Peggy Lampert was a customer of the One-Half Off Card Shop at the Minges Creek Shopping Center. After she left the card shop, as she was walking to her car in the parking lot, she slipped and fell, causing serious personal injuries and damages.

She sued the shopping center owner and the card shop. The state trial court dismissed the card shop from liability because the card shop did not legally have control over the sidewalk or parking area where Lampert’s injury occurred. Chubb Insurance Co., as insurer for the shopping center owner, then settled the lawsuit for $210,000.

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The shopping center owner, on behalf of Chubb, then sued the card shop’s insurer, Royal Insurance Co. Minges Creek argued that because the card shop was required by its store lease to name Minges Creek as an additional insured under its policy, that policy should pay Lampert’s $210,000 damages because she had just left that store.

But the card shop’s insurer argued its policy insured only injuries that occur inside the store, and the card shop had no control over the sidewalk and parking lot common areas, which were shared with patrons of other stores in the shopping center.

If you were the judge would you rule the card shop insurer should be liable for Lampert’s injuries since she had just left the card shop whose insurance policy named the shopping center as an additional insured?

The judge said no!

The lease between the card shop and the shopping center owner required the card shop’s insurer to name the shopping center as an additional insured under the policy, the judge began. Such a procedure is normal in commercial leases, he noted, in case an accident occurs within the store premises.

However, this accident occurred outside the card shop, the judge explained, and the card shop had no control over the sidewalk and parking lot common areas. The card shop had a duty under its lease to maintain insurance only inside its store premises and not outside that space, he noted.

An absurd result would occur if each of the store insurers were to be held liable for injuries occurring outside the stores in the common areas, the judge emphasized. This result would be unreasonable since the shopping center owner has its own insurance policy for the common areas, he continued.

The card shop insurer, Royal Insurance Co., had no duty to defend against Lampert’s claims, as the trial court determined, the judge ruled. The only reasonable result is that Chubb Insurance Co. was the proper insurance company to defend the case and the card shop’s insurer has no liability, the judge concluded.

Based on the 2006 U.S. Court of Appeals decision in Minges Creek LLC v. Royal Insurance Co. of America, 442 Fed.3d 953.

(For more information on Bob Bruss publications, visit his
Real Estate Center

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