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Horvitz & Levy partner Justin Sarno persuaded the California Court of Appeal to affirm a judgment and award of attorney’s fees in favor of Trader Joe’s arising out of a commercial landlord-tenant dispute.
Hill Family LP is the landlord of the Calle Real Shopping Center in Goleta, California. Trader Joe’s was the tenant. In 2016, eighty-five-year-old Berl Golomb inadvertently hit the accelerator when attempting to back out of his parking space. His vehicle jumped the curb, struck patron Matthew Quirk, and crashed into the front of a Trader Joe’s store. Quirk suffered significant injuries. The Quirk plaintiffs alleged that Hill Family LP and Trader Joe’s failed to install safety bollards outside the store to prevent vehicle intrusions. Hill Family LP and Trader Joe’s settled the underlying personal injury action brought by Matthew Quirk and his wife, each contributing $1.25 million dollars towards a $2.5 million settlement. Hill Family LP and Trader Joe’s then litigated their respective cross-claims against one another, which included claims for express indemnity and contribution. In a statement of decision, the trial court ruled in favor of Trader Joe’s, concluding that the injury had occurred in the common areas, which were under the exclusive ownership and control of the landlord. Under the lease, Trader Joe’s had no right to unilaterally modify the common areas of the property. Two years before the incident, Trader Joe’s requested that the landlord install safety bollards, and the landlord refused. The trial court found that Trader Joe’s was entitled to express indemnity, and it was awarded $1.25 million and attorney’s fees.
On appeal, the landlord argued it was entitled to reimbursement for the costs of defending the claim, due to the fact that Trader Joe’s was required under the lease to procure and maintain a commercial general liability (CGL) policy. The landlord argued that Trader Joe’s purported failure to reimburse it under the CGL policy overrode the trial court’s finding of express indemnity.
Trader Joe’s retained Horvitz & Levy partner Justin Sarno, who was at another firm at the time, to brief and argue the appeal. Justin joined Horvitz & Levy and brought this matter with him.
The Court of Appeal affirmed the trial court’s judgment and award of attorney’s fees in favor of Trader Joe’s, finding that the lease required the parties to insure their respective indemnity obligations, which were defined in terms of the physical spaces occupied, used, and maintained by the parties. The court concluded that Trader Joe’s obligation to obtain a CGL policy for its own premises and operations had no bearing on Trader Joe’s entitlement to indemnity from the landlord for injuries that resulted from a dangerous condition in an area within the landlord’s exclusive control. Because it was not a coverage case, the court concluded that the issue of reimbursement was reserved for a pending subrogation action amongst the respective insurers.
