FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`Index No: 811079/16
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`STATE OF NEW YORK
`SUPREME COURT: COUNTY OF ERIE
`----------------------------------------------------------X
`PIXLEY DEVELOPMENT CORP.,
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`Plaintiff,
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`v.
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`ERIE INSURANCE COMPANY and
`CANDY APPLE CAFÉ,
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`Defendants.
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`------------------------------------------------------------X
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`MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S MOTION FOR
`SUMMARY JUDGMENT AND IN SUPPORT OF DEFENDANTS’ CROSS-MOTION
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`Jennifer A. Ehman, Esq.
`HURWITZ & FINE, PG.C.
`Attorneys for Defendants,
`ERIE INSURANCE COMPANY and
`CANDY APPLE CAFÉ
`1300 Liberty Building
`Buffalo, New York 14202
`(716) 849-8900
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`PRELIMINARY STATEMENT
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`Defendants, ERIE INSURANCE COMPANY (“Erie”) and CANDY APPLE CAFÉ
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`(“Candy Apple”) (collectively, “Defendants”), submit this Memorandum of Law in opposition to
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`Plaintiff, PIXLEY DEVELOPMENT CORP.’s (“Pixley”) motion for summary judgment, and in
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`support of their cross-motion to dismiss Pixley’s Complaint against them in its entirety.
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`Defendants incorporate the Affirmation of Jennifer A. Ehman, affirmed April 27, 2017 (“Ehman
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`Aff.”), and the exhibits attached thereto, and the exhibits attached to the Affirmation of Brenna
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`Gubala (“Gubala Aff.”).
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`At the onset, it must be highlighted that Pixley seeks no relief as to Candy Apple in its
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`motion for summary judgment. The relief sought is solely as to Erie, Candy Apple’s insurer.
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`Pixley claims additional insured status pursuant to the policy of insurance Erie issued to Candy
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`Apple relative to a lawsuit commenced against Pixley by Jason Johnson seeking recovery for
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`injuries he allegedly sustained as a result of a February 5, 2014 slip and fall in the parking lot of
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`Pixley Plaza, located at 81 Buell Street, Akron, New York. Pixley also claims that “Erie owes
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`coverage to Pixley based upon the indemnification provision in the agreement between Pixley
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`and Candy Apple.”
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`Pixley is not entitled to additional insured status relative to this loss. The Erie policy is
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`clear that coverage will only be afforded to Pixley for “liability arising out of the ownership,
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`maintenance or use of that part of the premises leased” to Candy Apple. Candy Apple operated a
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`restaurant in Pixley Plaza. The facts developed in the underlying action establish that Johnson
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`was not injured on “that part of the premises leased” by Candy Apple or due to Candy Apple’s
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`failure to maintain said area. Instead, he allegedly sustained injury in the parking lot, which was
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`owned and maintained by Pixley, due to Pixley and its own contractor’s alleged failure to properly
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`clear snow and ice from the lot. Where Pixley explicitly agreed to maintain the parking lot at
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`2 of 22
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`Pixley Plaza, and where Pixley was paid an additional fee to do so, Pixley should not now be
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`permitted to shift responsibility for the claimed accident that occurred on its own area of the
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`premises due to its own alleged acts or omissions.
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`Moreover, with regard to any claimed entitlement to coverage based upon the
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`indemnification provision in the Lease, Erie was not a party to the Lease, and no claims can be
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`asserted against Erie directly based upon same. To the extent that this claim is actually an
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`attempt to obtain a ruling on the enforceability of the contractual indemnification provision in
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`that Lease as to Candy Apple, we note that such relief would be duplicative of the cross-claims
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`Pixley asserted against Candy Apple in the earlier filed underlying action, and Pixley has not,
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`and cannot, establish the necessary requirement of negligence on the part of Candy Apple in
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`order to trigger that provision.
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`Accordingly, based upon the foregoing, Pixley’s motion for summary judgment as to Erie
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`must be denied, and Erie’s cross-motion to dismiss Pixley’s Complaint in its entirety must be
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`granted.
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`A.
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`Background
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`STATEMENT OF FACTS
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`Jason Johnson (“Johnson”) allegedly sustained injury on February 5, 2014, when he
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`slipped and fell on ice in the parking lot at Pixley Plaza, located at 81 Buell Street, Akron, New
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`York (the “premises”). (See Gubala Aff., Exhibit D).
