In two recent opinions, separate Appellate Division panels have come to differing results regarding the nature of the duty owed by a commercial tenant to members of the public for dangerous conditions in common-area parking lots.

No Duty Imposed

In Kandrac v. Marrazzo’s Mkt., 429 N.J. Super. 79 (App. Div. 2012), the court held that a tenant, in a commercial shopping center, was not liable, as a matter of law, to a patron who tripped and fell over a parking lot lip/hump when the tenant’s lease required the landlord to maintain all common areas. While acknowledging that duty is normally a fact-sensitive issue, the court held as a general rule that a commercial tenant in a multitenant shopping center does not owe "a duty to maintain an area of the parking lot that the landlord is contractually obligated to maintain."

The defendant was one of the 36 stores in a shopping center. The plaintiff alleged she was injured when she fell in the shopping center’s parking area after leaving the defendant’s store. According to the relevant lease, the landlord had agreed to maintain the common areas of the shopping center which included the parking areas. Per deposition testimony, the landlord agreed this meant making repairs to the parking lot. In opposition to the defendant’s motion for summary judgment, the plaintiff maintained the defendant had an obligation to provide safe ingress and egress from its store to the parking lot.

In reviewing this matter, the court recognized the principles behind Stewart v. 104 Wallace St., 87 N.J. 146 (1981) (imposing an obligation on commercial landowners to maintain the sidewalk abutting their property), and Warrington v. Bird, 204 N.J. Super. 611 (App. Div. 1985), certif. denied, 103 N.J. 473 (1986) (imposing a duty of a commercial landowner beyond abutting sidewalk to parking lot across the street).

While the court noted that the sidewalk obligation in Stewart had been extended to commercial tenants in Antenucci v. Mr. Nick’s Mens Sportswear, 212 N.J. Super. 124, (App. Div. 1986), it refused to extend this obligation to common parking areas. The court cited three rationales for its holding. First, the area of the accident did not occur in a defined route from the store to the parking lot. Second, the area was not in close proximity to the defendant’s store and, finally, the accident did not occur in an area within the defendant’s control.

While denying a commercial tenant was automatically relieved of its obligations to provide safe ingress/egress by virtue of a lease term, the court did hold such a lease provision clearly impacted the tenant’s ability to address such parking lot conditions. This ability, or lack of ability in this matter, of a tenant to remedy an unsafe condition was a "significant factor" in imposing any duty.

Finally, the court held that a contrary decision might encourage "shotgun litigation" where a customer might "sue … every store at which he had browsed or purchased an item prior to his fall."

Duty to Foreseeable Users

In facts very similar to the Kandrac matter, the Appellate Division panel in Nielsen v. Wal-Mart Store #2171, 429 N.J. Super. 251 (App .Div. 2013), held that a commercial tenant, Walmart, did owe a duty to warn an independent contractor of an alleged dangerous condition in an area adjacent to Walmart’s store, despite a similar contractual obligation by the commercial landowner.

Specifically, the plaintiff alleged he slipped and fell on loose sand and gravel in an area outside of Walmart’s store. This particular plaintiff was an employee of an independent contractor exterminator, hired by Walmart to set rodent traps. In fact, Walmart had directed the plaintiff’s employer that the exterminator’s employees were to access the store entrances by walking around the building’s perimeter rather than through the store’s interior. It was during such a walk that the plaintiff was injured.

However, the area where the plaintiff fell was owned and maintained by the developer and, under a master deed with Walmart, the developer had agreed to "supervise, administer, operate, manage, insure, repair, replace and maintain" the common elements, including the area in question. While only initially suing Walmart, the plaintiff later amended his complaint to name the developer, who later successfully moved for summary judgment based on a statute of limitations defense.

Following denial of Walmart’s motion for summary judgment on liability, the matter was tried, with a jury finding Walmart 80 percent negligent and the plaintiff 20 percent negligent, awarding gross damages of $525,000. On appeal, Walmart argued that it lacked ownership and control of the area of the accident and that this dictated it owed no duty of care to the plaintiff.

As in Kandrac, this panel also went through, although more at length, the history and rationale in generally determining the nature and scope of a duty owed by one person to another. Through its discussion, it reasoned the law had evolved from prior decisions which viewed legal obligations based only on the strict identity of the parties.

It held that Walmart’s "ostensible central theses … that a land occupier’s duty of care extends only as far as the boundaries of its property … [was] simply out of step with the modern course of common law."

While acknowledging Walmart had no contractual obligation to repair the accident location, the court noted the master deed "did not preclude Walmart from taking similar action for the protection of foreseeable users" and that "neither ownership nor control is the sole determinant" to obviate obvious dangers. It is on this point that the panel strongly disagreed with the Kandrac decision. In its opinion, the Nielsen court held the contractual obligation "factor carrie[d] little weight" while, as discussed above, was a determinative factor for the Kandrac court.

Moreover, and likely more importantly, the court found it was not unfair to place a duty on Walmart when it was the one who had directed the plaintiff to access its store entrances by walking around the building’s perimeter rather than through the store’s interior. Therefore, the court held it was not unjust to impose a duty on Walmart to alert persons about the hazardous conditions when it was the one who had directed the plaintiff into those very conditions.

A Fact-Sensitive Issue

It is important to note that while, on the surface, the Kandrac and Nielsen decisions seem to conflict, they agree that a commercial tenant may, depending on the factual circumstances, owe a duty to persons injured in areas owned and contractually controlled by another. The substantive difference is in the weight given to the contractual obligation by the landowner to maintain the common area.

In Kandrac, the panel gave great weight to this lease provision while additionally finding it would be unfair to impose liability on the tenant where the accident did not occur in either a defined route to the tenant’s location or in close proximity to the location. While in Nielsen, the panel stressed that it was not so much concerned with the "labels adopted by the parties in defining their relationships" but rather whether "imposition of a duty ‘satisfies an abiding sense of basic fairness under all the circumstances in light of considerations of public policy.’"

Although not mentioned by the Nielsen court, it could have distinguished its holding from Kandrac because, in its case, the plaintiff was directed to the accident area by the tenant, whereas in Kandrac the plaintiff chose her own route of travel when exiting the store. Therefore, it is this forseeability distinction that should be noted as an important factor by practioners with similar cases.

Going forward, it is important to observe that, at the minimum, the Nielsen holding imposes an obligation to warn the public of the known dangers, whether or not on the tenant’s property. However, it would seem a logical extension that the tenant has an additional obligation to inform its landlord/property manager of these dangers and request they be remedied. Nonetheless, any further obligation such as making its own repairs, unless truly de minimis, could be argued to be onerous as the tenant neither owns nor contractually is obligated to maintain the property at issue.

As a practical matter, and although not specifically stated as playing any part in either holding, the ability of the injured party to be compensated for their loss may have played a role in the courts’ holdings. In Nielsen, had the court ruled in Walmart’s favor, the injured plaintiff would have been without any further legal recourse as the other seemingly culpable party, the commercial developer, had been already been dismissed on statute of limitation grounds. In contrast, the Kandrac plaintiff had already settled its claims against the land owner for $721,000.¢

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