Sterling Landlord Corp. v Axis Ins. Co.

2024 NY Slip Op 32955(U)

August 20, 2024

Supreme Court, New York County

Docket Number: Index No. 651800/2021

Judge: Suzanne Adams

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.
NYSCEF DOC. NO. 51 

INDEX NO. 651800/2021 

RECEIVED NYSCEF: 08/20/2024 

PRESENT: 

SUPREME COURT OF THE STATE OF NEW YORK 

NEW YORK COUNTY 

HON. SUZANNE ADAMS PART 

Justice 

39M 

-----------------------------------------------------------------------X INDEX NO. 

MOTION DATE 

651800/2021 

STERLING LANDLORD CORP., UNITED STATES 

REALTY & INVESTMENT COMPANY, C&I BROADWAY, 

LLC 

- V -

AXIS INSURANCE COMPANY, 

Plaintiff, 

Defendant. 

-------X 

N/A 

MOTION SEQ. NO. 002 

DECISION + ORDER ON 

MOTION 

The following e-filed documents, listed by NYSCEF document number (Motion 002) 26, 27, 28, 29, 30, 

31, 32, 33, 34, 35, 36, 37, 38, 39,40, 41,42, 43,44, 45,46,47,48, 49 

were read on this motion to/for JUDGMENT - SUMMARY 

Upon the foregoing documents, it is ordered that defendant's motion is denied and 

plaintiffs' cross-motion is granted. Plaintiffs in this action are the landlords of the premises at 1650 

Broadway, New York, New York. Pursuant to a lease effective June 1, 2017, through May 31, 

2027, non-party 1650 Broadway Associates Inc. ("Tenant") leased the premises. The lease 

provided that Tenant be responsible for taking good care of the premises and the adjacent 

sidewalks and keeping the sidewalks in good condition, and also that it obtain general liability 

insurance and name plaintiffs as additional insureds. Tenant procured a liability policy from 

defendant, who issued an insurance policy for Tenant effective June 17, 2019, through June 17, 

2020, which, inter alia, limited coverage to the premises as well as bodily injury arising out of the 

ownership, maintenance, or use of the premises and the operations necessary or incidental to the 

premises, and named plaintiffs as additional insureds. 

In 2019, a non-party individual allegedly tripped and fell on the sidewalk in front of the 

premises and brought suit against plaintiffs (and others) alleging the sidewalk was negligently 

651800/2021 STERLING LANDLORD CORP. ET AL vs. AXIS INSURANCE COMPANY 

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maintained and was in a broken and unsafe condition. Plaintiffs sent a tender letter on or about 

September 18, 2020, to defendant seeking defense and indemnification in the underlying action, ! · 

and commenced this declaratory judgment action in March 2021. Defendant now moves pursuant 

to CPLR 3212 for summary judgment dismissing the complaint and declaring it has no duty to 

indemnify or defend plaintiffs in connection to the underlying action. Plaintiffs oppose the motion 

and cross-move pursuant to CPLR 3001 and 3212 for summary judgment declaring that defendant: 

(1) has a duty to defend and indemnify plaintiffs in the underlying action; and (2) must cover costs 

of defense payments by plaintiffs or plaintiffs' insurer for the underlying action, plus statutory 

interest. Defendant opposes the cross-motion. 

"The proponent of a summary judgment motion must make a prima facie showing of 

entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material 

issues of fact from the case." Winegrad v. NY Univ. Med. Ctr., 64 N.Y.2d 851, 853 (1985) 

( citations omitted). If the moving party meets their burden, the opposing party must produce 

evidentiary proof in admissible form that is sufficient to raise a triable issue of fact. Zuckerman v 

City of New York, 49 N.Y.2d 557, 562 (1980). Further, "[a]n insurer's duty to defend its insured is 

'exceedingly broad.' An 'insurer will be called upon to provide a defense whenever the allegations 

in the complaint suggest ... a reasonable possibility of coverage.' 'If [a] complaint contains any 

facts or allegations which bring the claim even potentially within the protection purchased, the 

insurer is obligated to defend.' This standard applies equally to additional insureds and named 

insureds." Regal Constr. Corp. v National Union Fire Ins. Co. of Pittsburgh, PA, 15 N.Y.3d 34, 

