A New Jersey state appeals court has ruled that a Travelers policy issued to a tenant should cover a $2,296,000 judgment against a building owner for injuries suffered by a Newark firefighter who fell through a glass panel on the roof of the property. A three-judge appellate panel reversed a 2012 trial court order finding that NSPC Inc. was not entitled to coverage as an “additional insured” under a Travelers Property Casualty Company of America policy issued to Jenson & Mitchell Inc. A lawsuit had been filed against NSPC and J&M by the firefighter Kevin Killeen and his wife, alleging negligent maintenance of the property.
The appellate judges determined that the additional insured provision provided coverage to NSPC for “liability arising out of the ownership, maintenance or use” of the premises leased by J&M. The panel said: “The roof, a vital part of the Branford Street Property, is a part of the ‘premises’ leased to J&M.” Following the lower court’s ruling, Killeen and NSPC agreed that NSPC’s assets would be immune from judgment leading to an “arbitrated final judgment” entered in favor of Killeen and against NSPC for $2,296,000.
Under the agreement, Killeen had been assigned all of NSPC’s rights under the Travelers policy, including the right to appeal the July 11, 2012, order. Killeen did appeal that ruling. In agreeing with Killeen’s argument that NSPC is entitled to coverage because the roof was part of the premises leased to J&M, the appellate panel remanded the matter for the entry of an order granting summary judgment to Killeen on behalf of NSPC.
The incident occurred on July 26, 2009, when Killeen, then a Newark Fire Department battalion chief, and other firefighters were fighting a fire in a building in Newark, which is adjacent to the property owned by NSPC. At that time, J&M leased the property for the purpose of operating a truck repair business.
After climbing a ladder to access the roof of the building on the property that was on fire Killeen stepped through a translucent-glass roofing panel and fell 25 feet onto the concrete floor below. Killeen sustained serious injuries in the fall and is now unable to work. Killeen and his wife filed the lawsuit against NSPC and J&M in Essex County Superior Court in 2010. NSPC filed a third-party complaint against Travelers, seeking coverage under the policy issued to J&M. NSPC and Travelers filed competing summary judgment motions over “the coverage issue.”
The trial court granted summary judgment in favor of Travelers and dismissed the third-party complaint, finding that NSPC was not entitled to coverage because the lease obligated NSPC to maintain the roof. In handing down its ruling, the trial judge said:
Plaintiff’s complaint alleges that NSPC was negligent in its maintenance or repair of the roof. The lease between the parties allocates this potential liability to NSPC and expressly provides that NSPC is to indemnify J&M for any such liability. Thus, the lease cannot be read as obligating J&M to obtain insurance coverage protecting NSPC from this liability and the Travelers policy, in turn, does not provide such coverage.
On appeal, Travelers contended that the lease meant NSPC was not entitled to coverage, stating that “the lease does not obligate additional insured coverage for a condition over which NSPC retained sole responsibility – the roof – and for which it agreed to indemnify J&M where liability arose out of NSPC’s negligence.” The appellate panel rejected the insurer’s argument, finding that the Travelers policy clearly shows that NSPC is entitled to coverage. The panel said:
The policy was clear and unambiguous, therefore resort to the lease was unnecessary. NSPC is entitled to coverage under the terms of the Travelers policy.
The Killeens are represented by Jason A. Daria and John M. Dodig of Feldman, Shepherd, Wohlgelernter, Tanner, Weinstock & Dodig LLP. The case is Kevin Killeen and Noel Killeen v. Jenson & Mitchell Inc. et al, (case number A-0001-15T3) in the Superior Court of New Jersey, Appellate Division.
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