On appeal from the Superior Court of New Jersey, Chancery Division, Camden County, whose decision is reported at 239 N.J. Super. 488 (Ch. Div. 1989).
O'Brien, Havey and Stern.
[239 NJSuper Page 405] Plaintiffs Campbell Soup Company and Campbell Soup (Texas) Inc., appeal from orders for summary judgment in favor of defendants, 22 insurance companies. In their complaint, plaintiffs seek a declaratory judgment that defendants, under the provisions of their general liability and excess coverage policies, must defend and indemnify plaintiffs against a discrimination claim pending before the Equal Employment Opportunity Commission (EEOC).
We affirm the dismissal of plaintiffs' demand that defendants provide a defense in the EEOC proceedings substantially for the reasons expressed by Judge Lowengrub in his comprehensive written opinion reported at 239 N.J. Super. 488, 571 A.2d 1013 (Ch.Div.1989). We agree with the judge's determination that the EEOC's reasonable cause determination was not "the functional equivalent of a suit so as to compel the insurers . . . to defend plaintiff against charges of discriminatory employment practices[,]" and that "the duty to defend is triggered when the insured is involved in an adversarial proceeding, a consequence of which is the factual determination that legal liability may or may not be imposed upon the insured." We add only that we acknowledge that an EEOC probable cause determination may be admissible in a subsequent federal action instituted by the EEOC, or by an aggrieved party against the employer. See Smith v. Universal Services, Inc., 454 F.2d 154, 158 (5th Cir.1972). However, the admissibility of the probable cause determination does not transform the EEOC conciliation process into a coercive, adversarial proceeding tantamount to a "suit," for which a duty to defend is owed.
We also affirm the order for summary judgment entered on September 8, 1988, dismissing without prejudice plaintiffs' demand for indemnification under the policies. In dismissing the claim for indemnification, Judge Lowengrub concluded:
The judge reasoned that before issues of coverage and application of the exclusions pertinent to claims of discrimination can be resolved, there must be a "suit" setting forth the specific acts of discrimination alleged by the EEOC or by the aggrieved employees. Further, discovery as to these issues, before a suit is instituted, might be frustrated because of the confidentiality of the EEOC's conciliation proceeding. See 42 U.S.C.A. § 2000e-5(b). We affirm on this point substantially for the
reasons expressed by the judge in his September 8, 1988 oral opinion and written order.
Plaintiff's declaratory judgment suit is dismissed substantially for the reasons expressed by Judge Lowengrub in his comprehensive written opinion.