| Cucinotta v City of New York |
| 2009 NY Slip Op 09727 [68 AD3d 682] |
| December 29, 2009 |
| Appellate Division, First Department |
| David Cucinotta, Plaintiff, v City of New York et al.,Defendants, Northside Realty Corporation, Respondent, and Meriken Ltd., Appellant. (And aThird-Party Action.) |
—[*1] Epstein & Rayhill, Elmsford (Russell Monaco of counsel), for Northside Realty Corporation,respondent.
Order, Supreme Court, New York County (Eileen A. Rakower, J.), entered May 19, 2008,which denied defendant tenant Meriken Ltd.'s motion for summary judgment dismissing thecomplaint and defendant owner Northside Realty Corp's cross claim as against it and granteddefendant Northside's cross motion for common-law and contractual indemnification againstMeriken to the extent of holding Meriken liable for all damages, including defense costs incurredby Northside arising from Meriken's failure to procure insurance naming Northside as anadditional insured, unanimously modified, on the law, to grant Meriken's motion to dismiss thecross claims for common-law and contractual indemnification as against it, and to direct a trial ofNorthside's damages arising from Meriken's failure to procure insurance, and otherwise affirmed,without costs. Appeal from so much of the order as denied Meriken's motion for summaryjudgment dismissing the complaint as against it, unanimously dismissed.[FN*]
Plaintiff was allegedly injured on August 21, 2004 when he tripped and fell on an allegedlydefective sidewalk abutting the premises located at 162 West 21st Street, New York. [*2]The premises was owned by Northside, and leased by Meriken (therestaurant), pursuant to a lease agreement (lease) and a rider to the lease (rider) dated July 7,2004.
Section 4 of the lease required Meriken to make all nonstructural repairs to the sidewalks.Paragraph 43 (a) of the rider assigned responsibility to Meriken for, inter alia, structural repairsto the premises which arose from its negligence or misconduct or from a breach of anyobligation or covenant to be performed by it under the lease. Further, paragraph 52 of the rideridentified with specificity the restaurant's responsibilities regarding floors and sidewalk asfollows: "[Restaurant] shall keep the floors of the [p]remises and the sidewalk in front thereof,and extending 18 inches into the street, free and clean of snow, ice, dirt, debris and other foreignmatter and will, at its sole cost and expense, make suitable arrangements to dispose of all wasteand rubbish in compliance with all laws, regulations and ordinances pertaining thereto."
Paragraph 45 (a) of the rider (indemnification provision) requires Meriken to indemnifyNorthside for claims arising from, relating to or in connection with: "(i) [Meriken's] use oroccupancy of the Premises or the conduct of business in or management of the Premises or anywork or thing whatsoever done or any condition created in or about the Premises during the termof this lease; (ii) any act or omission of [Meriken] . . . ; and (iii) any default in theperformance or observance of any of the terms, provisions, conditions, or covenants of this leaseon [Meriken's] part to be observed or performed."
Paragraph 45 (b) of the rider (insurance provision) required Meriken to, inter alia, obtaininsurance in Northside's name independent of Meriken's management of the property,acts/omissions or its defaulting on requirements of the lease.
On January 13, 2005, plaintiff commenced this negligence action against, inter alia,Northside and Meriken. Northside cross-claimed against Meriken based upon Meriken's allegednegligence and contractual indemnification. On January 28, 2008, Meriken moved for summaryjudgment and sought dismissal of both plaintiff's action and of Northside's cross claims as toindemnification. Northside cross-moved for indemnification and defense pursuant to the terms ofthe lease.
By order entered on May 19, 2008, the motion court (1) denied Meriken's motion forsummary judgment against both plaintiff and Northside and (2) granted Northside's cross motion"only to the extent that defendant [Meriken] shall be liable for all damages, including the costs ofdefending the lawsuit as against Northside, which arise from its failure to procure insurancenaming Northside as an additional insured."
On appeal, Meriken contends that the motion court, in granting Northside's cross motion forsummary judgment based upon Meriken's contractual failure to list Northside as an additionalinsured, incorrectly held that the measure of damages to Northside was "all damages, includingthe costs of defending the lawsuit." Instead, Meriken contends that Northside is only entitled tothe full cost of insurance to Northside including premiums paid and any out-of-pocket costsincidental to obtaining such insurance that might have been incurred. Meriken also argues thatsince there is no evidence that the alleged defect was caused by its negligence or misconduct, itshould not be responsible for indemnity under the contract or common law. For the reasons setforth below, we agree and modify.
At the outset, we find that Meriken met its burden of establishing that the lease and rider[*3]did not shift responsibility for the structurally defectiveconcrete slab on the sidewalk from Northside to Meriken (see Administrative Code ofCity of NY § 7-210). Moreover, the record does not raise any triable issues of fact withrespect to whether the condition of the sidewalk was due to any acts of negligence on Meriken'spart (Berkowitz v Dayton Constr., 2AD3d 764 [2003]; cf. Margolin v New York Life Ins. Co., 32 NY2d 149, 154[1973]). Meriken therefore was entitled to summary judgment dismissing Northside's crossclaims for common-law and contractual indemnification against it insofar as those claims arepremised on the indemnification provision of the rider (see Berkowitz at 765-766).
However, to the extent Northside's cross claims are premised on Meriken's undisputedfailure to obtain insurance naming Northside as an additional insured, pursuant to the insuranceprovision of the rider, we find that the motion court correctly granted Northside's cross motion.In Inchaustegui v 666 5th Ave. Ltd. Partnership (268 AD2d 121 [2000], affd 96NY2d 111 [2001]), this Court addressed the damages recoverable by a landlord for a subtenant'sbreach of a sublease provision requiring the subtenant to procure liability insurance covering thelandlord after the landlord was sued for personal injuries covered under its policy. Notably, inInchaustegui, the landlord had procured its own insurance. We held that the damageswere limited to the landlord's costs of purchasing substitute insurance and other out-of-pocketexpenses arising from the liability claim not covered by the substitute insurance, such as anydeductibles or any increase in premiums resulting from the liability claim (Inchausteguiat 127).
In this Court, Meriken alleges for the first time, in mitigation, that Northside itself purchasedinsurance equivalent to that which Meriken was contractually obligated to procure. Thus, citingInchaustegui, Meriken contends that the measure of damages is limited to the cost ofNorthside's insurance, including premiums paid and any out-of-pocket costs incidental toobtaining such insurance that might have been incurred. Although Northside does not deny thatit obtained such insurance, the record does not indicate that this allegation was before the motioncourt. Therefore, the appropriate measure of damages must be determined upon proper proof attrial. Concur—Catterson, J.P., McGuire, Moskowitz, DeGrasse and Freedman, JJ.[Prior Case History: 2008 NY Slip Op 31395(U).]
Footnote *: In April 2009 there was a trialon the underlying case. Meriken was granted a directed verdict at the trial. Accordingly, theappeal is moot with respect to whether Meriken's motion for summary judgment dismissing thecomplaint against it was properly denied.