Another “Off-Premises Liability” Case

Nielsen v. Wal-Mart Store #2171, 429 N.J. Super. 251 (App. Div. 2013).  Defendant Wal-Mart Store #2171 owned a unit in a multi-unit condominium development owned by another defendant.  Plaintiff was an employee of an independent contractor whom Wal-Mart hired to do pest extermination.  Wal-Mart instructed plaintiff to access various store entrances from outside.  While doing that, plaintiff fell and was injured.  The place that he fell was not within the boundaries of Wal-Mart’s unit, which included a small outside area, and the place of injury was to be managed and maintained by the developer under the terms of the master deed.

Plaintiff sued Wal-Mart and fictitious defendants.  Later, plaintiff added the developer, but the developer was able to win summary judgment on limitations grounds.  Wal-Mart did not oppose the developer’s motion.  Thereafter, Wal-Mart sought summary judgment on the ground that the place that plaintiff fell was outside Wal-Mart’s property.  That motion was denied.  Wal-Mart then sought to file a third-party complaint against the developer, but that motion too was denied because Wal-Mart had not opposed the developer’s prior summary judgment motion and because trial was just a few weeks away.

The jury made an award to plaintiff.  Wal-Mart appealed, complaining that it should have been allowed to file its third-party complaint against the developer and that it was error to find it liable for an injury that occurred on property that it did not control.  Writing for the Appellate Division, Judge Fisher affirmed the decision below.

Judge Fisher found Wal-Mart’s first point to be groundless.  The abuse of discretion standard applied to the Law Division’s decision whether to permit the filing of the third-party complaint, and given the circumstances of Wal-Mart’s failure to oppose the developer’s motion for summary judgment and the fact that Wal-Mart waited until a few weeks before trial to seek to file the third-party complaint, the decision to deny permission to file that pleading was within the lower court’s discretion.  Moreover, Wal-Mart had not preserved this issue for review because it had not stated in its notice of appeal that the order denying leave to file the third-party complaint was being appealed.  This is a reminder that, when filing a notice of appeal, it is important to ensure that all orders being appealed from are explicitly identified.   

After a lengthy discussion of the caselaw development in circumstances involving whether “a land occupier’s duty of care extends only as far as the boundaries of its property– the ostensible central thesis of Walmart’s argument,” Judge Fisher rejected Wal-Mart’s position as “out of step with the modern course of the common law.”  Many cases now extend liability beyond property lines in appropriate circumstances.  Nor was it dispostive that the developer had the duty, as between itself and Wal-Mart, to take care of the area in question.  Plaintiff was an invitee, an innocent person who was present at the site at the request of Wal-Mart, and whom Wal-Mart had directed to do his work by entering from the outside rather than by going through the interior of the store.  The allocation of maintenance responsiblity as between Wal-Mart and the developer was not a sufficiently weighty consideration to defeat liability.  Wal-Mart could still have taken action to maintain the area, on which it could foresee that invitees would enter, despite, or in addition to, what the developer might do maintain the area.

Judge Fisher recognized that this ruling “may seem inconsistent with” the decision of another panel in Kandrac v. Marrazzo’s Market at Robbinsville, ___ N.J. Super. ___ (App. Div. 2012), discussed here.  He stated that Kandrac was “unduly dependent upon the assignment of responsibility for a common area defined by the defendant’s lease,” to the exclusion of other factors relevant to the calculus of whether and when a duty to an invitee arises.  Judge Fisher also found persuasive the dissent in a Third Circuit case, Holmes v. Kimco Realty Corp., 598 F.3d 115 (3d Cir. 2010), which stated that imposing a duty on a commercial tenant in such circumstances would “encourage [the tenant] to keep a watchful eye over leased premises and give prompt notification to landlords when problems arise.”   

There is a fair argument that these particular facts justify the Appellate Division’s result, and its decision not to follow Kandrac.  As Kandrac indicated, the option to look to the landlord or developer, the party with maintenance responsibility, is available, whether to an injured plaintiff or to a co-defendant.  Wal-Mart gave up that option by its conduct in this case.  But the overall area of off-premises liability is now arguably muddied enough that the Supreme Court should consider reviewing this decision and clarifying the weight to be given to the allocation of maintenance responsibilities in the overall balancing of factors relevant to the duty question.  The concerns raised in Kandrac about the potential difficulties in a regime where both an owner and a tenant have maintenance responsibility for the same area, and take conflicting views of how their respective duties should be handled, are also valid and worthy of Supreme Court review.