An appellate court in New Jersey, affirming a trial court's decision, has ruled that a property manager was not entitled to additional insured coverage under a tenant's insurance policy where it was not named as an additional insured and where it did not perform services on the tenant's behalf.
The Case
Michael Diaz alleged that he was injured when he slipped on ice on property that was owned by the Chrys S. Norwood Family, LP, and that was managed by Simotas Property Management, LLC.
Mr. Diaz's employer, Bon Jour Group, LLC, was a Norwood tenant and, under its lease with Norwood, had agreed to keep the walkway clear of snow and ice.
The property management agreement between Norwood and Simotas outlined tasks that Simotas agreed to perform on Norwood's behalf, including screening tenants, negotiating and executing rental or lease agreements, and commencing eviction actions in Norwood's name.
Mr. Diaz sued Norwood and Simotas.
Simotas filed its answer and filed a cross-claim against Bon Jour's insurer, Sentinel Insurance Company, seeking a declaratory judgment that it was entitled to insurance coverage under Sentinel's policy even though the Sentinel policy did not name Simotas as an insured or as an additional insured and even though Bon Jour had no obligation under its lease with Norwood to obtain liability insurance for Norwood or for Simotas.
The trial court granted summary judgment in favor of Sentinel, concluding that Simotas was not an additional insured under the Sentinel policy.
Simotas appealed, arguing that it was entitled to additional insured coverage under the provision of the Sentinel policy affording additional insured coverage to a “real estate manager.”
The Sentinel Policy
The Sentinel policy provided:
C. WHO IS AN INSURED. . . .
2. Each of the following is also an insured: . . . .
b. Real Estate Manager
Any person (other than your “employee” or “volunteer worker”), or any organization while acting as your real estate manager.
The Appellate Court's Decision
The appellate court affirmed, rejecting Simotas' contention that it was a “real estate manager” as that term was used in the Sentinel policy because it managed the property at which Bon Jour was a tenant.
In its decision, the appellate court found that Simotas never performed any snow or ice removal on Bon Jour's behalf and that it was not acting as Bon Jour's real estate manager to qualify for insurance under the Sentinel policy.
The appellate court determined that although Simotas could demonstrate that it was a real estate manager and that it was Norwood's real estate manager, it was “unable to demonstrate” that it was Bon Jour's real estate manager.
As such, the appellate court concluded, Simotas was not entitled to the benefit of coverage under the Sentinel policy – a policy “that it was not a party to.”
The case is Diaz v. Chrys S. Norwood Family, LP, No. A-5013-17T3 (N.J. Super. Ct. June 10, 2019). Attorneys involved include: Douglas F. Ciolek argued the cause for appellant (Rosenberg Jacobs Heller & Fleming PC, attorneys; Douglas F. Ciolek, of counsel and on the briefs). Thomas E. Schorr argued the cause for respondent (Dilworth Paxson, LLP, attorneys; Thomas E. Schorr, of counsel and on the briefs).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].