## Facts

- A commercial tenant leased premises from the landlords for a ten-year term to operate a public roller-skating rink.
- The lease required the tenant to maintain public liability insurance at specified minimum limits (including a $1 million aggregate).
- After six years of operation, the tenant’s insurer declined to renew the policy upon expiration, citing reinsurer and market conditions tied to an industry-wide liability insurance crisis.
- The tenant attempted to obtain replacement coverage but could not immediately secure a policy meeting the lease’s limits; the tenant was uninsured for a period after the prior policy expired.
- The landlords served a notice of default requiring the tenant to cure the insurance breach within 30 days or vacate.
- The tenant later obtained insurance with lower limits effective March 1, 1986, and ultimately obtained coverage meeting the lease requirements by August 1987.
- The lease contained a force majeure clause listing events (e.g., strikes, civil disorder, war, and restrictive governmental regulations) and “other similar causes beyond the party’s control,” but it did not mention insurance unavailability.

## Issues

1. Whether the tenant’s inability to obtain the contractually required liability insurance during an insurance-market disruption excused performance under the doctrine of impossibility.
2. Whether the lease’s force majeure clause excused the tenant’s failure to maintain the required insurance where the clause did not expressly address insurance availability.

## Decision

- The Court of Appeals of New York affirmed summary judgment for the landlords.
- The tenant’s noncompliance with the insurance requirement was not excused by impossibility.
- The force majeure clause did not cover insurance-market unavailability, so the tenant remained in default.
- The landlords were entitled to enforce the lease’s default remedies based on the period of noncompliance.

## Legal Principles

- Impossibility excuses performance only when an unanticipated event destroys the contract’s subject matter or the means of performance, making performance objectively impossible, and the event could not have been foreseen or guarded against in the contract.
- Impossibility is construed narrowly and generally does not include market difficulty, increased expense, or inability to obtain a preferred method of performance.
- Force majeure clauses are construed narrowly; a party is excused only when the clause specifically includes the event that prevents performance.
- General catchall language (e.g., “other similar causes”) is read in light of the enumerated events and does not extend to qualitatively different risks not identified in the clause.

## Conclusion

The court held that a tenant’s temporary inability to obtain contractually required liability insurance, even during an industry-wide insurance disruption, did not meet New York’s strict standard for impossibility and was not covered by a force majeure clause that did not specifically include insurance unavailability; the tenant’s lapse therefore constituted a lease default permitting the landlords’ contractual remedies.


Kel Kim Corp. v. Cent. Mkts., Inc., 70 N.Y.2d 900 (N.Y. 1987)