In the case of Cambria v. Two JFK Blvd., LLC, decided on January 5, 2012, the Appellate Division addressed the question of whether the insurer of a tenant at a shopping center was also obligated to provide a defense to the tenant's landlord and real estate manager in connection with a slip-and-fall claim by a customer.

The plaintiff, John Cambria, sued the owner of the shopping center and its real estate manager, contending he fell due to an icy condition of the center's parking lot, which was part of the common element area of the property.  

The property owner and its real estate manager then filed a declaratory judgment action against Harleysville Insurance Company, the insurer of one of the shopping center's tenants, third party defendant, JFK Food & News, Inc., contending they were entitled to coverage. 

The Appellate Division was faced with two main issues. First, the court was asked to decide whether the tenant, JFK Food & News, Inc., had complied with a provision in its lease with the landlord which required JFK to name the landlord as an additional insured on its own policy. Second, the court was asked to determine whether, if the landlord was not entitled to additional insured coverage, it or its real estate manager were nonetheless owed coverage by Harleysville pursuant to the "real estate manager" provision in the Harleysville policy, which provided coverage to the named insured's (viz. the tenant's) real estate manager.

In coming to its ruling, the appeals court disagreed with the trial court's initial finding that the landlord's real estate manager was also the tenant's real estate manager, and that therefore Harleysville owed coverage on that basis. The Appellate Division's decision rested upon its analysis of whether, with regard to the area of the property where the plaintiff's accident had occurred (the common area parking lot), the landlord's property manager was acting as the landlord's or the tenant's real estate manager.

In reviewing the terms of the lease, the Appellate Division determined it did not delegate responsibility for maintenance of the parking lot to the tenant. Although the lease included a provision under which the landlord was to allocate a certain portion of the tenant's rent to operating costs, including maintenance of the parking lot, the court held this did not equate with the tenant having assumed any responsibility for maintenance of the common areas. Rather, this responsibility stayed with the landlord, and the real estate manager the landlord had hired.

Consequently, the Appellate Division determined that since the lease did not allocate responsibility for maintenance of the common areas to the tenant, the landlord's property manager was not the tenant's property manager, and therefore any coverage owed by Harleysville under the policy's "real estate manager" provision did not extend to the landlord's property manager.

This case illustrates the analysis courts will apply in construing commercial property leases, specifically in terms of how they allocate responsibility for common element areas, and how those allocations impact upon entitlement to coverage.