37 (2010) (citations omitted). Where an insured has an express duty to maintain the sidewalk 

outside its leased premises, and to indemnify the landlord, it can be reasonably inferred that an 

underlying accident on the sidewalk in front of the leased premises arises from the maintenance of 

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the sidewalk. Wesco Ins. Co. v Rutgers Cas. Ins. Co., 202 A.D.3d 460 (l5t Dep't 2022). Thus, 

where an insurance policy covers liability arising out of the ownership, maintenance, or use of the 

part leased to a tenant, an additional insured endorsement covers claims arising out of a defect on 

the sidewalk where a lease agreement obligates a tenant to keep the sidewalk in reasonably good 

condition. Tower Ins. Co. of New York v Leading Ins. Group Ins. Co., Ltd., 134 A.D.3d 510, 510 

(1 st Dep't 2015). In fact, use of the sidewalk for access to a premises is an inextricable part of the 

use the premises so liability arising from the sidewalk use falls within an additional insured' s 

coverage. ZKZ Assoc. v CNA Ins. Co., 224 A.D.2d 174, 176 (1 st Dep't 1996), affd 89 N.Y.2d 990 

(1997); see also New York Convention Ctr. Operating Corp. v Cerullo World Evangelism, 269 

A.D.2d 275, 276 (1 st Dep't 2000) (liability insurance includes "not only the premises specifically 

identified as covered, but also other space whose use was incidental to the use of the expressly 

covered premises"). 

Here, defendant fails to meet its prima facie burden, in that it fails to show that the sidewalk 

is not part of the covered premises and that plaintiffs are not entitled to additional insureds 

coverage. The policy at issue states that coverage applies to "bodily injury" claims arising out of 

"[t]he ownership, maintenance, or use of the premises ... and operations necessary or incidental 

to those premises[.]" The policy itself makes no distinction between persons who use the sidewalk 

to enter or exit the premises and persons who use the sidewalk to pass by the premises. In either 

event, the adjacent sidewalk is an incidental part of the premises from which liability arising from 

its use squarely falls within plaintiffs' additional insured coverage. 

On the other hand, plaintiffs have met their prima facie burden, and defendant fails to raise 

a triable issue of fact that would preclude summary judgment. The personal injury claim in the 

underlying action arises out of the maintenance or use of the premises, which includes the 

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sidewalk, that is within the covered language or events of the insurance policy. Since the 

underlying plaintiff's claim stems from covered instances in the insurance policy, defendant has a 

duty to defend and indemnify plaintiffs in the underlying action, and defendant does not proffer 

an exclusion clause to deny coverage. Accordingly, it is hereby 

ORDERED that defendant's motion is denied; and it is further 

ORDERED that plaintiffs' cross-motion is granted in its entirety; and it is further 

ORDERED, ADJUDGED, and DECREED that defendant owes a duty to defend and 

indemnify plaintiffs on a primary basis with respect to the underlying action captioned Pinto v. 

Sterling Landlord Corp., et al., pending in the Supreme Court, New York County, under Index 

No. 155178/2020; and it is further 

ORDERED that a hearing in this matter to determine the amount of defense payments made 

by plaintiffs or plaintiffs' insurer with respect to the underlying action, plus statutory interest and 

costs of suit, is referred to a Special Referee, and that within 60 days from the date of this order 

plaintiff shall cause a copy of this order with notice of entry, including proof of service thereof, to 

be filed with the Special Referee clerk (Room 119M, 646-386-3028 or spref@nycourts.gov) to 

arrange a date for a reference to determine pursuant to CPLR § 43 l 7(b ), and that pursuant to CPLR 

§ 3215(b) the Clerk is directed to enter judgment in favor of plaintiffs and against defendant in 

accordance with the report of the aforementioned Special Referee without any further application. 

This constitutes the decision and order of the court. 

08/20/2024 

DATE SUZANNE ADAMS, J.S.C. 

CHECK ONE: 

APPLICATION: 

CHECK IF APPROPRIATE: 

CASE DISPOSED 

GRANTED □ DENIED 

SETTLE ORDER 

INCLUDES TRANSFER/REASSIGN 

NON-FINAL DISPOSITION 

GRANTED IN PART 

SUBMIT ORDER 

FIDUCIARY APPOINTMENT 

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GJ OTHER 

□ REFERENCE 

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