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`As a result of injuries allegedly sustained, he commenced a lawsuit in Supreme Court,
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`Erie County, captioned Jason Johnson v. Pixley Development Corp. v. Candy Apple Café, under
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`index number 809681/2015 (“the Underlying Action”).
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`Johnson testified at his deposition that on the day of the loss he had difficulty walking in
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`the parking lot because four to five inches of snow were on the ground, and the back parking lot
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`had not been plowed. (Ehman Aff. Exhibit C, pg. 33-34). The accident occurred in the parking
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`lot, less than six feet from Johnson’s parked truck, and not in the immediate vicinity of Candy
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`Apple’s rear door. (Id., pg. 45, lines 14-20). Johnson testified:
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`Q.
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`A.
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`Q.
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`A.
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`Q.
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`And how many steps did you take from the ramp of the trailer until you slipped?
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`I don’t know exactly. I’m six foot tall and I didn’t hit the ramp so I would assume
`it would be five to six feet.
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`And when you say the ramp, the ramp of your truck?
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`The ramp of my truck. I did not hit that so I would believe it would be that part.
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`And for clarification then would you have been walking at that point that you
`slipped were you walking on the surface of the back delivery area?
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`A.
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`Q. Were you on the ramp that goes up to the back door of Candy Apple?
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`A.
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`Yes.
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`No.
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`(Ehman Aff., Exhibit C, pg. 46 line 12 to pg. 47 line 5).
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`Pixley’s owner, John Lotz, testified at a deposition in the Underlying Action that Pixley
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`retained J and C Landscaping (“J and C”) to perform snow and ice removal at the premises.
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`(Ehman Aff, Exhibit E, pg. 50). J and C’s contract provided that it would clear snow from the
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`premises every time one inch of snow accumulates, and would apply salt upon Pixley’s request.
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`(id. pg. 51-53).
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`Mr. Lotz testified that J and C was responsible for clearing snow and ice from the rear
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`parking lot where Johnson allegedly fell:
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`Q.
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`Per the contract is J and C Landscaping required to plow both the front parking
`spot and the rear delivery area of 81 Buell Street?
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`A:
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`Yes.
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`(Ehman Aff., Exhibit E, pg. 62, lines 9-14).
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`Mr. Lotz was shown the section of the Lease obligating Pixley to remove snow from the
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`“common areas” of the premises. Mr. Lotz testified that the “common area” included the rear
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`parking lot where deliveries were made to the stores:
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`Q. What is your idea of the common area at 81 Buell Street?
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`A.
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`Q.
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`You're just talking about A?
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`I'm actually asking you about Subsection B where it states Common Area
`Maintenance Charges and I asked you what is your understanding of the common
`area at 81 Buell Street?
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`A.
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`Q.
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`A.
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`Q.
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`A.
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`That's the parking lot in the back, the whole parking area.
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`So that would be the parking lot in the front?
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`And the back and all the way around.
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`Just to be clear the parking lot in the front where customers park and also the
`delivery area in the back?
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`Yep.
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`(Ehman Aff., Exhibit E, pg. 73 lines 6-22).
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`Mr. Lotz later reiterated that J and C was responsible for clearing snow from the delivery
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`area:
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`I’m asking you in the back of the building where is the common area?
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`In the delivery area people go out and in in the back of the store.
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`Q.
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`A.
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`Q. Who does the snow plowing and ice removal in the common areas in the back of
`the building?
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`A.
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`Q.
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`J and C but they have the responsibility to keep it clear for their deliveries.
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`So J and C has responsibilities to clear snow and ice in the delivery area, correct?
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`Right.
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`And J and C is hired by Pixley Development, correct?
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`Right.
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`So then Pixley Development is ultimately responsible for snow and ice removal in
`the common areas, is that correct?
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`***
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`A.
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`Q.
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`A.
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`Q.
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`A. Well, I don't have it specified but if you have a delivery coming they usually
`clean the area out for them.
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`Q.
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`A.
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`Q.
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`A.
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`(Ehman Aff., Exhibit E, pg. 75 line 6 to pg. 76 line 13)
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`J and C Landscaping who was hired by Pixley Development clears it, correct?
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`Yes, for snow and ice.
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`How about for ice?
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`Yep. They salt it….
