February 25th, 2015
In 2010, the board of the St. Tropez condominium at 340 East 64th Street in Manhattan held its annual meeting in an unfinished space. It may have saved on renting a hall, but it wasn’t the best choice the board made that year. The condo was later sued by a resident who had tripped over an unseen hole in the paper-covered bumpy floor. “A lot of annual meetings are held in gyms,” says attorney Adam Leitman Bailey, principal of his eponymous law firm. “Well, that gym is not there for an annual meeting.”
Oops. Oh! OWW!
It is easy for a board to find itself embroiled in a slip-and-fall lawsuit, “among the most common” type of suit cooperatives and condominiums face, according to Bailey. And though you may have taken every precaution and been as prudent as a schoolmarm, you could still face a payout simply because it’s cheaper than fighting a claim in court.
Patricia Batih knows. As vice president of sales at the insurance brokerage Mackoul & Associates, she’s seen it all. “They come up with a doctor’s note: ‘Oh, yes, they twisted their ankle and missed work.’ Somebody says they hurt their back; you can’t prove if they’re in pain or not. In some cases, it will cost more in defense costs than just to give them $10,000 and get rid of them.” Yet a “payout” could affect future premiums.
And you could lose. New York Labor Law Section 240 says if someone gets injured from a fall, the owner of the building is liable, even if the owner has not been negligent or is ignorant of negligence. “Let’s say I’m a shareholder having my apartment painted,” says attorney [redacted], a partner at [redacted]. “I hire a contractor, he brings in painters. One of them falls off a ladder. His lawyer sues the cooperative, the managing agent, the shareholder, and the contractor. The contractor is covered under workers’ compensation. The shareholder says, ‘I hired the contractor, he’s supposed to have insurance, leave me alone.’ They get dismissed from the suit. But not the co-op and management. They’re both potentially liable under Section 240.”
Facing a Lawsuit
Yet despite all your efforts, sometimes a lawsuit is unavoidable. So what’s the process when your co-op or condo corporation gets sued? Generally, three steps:
The co-op or condo corporation is notified. When an alleged accident happens, if no one sees it or is aware of it, your property manager generally will receive the complaint in the mail.
The co-op/condo attorney and insurance broker are notified. This should be done immediately. The insurance broker will get the claim filed, says Batih. “Your broker should report it to both your liability carrier and your umbrella carrier” if they are different companies, she says. “If you only report it to your liability carrier, and the [injured party] dies eight months later, and the broker only notifies the umbrella carrier then, it could be declined for failure to file a claim in a timely fashion.”
The board stays out of it and refers any question or communication to its attorney and/or insurance broker. Once the complaint is in the hands of a manager, an insurance broker, and an attorney, there’s no reason for a board member to speak with the claimant or the claimant’s professionals. “You can open up your mouth, and a whole can of worms can come out,” Batih warns. “Just tell them, ‘Please contact our insurance agent or the adjuster or attorney’ and leave it at that.” Any correspondence a board member may get should be forwarded immediately to the manager and attorney.
Keep in mind that the insurance company may settle out of court if it believes it is cheaper than going to trial. “Under virtually every general liability policy, the carrier does not need the insured’s consent to offer a settlement,” Batih says. “The carrier has the right to say, ‘We’re paying the claim and closing the file.'” You may want to stand on principle and fight to the end. Don’t. The insurance company won’t be paying for it.
Caught on Video
Documentation is important. When the incident happens, instruct the building staff to get witnesses’ names and phone numbers so that the attorney and insurance company can contact them for their statements.
In the end, prevention and documentation — particularly video footage — are the best ways to mitigate slip-and-fall suits. “If you lived in a house, you would do everything so that somebody would not trip and fall,” Fischer says. “A board member should look at the cooperative or condominium the same way.”
Concludes Bailey: “New York City recognizes that people walking by may slip and fall. The thing is whether you’ve been negligent. If you did everything you’re supposed to do and someone slips and falls, that’s just an accident and not negligence, which is the standard required for the co-op or condo to lose the lawsuit.”