Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


10-17-2005

Travelers Indemnity v. SCS Realty Corp
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-3623




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Recommended Citation
"Travelers Indemnity v. SCS Realty Corp" (2005). 2005 Decisions. Paper 400.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/400


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                                                                  NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT

                                      No: 04-3623

                        TRAVELERS INDEMNITY COMPANY
                        as subrogee of Mario’s Shoe Outlet, Inc.,
                                          Appellant

                                                 v.

                           S.C.S. REALTY CORPORATION
                               and THE CORNER CAFÉ

                      Appeal from the United States District Court
                             for the District of New Jersey
                                 (Civ. No. 03-CV-5021)
                        District Court: Hon. William J. Martini

                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                 September 16, 2005

                   Before: ROTH, McKEE & FISHER, Circuit Judges

                            (Opinion filed: October 17, 2005)

                                        OPINION

McKEE, Circuit Judge.

       Travelers Indemnity Corporation (“Travelers”) appeals the district court’s grant of

summary judgment based upon the court’s determination that the lease agreement

between S.C.S. Realty Corporation (“SCS”) and Mario’s Shoe Outlet, Inc. barred

Travelers’ subrogation claim. For the reasons that follow, we will affirm.

                                            I.
       Because we write only for the parties, it is not necessary to recite the facts of this

case in detail. In a succinct opinion filed August 12, 2004, the district court explained

that it was granting summary judgment against Travelers because “[t]he plain language of

clause 11 [of the lease] indicates that SCS. cannot be held liable for any tenant’s

negligence, or its own negligence, and the Court will enforce clause 11 as it was written.

See Cumberland County Improvement Authority v. GSP Recycling Co., 

, 496 (App. Div. 2003).” This appeal merits little further discussion, and we will

affirm the district court substantially for the reasons set forth in its opinion.

       We do note, however, that Travelers argues that the applicable provisions of the

lease only apply to negligence and therefore do not shield SCS from liability for its own

gross negligence and wanton and/or willful misconduct. We disagree.

       In Tessler and Son, Inc. v. Sontirol Security Systems of Northern New Jersey, Inc.,

, 533-34 (N.J. Super.Ct.App.Div. 1985), the Superior Court of New Jersey,

Appellate Division, held that any exculpatory clause that bars suits for negligence also

bars suits for “very negligent, or grossly negligent performance.” That applies to

Travelers’ attempt to rescue its claims from the reach of Clause 11. However, Tessler

specifically stated that claims for wanton and/or willful misconduct are not barred by an

exculpatory clause that only addresses negligent performance. 

The Supreme

Court of New Jersey has defined wanton and/or willful misconduct in McLaughlin v.

Rova Farms, Inc., 

, 305 (N.J. 1970), as follows:



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              It must appear that the defendant with knowledge of existing
              conditions, and conscious from such knowledge that injury
              will probably or likely result from his conduct, and with
              reckless indifference to the consequences, consciously and
              intentionally does some wrongful act or omits to discharge
              some duty which produces the injurious result.

(Emphasis added). Accordingly, we hold that the district court correctly determined that

Travelers’ claim of willful and/or wanton misconduct fails as a matter of law because

SCS had no duty to ensure that The Corner Café (“Corner”) installed the fire prevention

equipment based upon the lease agreement between SCS and Corner. That lease required

Corner to comply with all laws and regulations and specifically to follow all required

directives to prevent a fire. However, the clause specifically placed the burden of

compliance on Corner, the tenant. There is no language requiring SCS to purchase and

install a fire suppression system, nor is there any language requiring SCS to monitor

Corner’s compliance.

       Travelers also argues that the district court committed reversible error when it

granted the motion for summary judgment prior to discovery. Travelers believes that it

could have proved that SCS knew that no fire prevention system existed and that SCS

nevertheless failed to act with reckless indifference to the consequences. However, as we

have already explained, the district court correctly determined that Travelers’ claims for

negligence and gross negligence covered in the applicable provisions of SCS’s lease.

Accordingly, any claim for wanton and/or willful misconduct also fails as a matter of law

because of the operation lease between SCS and Corner. Accordingly, the district court

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did not err in realizing the futility of discovery and granting summary judgment.




                                  III. CONCLUSION

       For all of the above reasons, we will affirm the District Court’s judgment granting

SCS Realty Corporation’s motion for summary judgment.




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