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`Candy Apple’s owner, Cheryl Johannes, testified that Candy Apple was responsible only
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`for shoveling immediately in front of Candy Apple’s door, the area near its dumpster, and the
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`ramp leading to its rear door for deliveries. (Ehman Aff., Exhibit D, pgs. 33-34). J and C was
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`responsible for clearing the rear parking lot itself. Ms. Johannes testified:
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`Q.
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`Is it your understanding that it’s Pixley Development’s responsibility to clear the
`common areas at 81 Buell Street of snow and ice?
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`Yes.
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`A.
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`Q. What does Pixley Development do to remove snow and ice?
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`A.
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`Q.
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`A.
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`They have a snow plow driver.
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`Do you know what the name of the contractor is?
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`Yeah, J and C Landscaping.
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`(Ehman Aff., Exhibit D, pg. 46 lines 4-14).
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`Ms. Johannes was shown a photograph of the area where Johnson allegedly fell, and
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`testified that Pixley, not Candy Apple, was responsible for clearing snow and ice from the area.
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`She testified:
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`Q.
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`So based on what I’m telling you is the area where Mr. Johnson slipped and fell,
`is that the responsibility of Pixley Development or Candy Apple Cafe to clear
`snow and ice?
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`A.
`I would say it’s Pixley Development. It’s far enough away from my building.
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`(Ehman Aff., Exhibit D, pg. 57 lines 1-6)
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`B.
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`Pixley/Candy Apple Lease Agreement
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`On or about June 1, 2009, prior to the incident, Pixley entered into a Lease agreement
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`with Candy Apple. The Landlord is identified as Pixley, and the Tenant identified as Candy
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`Apple. (Gubala Aff., Exhibit G).
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`The Lease provides, in pertinent part:
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`1.
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`PREMISES
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`Landlord does herby grant, demise and least unto the
`Tenant hereby takes the following demises premises, to
`wit: That portion of PIXLEY’S PLAZA, located at 81
`Buell Street in the Village of Akron, County of Erie and
`State of New York (the “Premises”), consisting of a ground
`floor
`store approximately 5600
`square
`feet,
`(the
`“Premises”), together with the right to use in common with
`other Tenants in the said Plaza the space designated for the
`parking of automobiles by customers of Tenants, and the
`right to use the driveway designated for delivery purposes
`in common with other tenants in the Plaza…
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`***
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`7
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`6.
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`ADDITIONAL RENT
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`(a)
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`(b)
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`18.
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`Status of Charges
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`In addition to the Fixed Minimum Rent to be paid
`under this Lease, the Tenant agrees to pay to
`Landlord, as Additional Rent, the additional charges
`as described in this Section and if not paid, shall be
`subject to all provisions of this Lease and of law as
`to default in the payment of Rent.
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`Common Area Maintenance Charges
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`(i)
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`The term “Common Area Maintenance and
`Operating Charges” shall mean the total
`costs and expenses incurred by Landlord in
`operating, managing and maintaining the
`Common Areas, including but not limited to
`repair, replacement and resurfacing of the
`parking areas, driveways, curbs, sidewalks;
`snow, ice and rubbish removal; sweeping;
`painting…and any other expenses incurred
`by Landlord in operating, managing and
`maintaining the Common Areas…
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`***
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`(ii)
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`Tenant shall pay its proportionate share of
`the Common Area Maintenance Charges of
`the Plaza…
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`***
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`PUBLIC LIABILITY INSURANCE
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`Tenant shall keep, save and hold harmless the Landlord
`from any and all damages and liability for anything
`whatsoever arising from, or out of, the occupancy by, or
`under, the Tenant, the Tenant’s invitees, employees, or
`agents and from any loss or damages arising from any fault
`or negligently by the Tenant, its invitees, employees, or
`agents, or any failure on the Tenant’s part to comply with
`any of
`the covenants,
`terms and conditions herein
`contained, or otherwise, or whether it be caused by, or be
`due to, the failure of the Landlord to perform any of the
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`8
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`covenants herein, expressed or implied that are to be
`performed by the Landlord.
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`Tenant shall provide, on or before the commencement date
`of the term herein and keep in force during the term of this
`Lease, for the benefit of the Landlord, a comprehensive
`liability policy of insurance protecting the Landlord against
`any liability whatsoever, occasioned by accident, or about
`the Premises, or any appurtenances, thereto. Such policy is
`to be written by a good and solvent insurance company
`satisfactory to the Landlord in the amount of at least One
`Million ($1,000,000.00) Dollars in respect to any one
`person, in the amount of Three Million ($3,000,000.00)
`Dollars in respect to any one occurrence, and in the sum of
`One Million ($1,000,000.00) Dollars in respect to property
`damage. Such insurance may be carried under a blanket
`policy covering the Premises and other location of the
`Tenant, if any. Tenant agrees to deliver to the Landlord a
`duplicate original of the aforesaid policy, naming the
`Landlord as an additional insured, together with evidence
`of payment therefor.
