Navigators Insurance Company sued defendant Pacific Insurance Company for a declaration that Jenel was entitled to indemnification and a defense under a policy issued by Pacific to Youngworld of Eighth Avenue, Inc. Plaintiffs moved for summary judgment and for leave to amend the complaint to add 601 Eighth Avenue Associates, Inc. (“601 Eighth”) as a party plaintiff.

Big Sol Manufacturing Company, Inc ., was the owner of a building located at 601 Eighth Avenue, at the corner of Eighth Avenue and West 39’” Street in Manhattan. Big Sol leased the building under a net lease to 601 Eighth. 601 Eighth in turn leased commercial retail space on the ground floor and the entire second floor to Versace Realty Corp. in 1995, which then assigned the lease to Youngworld, a children’s clothing store. Jenel was the building manager. The store lease provided that tenant was required to procure comprehensive general liability insurance protecting 601 Eighth, and naming it as an additional insured. The lease further provided that tenant indemnified 601 Eighth against all claims for personal injury arising “upon or about the demised premises, the building including any basement or storage area, or on the sidewalk adjoining the demised premises, except such claims as may be the result of the negligence or acts of the Owner, its agents, employees or contractors.” In furtherance of the insurance provision in the lease, Pacific issued a policy to Youngworld that included an additional insured endorsement that extended coverage to any person as required by written contract “but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule’” “Of necessity,” held the Court, “this covers Youngworld and, although Pacific denied that Jenel is an additional insured in its answer, on these motions it does not contest Jenel’s status as an additional insured.”

“The basement of the building was occupied by an unrelated nightclub. To prevent access to its space from the basement, Youngworld installed a gate with Jenel’s permission in a stairwell that connected to the two premises, and used the stairwell as a fire exit from the second floor. Youngworld kept the gate open during business hours, and locked it at night.” “In May 1996, a security guard employed by Youngworld, named Thomas Page, slipped and fell while he was walking down the stairwell from Youngworld`s premises to unlock the gate. In 1999, he sued Jenel and the net lessor (but not 601 Eighth) in. Supreme Court, Richmond County (the “underlying action”); Jenel impleaded Youngworld as 3rd third-party defendant. The complaint was amended in 2005 to add 601 Eighth as a defendant.” “Jenel first learned of Page`s accident when it received notice from his lawyer in a letter dated November 17, 1997. Jenel notified Pacific of the claim in a letter dated December 3, 1997. Pacific’s third-party claims adjuster acknowledged receipt of the December 3, 1997 letter. Prior to this lawsuit, there had been no disclaimer by Pacific.”

By a decision in Page’s underlying action the court granted Youngworld’s motion for summary judgment to the extent of dismissing Jenel’s claim for common law negligence as barred under Workers Compensation Law section 11, but denied the motion with respect to the first cause of action for contractual indemnification and / or breach of covenant to procure insurance for Jenel’s benefits. The court held that the contractual claim could not be dismissed because of material issues of fact about whether the subject stairwell was Youngworld’s space.

This court held, first, that the Richmond court’s finding that there were issues of fact did not preclude summary judgment here “because the issues are different.” The first relevant question, held this court, is whether an additional insured enjoys the same protection as the named insured on an insurance policy. “The Court of Appeals answered that question in the affirmative. Pecker Iron Works of NY v. Traveler’s Ins. Co., 99 NY2d 391 (2003). An insurer’s duty to defend is exceedingly broad [it] must defend whenever the four corners of the complaint suggest - or the insurer has actual knowledge of facts establishing - a reasonable possibility of coverage.’”

This issue arose because of a diagram included in the store lease that indicated that the stairwell was part of the demised premises on the first floor, but not on the second floor. Page alleged that his injury occurred in the course of his employment by Youngworld, and that he fell in the stairwell running from Youngworld’s second floor to the gate. The Richmond court decision showed that “there is no triable issue of fact on these points” and “supports the finding that Page’s claim arises from Youngworld’s operation at the premises,” and that the facts are sufficient to trigger “Pacific Insurance’s obligation to defend the claim on behalf of its additional insured.”

The next issue was whether or not the fact that the injury occurred in the stairwell, and not within Youngblood’s leased premises, was material to the issue of coverage. The Court held it was not. “The policy does not limit coverage for additional insureds to accidents that occur on the premises. The additional insured endorsement provides coverage ‘with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to [Youngworld].’ Page’s injury arose from Youngworld’s use of the leased premises. The policy language unambiguously covers claims arising from Youngworld’s ownership and use of the premises, and Page’s injury falls within the scope of coverage. To the extent that an ambiguity is discerned, it is construed in favor of the insured and against the insurer.”

“Youngworld agreed to procure insurance protecting it and 601 Eighth from liability occasioned by an occurrence on or about the demised premises or any appurtenances thereto. Pacific argues that this provision required Youngworld to procure insurance only with respect to claims arising on the premises, and not one where the accident occurred on the subject stairwell. This construction would render meaningless the phrase ‘on or about’ the demised premises, and the rest of the language that clearly indicates the intent to include the immediately surrounding area and appurtenances.”

“Moreover,” held the Court, “if Jenel and 601 Eighth are entitled to coverage under the Pacific policy as additional insureds on the same basis as Youngworld, then such coverage is primary, because there is no indication in the lease or in the policy that non-primary coverage would satisfy the additional insurance coverage requirement.”

Pacific also argued that the phrase “appurtenance” in the lease’s insurance clause was ambiguous and that it should have specified the staircase. “‘Appurtenance is defined in Black`s Law Dictionary as ‘something that belongs to or is attached to something else.’ Pacific does not suggest any alternate meaning, and under its plain meaning, the stairwell is an appurtenance. In any event, the accident occurred ‘upon or about’ the premises in the clear, unambiguous meaning of that phrase.”

The Court granted summary judgment to plaintiffs on the issue of coverage under the Pacific policy.