Opinion
DOCKET NO. A-2810-11T1
03-11-2013
ESSEX INSURANCE COMPANY, Plaintiff-Respondent, v. PINE TOWERS GROUP, Defendant-Appellant, and PINE TOWERS, INC., PINE TOWERS CONSTRUCTION, INC., BROTHERS HOME CONSTRUCTION, FM HOME IMPROVEMENT, INC., MANUEL CRUZ BERMEJO and MARIA MERCEDES CHANGUAN, Defendants.
On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9086-10. Francis X. Garrity argued the cause for appellant (Garrity, Graham, Murphy, Garofalo & Flinn, P.C., attorneys; Mr. Garrity, of counsel; Mr. Garrity and Jane Garrity Glass, on the briefs). Daniel R. Bryer argued the cause for respondent (Clausen Miller, P.C., attorneys; Mr. Bryer and Thomas D. Jacobson, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Reisner and Yannotti.
On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9086-10.
Francis X. Garrity argued the cause for appellant (Garrity, Graham, Murphy, Garofalo & Flinn, P.C., attorneys; Mr. Garrity, of counsel; Mr. Garrity and Jane Garrity Glass, on the briefs).
Daniel R. Bryer argued the cause for respondent (Clausen Miller, P.C., attorneys; Mr. Bryer and Thomas D. Jacobson, on the brief). PER CURIAM
Defendant Pine Towers Group, LLC (Pine Towers) appeals from an order entered by the Law Division on January 12, 2012, which granted a motion for summary judgment by plaintiff Essex Insurance Company (Essex) and denied Pine Towers' motion for summary judgment. We affirm.
This appeal arises from the following facts. Pine Towers was the general contractor for a project involving construction on a building in Newark, New Jersey. Pine Towers retained FM Home Improvement, Inc. (FM) to install siding on the building, and FM in turn contracted with Brothers Home Construction (Brothers) to perform that work.
On March 19, 2007, one of Brothers' employees, Manuel Bermejo (Bermejo), was injured while working on the building. Bermejo was apparently working with aluminum flashing on a scaffold, when the flashing came into contact with a high-tension, electric-utility wire. Bermejo claimed that he fell through an unguarded opening in the scaffold to the ground below and sustained personal injuries.
Bermejo brought suit against various defendants, including Pine Towers (the Bermejo litigation). Bermejo alleged that defendants were negligent, reckless and careless in failing to provide a safe work site and safe equipment for the employees of the subcontractors working on the site. Bermejo further alleged that defendants were negligent, reckless and careless in allowing the work site to become hazardous and dangerous. He additionally claimed that defendants improperly supervised the activities of the workers, and failed to make adequate safety inspections.
Pine Towers sought insurance coverage under a commercial general liability policy issued by Essex. Essex informed Pine Towers that it was reserving the right to deny coverage for the claims asserted against it in the Bermejo litigation. Essex thereafter filed this action seeking a declaratory judgment that Pine Towers was not entitled to a defense or indemnification for the claims asserted by Bermejo.
The policy was issued to Pine Towers for the policy period from July 6, 2006, to July 5, 2007. The policy generally provided that Essex would pay those sums the insured became legally obligated to pay as damages because of "bodily injury" or "property damage" for which the policy provided coverage. The policy stated that Essex had no duty to defend the insured against any suit seeking damages for "bodily injury" or "property damage" as "to which this insurance does not apply."
Essex claimed that Pine Towers was not entitled to coverage because the policy excluded coverage for claims of employees of subcontractors on Pine Towers' project. The policy included an "Additional Conditions Endorsement," which stated in pertinent part:
This insurance does not apply to "bodily injury", "property damage", "personal injury", "advertising injury" or any injury, loss, or damages, including consequential injury, loss or damage, arising out of, caused by or contributed to or as a result of:
. . . .
(D) If contractors or subcontractors are used, it is a condition of coverage that you use only those that are insured, and carry at a minimum Commercial General Liability coverage with limits at least equal to the limits of this policy, name you as an additional insured on their policy, and carry workers compensation insurance, and you require and secure certificates of insurance confirming same. Failure to comply with this condition does not void your coverage, however, limits of liability hereunder will be reduced and apply as a "sublimit" of liability, being a Combined Single Limit, $50,000 each occurrence and in the aggregate, including loss adjustment expenses and defense.
The sublimit would be the most payable for all damages arising out of any one occurrence, and the most payable for all claims under this policy, including investigation and defense. If such sublimits were tendered or exhausted, we would not defend or continue to defend in any suit.
Further, there is no coverage under this policy for "bodily injury", "personal injury" or "property damage" sustained by any contractor, self-employed contractor and/or subcontractor, or any employee, leased worker, temporary worker or volunteer help of same.
