Adam Leitman Bailey, P.C., Wins Trial in Commercial Breach of Contract Action Securing Indemnification for Handicap Accessibility Claims
Adam Leitman Bailey, P.C., recently prevailed at trial on behalf of a Manhattan commercial landlord in a breach of contract action arising from a former commercial tenant’s obligations under its lease, and the guarantor’s obligations under the lease guaranty, including the obligations to indemnify the landlord for claims arising from the tenant’s use and occupancy of the premises concerning handicap accessibility.
The lease required the tenant to indemnify the landlord against claims, damages, expenses, and judgments arising from the use or occupancy of the premises. The lease specifically required the tenant, at its own expense, to comply with regulations concerning access to the premises by handicapped persons. The lease was secured by a personal guarantee executed by the tenant’s principal.
During the tenancy, the landlord was named as a defendant in a federal court lawsuit alleging violations of the Americans with Disabilities Act (“ADA”) associated with the commercial premises in the building. The landlord defended and settled that action to resolve the ADA claims.
Adam Leitman Bailey, P.C., then commenced an action seeking reimbursement from the commercial tenant and guarantor pursuant to the indemnification and hold harmless provision of the lease.
The tenant argued that it should not be responsible for the landlord’s settlement because the building contained two storefronts and the ADA claims involved conditions that could have arisen from either storefront.
Adam Leitman Bailey, P.C. established at trial that the tenant’s lease specifically identified its premises and that the ADA complaint asserted detailed violations against both the tenant and the occupant of the adjoining storefront. The Court determined that the tenant’s contractual indemnification obligation extended to claims arising from conditions in its store.
The Court applied a fair and equitable allocation and determined that one-half of the landlord’s federal claim settlement was attributable to the tenant’s premises. The Court therefore found the tenant liable under the lease’s indemnification provision.
The landlord also sought, and the Court awarded, unpaid rent under the lease after determining that the tenant failed to pay rent in the last several months of the lease term and that the tenant overstayed the expiration of its lease term.
The Court directed the entry of a money judgment in favor of the landlord against both the commercial tenant and the guarantor.
The Court also determined that the landlord was the prevailing party under the lease and therefore entitled to reasonable attorneys’ fees incurred in prosecuting the action.
Vladimir Mironenko, a partner at Adam Leitman Bailey, P.C., represented the commercial landlord in the action and at trial.