31-8-7213 Holmes v. Kimco Realty Corporation, Third Cir. (Hardiman, U.S.C.J.).

Friday 16 April 2010 - Filed under Landlord / Tenant - Common areas liability + Negligence - Duty

“[T]he question of a tenant’s common law duty to maintain a multi-tenant parking lot has not been addressed by the New Jersey Supreme Court . . . .”

In the absence of a controlling New Jersey Supreme Court opinion, the U.S. Court of Appeals for the Third Circuit recently predicted that New Jersey would not impose a duty on an individual commercial tenant for a dangerous condition in a common area, at least not where the commercial landlord had agreed to exercise maintenance responsibilities.  Whether you agree or disagree with the Third Circuit’s analysis, it seems that applying the law in this area will remain heavily dependent on the facts of a given landlord / tenant situation.  Expect future litigation to depend heavily on the unique facts of each situation.

The Holmes facts:

The plaintiff in Holmes was injured when he slipped and fell on ice in a chain store parking area, part of a large parking lot shared by the chain store and two other large, standalone chain stores.  Although the area where the injury happened was close enough to the defendant store to be dotted with cart corrals and signs belonging to defendant, the parking spaces were not dedicated for exclusive use by the customers of that store only.  Moreover, all three stores had their signs posted at the entrance to the parking lot.  Customers could park anywhere and follow their own walking path to whichever store they chose.  Defendant’s lease also explicitly provided that all tenants in the shopping center and their “invitees” (i.e., store customers) enjoyed a shared “non-exclusive right to use the parking lot and other common areas” and that the landlord would maintain and carry liability insurance for the parking lot.

Issue:

Will New Jersey courts hold a commercial tenant defendant liable for a dangerous condition in a parking lot it shares with other commercial tenants, where the defendant’s lease explicitly provides that the landlord will maintain and carry liability insurance for that common area?

Holding:

After reviewing available case law, the Third Circuit Court of Appeals predicted that the New Jersey Supreme Curt would find that “[a] lessee in a multi-tenant shopping center does not have a duty to maintain common areas controlled by the landlord.”

Rationale:

The Court reasoned that although the three chain stores were widely spaced and the particular area of the parking lot where plaintiff fell was marked with defendant’s own signs and cart corrals, the lot otherwise “looked like a multi-tenant facility.”  The Court noted that lower courts “have refused to impose a duty on tenants for common areas of a multi-tenant facility.”

The Court explored, mostly in footnotes, issues of control and contractual maintenance duties at some length without establishing a bright line for future analysis.  In this case, the Court seems to have based its decision on three key factors: 1) Customers could have walked any number of paths to and from the store; 2) It would be unfair as well as impractical to hold one tenant or another responsible for an entire, shared parking lot; 3) There was no question that the landlord had agreed to maintain the lot in the lease.

Dissent:

The dissenting opinion focused on the customers’ expectation of safe passage to and from the store and engaged in its own factual analysis.  The dissent noted that there were only three stores, spaced far apart, and the defendant store was in “exclusive possession” of its portion of the shared parking lot.  Defendant’s own signs and cart corrals, for example, demonstrate that the tenants controlled their own areas of the lot.  These installations suggested to customers that defendant was a separate entity with its own responsibilities over its own area of the lot, such that customers would expect the store to provide “safe passage” to and from the store.

The dissent also argued that the majority failed to consider sufficiently that the tenant might pursue indemnification from the landlord.

Conclusion:

Future cases will depend heavily on a court’s interpretation of available facts.

The opinion may be found here: http://www.ca3.uscourts.gov/opinarch/084834p.pdf

2010-04-16  »  admin