Essex also claimed that its policy excluded coverage for Bermejo's claims for negligent supervision. The policy stated in pertinent part:
10. This insurance does not apply to "bodily injury", "property damage", "personal injury", "advertising injury" or any injury, loss, or damages, including consequential injury, loss or damage, arising out of, caused by or contributed to:
. . . .
e. as a result of alleged negligence or other wrongdoing in the hiring, training, placement, supervision, or monitoring of others by insured[.]
Essex and Pine Towers filed motions for summary judgment in the trial court. The court considered the motions on January 9, 2012, and placed its decision on the record on that date. The court determined that Pine Towers was not entitled to coverage for the claims asserted by Bermejo in his lawsuit because Essex's policy did not cover claims for bodily injury of subcontractors working on the Pine Towers' project, or claims involving the alleged negligent supervision of a construction site. The court entered an order dated January 12, 2012, which granted Essex's motion and denied Pine Towers' motion.
Thereafter, the trial court determined that Pine Towers was entitled to coverage as an additional insured under its subcontractor FM's insurance policy. The Bermejo lawsuit was later settled, and the issue of whether Essex must indemnify Pine Towers for the claims asserted by Bermejo became moot. Pine Towers nevertheless appeals, arguing that it was entitled to coverage under the Essex policy and should therefore be permitted to recover its attorney's fees and costs.
Pine Towers argues that the trial court erred by granting summary judgment to Essex. Pine Towers contends that the trial court erroneously concluded that the Essex policy did not cover the claims asserted against it in the Bermejo litigation. We do not agree.
"Insurance policies are contracts of adhesion and, as such, are subject to special rules of interpretation." Gibson v. Callaghan, 158 N.J. 662, 669 (1999) (citing Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537 (1990)). Generally, the words of an insurance policy are given their plain, ordinary meaning. Id. at 670 (citing Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 175 (1992)).
"In the absence of any ambiguity, courts 'should not write for the insured a better policy of insurance than the one purchased.'" Ibid. (quoting Longobardi, supra, 121 N.J. at 537). If the terms are clear, the court should enforce the policy as written. Ibid. (citing Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960)).
We are satisfied that the trial court correctly determined that Pine Towers was not entitled to coverage under the Essex policy for the claims asserted in the Bermejo litigation. It is undisputed that Bermejo's claims were for bodily injuries he allegedly sustained while employed by a subcontractor working on the Pine Towers construction project. Essex's policy clearly and unambiguously excluded coverage for "bodily injury" claims of "any" contractor or subcontractor or "any" employee of the same.
Pine Towers argues, however, that the relevant provision of the policy is ambiguous. It contends that the three paragraphs of condition "D" should be read together, and the third paragraph should be interpreted to apply only to those contractors with whom the insured is in privity of contract. We cannot agree.
The first paragraph of condition "D" states that coverage is only available if the insured uses "contractors or subcontractors" that have insurance with minimum commercial liability coverage with limits equal to those under the policy, and which names the insured as an "additional insured," and carry workers' compensation coverage. The insured is required to obtain certificates of insurance confirming that the "contactors or subcontractors" have the required coverage.
The first paragraph also provides that the insured's failure to comply with this condition does not void coverage. Rather, the limits of liability will be reduced as a "sublimit" of liability. The second paragraph of condition "D" states that the "sublimit" would be the most paid for all damages arising from any occurrence and the most paid for all claims under the policy.
While the first two paragraphs can be read to apply to contractors and subcontractors with whom the insured is in privity of contract, the language of the third paragraph contains no such limitation. That paragraph states that there is no coverage under the policy for personal injuries or property damages for "any" contractor or subcontractor or "any" employee "of same." Thus, the condition to coverage is not limited to contractors or subcontractors with whom the insured is in privity.
Pine Towers also argues that the condition barring coverage for claims of contractors and subcontractors does not apply here because its purpose was to protect Essex from having to cover workers' compensation claims of employees of subcontractors used on the insured's projects. Again, we disagree. The purpose of the condition is to limit the insurer's exposure to all claims for "bodily injury" and "property damage" asserted by "contractors or subcontractor" and their employees, not simply claims for workers' compensation coverage.
In addition, Pine Towers argues that the exclusion for claims of contractors and subcontractors is unenforceable because it is designated as a condition to coverage rather than an exclusion from coverage. Again, we disagree.
Here, the policy's distinction between a "condition" and "exclusion" is irrelevant to whether Essex was obligated to provide coverage for the claims against Pine Towers in the Bermejo litigation. As we have explained, the policy clearly and unambiguously provides no coverage for the claims at issue.
Pine Towers additionally contends that the trial court erred by finding coverage also was barred under the exclusion for claims based on negligent supervision. In view of our determination that the condition on coverage for claims contractors and subcontractors and their employees bars the coverage Pine Towers sought in this case, we need not address this argument.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION