In Moran-Alvardo v. Nevada Court Realty, LLC, the Superior Court of New Jersey, Appellate Division, addressed a liability insurance claim arising from a fall on snow in a shopping center parking lot. After the injured party filed an action against the shopping center owner and a tenant, the property owner filed a third-party indemnification action against the tenant and the tenant’s liability insurer. The trial court granted summary judgment in the tenant’s favor with regard to the indemnification claim, but granted summary judgment in the owner’s favor with regard to insurance coverage. Both decisions were reversed on appeal, as the Appellate Division determined that the property owner’s potential entitlement to indemnification required resolution of disputed issues of fact regarding whether the accident occurred on the tenant’s premises, and if so, whether the accident was due to the property owner’s sole, gross, or willful negligence.
On remand, the trial court concluded that the accident was due to the property owner’s gross negligence, as it had failed to clear the parking lot of snow and ice for three days prior to the accident. The trial court therefore held that the property owner was not entitled to indemnification under its lease with the tenant, as the indemnification provision did not apply to gross negligence or willful misconduct. However, the trial court concluded that the property owner was entitled to coverage under the tenant’s liability insurance policy, as it was an additional insured on the policy.
On appeal for a second time, the Appellate Division noted that under established New Jersey law, the obligation of a tenant’s insured to provide coverage to a landlord pursuant to an additional insured endorsement was coextensive with the tenant’s liability. The Court also observed that the policy in question excluded coverage for the insured’s gross negligence or willful misconduct. The Court therefore held that as the property owner had engaged in gross negligence, it was not entitled to coverage on the tenant’s policy. The Court therefore reversed the trial court’s decision with regard to coverage.