Kmart Corp. v. Footstar, Inc.

Dist. Ct. did not err in finding that defendants (entity that leased footwear space within plaintiff’s store and entity’s insurance company) had duty to defend plaintiff in underlying lawsuit by plaintiff’s customer, who suffered injuries in store while being assisted by entity’s employee and plaintiff’s employee, even though agreement between plaintiff and defendant-entity provided that entity’s employees could only work in footwear department controlled by entity. Customer’s injuries (which occurred outside footwear department) were potentially covered under said agreement and relevant insurance policy. Moreover, fact that plaintiff waited 18 months to alert defendant-insurance company about underlying lawsuit did not constitute breach of notice provisions, although defendants were responsible for only those defense costs incurred after insurance company received notice of lawsuit. Also, Dist. Ct. erred in finding that defendant-entity was responsible for 15% of customer’s injuries where said injuries did not actually occur “pursuant to” or “under” agreement between plaintiff and entity.