that the
owners had no actual knowledge of the hazard that caused decedent's accident. The
court could only make this finding by accepting the deposition testimony of
Hudson's principal owners as true and ignoring Gallucci's deposition testimony. Nor
does the record support the trial court's finding that "[t]he record is completely
devoid of any evidence" that the hatch ladder system created "a danger." To the
contrary, the results of the OSHA investigation presented compelling evidence that
the hatch ladder system created "a danger," considering the five "serious" violations
of OSHA safety regulations identified, with three of the violations exposing workers
to risk of death. In addition, photographs in the record provide strong support for
the OSHA findings.
Plaintiff also argues the owners owe a duty to decedent under general
negligence case law. Plaintiff states, "Whether a duty of care is owed in a case
is truly a fact-sensitive decision that is ultimately a test of fairness," citing
Weinberg v. Dinger, 106 N.J. 469, 485 (1987). Plaintiff argues the owners had
a duty of care because of their actual knowledge of the existence of the unsafe
hatch ladder system. In response, Hudson argue that Geringer clearly holds a
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property owner has no duty to protect against hazards when the owner h as no
control over the premises. The trial court found no basis to impose liability on
Hudson, citing the triple net lease and its finding that Hazel Rock constructed
the hatch ladder system without the approval of Hudson.
As noted, the record reflects a clear dispute regarding Hudson's approval
of the hatch ladder system and its alleged responsibility for the installation
occurring without permits or inspections. We also part company with the trial
court's finding that Hudson does not have any potential liability to plaintiff
based upon its triple net lease agreement with Hazel Rock. Even if Hazel Rock
installed the hatch ladder system, Hudson here remains potentially liable under
their lease agreement.
As we recognized in Geringer, a triple net lease agreement does not relieve
the landlord from liability when the provisions of the lease require the landlord's
approval in the design and construction process. 388 N.J. Super. at 404-05.
Summary judgment is not appropriate, and a trial is necessary where the record
contains evidence the landlord "breached its duty to exercise reasonable care in
assuring the safe design and construction of the stairway on which plaintiff
suffered her injury." Ibid. Here, the record not only contains no evidence
Hudson exercised reasonable care to assure the safe design and construction of
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the hatch ladder system, the record contains evidence that Hudson directly
facilitated the construction of the unsafe hatch ladder system. Specifically,
according to Hazel Rock, Hudson advised they had a standing or open building
permit, thus relieving Hazel Rock of its normal obligation to secure a
construction permit.
Here, the lease agreement provides that any improvement by Hazel Rock
must be performed by "fully licensed and insured contractors," after first
submitting "all plans and specifications" for "prior written approval, and
obtaining" all required "governmental permits and authorizations." In this
regard, this case is similar to Geringer, where we held that "the surrounding
circumstances suggest that [the landlord] kept its hand in the design and
construction phase of the project, thereby providing it with both the 'opportunity
and ability to exercise reasonable care' in how the stairway in question was
built." Id. at 403 (quoting Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439
(1993)).
Consequently, it is incumbent upon a factfinder at trial to determine
whether Hudson was negligent in relation to the unsafe hatch ladder system,
including whether it caused or shares in the responsibility for Hazel Rock's
failure to obtain design plans, failure to secure a construction permit, and failure
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to use a licensed contractor. We further note that the hatch ladder system at
issue here did not present a danger because of negligent maintenance or repair;
instead, the record indicates an unsafe apparatus, which OSHA found lacked
"standard railings" and other basic safety precautions. The glaring deficiencies
noted by OSHA indicate negligent design, not negligent maintenance or repair.
Affirmed in part, and reversed and remanded in part.
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