NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

PER CURIAM.

State National Insurance Company (State National) appeals a judgment that requires it to reimburse American Fire and Casualty Company (American Fire) as an "additional insured" under State National's comprehensive general liability policy for monies paid by American Fire to settle a personal injury lawsuit. We affirm Judge Silverman Katz's decision requiring reimbursement under the policy.

I.

The controversy arose from a trip and fall accident by a patron of Trinity Vintners Investment Holdings, LLC, d/b/a Annata Wine Bar (Annata), a restaurant insured by State National. American Fire paid $175,000 to settle the resulting personal injury lawsuit on behalf of its insured, Vision Property Group (Vision), the landlord of the premises leased to Annata. State National paid $40,000 on behalf of its insured, Annata.

American Fire sought reimbursement for its portion of the settlement and for its attorney's fees and costs from State National in a declaratory judgment action. Following a bench trial that was based on the parties' stipulations and earlier summary judgment motions, Judge Silverman Katz entered an order of judgment against State National for $237,029.27, finding that Vision was an "additional insured" entitled to coverage under State National's policy and that the policy's exclusion for structural alterations did not apply.

In support of her decision, the judge relied on the parties' stipulations and prior submissions, finding that:

Photographs taken the day after the accident "depict[ed] a squared off hole."

Vision's managing member testified in his deposition that "there was no physical work performed by or on behalf of Vision Property Group in the passageway prior to September 17, 2008 leading from Annata to the parking lot." Further, Vision did not perform or authorize any construction or repairs that created the hole, although Vision acknowledged making substantial renovations to the alleyway after the accident.

In finding coverage under the policy, the court concluded that "[t]he use of walking through the alley was a use arising out of the use of the leased premises." The court found "Vision did not assume sole responsibility for maintenance of the common areas[,]" based on the lease that expressly provided the tenant shall "keep the walks, driveway, parking area, yard, entrance, hallways and stairs clean and free from trash, debris, snow and ice," and advise the landlord "when there are conditions which need repair." The lease did not require Vision to indemnify Annata for losses in the common area.

In rejecting the policy's exclusion for structural alterations, the judge found:

State National raises the following issues on appeal.

II.

Our review of the court's judgment is governed by well-established principles. Factual findings that are supported by adequate, substantial and credible evidence should not be disturbed "unless `. . . they are so wholly insupportable as to result in a denial of justice[.]'" Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974) (quoting Greenfield v. Dusseault, 60 N.J.Super. 436, 444 (App. Div.), aff'd o.b., 33 N.J. 78 (1960)). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

The lease with Vision required Annata to "obtain, pay for, and keep in effect for the benefit of the landlord and the tenant public liability insurance on the [r]ental [s]pace." An addendum to the lease provided that the tenant "shall defend, indemnify and hold [l]andlord harmless, to the fullest extent permitted by law, for any actual or threatened occurrence arising out of the [t]enant's operations, business, and equipment on site under this lease."

To satisfy these provisions, Annata procured insurance from State National that named Vision as an additional insured under the additional insured endorsement. Vision was covered for "liability arising out of the ownership, maintenance or use of that part of the premises leased to [Annata]. . . ."

"Additional insured" coverage for a landlord "is not contingent upon a finding of the tenant's liability." Liberty Vill. Assoc. v. West Am. Ins. Co., 308 N.J.Super. 393, 402 (App. Div.) (citing Harrah's Atlantic City, Inc. v. Harleysville Ins. Co., 288 N.J.Super. 152, 159 (App. Div. 1996)), certif. denied, 154 N.J. 609 (1998). "Indeed, the very premise of the need for the policy is the actual or potential liability of the landlord—not the tenant." Ibid. "[T]here need be shown only a substantial nexus between the occurrence and the use of the leased premises in order for the coverage to attach." Franklin Mut. Ins. Co. v. Sec. Indem. Ins. Co., 275 N.J.Super. 335, 340-41 (App. Div.), certif. denied, 139 N.J. 185 (1994). Where that nexus is present, "an insurer would expect to provide coverage to a landlord," Harrah's, supra, 288 N.J. Super. at 158, whether or not "the occurrence takes place within the leased premises." Franklin Mutual, supra, 275 N.J. Super. at 341. "That is so because in negotiating for such an endorsement in a lease the landlord is simply attempting to insure against the risk of liability generated by the business about to be conducted by the tenant, and place the cost of insuring that risk on the tenant." Harrah's, supra, 288 N.J. Super. at 158.

