Daily Development for
Friday, May 16, 1997

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

LANDLORD/TENANT; TENANT'S LIABILITY FOR INJURY OFF PREMISES: A lessee has a general duty of reasonable care toward all persons on the property, even if not on the specific premises leased, occupied or controlled by the lessee. Coblentz v. Hotel Employees & Restaurant Employees Union Welfare Fund, 925 P.2d 496 (Nev. 1996). The lessor and the lessee were both sued by an employee who was injured when she fell down an external stairway. The Nevada Supreme Court reversed the trial court's determination that the lessee had no duty to the plaintiff because the stairway was not part of the leased premises, holding that distinctions between common areas and leased premises, or of control and noncontrol of areas, are akin to outdated distinctions between trespassers, invitees and licensees. The Supreme Court nevertheless affirmed summary judgment against the plaintiff on the facts.

Comment 1: In other words, the plaintiff's lawyers get to threaten the tenant with an adverse jury decision and thus force a settlement, even when the tenant had nothing to do with the injury.

Comment 2: This case is another wonderful demonstration of two precepts: (1) Transactions lawyers ought to labor to find ways to get to the bench persons who have backgrounds in fields other than tort or criminal law. Many modern judges seem incapable of appreciating the impact of their decisions on transactions practice. (2) As a consequence of precept (1), in negotiations, everyone will have to insure all other parties against any conceivable liability in any area of the property owned or possessed by any party to the deal, whether or not related to the deal itself.

Comment 3: For a case that was finally too much even for the court to accept, see Zenkina v. Sisters of Providence in Wash., Inc., 922 P.2d 171 (Wash. App. Div. 1996), where the plaintiff sought damages because the hospital had failed to warn her of the danger of fainting when she was called upon to comfort her nephew while his chin was getting stitched. The court dismissed the case on summary judgment - no duty as a matter of law. So if you have a absolute "cold" case and you represent the Sisters of Providence, maybe you have a chance for summary judgment. Note, however, that the case had to go to the Court of Appeals to be resolved.

INSURANCE; INSURED PARTIES: Requirement that lessee insure lessor for damage "arising out of the use of" the premises by lessee "or . . . its employees" requires coverage for injuries to employees as well as injuries to third parties as a consequence of the actions of such employees, even where the injury to the employee does not result from actions of the lessee. Coblentz v. Hotel Employees & Restaurant Employees Union Welfare Fund, 925 P.2d 496 (Nev. 1996). The lessor and the lessee were both sued by an employee who was injured when she fell down an external stairway.

The Supreme Court also reversed the trial court's enforcement of an arbitration decision on the lessor's cross-claim based on its exclusion from the lessee's liability insurance. The lease required the lessee to insure the lessor for injury or damage "in or upon the Premises or the remainder of the Property, and arising out of the use of all or any portion of the same" by the lessee "or its agents, employees, officers, invitees, visitors and guests." The arbitrators found that the lessee's duty to provide insurance extended only to the lessee's use of the premises.

The Supreme Court construed the reference to the "remainder" of the property as directly applicable, given that the plaintiff was employed by the lessee's "invitee and agent" to whom it had subleased space, despite the occurrence of the injury on an exterior stairway. The Supreme Court also ruled that the arbitrators erred by confusing the duty to insure with a narrower duty to indemnify; the duty to indemnify was separate rather than inclusive of the duty to insure.

Comment: This perhaps strained reading of the insurance policy seems quite consistent with the horribly strained reading of the liability part of the case.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1-6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Walter at the ABA. (312) 988 5260 or stacywalter@staff.abanet.org

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