Common-Area Risk Abatement: Who is Responsible?

Clark Commons contracted with Silbert Realty and Management Company, Inc. to provide maintenance and security for the parking lot area, thus presumably covering its responsibilities in those regards. Silbert Realty, however, did not employ anyone to secure the parking lot; instead, the only security presence was the occasional municipal police car drive-through.

Vandalism: Who's Fault?

One of Whole Foods' employees, Tanisha C. Lane, complained to her employer that her car had been vandalized while it was parked in the recommended parking area, but nothing came of that complaint. She claimed on another occasion that her car was scratched while she was at work, but she did not tell her employer about this incident. When Lane's car was damaged a third time — this time by a thief or vandal who tore off her car's mirror — she brought suit against Whole Foods, the facility's landlord Clark Commons and the landlord's parking lot management company Silbert Realty, claiming they had all failed in their collective duty to keep her property safe. Her suit sought damages to cover the repair of her car, which would cost approximately $1,000. The Special Civil Part court found against all defendants and awarded Lane damages to cover her losses.

Whole Foods Appeals

Whole Foods objected to the trial court's decision because landowners traditionally are held responsible for ensuring their properties are safe places for invitees to enter. Further, contractually, landlord Clark Commons had accepted full responsibility for ensuring the parking areas around the shopping complex remained safe and secure. But the trial court had found that when Whole Foods required its employees to park in a somewhat remote area of the parking lot, even after learning that at least one of those employees' car had been damaged when parked there, it had taken on responsibility for any harm flowing from that order. As the appeals court explained: "It is undisputed that Whole Foods instructs its employees to park in an area of the shopping center parking lot distant from the entrance to the store. Written materials distributed to Whole Foods employees include a map of the shopping center parking lot with a shaded area considered appropriate for employee parking. Parking outside of the designated area by a Whole Foods employee may result in discipline, up to and including termination." So, by insisting that its employees park in a certain area, had Whole Foods exposed itself to liability it would normally not have had to shoulder?

The court noted that general negligence law in New Jersey requires that a plaintiff show that: 1) the defendant had a duty of care to the plaintiff; 2) the defendant breached that duty; 3) the breach was the proximate cause of injury to the plaintiff; and 4) the plaintiff suffered actual damages. See, Polzo v. City of Essex, 196 N.J. 569 (2008). The Whole Food appeals court stated: "Whether a person owes a duty of reasonable care toward another turns on whether the imposition of such a duty satisfies an abiding sense of basic fairness under all of the circumstances in light of considerations of public policy. That inquiry involves identifying, weighing, and balancing several factors." Among these factors are the relationship of the parties to one another, the nature of the attendant risk that caused the injury, the parties' and others' opportunity and ability to exercise care over the risk-creating matter, and the public interest in the proposed solution. See, Goldberg v. Housing Auth., 38 N.J. 578 (1962).

To apply these questions to the case before it, the court turned first to a similar case, Kandrac v. Marrazzo's Market at Robbinsville, 429 N.J. Super 79 (App. Div. 2012). In Kandrac, the plaintiff had gone shopping in the defendant's store and was injured after she left the store to head to her car when she tripped over a bump in the road between the sidewalk outside the defendant's business and the parking lot. The defendant store operator had leased the premises from a landlord who had contractually accepted all responsibility for maintaining and repairing the parking area. This parking area was used by all 36 separately-leased commercial units on the property. The injured patron sued both the landlord and tenant and the court granted summary judgment to the defendant tenant, finding that a commercial tenant in a multi-unit property owes no duty of care to invitees injured in common areas. The decision was upheld on appeal, that court concluding that "as a general rule, when a commercial a tenant in a multi-tenant shopping center has no control or contractual obligation to maintain a parking lot shared with other tenants, the common law does not impose a duty upon the tenant to do so."

The Exceptions

Still, the Whole Food appellate court noted that when it decided Kandrac, it had allowed that, under another set of facts, a commercial tenant might yet be held responsible for injuries to an invitee. Among the things a court might consider in assessing the allocation of responsibility between a commercial landlord and tenant, the court declared, were factors set out in the earlier case of Stewart v. 104 Wallace Street Inc., 87 N.J. 146 (1981): 1) the rights and interests of the commercial landowner in the property; 2) whether it would be arbitrary to impose a duty associated with the landowners rights; 3) whether innocent victims would be left without recourse if a duty were not imposed on one or another of those with a property interest in the premises; 4) a recognition that the landowner would be more inclined to take care of the property if liability were imposed; 5) whether the proximity of the place where the injury occurred to the business establishment would render a failure to impose a duty arbitrary; and 6) a recognition that the commercial landowner would treat the costs associated with additional insurance premiums and maintenance as one of the necessary costs of doing business. In the Kandrac case, the court had found no reason to hold the commercial tenant responsible for the plaintiff's injuries, even under the Stewart v. 104 Wallace St. expanded rubric, because: 1) the plaintiff fell in an area distant from and not under the control of the commercial tenant; and 2) the shopping center landlord had not been excused from responsibility for the plaintiff's damages, so even without the commercial tenant's contribution to the plaintiff's recovery, she was not without recourse.

