I recently participated in a presentation to snow clearing professionals at Rutgers University in New Jersey. The focus of my presentation was avoiding liability for snow clearing services, and although the presentation covered a wide array of topics, the following discussion covers what appeared to be of most importance and relevance to the men and women attending the presentation at Rutgers University (names are changes to protection confidentiality).
Scenario 1: Troy Smith LLC performs snow clearing services in the Minnesota area. Winters are usually harsh, and snow stays on the ground for many months. Troy has a new customer who is unwilling to pay the cost of hauling snow off the property of a small retail shopping center. Troy is running out of space to push the snow, and is concerned the snowfall from a large storm will result in an inability to properly service the location.
Smith requests permission of the management company to haul snow away from the center for a reduced price, but permission is refused. Smith is reluctantly put in a position of trying to develop a plan for handling a significant storm event, including devising a location to pile snow, and responding to a potential melt and freeze problem, especially since he can no longer store the snow in the distant corners of the parking lot because of the already accumulated snow present.
My best advice to Smith is to place his concerns in writing to the management of the shopping center, and to the extent possible, ask if the shopping center will release him from the contract. Smith is not in business to lose or give away customers, but it makes no sense for Smith to find himself in a position where he is unable to properly perform his contractual duties due to a lack of cooperation of the management company. Giving up a contract is a drastic measure, but Smith is left with few options in this situation.
Scenario 2: K. Paul & Sons is under contract for the Zurich Plaza in Philadelphia. The location is next to a large street where municipal trucks constantly plow snow onto sidewalks of the Plaza, many times long after K. Paul completes services.
K. Paul does a thorough job performing his initial clearing services, yet he constantly receives complaints from the Plaza management company. K. Paul has attempted to address the issue with the city, but has gotten absolutely nowhere with his efforts. While the Plaza management company understands and is sympathetic to K. Paul’s predicament, the company takes the position K. Paul is contractually responsible for the entire premises, including the sidewalks abutting city streets.
Unlike the above scenario, I did not recommend K. Paul attempt to escape his contract. K. Paul simply has to go to the extra expense of clearing the sidewalks after the city’s trucks perform their plowing operations. When the contract comes up for renewal, K. Paul should price the cost of additional services into the new contract, but for now, K. Paul is obligated to honor the terms of the contract.
Scenario 3: Gerroir Snow & Ice is working under a flat fee or seasonal contract. Gerroir is under tremendous financial pressure because of the heavy snowfall this year, and is losing money on the contract. Gerroir asked if there is any legal recourse or remedy to possibly secure additional compensation.
The first place to look when trying to renegotiate or change contractual terms is the original contract. I suggested Gerroir review the initial contract to see if there is any clause allowing for any increase in the agreed upon contractual price, and to see the circumstances under which an increase will be allowed.. In the absence of such a clause, it is unlikely Gerroir will have any legal justification to increase the price. I explained that just as Gerroir would expect its client to have no legal justification to reduce the price in a season with a minimal amount of snow, there is likely no justification for a price increase.
The value of flat fee or seasonal contracts is cost certainty for all parties involved. In the short run, either party may lose money based on the level of snow clearing activity, but generally, over the course of several winters, these contracts prove fair and balanced.
Scenario 4: Losey Shopping Center houses two major department stores and many smaller businesses. Losey is expected to constantly monitor the premises for melt and freeze, as the shopping center is extremely serious about creating a safe environment for its customers. Losey is paid for all monitoring services, including monitoring days after snow events.
A legal claim arises from a slip and fall on ice seven days after a snow event. Investigation reflects the ice formed because of a clogged drain. Investigation further reflects no ongoing weather event around the time of the fall, and no reason for Losey to expect an ice problem. Additionally, and importantly, Losey had not knowledge of the clogged drain and ice formation before the accident.
Based on the above factual scenario, I offered the preliminary opinion Losey will not be liable for the accident, but this is a very close call. Losey was given authority to monitor the site whenever Losey felt necessary, and Losey was paid for this service. The shopping center has a high expectation Losey will keep the premises free and clear of snow and ice, and there is a high contractual obligation imposed on Losey. My opinion Losey will not have liability is based on the fact Losey had no knowledge of the drain clog before the occurrence and there were no weather conditions giving Losey reason to be at the shopping center performing inspections when the subject occurrence took place.
Scenario 5: C. Decker was instructed to perform no services without prior approval. C. Decker took the job because it was a new company and trying to establish itself in the region. Once the snow season started, C. Decker realized the inability to perform services until receiving approval resulted in the premises being in extremely poor condition once C. Decker was authorized to service. After the third storm of the season C. Decker realized the mistake of agreeing to such a contract.
It is almost always a terrible idea to agree to a contract where you are not permitted to perform any services whatsoever without receiving prior authorization. In my experience, a property owner requiring such a contract is under extreme financial pressure to limit the cost of services, and the job will be come very difficult for the snow clearing company. I always recommend a pre-agreed upon trigger for the initiation of services in any snow clearing contract, allowing a comfort level for both the snow clearing company and the property owner.
Scenario 6: Lucente Crossing is an upscale shopping center in New Jersey. Lucente Crossing will pay for initial snow clearing snow services, but will not pay for B. Wilbur Snow Clearing Company to return to inspect and/or apply ice melt produce after the initial services are complete. This presents an extremely challenging situation for B. Wilbur, but after thoughtful consideration, B. Wilbur agrees to the terms.
I advised B. Wilbur there is no problem with the terms imposed by Lucente Crossing, as long as the terms are expressly placed in writing in the contract. There is, however, absolutely no reason to agree to perform services under these restrictions without a written contract.