Daily Development for Monday, February 4, 2002

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

LANDLORD/TENANT; TENANT'S LIABILITY FOR INJURY TO GUESTS: Although a lease may allocate maintenance duties to landlord, no lease provision can absolve a tenant from its duty to maintain its premises in a reasonable, safe condition for its patrons. But good indemnifications provisions can help the tenant even when the landlord enjoys sovereign immunity from the original plaintiff's action.

O'Connell v. New Jersey Sports and Exposition Authority, 337 N.J. Super. 122, 766 A.2d 786 (App. Div. 2001).

A football fan fell on snow and ice that had accumulated in the aisles of a stadium. The stadium was owned by a public authority and leased to the home football team. Only limited portions of the stadium were reserved for the sports authority's exclusive use, primarily maintenance areas and administrative facilities. The lease provided that the sports authority would keep the stadium in good order and repair and would provide the personnel necessary to supervise and operate the stadium. The lease further required the sports authority to "have seats cleaned and in working order at least three hours before the start" of each game and "at least three hours prior to the start of each football game" remove all refuse and garbage from the stadium, stands, and pedestrian areas. Further, the sports authority was required to "keep all such parking areas and pedestrian walks ... in good order, condition and repair at all times, and ... [to] sand or treat chemically when icy, remove snow and other debris."

The football team sought to be released by way of summary judgment, asserting that it was entitled to be released because the sports authority "alone has control over maintenance and snow removal at the stadium, including removal of snow and ice from the stadium seats and steps."

The Court did not find that to be factually clear, questioning whether "parking area and pedestrian walks" included the interior of the stadium. Further, the Court did not believe that the sports authority had exclusive control over the interior of the stadium, in particular the stadium seats and steps. The Court pointed out that according to the lease, the football team had "the exclusive right and privilege ... to use and occupy the Football Stadium during each Football Season ... ."

In addition, the Court expressed the view that even if the lease placed responsibility on the sports authority for snow and ice removal from the stadium's seats and steps, another section of the lease expressly provided that the football team could cure any default on the part of the sports authority.

Even more importantly, the Court believed that "[c]learly then while the lease provisions may allocate the maintenance responsibilities and costs between the [football team] and [the sports authority], they do not divest the [football team] of control over the areas within its leasehold, including the stadium seats and steps." The football team had the right to clean the seats and steps of snow and ice if the sports authority failed to do so. The injured football fan was a patron of the football team, was attending the team's game at the leased stadium, and was using a seat reserved for him by virtue of his season ticket.

Consequently, the football team owed its fan a duty of care. "The general rule is that a tenant or lessee occupying premises to which third parties are invited owes a duty to use ordinary care to have the premises in reasonably safe condition. ... Thus, a lease agreement between the lessor and lessee, or landlord and tenant, may fix the respective duties and allocate respective costs for repair and maintenance as between the lessor and lessee; however, no provision of the lease can absolve a lessee or tenant as against a third party from the tenant's duty to maintain the premises in a reasonable safe condition."

Comment 1: In this same case, the court found that general sovereign immunity would not protect the sports authority here. It was not engaged in a "governmental function" according to the court. But the court went on to find that a special form of governmental immunity for snow removal duties did apply, and upheld summary judgment for the authority.

So, if the landlord can raise a defense of sovereign immunity against the plaintiff's tort suit, what does this help the tenant?

The court cites authority that, ultimately, if a landlord indeed has the primary duty of care, it is likely that it will bear the burden of any damage award. The court cites language from Jackson v. K-Mart Corp.,

182 N.J. Super 645, 651 (Law . Div. 1981) to the effect that "If a lfandlord negligently fails to make repairs required by the covenant and his tenant is consequently subjected to tort liability, the tenant may impose the consequences of that liability upon the landlord by crossclaim in the tort action or otherwise." But the court does not indicate how this fits together with a sovereign immunity defense.

Comment 2: Nevertheless, the court concludes that the contractual indemnification provisions in the lease will lead to derivative liability on the part of the sports authority. Presumably, if properly worded, this indemnification will cover not only damages awards but costs of defense.

This case underscores the basic fact that an allocation of duty must be accompanied by adequate indemnification and hold harmless agreements that insure that any costs borne by one party in defending against costs that arise from the negligence of the other are collectible as a contract claim.

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