Many construction contracts contain waiver of subrogation clauses. Where a property owner agrees to such a clause, that owner's insurer cannot seek reimbursement from the contractor for any payment made to the property owner, even if the claim was caused by the fault of the contractor. This was the situation in an unpublished Appellate Division case entitled National Fire Ins. Co. of Hartford, et. al. v. Cintas Fire Protection Inc. There, the sprinkler contractor's faulty work resulted in National Fire having to pay a claim for $1,500,000 in damages to the property, and National Fire sought to be reimbursed from Cintas Fire Protection for such payments. However, Cintas was victorious at both the trial and appellate levels in arguing that the waiver of subrogation clause in its contract was enforceable and insulated them from any subrogation claims.
Although Ohio law governed in this New Jersey court case, the court found that that both New Jersey and Ohio law were in agreement on the issue. In so doing, the court held that waiver-of-subrogation provisions were, in fact, valid under New Jersey law. Further, even if the contract in question could be characterized as one of adhesion, the contract was not unconscionable and the waiver of subgrogation provision was enforceable. Consequently, despite performing faulty work, the fire sprinkler contractor was not responsible for paying for any of the damages caused by its negligence. (Nation Fire Ins. Co. of Hartford, et. al. v. Cintas Fire Protection, Inc.)
In a matter of first impression due to statutory amendments addressing certain issues relating to the continued re-building after Superstorm Sandy, an owner of a townhome in Margate was permitted to raise their home to meet new flood standards despite a deed restriction limiting the height of the structure. The townhome development consisted of one row of ten attached two-story oceanfront townhomes, and a second row of ten attached three-story townhomes located directly behind the first row. The expressed purpose of this configuration was to give both rows of townhomes an ocean view. Although the townhomes shared party walls that extended down into the foundation, each was situated on its own subdivided lot, was owned in fee simple. After the home in question was destroyed by Superstorm Sandy, the owner sought to elevate the unit thirteen feet in order to meet the new flood-protection standards, negatively affecting the ocean view of the second row of townhomes. Despite a deed restriction limiting the height of the owners townhome, the Appellate Division found that it could be built at the new height. Relying on the legislature's amending of N.J.S.A. 58:16A-103, the court held that he was entitled to, "elevate the structure as required by current flood-safety standards, despite Declaration provisions that would otherwise preclude him from doing so. As intended by the Legislature, the amended statute overrides the Declaration and any local development regulations that might otherwise prevent Iannuzzi from elevating the townhome." Furthermore, the court clarified that the structure could be rebuilt to the same total height, even at its new elevation stating that, "Iannuzzi's right to protect his property from flood hazards outweighs his neighbors' right to preserve their ocean views." (Gross, et. al. v. Iannuzzi, et. al.)
In an unpublished case, the Appellate Division overruled a trial court's finding that customer lists used by a former employee to compete with his former employer were not considered protected trade secrets. The trial court held that the information was not protected since the names, addresses and phone numbers of the people on the list were "well known in the industry" and therefore it was immaterial that the defendant obtained the information from his former employer's database. However, the Appellate Division opined that a more detailed analysis is required pursuant to Lamorte Burns & Co. v. Walters, listing the factors to be considered as follows: (1) the extent to which the information is known outside of the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the owner to guard the secrecy of the information; (4) the value of the information to the business and to its competitors; (5) the amount of effort or money expended in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Given these factors and the specific facts of the case at issue, the appellate court ruled that there were issues of fact as to whether or not the customer lists were protected trade secrets and consequently remanded the case for trial. (Steris Corporation v. Shannon)
Peter J. Vazquez, Jr.