As we explained in our case summary, the question in this case was whether an out-of-possession property owner could be liable for injuries sustained on its property under Putnam v. Stout, 38 N.Y.2d 607 (1976), where the owner agreed to maintain the property in “good repair and condition” in an agreement with a mortgage guarantor (i.e., not the lessee). The Court (Stein, J.) held that it could not and that the out-of-possession property owner retained its immunity from liability.
The Court rejected plaintiff’s assertion that an agreement with someone other than the lessee could qualify as a liability-shifting contractual obligation under Putnam. The rationale of Putnam was based on the relationship between the landlord and tenant, the Court emphasized, and it was that relationship “as reflected in their agreements regarding the maintenance of the property, that drives the analysis” of whether an out-of-possession owner has assumed maintenance obligations under Putnam. To be sure, the guaranty agreement contained language about defendants’ maintenance obligations vis-a-vis guarantor. But the Court explained that nothing in the guaranty agreement altered the respective maintenance obligations between defendants and the in-possession lessee as set out in their lease agreement.
The dissent (Rivera, J.) disagreed with the majority’s reading of the contract. The dissent would have concluded as a matter of contract interpretation that the lease agreement, which incorporated the guaranty agreement, imposed on defendants a nondelagable duty to maintain the premises. The dissent also would not have limited the Putnam analysis to contracts between the lessee and lessor. In the dissent’s view, it was “the landowner’s conduct” that drove the Putnam analysis, not strictly the owner’s relationship to the lessee, and the guaranty agreement here contained the landowner’s clear assumption of a maintenance responsibility. The dissent also noted an incongruity between the majority’s holding and the Court’s decision in the companion case, He v. Troon Management, Inc. If a city law–a “statutory fiat”–could displace an out-of-possession landlord’s tort immunity under Putnam, so too should an agreement between the owner and a non-lessee.
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