Cogliati v. Ecco High Frequency Corp.

• Citation: 456 A.2d 524,92 N.J. 402
• Parties: Charlotte COGLIATI, Plaintiff-Respondent, v. ECCO HIGH FREQUENCY CORP., a New Jersey Corporation, and Emil R. Capita, Defendants-Appellants, and Bernard OSTER, Defendant and Third-Party Plaintiff-Appellant and Cross-Respondent, v. INVESTORS INSURANCE COMPANY OF AMERICA, Third-Party Defendant-Respondent and Cross-Appellant.
• Decision Date: 08 February 1983
• Court: United States State Supreme Court (New Jersey)

Page 402

92 N.J. 402

456 A.2d 524

Charlotte COGLIATI, Plaintiff-Respondent, v. ECCO HIGH FREQUENCY CORP., a New Jersey Corporation, and Emil R. Capita, Defendants-Appellants, and Bernard OSTER, Defendant and Third-Party Plaintiff-Appellant and Cross-Respondent, v. INVESTORS INSURANCE COMPANY OF AMERICA, Third-Party

Defendant-Respondent and Cross-Appellant.

Supreme Court of New Jersey.

Argued Sept. 29, 1982.

Decided Feb. 8, 1983.

Joseph S. Nester, Jersey City, for defendants-appellants (Russo, Tumulty & Nester, Jersey City, attorneys).

Arthur D. Pajonk, Ridgefield, for defendant and third-party plaintiff-appellant and cross-respondent (Pajonk & Pajonk, Ridgefield, attorneys).

Milton D. Liebowitz, Englewood, for third-party defendant-respondent and cross-appellant (Liebowitz, Liebowitz & Clark, Englewood, attorneys).

Melvin R. Solomon, Hackensack, for plaintiff-respondent (Parsekian & Solomon, Hackensack, attorneys).

The opinion of the Court was delivered by

SCHREIBER, J.

We are called upon today to determine the liability of predecessors in title of commercial properties for injuries suffered on public sidewalks. Plaintiff, Charlotte Cogliati, began this action for damages for personal injuries that she suffered as a result of a fall on the public sidewalk in front of the premises designated 9223-9243 Kennedy Boulevard, North Bergen, New Jersey. She alleged that the sidewalk was in a dangerous condition due to its improper construction and maintenance. The defendants were Ecco High Frequency Corp., the owner of the property, Emil Capita, its principal stockholder, and Bernard Oster, Ecco's predecessor in title. Ecco filed a cross-claim against Oster for contribution in accordance with the Comparative Negligence Law, N.J.S.A. 2A:15-5.1 et seq., and the Joint Tortfeasors Contribution Act, N.J.S.A. 2A:53A-1 et seq. Oster joined as third party defendant Investors Insurance Company of America (Investors), which had insured Oster. Investors had refused to defend the suit on behalf of Oster and disclaimed coverage because the accident occurred after Oster had conveyed title.

The issues were resolved when the trial court granted Oster's motion for summary judgment and subsequently granted Ecco's and Capita's motion for summary judgment. Investors prevailed on its motion for summary judgment because its insured was not liable. The plaintiff appealed and the Appellate Division reversed. 181 N.J.Super. 579, 439 A.2d 91 (1981). We granted petitions for certification filed on behalf of defendants Oster, Investors, Ecco and Capita. 89 N.J. 441, 442, 446 A.2d 163 (1982), 91 N.J. 286, 450 A.2d 593 (1982).

The respective motions for summary judgment were decided on the basis of depositions of the plaintiff and defendants Oster and Capita, an affidavit of an engineer, and an affidavit of an insurance broker. The following facts, viewed favorably for the plaintiff, may be adduced from that record.

At about 6:00 p.m., on November 8, 1977 plaintiff, Charlotte Cogliati, was walking on the public sidewalk on Kennedy Boulevard, North Bergen. While walking by the commercial building owned by Ecco, she tripped on the broken sidewalk and fractured her hip. She described the sidewalk as "all cracked up to pieces" and asserted "the whole sidewalk was caving in." George Marr, an engineer, examined the sidewalk on February 4, 1980 and found that it had been completely repaired and resurfaced since the accident. He also examined ten photographs of the walk taken in April 1978. It was his opinion that the conditions relating to cracks in and raised portions of the sidewalk were due to improper and inadequate subsoil preparations. He also averred that the pictures depicted a condition that had existed for a substantial period of time before the accident.

When defendant Oster purchased the property in 1973, ¹ there was an unoccupied building, formerly a supermarket, on it. The premises remained vacant until the property was conveyed to Ecco on July 26, 1977. During Oster's ownership nothing was done to the sidewalk. Capita, Ecco's president and principal stockholder, examined the building and observed the sidewalk before Ecco bought the property. Ecco refinished the sidewalk in the early part of 1979. There had been a liability insurance policy with Investors, but on closing title the policy was canceled and Investors returned a part of the annual premium. The accident occurred more than three months after Ecco took title.

