Kmart Entitled to Indemnification from Landlord from Injury Due to Fall on Common Sidewalk

The defendant Kmart was a tenant of a 150,000 square foot building in which Belmont Associates was the landlord. The lease contained clauses regarding the parties’ responsibilities in maintaining the sidewalk area adjacent to the building and maintaining insurance. In Senatore v. Kmart Inc.,  2015 N.J. Super. Unpub. LEXIS 2210 (App. Div. Sept. 21, 2015, plaintiff Valerie Senatore sued Kmart, claiming injury due to a fall on the sidewalk. In turn, Kmart tendered its defense to Belmont’s insurance carrier and filed a third party complaint against Belmont, seeking indemnification from liability and attorneys fees.

Plaintiff alleged she was injured due to a dangerous condition of the sidewalk. She submitted photos of the sidewalk showing small cracks a couple of inches in size. Her expert report opined that these cracks were due to defects in the paving.

Belmont’s carrier rejected Kmart’s tender of its defense because Belmont had not named Kmart as an additional insured. Kmart claimed that Belmont breached the terms of the lease by failing to name Kmart as an additional insured.

The case was settled with the plaintiff with Kmart and Belmont each paying half of the settlement, but leaving open the issue of indemnification between them that would be resolved at a later date.

Belmont filed a motion for summary judgment, which was denied. The trial court awarded Kmart damages for breach of contract and indemnity paid, as well as legal fees and costs. Belmont appealed all of these orders.

The Appellate Division found that the appeal turned on the interpretation of the lease as to who was responsible for the maintenance and insurance of the sidewalk where the injury occurred. Belmont argued that the sidewalk was not a common area within the landlord’s maintenance obligation under the lease, that Kmart had a duty to name the landlord Belmont as an additional insured, and that Kmart breached its obligation by failing to do so.

The court rejected Belmont’s arguments. According to the lease, the sidewalks are not included in the demised premises leased to Kmart, which included the building, together with the licenses, rights, privileges and easements appurtenant thereto. Although Kmart had the right to use the common areas, it did not demise Kmart the common areas themselves.

Further, the lease expressly stated that the landlord was responsible for the maintenance of common areas. Although the lease required Kmart and the other tenants to keep the sidewalk in front of or adjoining their buildings free of snow, ice, and refuse, it did not require Kmart to maintain the paving of the sidewalk. Thus, if the cracks in the sidewalk, due to paving, caused plaintiff’s injuries, the Appellate Division found that it was due to the negligence of the landlord, rather than Kmart.

Last, the court noted that because Kmart did not have exclusive possession of the common areas such as the sidewalk, it would not have common law liability to the plaintiff. Regardless, even if under the case law a common law duty ran from Kmart to plaintiff, that did not change Belmont’s contractual duty to Kmart under the lease to maintain and repair the sidewalk.

Hence, based upon the court’s review of the lease provisions, it upheld the trial court’s ruling, enforcing Belmont’s duties to Kmart under the lease.