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`C.
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`The Erie Policy
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`(Gubala Aff., Exhibit G, pg. 2).
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`Erie issued an Ultraflex Package Policy to Candy Apple, policy number Q41-6650075,
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`effective May 16, 2013 through May 16, 2014 (“the Policy”). (Gubala Aff., Exhibit H).
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`The Policy contained Endorsement CG 20 11(Ed. 1/96) UF-9667, which states in relevant
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`part:
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`insurance provided under
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`the
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`ADDITIONAL INSURED – MANAGERS OR LESSORS OR
`PREMISES
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`This endorsement modifies
`following:
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`COMMERCIAL GENERAL LIABILITY COVERAGE PART
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`SCHEDULE
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`1.
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`Designation of Premises (Part Leased to You);
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`
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`2.
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`3.
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`Name of Person or Organization (Additional
`Insured);
`Additional Premium:
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`
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`(If no entry appears above, the information required to complete
`this endorsement will be shown in the Declarations as applicable to
`this endorsement).
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`WHO IS AN INSURED (Section II) is amended to include as an
`insured the person or organization shown in the Schedule but only
`with respect to liability arising out of the ownership, maintenance
`or use of that part of the premises leased to you and shown in the
`Schedule and subject to the following additional exclusion.
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`
`
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`1.
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`2.
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`This insurance does not apply to:
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`Any “occurrence” which takes place after you cease to be a
`tenant in the premises.
`Structural alterations, new construction or demolition
`operations performed by or on behalf of the person or
`organization shown in the Schedule.
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`ARGUMENT
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`POINT I
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`PIXLEY DOES NOT QUALIFY AS AN ADDITIONAL INSURED ON THE ERIE
`POLICY
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`It is settled law that the party claiming insurance coverage bears the burden of proving its
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`entitlement to coverage. Consol. Edison Co. of N.Y. v. Allstate Ins. Co., 98 N.Y.2d 208, 218,
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`774 N.E.2d 687, 690 (2002). See, also Restoration Corp. v. Solty's Const., Inc., 79 A.D.3d 861,
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`914 N.Y.S.2d 178 (2d Dept. 2010); Tribeca Broadway Assocs., LLC v. Mount Vernon Fire Ins.
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`Co., 5 A.D.3d 198, 200, 774 N.Y.S.2d 11, 13 (1st Dept. 2004).
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`
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`For more than thirty-five (35) years of undisturbed precedent, it has been the law of this
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`State that a carrier owes no duty to defend, or indemnify, where, as a matter of law, there is no
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`possible factual or legal basis upon which it might eventually be obligated to indemnify the
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`insured. See, First State Ins. Co. v J & S United Amusement Corp., 67 N.Y.2d 1044, [1986];
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`Spoor-Lasher Co. v Aetna Cas. & Sur. Co., 39 N.Y.2d 875 [1976]).
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`
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`As noted by the Second Department in the 2003 decision of City of New York v. Ins.
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`Corp., 305 AD.2d 443 (2d Dept. 2003), “[a]n insurer may be relieved of its duty to defend only if
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`it can establish, as a matter of law, that there is no possible factual or legal basis upon which it
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`might eventually be obligated to indemnify its insured, or by proving that the allegations fall
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`wholly within a policy exclusion.” See, Frontier Insulation Contrs. v Merchants Mut. Ins. Co.,
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`supra; Deetjen v Nationwide Mut. Fire Ins. Co., supra; City of New York v. Ins. Corp., 305
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`A.D.2d 443 (2d Dept. 2003) see also Pagano v. Allstate Ins. Co., 5 A.D.3d 576 (2d Dept. 2004).
