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Cowin v. First Fidelity Bank

A-6071-00T3 (N.J. Super. App. Div. 2002) (Unpublished)

LANDOWNER’S LIABILITY; SIDEWALKS— A predecessor in title who has created or maintained a dangerous sidewalk condition remains liable to an injured pedestrian irrespective of the fact that the property has been conveyed.

A bank owned an entire building and had its retail branch on the first floor. It then sold the building to another bank, taking back a lease for a “first floor bank branch area.” Later, a customer using an ATM machine was injured when she fell and slipped on ice presumably formed when water from a down spout flowed onto the sidewalk in front of the ATM machine. She sued both banks and settled with the bank that owned the building. Subsequently, that bank sought contribution and/or indemnification against its first floor tenant, the former owner of the building. A jury found that the former owner was negligent “in allowing the dangerous condition to exist on the sidewalk prior to the sale of its property to [the new bank].” The lower court denied the indemnification claim of one bank against the other. The lease between the two banks required the tenant-bank to maintain liability insurance covering the landlord. The landlord-bank contended that the policy obtained by its tenant contained a substantial “retained limit” and did not name the landlord-bank as an insured. The Appellate Division held that whether or not the tenant-bank breached the lease, the landlord-bank was not entitled to the relief it sought. This was because the lease gave the tenant-bank possession of the “Rental Space,” which was defined as “the first floor branch area.” The fall took place on an icy sidewalk outside of the branch area (not in the rental space) and the landlord-bank, according to the lease, was required to maintain the sidewalk. Consequently, the landlord-bank sustained no damage as a result of the failure of the tenant-bank to obtain proper insurance. Had the insurance been obtained, “there would have been no coverage for this fall that did not occur within the leased premises.” When the tenant-bank sought to be indemnified by the landlord-bank, as its successor in title, the Appellate Division pointed out that the New Jersey Supreme Court had decided that the “preferable doctrine is that the predecessor in title who has created or maintained the dangerous sidewalk condition should remain liable to the injured pedestrian irrespective of the fact that the property has been conveyed.” Consequently, the Court would not permit the tenant-bank to be indemnified by the landlord-bank because of the tenant-bank’s own negligence in the original design of the building and its down spouts.


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