Snow Removal Contractor’s Failure to Add Property Owner as an Additional Insured Did Not Cause the Owner Damage
In Michel v. Langel, No. A-4054 (App. Div. May 8, 2020), the New Jersey Appellate Division confirmed that a failure of a snow contractor to name the owner as an additional insured on its insurance policy resulted in no damages to the owner and the contractor’s duty to defend and indemnify did not cover the owner's negligence
In the winter of 2015, Plaintiff was walking across a parking lot of a Shopping Center when she was struck by a car driven by one of the Defendants. The Appellate Division summarized the facts as follows: “[a]t the time of the accident, there were piles of snow on medians at the end of rows of parking spaces in the parking lot. It was alleged that the piles of snow impeded [the Driver’s] visibility as she made a left-hand turn just before her car struck [Plaintiff].” Plaintiff sued the driver of the vehicle, the owner of the Shopping Center, the Store she was in front of at the moment of the accident, and the Snow Removal Contactor responsible for the area. The Shopping Center and Contractor asserted crossclaims, and the Shopping Center demanded a defense and indemnification from the Contractor.
Depositions revealed that the property manager told the Contractor to plow and pile the snow in the median islands in front of the Store. Thus, the Contractor argued that the decision as to where to place the plowed snow was made by the property manager, who was controlled by the Shopping Center.
Thereafter the Store and Shopping Center moved for partial summary judgment against the Contractor contending that the Contractor breached its contractual agreement to name the Shopping Center as an additional insured and to defend and indemnify the Shopping Center. While the motion was pending the non-binding arbitration pursuant to Rule 4:21A awarded Plaintiff $450,000 in gross damages for a two-level cervical fusion, bilateral labral rotator cuff injury, and right shoulder arthroscopy. No party objected to the award, and a judgment was entered.
Thereafter the partial summary judgment motion was decided, and the trial court found that the Contractor’s failure to name the Shopping Center as an additional insured did not cause the Owner any damages because the insurance policy excluded coverage for the negligence of the additional insured party. Even if the Shopping Center had been named as an additional insured, it would not have been covered for its own negligence. The court noted that nothing in the agreement between the Contractor and Shopping Center prevented the Contractor from obtaining a policy excluding coverage for the negligence of the additional insured.
The Appellate Division reasoned that both the insurance and the indemnification provisions in the contract between the Contractor and the Shopping Center was protecting the Shopping Center from claims arising out of negligent or intentional actions by Contractor and its employees. Those provisions did not protect the Shopping Center from claims arising out of the Shopping Center’s own, independent, negligent acts. (In this case directly or indirectly deciding where to place snow piles). The Appellate Division concluded that the contract was consistent with indemnification provisions, which generally do not protect the party being indemnified from its own negligence.