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`Erie’s policy affords coverage to Pixley only for “liability arising out of the ownership,
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`maintenance or use of that part of the premises leased” to Candy Apple. (Gubala Aff. ¶ 7). Pursuant
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`to the terms of the Lease, Candy Apple leased that portion of Pixley Plaza consisting of a ground
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`floor store approximately 5600 square feet. (Gubala Aff., Exhibit G). The Second Department’s
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`decision last month in Chappaqua Cent. Sch. Dist. v. Philadelphia Indem. Ins. Co., No. 2015-
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`00197, 2017 WL 1068768, (2d Dept. Mar. 22, 2017), along with other instructive case law,
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`demonstrates why Pixley did not and cannot establish that Johnson’s accident, which occurred in
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`the parking lot, arose out of the use of “that part of the premises leased” to Candy Apple. At the
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`time of the incident, Johnson’s truck was parked twenty feet from the café’s back door, and he fell
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`approximately four feet from the bottom of the ramp leading up to the restaurant’s rear door.
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`(Ehman Aff., Exhibit C, pgs. 32, 59).
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`In Chappaqua Cent. Sch. Dist. v. Philadelphia Indem. Ins. Co., No. 2015-00197, 2017
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`WL 1068768, (2d Dept. Mar. 22, 2017), the Appellate Division, just last month, ruled that where
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`an insurance policy afforded coverage to the school district for liability “arising out of the
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`ownership, maintenance or use of the premises leased” to its tenant, the carrier had no obligation
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`to defend or indemnify the school district in an action stemming from a slip and fall on a
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`stairway by a worker after leaving the cafeteria.
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`In Chappaqua, Brunsting was employed by the Chappaqua Children’s Workshop, Inc.
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`(“CCW”), which operated a children’s after-school program in the cafeteria of the Robert E. Bell
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`Middle School building, which was owned by Chappaqua Central School District (“the School
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`District”). The School District leased the cafeteria to CCW for its after-school program.
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`Brunsting allegedly was injured when she tripped and fell while descending an exterior staircase
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`that led from the school down to its parking lot after leaving the cafeteria. CCW was insured
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`with Philadelphia Indemnity Insurance Company (“Philadelphia”). Brunsting sued the School
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`District to recover damages for personal injuries sustained in the fall, and the School District
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`sought coverage from Philadelphia, which disclaimed coverage on the grounds that Brunsting
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`was not injured on the leased premises and because CCW was not responsible for maintaining or
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`repairing the staircase.
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`Philadelphia afforded coverage to the School District for “liability arising out of the
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`ownership, maintenance or use of that part of the premises leased or rented to” CCW. The Court
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`held that despite the breadth of the phrase “arising out of” (which requires that there be “some
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`causal relationship between the injury and the risk for which coverage is provided”), that
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`Philadelphia established, prima facie, that it was not obligated to defend or indemnify the School
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`District in the underlying action, finding “that it was undisputed that CCW leased only the
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`cafeteria from the School District, and that CCW had no duty to maintain or repair the staircase
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`where the accident occurred.” Accordingly, there was no causal relationship between the injury
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`and the risk for which coverage is provided. Id. * 4.
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`Here, Johnson did not fall in Candy Apple’s cafe, or around Candy Apple’s door, but
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`instead fell in the parking lot, the “common area” that Pixley, not Candy Apple, was indisputably
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`obligated to keep free from snow and ice. (Ehman Aff., Exhibit C, pgs. 46-47; Exhibit E pgs.
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`73 and 75-76; Gubala Aff. Exhibit G, §6(b)). As in Chappaqua, the fact that Candy Apple had no
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`duty to maintain the area where Mr. Johnson fell (to the contrary, Pixley had the exclusive duty),
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`establishes that Pixley is not entitled to coverage from Erie as a matter of law. Where Pixley
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`explicitly assumed responsibility for snow and ice removal in the parking lot, and where it is
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`claimed that such removal was performed improperly, any loss resulting therefrom should be
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`paid by Pixley’s insurer, not Candy Apple’s. Candy Apple did not retain the snow contractor.
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`Candy Apple was not responsible for monitoring its work. Instead, this was a task solely
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`assumed by Pixley, and in fact, it was paid an additional amount for this work. And, now that
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`there is a loss which is claimed to result from this work being performed improperly, Pixley
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`should not permitted to try to push that responsibility on to Candy Apple, and its insurer. Candy
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`Apple, as a tenant of one portion of the building, is not a guarantor of parking lot safety.
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`
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`In Prestige Properties & Dev. Co. v. Montefiore Med. Ctr., 36 A.D.3d 471, 828 N.Y.S.2d
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`31 (1st Dept. 2007), the Court held that a landlord was again not entitled to coverage as an
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`additional insured under its tenant’s insurance policy when a tenant’s employee was injured in a
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`common area hallway of the demised premises when part of the ceiling fell and struck her.
