Travelers Indemnity Co. Ex Rel. Mario's Shoe Outlet, Inc. v. S.C.S. Realty Corp.

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
10-17-2005
Travelers Indemnity v. SCS Realty Corp
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-3623
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Recommended Citation
"Travelers Indemnity v. SCS Realty Corp" (2005). 2005 Decisions. Paper 400.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No: 04-3623
TRAVELERS INDEMNITY COMPANY
as subrogee of Mario’s Shoe Outlet, Inc.,
Appellant
v.
S.C.S. REALTY CORPORATION
and THE CORNER CAFÉ
Appeal from the United States District Court
for the District of New Jersey
(Civ. No. 03-CV-5021)
District Court: Hon. William J. Martini
Submitted Pursuant to Third Circuit LAR 34.1(a)
September 16, 2005
Before: ROTH, McKEE & FISHER, Circuit Judges
(Opinion filed: October 17, 2005)
OPINION
McKEE, Circuit Judge.
Travelers Indemnity Corporation (“Travelers”) appeals the district court’s grant of
summary judgment based upon the court’s determination that the lease agreement
between S.C.S. Realty Corporation (“SCS”) and Mario’s Shoe Outlet, Inc. barred
Travelers’ subrogation claim. For the reasons that follow, we will affirm.
I.
Because we write only for the parties, it is not necessary to recite the facts of this
case in detail. In a succinct opinion filed August 12, 2004, the district court explained
that it was granting summary judgment against Travelers because “[t]he plain language of
clause 11 [of the lease] indicates that SCS. cannot be held liable for any tenant’s
negligence, or its own negligence, and the Court will enforce clause 11 as it was written.
See Cumberland County Improvement Authority v. GSP Recycling Co., 358 N.J. Super.
484, 496 (App. Div. 2003).” This appeal merits little further discussion, and we will
affirm the district court substantially for the reasons set forth in its opinion.
We do note, however, that Travelers argues that the applicable provisions of the
lease only apply to negligence and therefore do not shield SCS from liability for its own
gross negligence and wanton and/or willful misconduct. We disagree.
In Tessler and Son, Inc. v. Sontirol Security Systems of Northern New Jersey, Inc.,
497 A.2d 530, 533-34 (N.J. Super.Ct.App.Div. 1985), the Superior Court of New Jersey,
Appellate Division, held that any exculpatory clause that bars suits for negligence also
bars suits for “very negligent, or grossly negligent performance.” That applies to
Travelers’ attempt to rescue its claims from the reach of Clause 11. However, Tessler
specifically stated that claims for wanton and/or willful misconduct are not barred by an
exculpatory clause that only addresses negligent performance. Id. at 533. The Supreme
Court of New Jersey has defined wanton and/or willful misconduct in McLaughlin v.
Rova Farms, Inc., 266 A.2d 284, 305 (N.J. 1970), as follows:
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It must appear that the defendant with knowledge of existing
conditions, and conscious from such knowledge that injury
will probably or likely result from his conduct, and with
reckless indifference to the consequences, consciously and
intentionally does some wrongful act or omits to discharge
some duty which produces the injurious result.
(Emphasis added). Accordingly, we hold that the district court correctly determined that
Travelers’ claim of willful and/or wanton misconduct fails as a matter of law because
SCS had no duty to ensure that The Corner Café (“Corner”) installed the fire prevention
equipment based upon the lease agreement between SCS and Corner. That lease required
Corner to comply with all laws and regulations and specifically to follow all required
directives to prevent a fire. However, the clause specifically placed the burden of
compliance on Corner, the tenant. There is no language requiring SCS to purchase and
install a fire suppression system, nor is there any language requiring SCS to monitor
Corner’s compliance.
Travelers also argues that the district court committed reversible error when it
granted the motion for summary judgment prior to discovery. Travelers believes that it
could have proved that SCS knew that no fire prevention system existed and that SCS
nevertheless failed to act with reckless indifference to the consequences. However, as we
have already explained, the district court correctly determined that Travelers’ claims for
negligence and gross negligence covered in the applicable provisions of SCS’s lease.
Accordingly, any claim for wanton and/or willful misconduct also fails as a matter of law
because of the operation lease between SCS and Corner. Accordingly, the district court
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did not err in realizing the futility of discovery and granting summary judgment.
III. CONCLUSION
For all of the above reasons, we will affirm the District Court’s judgment granting
SCS Realty Corporation’s motion for summary judgment.
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