The trial court in an oral opinion began with the premise that an abutting owner is not liable for the condition of a sidewalk caused by the action of the elements or by wear and tear incident to public use. It stated that an owner could be liable only for his negligent construction or repair of the sidewalk or that of his predecessor. The trial court also noted that the plaintiff must show the proper standard of construction at the time the sidewalk was constructed or repaired and the deviation from that standard. The court found no evidence from which it could infer that the defendants Ecco or Oster either repaired the sidewalk or repaired it negligently. In a letter opinion the trial court found in favor of Investors because its insured Oster was not liable.

Pending the appeal to the Appellate Division, we decided Stewart v. 104 Wallace Street, Inc., 87 N.J. 146, 432 A.2d 881 (1981), holding that commercial landowners are responsible for maintaining the public sidewalks abutting their property in reasonably good condition and are liable to pedestrians injured as a result of their failure to do so. Id. at 157, 432 A.2d 881. The Appellate Division held that Stewart should be applied retrospectively and therefore the summary judgments in favor of Ecco and Capita against the plaintiff could not stand. The Court concluded that Stewart should be applied to the predecessor in title Oster, holding that a predecessor in title would remain liable for a reasonable period of time after the sale and conveyance for failure to maintain the public sidewalk. Lastly, the Appellate Division observed that Investors was let out only because Oster was not liable. It observed that "[t]he legal question of Investors' continuing obligation to Oster, assuming Oster's liability to plaintiff, depends on factual determinations and construction of policy language which in the first instance should be made by the trial court." 181 N.J.Super. at 585, 439 A.2d 91.

There are two major issues before us. One concerns the duty owed by a predecessor in title of a commercial property to a pedestrian who is injured on a public sidewalk because of a defective condition that had existed during the predecessor's ownership and control. The second involves the retrospectivity of Stewart to the owner and to predecessors in title.

I

Our case law has been unclear as to the obligation of a predecessor in title of realty after conveying title with respect to a defective public sidewalk abutting the premises. ² Three rules have evolved. One general rule has been that a seller of realty is not subject to liability for bodily injury suffered by third persons arising after the purchaser has taken possession, even though the seller may have been responsible for creation of the dangerous condition. McQuillan v. Clark Thread Co., 12 N.J.Misc. 409, 172 A. 370 (Sup.Ct.1934). Thus the seller who would have been responsible if the pedestrian had been injured during the seller's possession avoids liability if the property had been transferred the day before the accident. A second rule provides that the predecessor in title remains liable until the dangerous condition is corrected. See Garvey v. Public Service Co-ordinated Transport, 115 N.J.L. 280, 179 A. 33 (E. & A. 1935). A third rule states that the predecessor in title remains responsible for a reasonable period of time after the conveyance. See Sarnicandro v. Lake Developers, Inc., 55 N.J.Super. 475, 151 A.2d 48 (App.Div.1959) (dictum).

The policy underlying the first rule was that the seller no longer had possession of the premises and therefore his duty had been extinguished. He had no right to enter and repair the walk, for the property was no longer his. It was the buyer who was now in control and accordingly it was his obligation to remedy the condition. McQuillan v. Clark Thread Co., supra. There the seller was held not liable for a defective sidewalk condition caused by him where the accident occurred after he had sold and conveyed the property. Justice Oliphant summarized the rule as follows:

Where there has been a transmutation of title and possession, the former owner has no control over the premises and he does not have the right of possession nor the right of entry. Any attempt to make entry on his part for whatever purpose would put him in the category of a trespasser. Having divested himself of all rights in regard to the property, he owes no duty with respect to the condition of the premises. Therefore, the negligent condition which may exist on the premises to the injury of any member of the public, whether he be a licensee or invitee, is not actionable as against the former owner. ³ [12 N.J.Misc. at 411-412, 172 A. 370]

Where, however, control was retained, the seller's responsibility continued. In East Jersey Water Co. v. Bigelow, 60 N.J.L 201, 38 A. 631 (E. & A. 1897), the East Jersey Water Co. constructed dams and reservoirs on the Pequannock River that diverted the flow of water and interfered with operation of the plaintiff's sawmill. The Water Company sold the dams and reservoirs to the City of Newark, but under its agreement the Water Company maintained and controlled the works and had the right to divert water, at the Newark city limits, for its own use. The Court held the Water Company's duty remained because it not only had constructed the nuisance but also had a contractual obligation that was tantamount to continuing the nuisance. It reached this conclusion on the...