A fire occurred at the insured’s light industrial multi-unit building that originated in space leased to the tenant and spread to an adjacent vacant unit. The tenant sought dismissal based on language in the lease that stated in the event of a fire, if the tenant was the insuring party, and if the insurance proceeds were insufficient to effect the repair, then the landlord’s sole remedy was to terminate the lease if the tenant refused to pay the shortfall. In response, Stutman Law argued that the terms of the lease made the landlord and not the tenant responsible for insuring the building, making the language inapplicable.
Shortly before the deposition of the tenant’s president, demand was made for $300,000, the full policy limit, for fire damage to the rented premises. The cost of repair to the vacant space was segregated and a separate demand made for that portion of the loss under the general liability limit. Although still contending that it disputed liability, the tenant paid the full policy limit on the rented premises and a sizable portion of the loss to the vacant unit.