Category Archives: insurance law

When May The Landlord Of A Strip Mall Be Covered Under the Mall’s Tenants’ Insurance Policy?

If a person slips in the icy parking lot of a strip mall, may the landlord be indemnified by one of the tenants’ insurance policies? In a recent decision, the Appellate Division of the Superior Court of New Jersey attempted to clarify that question. Cambria v. Two JFK Blvd, LLC, Superior Court of New Jersey, Appellate Division. A-0802-10T2 (2012).

The plaintiff, John Cambria (“Cambria”), slipped and was injured in an icy parking lot of a strip mall that was owned by the landlord and defendant Two JFK Blvd., LLC (“the landlord”). The landlord and a real estate manager, David Rubin (“Rubin”), sought a declaration that they were covered by the liability insurance policy that one of the mall’s tenants (“the tenant”) had obtained. The policy had been issued by Harleysville Insurance Company of New Jersey (“Harleysville”). A lower court determined that the tenant had failed to obtain the required coverage for the landlord by failing to name it as an additional insured. However, the lower court also held that the landlord did not have to consider whether the tenant was liable for breaching the lease because that court viewed Rubin as the tenant’s “real estate manager.” The (defendants) appealed.

The Appellate Court determined that Rubin was a real estate manager and was the landlord’s real estate manager, but said that the landlord and Rubin needed to provide evidence that Rubin was also the real estate manager for the tenant in order for them to succeed on their claim that Harleysville owed them indemnification. The Appellate Court held that the landlord and Rubin failed to meet that requirement.

In order to determine whether Rubin was acting as the real estate manager of the landlord or the tenant, the Court looked at whether the incident causing the injury occurred in the leased premises or some other area of property for which the tenant was responsible. The lease stated that the “leased premises” did not include any part of the parking lot where the plaintiff fell. Additionally, the landlord and Rubin argued that New Jersey courts have previously interpreted “real estate manager” expansively. However, the Court distinguished this case from previous interpretations, holding that here the landlord retained the sole responsibility for maintaining and caring for the parking lot. Consequently, Rubin again acted solely as the landlord’s – and not the tenants’ –  real estate manager.

Finally, the Court determined that contending Rubin was the tenant’s real estate manager would not be persuasive unless the lease saddled the tenant with a duty of care for the parking lot. The landlord and Rubin relied on a lease provision that imposed on the tenant “additional rent” for its “proportionate share” of the “operating costs,” which included, among others, that of “removing snow and debris.” However, the Court rejected this argument, stating that common law principles impose on the landlord a duty to maintain the parking lot and other common areas in a reasonably safe condition for the use of both tenants and guests. See Gonzalez v. Safe & Sound Sec. Corp., 185 N.J. 100, 121 (2005). The Court clarified that though this provision may have advised the tenant of the manner in which part of the rent would be applied, it did not shift the burden of caring for the common areas from landlord to tenant. “That a portion of the rent was devoted by the landlord to hire someone to care for the common areas, which were the landlord’s responsibility, does not alter the parties’ rights and obligations regarding the common areas or render that hired person the real estate manager for the tenant.” Id. “The obligation to care for the common areas remained with the owner absent a clear and unambiguous declaration to the contrary that cannot be found in the parties’ lease.” Id. 


© 2012 Nissenbaum Law Group, LLC

Does The New York Prompt Pay Law Allow For a Private Right Of Action?

In January 2010, the New York legislature enacted Insurance Law § 3224(a) (“Prompt Pay Law”) to ensure that insurance companies paid their claims in a timely fashion. However, it was not clear whether the statute granted a party a private right of action. In a recent decision, the New York Supreme Court for Kings County held that it did. Maimonides Medical Center v. First United American Life Insurance Co., 2012 N.Y. Misc. LEXIS 701 (N.Y. Sup. Ct. Feb. 22, 2012).

The plaintiff in the case, Maimonides Medical Center (“Maimonides”), was a non-profit hospital that provided inpatient healthcare services. The cases stemmed from the hospital’s treatment of six patients, each of whom held Medigap policies issued by the defendant, First United American Life Insurance Company (“First United”). Some of the patients remained at the hospital for more than a year. Between the six, their stays at the hospital exceeded four years. Malimonides billed First United more than $19 million, but the insurance company paid them only $4,078,663.29. Consequently, Malinonides filed suit against First United, alleging breach of contract and violation of the Prompt Pay Law.

The Prompt Pay Law provides that, where an insurer is clearly liable to pay a healthcare claim, the health care provider or patient must be paid

a)      within 30 days of receipt of an electronically transmitted claim, or

b)      within 45 days of receipt of a claim transmitted by any other means.

See Insurance Law § 3224-a.

Additionally, where liability for a claim is not reasonably clear, the insurer must pay any undisputed portion and, within 30 days of receiving the claim, provide either written notification specifying why it is not liable or a written request for any additional information necessary to determine its liability. Id. This was not done.

The issue before the New York Court was whether the Prompt Pay Act gave Maimonides the ability to sue First United. When considering whether a statute implies a private right of action, courts will consider:

a) whether the plaintiff is one of the class for whose particular benefit the statute was enacted;

b) whether recognition of a private right of action would promote the legislative purpose; and  

c) whether creation of such a right would be consistent with the legislative scheme.

Sheehy v. Big Flats Community Day, Inc., 73 N.Y.2d 629 at 633 (1989).

The Court found that Maimonides satisfied the first two prongs, but First Insurance argued that the hospital did not satisfy the third – namely, that creating a right for Maimonides to sue would go against the legislative scheme of the statute. First Insurance argued that “a private right of action would be inherently inconsistent with enforcement,” but the Court disagreed. “Although defendant argues that the Prompt Pay Law is predominantly a remedial statute, it clearly creates rights for health care providers and patients and affirmative duties for insurers,” the Court held. “Before the statute was passed, the only requirements for timely payment of health care claims were contractual.”

The statute “was enacted to protect health care providers and patients against insurance companies that fail to pay claims in a timely fashion.”

The Court concluded that Maimonides was a member of the class that the legislature intended to benefit by passing the law, particularly because the purpose of the law was interpreted to be preventing the delay in the payment of health care claims. Therefore it had a private right of action available to it.


© 2012 Nissenbaum Law Group, LLC