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`Finding that the additional insured endorsement was not triggered, the court highlighted that the
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`record was devoid of any evidence that the tenant’s negligence caused a portion of the ceiling to
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`fall or any relationship between the ceiling collapse and Montefiere’s use, occupancy,
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`construction or repair of the demised premises. Here, there is likewise no evidence that Candy
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`Apple’s negligence caused the accident or that a causal relationship existed between the alleged
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`ice and snow condition and Candy Apple’s use of the premises. To the contrary, again, it was
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
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`RECEIVED NYSCEF: 04/27/2017
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`Pixley’s contractor (J and C) that allegedly failed to clear the snow and ice or did so negligently.
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`(See Ehman Aff. Exhibit C pg. 33-34; Exhibit E, pg. 50).
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`In Rensselaer Polytechnic Institute v. Zurich American Ins. Co., 176 A.D. 2d 1156 (3d
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`Dept. 1991), the underlying plaintiff attended an Ice Capades performance at Rensselaer’s field
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`house, which Rensselaer had leased to the Ice Capades. The underlying plaintiff slipped and fell
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`after exiting the field house. Rensselaer sought additional coverage for the incident under the
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`policy issued to the Ice Capades. There, the Court held that the leased premises only included
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`space within the field house, not the walkways immediately adjacent to the field house.
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`In Christ The King Regional High School v. Zurich Ins.Co. of N. Am., 91 A.D.3d 806
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`(2d Dept. 2012), a case very similar to the matter at bar, the underlying plaintiff was injured on a
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`sidewalk in front of a school. Christ the King had leased the auditorium and three classrooms to
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`All American Talent for a dance competition. The underlying plaintiff was injured while
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`walking from the parking lot to the school’s entrance. Christ the King sought additional insured
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`coverage under All American Talent’s insurance policy. The Court held that Christ the King was
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`not entitled to coverage because the plaintiff’s accident did not arise out of the use of that part of
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`the premises leased to All American. It was clear that:
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`The plaintiffs failed to raise a triable issue of fact as to the
`relationship. All American's
`existence of such a causal
`“operations” consisted of conducting a dance competition in
`the school auditorium and three classrooms. Bodily injury
`occurring outside the leased premises, in an area which All
`American had no responsibility to maintain or repair, “was not
`a bargained-for risk” (Maroney v New York Cent. Mut. Fire Ins.
`Co., 5 NY3d at 473). Rather, All American's “operations” at the
`school merely furnished the occasion for the accident, much like in
`Worth Constr. Co., where the fact that the named-insured
`subcontractor installed a staircase on which the injured plaintiff
`fell, thus furnishing “the situs of the accident,” did not demonstrate
`that the accident, caused by the installation of fireproofing on the
`staircase by another subcontractor, arose from the named-insured
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`subcontractor's “operations” (Worth Constr. Co., Inc. v Admiral
`Ins. Co., 10 NY3d at 416; cf. Castillo v Amjack Leasing Corp., 84
`AD3d 1298, 1298 [2011] [“liability may not be imposed upon a
`party who merely furnishes the condition or occasion for the
`occurrence of the event but is not one of its causes” (internal
`quotation marks omitted)]). (emphasis supplied).
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`Similarly, here, Candy Apple’s operations consisted of running a restaurant. Johnson’s
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`
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`accident did not occur within the café or in its immediate vicinity, and bodily injury occurring
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`outside the leased premises, in an area which Candy Apple had no responsibility to maintain or
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`repair, “was not a bargained-for risk.” Accordingly, where it is claimed that Pixley, or its
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`contractor, improperly performed this work, Pixley should not be permitted to turn around and
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`demand that Candy Apple and its carrier pay for the loss. It should not be permitted to have it
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`both ways. It should not be permitted to accept payment for work, and then deny responsibility
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`for a loss which allegedly occurred because the work was performed improperly.
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`Also instructive is Leading Ins. Grp. Ins. Co., LTD v. Argonaut Great Cent. Ins. Co., 47
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`Misc. 3d 1214(A), 16 N.Y.S.3d 792 (N.Y. Sup. Ct. Kings Co. 2015). There, the underlying
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`plaintiff was injured as a result of a trip and fall due to a defect on the sidewalk in front of the
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`premises owned by Hartsdale Village Square (“Hartsdale”) and leased to the Benincasas. The
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`lease required Benincasas keep the sidewalk free from debris, including snow and ice. Hartsdale
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`sought additional insured coverage under the policy issued by Argonaut to the Benincasas. The
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`Court held that the sidewalk was not included in the leased premises and noted that the
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`Benincasas did not have a duty to repair or maintain the sidewalk. The Court found that the
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`underlying plaintiff’s accident did not fall within the language of the additional insured
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`endorsement and dismissed the Complaint against Argonaut.
