By Robert E.B. Hewitt III, Esq. and Lawrence M. Ross, Esq.
Whether or not you are an avid TV watcher or have been assigned “couch potato” duty as a stay-at-home parent during the COVID-19 pandemic, you cannot help but notice that there are countless lawyers advertising for personal injury cases. Some concentrate on vehicular injuries while others emphasize slip & falls. While some of these commercials are over-the-top and sensational, slip & fall cases raise significant questions about who is legally responsible for maintaining a sidewalk. In a famous Abbott and Costello comedy routine from the late 1930s, Costello grows increasingly frustrated trying to find out the names of the players on a baseball team. An excerpt follows:
Lou Costello: Well then who’s on first?
Bud Abbott: Yes.
Lou Costello: I mean the fellow’s name.
Bud Abbott: Who.
Lou Costello: The guy on first.
Bud Abbott: Who.
Lou Costello: The first baseman.
Bud Abbott: Who.
Lou Costello: The guy playing…
Bud Abbott: Who is on first!
Lou Costello: I’m asking YOU who’s on first.
Bud Abbott: That’s the man’s name.
Lou Costello: That’s who’s name?
Bud Abbott: Yes.
Lou Costello: Well go ahead and tell me.
Bud Abbott: That’s it.
Lou Costello: That’s who?
Bud Abbott: Yes.
For those unfamiliar with this signature comedy routine, it is well worth your time to research, read and laugh over its antics. They are timeless. For a link to the skit, click here.
But the question “Who's on First” is a good one in determining who is responsible to an injured party in New York City and other areas of the state where liability for sidewalk accidents is placed by statute on the owner of an abutting property. The out of possession owner or the tenant? The analysis can be equally confusing but not very funny. A recent case by the Court of Appeals indicates “Yes.” But by careful planning, an owner can achieve the desired pass through to the tenant.
For those of us fortunate enough to own our own homes, and prudent enough to maintain adequate homeowner’s insurance, personal injury cases based on injuries sustained on sidewalks infrequently present any material coverage issues. However, in the contested realm of tenants and owners, slip and fall cases taking place on sidewalks contribute to a tsunami of disputes in the judicial system.
Let’s take a simple example: Hari Singhal and his family lease a pleasant 3 bedroom, 2 and ½ bath home on Staten Island, out of which Hari also conducts some business. In March 2019, a series of unexpectedly heavy and late winter storms battered this region as a result of some very powerful Nor’easters. The owner, Out of Control Management LLC, an out of possession owner, regularly employed a snowplow service for their properties but the service season commenced November 15th and ended March 15th and ordinarily did not include sidewalk clearance. The sidewalk was also in poor repair. The lease put the responsibility for maintenance of the premises, including the sidewalk, on the tenant.
On the morning of Thursday, March 22, 2018, Hari awoke to a winter wonderland; a beautiful coverlet of snow with a treacherous one-inch base of ice from the previous day’s rains. As Hari looked out his front bay window in awe, his neighbor, out walking her two Shih Tzu dogs, tumbled in plain sight in front of him on his sidewalk, suffering painful and severe injuries. The Shih Tzus escaped unharmed. Inevitably a lawsuit followed. Who would be the responsible party to the claimant in this case, the owner or the tenant? Or both?
This hypothetical raises the point that leases are often vague or silent about assigning legal risk for maintenance of the sidewalk. Even if the lease holds the tenant responsible for keeping the “premises” in “good repair”, it is rare for a lease to address responsibility for taking care of the sidewalks. Under the common law, the municipality was responsible for injuries occurring on public sidewalks due to negligent conditions of the sidewalk. However, municipalities were allowed to pass this civil liability onto adjacent landowners if they did so explicitly by statute. New York City has done just that through Administrative Code Section 7-210, which states an “abutting landlord/owner” (which is a property owner who owns the property next to a public sidewalk) is liable for injuries that occur on public sidewalks adjacent to their property, with several exceptions, including if the abutting property is a one, two, or three family residence that is in whole or in part owner occupied and used exclusively for residential purposes. Long Island towns, in contrast, are not uniform in their approach, with the Town of Hempstead not imposing such liability unless the landlord owner created the condition or through a special use caused the condition, while the Village of Rockville Centre does impose civil liability on landowners except for one or two family dwellings. Whatever the applicable Code says, those are the rules you must follow, and while you may have been familiar with the rules of your last residence you should not take for granted that those rules are the same where you now live.
Last October, the New York Court of Appeals decided a personal injury case under the New York City Administrative Code which will affect New York City property owners. Xiang Fu He v Troon Mgt., Inc. 2019 NY Slip Op 07643. The Court held that “out of possession” owners will be held liable to pedestrians for accidents arising from failure to properly maintain sidewalks abutting their properties as their duty is nondelegable. Previously, out of possession owners were able to contract that away through leases assigning the responsibility for sidewalk maintenance, including snow and ice removal to tenants, unless the cause of the accident was based on a significant structural or design defect of the premises itself. Under the terms of this decision, pedestrians can now sue owners directly in New York City, despite the terms of the lease and owners will not be able to move to dismiss based on the lease as they had done previously. This could be a significant new liability for owners as the owner typically have greater resources or more insurance than the tenant, and the property itself could be at risk.
However, there is a possible solution to this problem. Owners with well-drafted leases can be indemnified by tenants or lessees who covenant to maintain the property, even if the owner is directly sued by the injured party. The Court of Appeals acknowledged that while out of possession owners may have a nondelegable duty to pedestrians to maintain the sidewalks, the owner can require tenants contractually to maintain those very same sidewalks and be indemnified by the tenants or lessees for breach of these obligations. Though the pedestrian can sue the owner, the owner can then pass on the costs of any damages sustained to the tenant.
For an owner to benefit from this exception, the lease needs to be clear in providing that the tenant is responsible for maintaining the sidewalk, following all applicable laws, and explicitly hold the tenant responsible for snow and ice removal. The lease should have a specific indemnification provision, and also must require the tenant to purchase insurance that names the owner as an additional insured and provides a defense to the owner.
Owners should avoid getting “proof” of insurance through certificates of insurance from a broker which are often unenforceable against the insurance company itself, and which often state they are for “informational purposes only.” Rather, they should get a copy of the insurance policy, with the declaration page explicitly naming them as an additional insured for all liability purposes arising out of the premises including abutting sidewalks. This will bind the insurance company. The insurance coverage should also be adequate, with amounts that will provide suitable reimbursement of any possible damages. Otherwise, if the tenant is underinsured, the indemnification provision will not be helpful, and the owner will be surprised to find out that it will have to directly pay the injured pedestrian or even risk losing the property itself.
Through proper drafting of a lease, an owner may have the security of knowing it will be indemnified by a tenant for pedestrian accidents on its sidewalk, even in New York City where out of possession owners can be sued directly by the pedestrian. Such a lease, and proof of proper insurance, can give the owner peace of mind even in a heavy snow or ice year. Then those amusing television advertisements for slip and falls can be skipped over without worrying about any personal impact or causing fear that a landlord owner will be unreimbursed by the tenant or potentially have a lien imposed against the property.