Disputes between a commercial landlord and its tenant often turn on the provisions contained in the lease agreement.  In Senatore v. Kmart, the tenant Kmart argued that the landlord was responsible for allowing the allegedly hazardous condition (cracks on the sidewalk) to exist and the landlord failed to properly maintain it as required under the lease agreement.  To that end, Kmart filed a third-party complaint against Belmont Associates, arguing that Belmont was contractually obligated to indemnify Kmart.  In its defense, Belmont argued that Kmart breached the lease agreement by failing to name it as an additional insured on Kmart’s commercial general liability policy.

In dueling motions, Kmart sought damages for breach of contract and attorneys’ fees, while Belmont argued for reconsideration of denial of an earlier motion for summary judgment due to a breach of the lease agreement.  Kmart prevailed and Belmont was ordered to pay damages for breach of contract and attorneys’ fees.

One might ask, how does Kmart’s failure to add Belmont as an additional insured relate to plaintiff’s accident?  On appeal, the Court saw that the two issues are clearly not related, upheld the denial of Belmont’s summary judgment and enforced the related orders.  In doing so, the Appellate Division focused on the lease language.

Belmont argued that the sidewalk adjacent to the property leased by Kmart was not a “common area.”  But the court determined that the sidewalk was not included in the demised property, that Kmart did not have exclusive possession of the sidewalk, and that instead was a common area which Belmont had a duty to maintain.

Thanks to Emily Kidder for her contribution to this post and please write to Mike Bono for more information.