TRENTON, N.J. (Legal Newsline) - The New Jersey Supreme Court says a cleaning company that provided services for Best Buy has no contractual obligation to pay the legal costs incurred by the store in defending a lawsuit that was dismissed for lack of evidence.
The Court, in its unanimous opinion filed March 15, reversed a trial court's ruling and remanded the case for entry of judgment dismissing the fourth-party complaint against the cleaning company.
American Industrial Cleaning Co., or AIC, had entered into an agreement with the electronics retail giant to clean and provide maintenance for its stores. AIC then subcontracted with All Cleaning Solutions Co. for the daily cleaning of a Best Buy store in Holmdel.
While at the Holmdel store, shopper Tina Kieffer fell and broke her ankle. She sued Best Buy, AIC and All Cleaning, alleging her fall was caused by an unsafe, slippery floor.
Earlier that day, All Cleaning had swept, mopped and scrubbed the floor, and had waxed the floor three months earlier.
Kieffer's expert opined that in the area of the fall the floor finish material was not properly applied, and that "hazardous conditions" created by Best Buy, AIC and All Cleaning caused the fall.
Best Buy filed a third-party complaint against AIC, claiming it was contractually bound to defend and indemnify Best Buy. In turn, AIC filed a fourth-party complaint against All Cleaning.
The floor service agreement between Best Buy and AIC permitted AIC to delegate its duties to others, but AIC remained "solely responsible for the conduct of all such subcontractors." The Best Buy/AIC agreement also provided that AIC would defend and indemnify Best Buy for all "suits, causes of action, claims and demands" asserted against Best Buy.
The agreement between AIC and All Cleaning, which AIC drafted, required All Cleaning to defend and indemnify AIC and Best Buy "from any connection with any act of negligence, omission or conduct arising out of the operation of (All Cleaning's) business and (its) performance or non-performance" of its services.
A trial court granted summary judgment in favor of all three defendants, concluding they were not negligent or otherwise liable for Kieffer's injuries. The court noted that Kieffer did not know why she fell and that her only observation was that the floor was shiny. The court rejected her expert's conclusion that the floor was negligently maintained as nothing more than a bare conclusion unsupported by factual evidence.
Despite its no-negligence finding, the court ruled that All Cleaning was responsible to pay the legal defense costs of both AIC and Best Buy. An appellate panel affirmed.
Justice Barry T. Albin, who authored the Court's opinion, said both courts focused on language in the wrong contract -- the broader language in the Best Buy/AIC contract.
"Unlike the clear language of the Best Buy/AIC contract, the AIC/All Cleaning contract did not require All Cleaning to defend and indemnify AIC or Best Buy based on the assertion of mere 'claims' by a party," it wrote.
"The indemnification clause drafted by AIC only imposed on All Cleaning the responsibility of paying defense costs 'from any connection with any act of negligence, omission, or conduct arising out of the operation of (All Cleaning's) business and (its) performance or non-performance of the Services.'"
From Legal Newsline: Reach Jessica Karmasek by e-mail at email@example.com.