Borges v. Hamed

• Decision Date: 23 March 1990
• Parties: Albertina BORGES, Plaintiff, v. Faiez HAMED and Lourdes Hamed, Defendants.
• Court: New Jersey Superior Court

Page 353

247 N.J.Super. 353

589 A.2d 199

Albertina BORGES, Plaintiff, v. Faiez HAMED and Lourdes Hamed, Defendants.

Superior Court of New Jersey, Law Division,

Union County.

Decided March 23, 1990.

Hector M. Garcia, Elizabeth, for plaintiff.

Robert J. Casulli, Cranford, for defendants.

DeSTEFANO, J.S.C.

This is a motion for summary judgment by defendant homeowners. The question presented is whether a three family, owner-occupied house, with two rental units, is "commercial" property for purposes of extending liability for a defective abutting sidewalk under the authority of Stewart v. 104 Wallace Street Inc., 87 N.J. 146, 432 A.2d 881 (1981).

Plaintiff, Albertina Borges, tripped and fell on a cracked sidewalk abutting defendants' property. Borges suffered facial injuries, including a fractured nose. She brings this action alleging negligence in the maintenance of the sidewalk. The sidewalk where plaintiff fell was in place before the defendants purchased the house. There is no indication of when the sidewalk was constructed or by whom. Defendants have made no repairs to the sidewalk. There is no evidence that anyone made repairs.

The defendants, Faiez Hamed and Lourdes Hamed, are husband and wife. They purchased a three family house located at 1451-1455 Concord Place, Elizabeth, in February 1979. The first floor is occupied by Lourdes Hamed's sister, her husband and two children. The second floor is occupied by Mrs. Hamed's mother, stepfather and two brothers. The third floor is occupied by Mr. and Mrs. Hamed. The entire family has lived in this residential neighborhood for eleven years. Mrs. Hamed's mother and sister pay monthly rent.

In Yanhko v. Fane, 70 N.J. 528, 362 A.2d 1 (1976) the Supreme Court held,

"an abutting owner is not liable for the condition of the sidewalk caused by the action of the elements or by wear and tear incident to public use, but only for the negligent construction or repair of the sidewalk by himself or by a specified predecessor in title or for direct use or obstruction of the sidewalk by the owner in such a manner as to render it unsafe for passersby." Id. at 532, 362 A.2d 1.

In Stewart v. 104 Wallace Street Inc., supra, the Supreme Court held that,

"commercial land owners are responsible for maintaining in reasonably good condition the sidewalks abutting their property and are liable to pedestrians injured as a result of their negligent failure to do so." Id. at 157, 432 A.2d 881.

The Stewart decision did not impose a duty to maintain abutting sidewalks on owners of residential property. The Court specifically left that determination to the Legislature. Id. at 159, fn. 6, 432 A.2d 881. The Court also remarked that commonly accepted definitions of "commercial" and "residential" property would apply. An apartment building is an example of "commercial" property. Id. at 160, fn. 7, 432 A.2d 881.

The New Jersey Administrative Code, Section 13:45A-16.1 defines residential or non-commercial property as,

"a structure used, in whole or in substantial part, (emphasis added) as a home or place of residence by any natural person, whether or not a single or multi-unit structure, and that part of the lot or site on which it is situated and which is devoted to the residential use of the structure, and includes all appurtenant structures." Blake Construction v. Pavlick 236 N.J.Super. 73, 79, 564 A.2d 130 (Law Div.1989).

In Blake Construction the first floor, of a two and one-half story structure, served as a combination tavern and liquor store. The second and third floors were occupied by the family as a dwelling. The Court held that this mixed use property qualified "as a residential or non-commercial property" for purposes of applying the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq.

In Hambright v. Yglesias 200 N.J.Super. 392, 491 A.2d 768 (App.Div.1985), the Appellate Division held that a non-owner occupied, two family house, generating two rental incomes, would be considered "commercial" property for purposes of applying the Stewart rule. The court made a point of saying, "we express no opinion as to the result where a two family house is partly owner occupied." Id. at 395, 491 A.2d 768. The Appellate Division interpreted fn. 7 of the Stewart opinion to the effect that,

"... it was the nature of the ownership that mattered, but not the use to which the property is put. Apartment buildings are residential in the sense that they are places where people live; they are commercial in the sense that they are operated by their owners as a business. In the instant case, it is undisputed the property was owned and operated by defendant as a business venture." Id. at 395, 491 A.2d 768.

In its own footnote, the Appellate Division went on to say, "Residence is defined as the place in which one lives or resides. Commerce is defined as business." Id. at 395, fn. 1, 491 A.2d 768.

The defendants own and occupy a three family house with income from two rental units. The area is zoned residential. The house is clearly a residence for Mr. and Mrs. Hamed; but is it also a business?

In Brown v. St. Venantius School 111 N.J. 325, 544 A.2d 842 (1988) the Supreme Court found that St. Venantius School was a "commercial" landowner. They were, as such, liable to a pedestrian who fell on the public sidewalk abutting the school. This case is helpful to our present inquiry for two reasons. First, the Court said,

"... higher insurance premiums for commercial property owners as the result of the newly imposed sidewalk liability could be spread through higher charges for the commercial enterprises, goods or services as distinct from residential owners, who must bear the loss." (emphasis added) Id. at 331, 544 A.2d 842, Mirza v. Filmore Corp., 92 N.J. at 397 [456 A.2d 518 (1983) ].

The Court recognized that commercial landlords are in a better position to spread the risk of loss than are residential homeowners. Commercial property owners can pass the increased cost of insurance on to customers. This distinction between residential and commercial landowners may outweigh the goal of compensating all innocently injured pedestrians. See 35 Rutgers Law Review 425 (1983). One of the examples cited in this article questioned the fairness of shifting the risk of loss to a middle income homeowner where a well-to-do pedestrian trips on the abutting sidewalk. Id. at 442, fn. 128. The author observed that if a homeowner purchases inadequate insurance an injustice may occur.

"A residential landowner could be forced to sell his house to satisfy a judgment. This result, however, seems to violate an objective standard of fairness; the benefits derived from having an abutting sidewalk in good repair simply do not justify the severity of this result." Id. at 443 fn. 130.

The Court pointed to a second area of interest when it drew a clear distinction between buildings that actually house people versus a business site; even if it is a small business or a private school operated by a non-profit religious corporation.

Justice Garibaldi, writing for the Court, said "Clearly, defendant St. Venantius School, a private school, is not a residential property. No one resides in the school." (emphasis added) Id. at 332, 544 A.2d 842.

The Court cited Roman Catholic Diocese of Newark v. Ho-ho-kus Borough, 47 N.J. 211, 220 A.2d 97 (1966) which held that schools do not constitute a residential use under a community's zoning ordinance.

The Stewart case did not say that "residential" means only single family, owner- occupied homes and that everything else is commercial. If an owner lives in a twenty-five unit apartment complex, that would not change the essential commercial character of the property. 87 N.J. at 160, fn. 7, 432 A.2d 881. If, on the other hand, an owner occupied one unit of a two family house, and collected rent from the second unit, does that modest income change the essential character of the property from a residence to a commercial enterprise? This Court has found at least one commentator that would not impose Stewart liability, absent statute, on a residential landlord collecting rent from one unit. See 35 Rutgers Law Review 425 at 444-446 (1983).

The defendants are undoubtedly paying their rising real estate taxes, homeowners...