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`A review of Pixley’s motion reveals that the basis for its claim of additional insured status
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`is that Johnson was making a food delivery to Candy Apple at the time of the incident, and based
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`upon certain testimony that employees of Candy Apple would shovel and apply salt outside of
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`the restaurant’s rear door. The mere fact that Johnson was walking into Candy Apple Café at the
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`time of the incident is not sufficient to find that the injury arose out of the use the premises.
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`And, the cited testimony concerning Candy Apple’s shoveling is simply a “red herring.” Johnson
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`did not fall immediately outside Candy Apple’s door, where those employees would at times
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`shovel, but rather in the parking lot; a location solely under the control of Pixley to which it
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`retained a separate contractor to conduct snow and ice removal.
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`The Lease did not obligate Candy Apple to remove snow from the parking lot; that was
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`Pixley’s responsibility. And, any reliance on the provision which provides that Candy Apple was
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`obligated to “keep the sidewalk in front of and adjacent to said demised premises free from
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`rubbish and obstacles of any kind” is inapplicable to this situation as Johnson did not fall on a
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`sidewalk, and the average tenant would not interpret snow and ice to fall within the category of
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`“rubbish” or “obstacles”. The reference to this provision is merely an attempt to enlarge Candy
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`Apple’s responsibilities under the Lease.
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`There is no dispute that Pixley was responsible for snow removal in the common areas,
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`were this incident occurred. There is also no dispute that Pixley accepted a separate payment
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`from all tenants for its performance of this work. Where Pixley’s claimed failures are the basis
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`for the Underlying Action, Pixley should not be permitted disclaim responsibility and ask Candy
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`Apple, and its insurer, to pay the loss. Thus, as in Christ the King, Rensselaer, and their progeny,
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`and as in the Chappaqua decision issued just this month, Pixley is not entitled to additional
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`insured coverage for this accident which, by all accounts, occurred in the common area, and not
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`in the leased premises.
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`Pixley, seeking to avoid applicable rulings such as Christ the King, Rensselaer, and
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`FILED: ERIE COUNTY CLERK 04/27/2017 12:33 PM
`NYSCEF DOC. NO. 26
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`INDEX NO. 811079/2016
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`RECEIVED NYSCEF: 04/27/2017
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`Chappaqua, argues only that Candy Apple was obligated to remove snow from its doorway, not
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`from the parking lot. Even if Johnson had fallen right outside Candy Apple’s door—which he
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`did not—this would, at most, raise an issue of fact as to whether Pixley was entitled to coverage.
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`See QBE Ins. Corp. v. Hudson Specialty Ins. Co., 82 A.D.3d 595, 920 N.Y.S.2d 27 (2d Dept.
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`2011) (Fact issues existed as to whether owner’s liability in underlying personal injury action
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`was based on ownership, maintenance, or use of that part of premises leased to restaurant and
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`whether restaurant was responsible for keeping site of accident free of snow and ice, precluding
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`summary judgment in favor of franchisee and its insurer, in action by lessor and its insurer
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`seeking declaration that restaurant’s insurer was obligated to defend and indemnify owner in
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`underlying action by customer arising from alleged fall in parking lot).
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`To the extent Mack-Cali Realty Corp. v. NGM Ins. Co., 119 A.D.3d 905 (2d Dept. 2014)
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`hold differently, it should not be followed, as Chappaqua is the Second Department’s most recent
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`decision on the “leased premises” issue.
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`ZKZ Assocs. LP v. CNA Ins. Co., 224 A.D.2d 174, 175, 637 N.Y.S.2d 117, 118 (1996),
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`aff’d, 89 N.Y.2d 990, (1997), relied upon by plaintiff, is distinguishable. There, while the policy
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`at issue provided coverage “only for liability arising out of the ownership, maintenance and use
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`of the described premises which is leased to” the garage, the relationship between the two parties
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`was much different than here. In that case, the owner had retained Guardian to manage the
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`garage pursuant to the terms o