Looking back at its Kandrac decision, the Whole Food court recalled it had ultimately determined that "although a contractual obligation of the property owner to maintain the common areas of the parking lot does not relieve [the tenant] of all duties to its customers regarding ingress and egress, the facts did not support imposing a duty of care on the tenant." Had liability been imposed on shop lessees in that case, the court had cautioned, the plaintiff might have been encouraged to conduct a "shot-gun litigation" by suing "every store at which he had browsed or purchased an item prior to his fall."

So, when might factors like those considered in Kandrac cause a commercial tenant to be held liable for a plaintiff invitee's injuries in a common area otherwise under the control of a landlord or condo association? Two months after the Kandrac decision, the court gave one answer in Nielsen v. Wal-Mart Store #2171, 429 N.J. Super. 251 (App. Div. 2013), which held that a commercial condo owner may be liable for maintaining the safety of a common area when that area immediately abuts the condo owner's property and the condo owner directs its invitee to perform work in that common area. In Nielsen, the commercial condominium association was contractually charged with maintaining the common areas of premises. Just one of the condo owners hired an exterminator to perform work on its unit only. The unit's owner told the exterminator to perform its work in an area of the building adjacent to the unit but technically in the common area. The exterminator was injured there and brought suit against the unit's owner, adding the condo association to the lawsuit only several years later, after the statute of limitations for filing suit against the association had passed. Therefore, had the Nielsen v. Wal-Mart court let the unit owner off the hook, the plaintiff would have been left without a source for recovery. Instead, the court determined that the commercial condo owner was responsible because it had instructed the exterminator to do its work in a certain place, and that place, though part of the common area, was contiguous to the unit and in a place where the condo owner could have maintained safer conditions.

Applying the Precedents to Whole Food

After considering Kandrac and Nielsen v. Walmart, among other precedents, the Whole Food court concluded the trial court erred in assigning any portion of fault for the plaintiff's damages to Whole Foods. Stated the court: "We agree with the holding in Kandrac that, as a general rule, when a commercial tenant in a multi-tenant shopping center has no control or contractual obligation to maintain a parking lot shared with other tenants, the common law does not impose a duty upon the tenant to do so. This is especially true where, as is the case here, the property owner assumes responsibility to maintain and secure the common areas of the shopping center in its lease with the tenant."

The court was not convinced that the commercial tenant's parking rules created a duty on its part to the plaintiff because, in making its rule that employees park in a designated area, Whole Foods had not gained any "contractual right or apparent ability to control that portion of the parking lot." In fact, contractually, and as a practical matter, only the landlord and its security company had the right and ability to maintain the safety and security of this remote area of the parking lot. "It is unrealistic," the court stated, "to conclude that Whole Foods could have provided security in the limited area of the lot to which it directed its employees." Additionally, the plaintiff was not left without recourse, as the trial court had found the security company liable for the damage to her car, based on its clear contractual obligation to provide security in the entire parking lot, its knowledge of the previous incidents of vandalism, and its failure to do anything to address the risks in that section of the parking lot once it learned of the vandalism that was taking place there. The court therefore vacated the judgment against Whole Foods and directed the trial court to allocate 100% of the liability to the landlord and the security company.

Analysis

In New Jersey's Hopkins v. Fox & Lazo Realtors, 132 N.J. 426 (1993), the state's highest court explained: Whether a person owes a duty of reasonable care toward another turns on whether the imposition of such a duty satisfies an abiding sense of basic fairness under all of the circumstances in light of considerations of public policy. That inquiry involves identifying, weighing, and balancing several factors — the relationship of the parties, the nature of the attendant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution." There is a lot of wiggle room here, so what do decisions like those in Lane v. Whole Food, Nielsen v. Walmart and Kandrac v. Marrazzo's Market at Robbinsville mean for commercial tenants, their landlords and the properties' contracted caretakers? Do these decisions clarify the duties and responsibilities of each, or further muddy the waters?

Arguably, the precedents in these cases simply illustrate that New Jersey's courts have a license to interpret the facts of any case in a way that allows them to achieve the desired outcome. If a landlord and a security company cannot be held liability for jurisdictional reasons, for example, the court says it's fine to go ahead and stretch the responsibility of the lessee beyond its front door to the immediately abutting common area, as happened in Nielsen v. Walmart. But how far from the leased premises can such liability go? Five feet? 15? What about 30? As there is no real guidance, tenants sued for mishaps occurring in common areas near their premises would be wise to do one thing: make sure the landlord and any security contractor are also joined as defendants. Otherwise, the plaintiff risks being left without recourse if not permitted to recover from the commercial tenant, which may shift more responsibility for the common area than is customary to the tenant, as in Nielsen v. Walmart.

Further, what if the Whole Foods employee parking policy had resulted in repeated assaults on plaintiff Lane herself, rather than on her car? Certainly, she could recover from the landlord and the security company, but would it be wise to hold Whole Foods legally blameless for an injury resulting in large part from its requirement that its employees park in a known dangerous area, merely because that area is distant from its rented commercial unit? In such a situation, the landlord and security company charged with keeping the entire parking lot safe have some control, of course, but so has the commercial tenant, who can choose whether to designate a safe or dangerous parking area for its employees' use. Should the tenant suffer zero legal consequences if its bad policies place others in harm's way?

Clearly, definitive guidance is lacking, and piecemeal solutions will continue to be required from the courts.

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Janice G. Inman is Editor-in-Chief of this newsletter.