Wade Clark Mulcahy LLP

A New York County Supreme Court justice recently ruled in favor of our client’s cross motion for a declaratory judgment that the additional insured provision in a policy issued to its insured was not triggered.

In Wesco Insurance Company v. Jewelers Mutual Insurance Company, Index No. 155417/2023, plaintiff Wesco insured a property owner which maintained on the sidewalk abutting its property a raised cement bulkhead structure surrounding cellar doors that lead to a basement.  Wade Clark Mulcahy’s client Jewelers Mutual insured the jewelry store holding the ground-level tenancy above the basement and around the corner from that bulkhead structure.

In 2018, a pedestrian allegedly tripped and fell over that cement bulkhead structure -- calling it a “cake” made of cement -- and filed the underlying litigation against both the landlord and tenant, leading to this coverage dispute.

Wesco, the landlord’s insurer, sought defense and indemnification costs from defendant Jewelers Mutual, the tenant’s insurer, in the trip-and-fall litigation, claiming that the additional insured provision from the Jewelers Mutual policy issued to the tenant was triggered upon the liability arising out of the ownership, maintenance or use of the leased premises.

Jewelers Mutual cross-moved for a declaration that the additional insured provision was not triggered, pointing to the specific facts and circumstances of this case that caution against the unfair expansion of additional insured coverage.  Those facts include the following:

 ·         the basement was not a part of the leasehold;

·         the cement bulkhead structure pre-existed the effective date of the landlord-tenant lease;

·         the tenant neither created nor contributed to the cement bulkhead condition;

·         customer traffic to the ground-floor tenancy did not exacerbate the cement bulkhead condition;

·         the tenant had no duty to maintain the basement or the cellar doors which open to the staircase leading to the basement.

Wesco argued that anything pertaining to the sidewalk triggers additional insured coverage.  But, as successfully argued in Jewelers Mutual’s moving papers, the underlying litigation does not implicate the classic Sidewalk Law jurisprudence because the structural hazard upon which the underlying pedestrian tripped did not qualify as part of the “sidewalk” subject to maintenance by an abutting property owner.  Moreover, the landlord never asked the tenant to contribute to the repair of that bulkhead structure when it made the cellar doors flush with the surrounding sidewalk after the underlying litigation.

In a short-form Decision & Order issued after oral argument, the Court denied Wesco’s motion and granted Jewelers Mutual’s cross motion.  A notice of appeal has been filed.

In granting our motion, the Supreme Court rightly decided against obligating tenants to remedy pre-existing structures located well away from the leasehold and forcing insurers of tenants to cover future litigation costs for structural defects not contemplated in a tenant’s lease or even used by a tenant. Nice work by Dennis Wade and Abed Bhuyan.