Building owners targeted on sidewalk slips & falls.

As part of its general tort reform package, New York City wants to make building owners liable for the costs of accidents that happen on the adjacent sidewalk. One, two and three family homeowners would be exempt.

While all building owners currently are responsible if they make some special use of the sidewalk - such as an outdoor cafe - or if they fix a portion of the sidewalk, they are not liable if they do not touch it.

That has to change, says Lawrence S. Kahn, chief litigating assistant corporation counsel, who is drafting the legislation that must be approved in Albany.

As a matter of law in New York State, he noted, an adjacent land owner has a duty in New York City and other places to repair any defects on the adjacent sidewalk. If the owner does not fix it, the owner can be fined or the city can do it and charge the owner, but if someone slips and falls, they cannot recover from the landowner. Instead, the plaintiff can sue the city.

"This is not the first time we've made an effort but, because of awards, the speed of which and the amount of which are going up, we need to make a serious effort," Kahn explained as the reason for the tort reform. "The city ends up stuck and is not in a position to fix every sidewalk. The landowner should have the incentive."

Kahn stressed the law does not take the city off the hook, but would merely enable a plaintiff to sue the landowner directly and also allow the city to implead the landowner if the city is the only named party. It would also give the city the ability to recover from the owner any award it might have to pay out to the plaintiff.

Over the past four years, the city has had 1,200 to 1,500 cases annually, with an average settlement of $24,000, adding up to $125 million in judgments. While most slips are not too serious, two people have died in sidewalk falls - albeit not in the last few years - and one recent slip and fall case generated a $1.7 million award for a badly injured leg. That case, in fact, happened at the edge of a single-family homeowner's driveway and after the plaintiff settled for a small amount from the homeowner, he sued the city.

"They already have policies and these insurance companies are not concerned about $50,000 claims," explained Kahn as the reason why the city wants to have larger property owners liable and exempt small homeowners. "We have made some calls to other states [New Jersey and Pennsylvania] and rates did not go up," he insisted.

But those in the real estate industry believe that is misleading.

"If that were true the city would not want to be changing the law," said attorney Neil Brody, a partner with Brody & Fabiani, who defends owners against such charges. "It would probably cause an increase in insurance rates."

Brody said the insurance companies all conduct site inspection surveys, including the sidewal. "Once you move [liability] over to the building owner, it will increase the number of claims," he noted.

Nancy Sachs, the general counsel for Walter Kaye Associates, an insurance brokerage, was uncertain if the competitive insurance market would go along with higher rates. She said, "I think the insurance companies will very carefully analyze if this will increase the risk and consider if market factors will allow them to increase the rates."

The current law also requires the city to have a "prior notice" of the sidewalk defect. To get around that obstacle, instituted around 1980 to repel claims, plaintiff's attorneys provide information for a map that is submitted to the city each year and gives them notice of most defects.

"If the city has a notice of defect," wondered Brody, "why don't they just fix it?"

One of the oddest quirks in the current law is that if the city's emergency repair crew fixes the defect and bills the owner, the owner is not liable for a slip and fall. But once the owner decides to save a few dollars and have the work done by a familiar contractor, the owner is liable should someone trip on defective work.

Of course, the owner can then go after the construction company, but the reality, noted attorneys, is that it is hard to determine when the sidewalk heaved up or fell and the buck will still stop with the owner.

So those owners who try to keep their sidewalk in good repair actually open themselves up for more future problems than those who turn their heads and pay the city for repairs and fines. "In the short term it may cost more but in long term it's less," said one attorney who asked not to be identified. "But of course it's an increase in what the insurance company pays out and then ultimately, their rates."

Joseph Strasburg, president of the Rent Stabilization Association, who has previously worked with both the City Council and legislature, does not believe the bill will come to pass. "I don't think Albany is so inclined to deal with such a controversial issue," he said. "All Albany is interested in doing is getting out. I don't know how successful the mayor's program bill is going to be."

Agreed Charles R. Rappaport, president of the Federation of New York Housing Cooperatives, "It will never get passed."

Rappaport said his own co-op in Queens recently received a violation to repair its own sidewalk after it was affected by the winter's frost. "Some of the squares heaved and there is a half to three quarters of an inch difference and by the end of the summer we believe it will be flat again. Meanwhile we have a running battle because we got a violation to replace the entire sidewalk."

The law is similarly idiosyncratic when it comes to snow and ice removal, added Kahn. "If the owner clears and it is done negligently, plaintiff could recover from the property owner, but they are not negligent if they don't make an attempt at it at all," he said. Then of course, the city gets sued.