Del Boca Vista

The New Jersey Supreme Court has held that an ambiguous indemnification provision must be construed against the party seeking indemnification.

The dispute involved the removal of a trustee of an condominium association

Boyle purchased a unit with his wife in 2017. In June 2018, the Board temporarily appointed Boyle to fill a vacancy and later appointed him to a regular seat in August 2019. Boyle’s background and experience as an accountant led him to raise serious concerns regarding “errors and anomalies” he discovered in the Association’s finances. A bitter dispute arose between Boyle and his fellow trustees over the financial management of the Association.

In response, on August 16, 2020, the Board adopted a special resolution to expel Boyle as a trustee. The Board’s resolution alleged that Boyle had engaged in various acts of misconduct, including “disrupting the 2019 election. . . [and the] assault, harassment, intimidation, and bullying of other board members.” After his expulsion, Boyle requested reinstatement, which the Board refused.

The court

At minimum, the indemnification provision is ambiguous and must therefore be construed against Boyle as the indemnitee. See Kieffer, 205 N.J. at 223-24. Contrary to the conclusion reached by the Appellate Division, we
cannot presume first-party coverage in the absence of language precluding it; rather, there must be affirmative indicia of the intent to indemnify to overcome the presumption that parties will each pay their own way.

(Mike Frisch)