State National acknowledged that "[t]he use of walking through the alley was a use arising out of the use of the leased premises." Because the trip and fall of the patron arose out of the operations of Annata, that occurrence then came squarely under the language of the additional insured endorsement, whether or not the tripping hazard was located physically on the leased property.

We reject State National's argument that the trial court erred in applying the additional insured provision on the ground the tenant had no duty to maintain the alley where the accident happened. Pennsville Shopping Center Corp. v. American Motorists Ins. Co., 315 N.J.Super. 519, 521 (App. Div. 1998), certif. denied, 157 N.J. 647, (1999), relied on by State National, involved a supermarket customer who fell in the shopping center's parking lot. Although the landlord (shopping center) was named as an additional insured, the lease provided "that landlord would indemnify tenant [supermarket] from loss or liability for damages `resulting from [l]andlord's failure to carry out repairs or maintenance of the common areas required of it by this [l]ease.'" Id. at 521-22. The lease also provided that the tenant pay its pro rata share of maintaining the common areas of the shopping center, including the parking lot. Id. at 522. Pennsville held the tenant was not required to indemnify the landlord where "the landlord ha[d] assumed sole responsibility and ha[d] agreed to indemnify the tenant." Id. at 523.

In distinguishing Pennsville, Judge Silverman Katz found that Annata's lease required it to "keep the walks, driveway, parking area, yard, entrances, hallways and stairs clean and free from trash, debris, snow and ice and notify the landlord when conditions are in need of repair." Also, the manager of Annata "testified that Annata was responsible for maintaining walkways adjacent to the restaurant[,]" as "[h]e regularly hosed down the sidewalks and the alleyway." We find no abuse of discretion in the factual findings made by the trial judge because they were supported by the record. The same manager testified to daily checking the passage for debris and was aware of the depression in the alley when the injury occurred.

The lease supported the court's finding that the landlord "did not agree to indemnify [the tenant] for any losses or for the common area[,]" a fact critical in Pennsville in finding coverage. Our review of the lease between Vision and Annata shows it did not make provision for Vision to indemnify Annata for Vision's actions. Although Annata paid a common area maintenance charge for "repair, maintenance, snow removal, electricity, trash, sewer, water, management, replacement reserve, as well as real estate taxes and insurance[,]" (capitalizations omitted), the lease did not require Vision to be solely responsible for maintenance or to indemnify Annata. There is no ambiguity in the lease regarding such a provision, as Annata contends, because there simply is no such indemnification provision.

We are not persuaded to preclude coverage by the fact Vision made substantial changes to the alleyway after the trip and fall accident. Consistent with the testimony of Annata's manager, the lease plainly provided that it maintain the alley. This and the lack of an indemnification provision distinguishes the case here from Pennsville.

The State National policy provided an exclusion for "[s]tructural alterations, new construction or demolition operations performed by or on behalf of the person or organization shown in the [s]chedule." Exclusions in an insurance policy are to be narrowly construed. Doto v. Russo, 140 N.J. 544, 559 (1995). State National contended it met its burden of demonstrating the applicability of the exclusion. Flomerfelt v. Cardiello, 202 N.J. 432, 456 (2010). We are satisfied from the record that the exclusion for structural alterations did not apply. As Judge Silverman Katz concluded, "Vision, pursuant to the stipulated facts and the facts in front of me, did not perform any paving work in the alley before the accident. Vision didn't authorize any construction, repairs that would have created the hole." Although State National speculated to the contrary, it did not meet its burden of proving Vision structurally altered the passageway.

Affirmed.