On appeal from Superior Court of New Jersey, Law Division, Essex County.
Brody and D'Annunzio. The opinion of the court was delivered by D'Annunzio, J.A.D.
This is a liability insurance coverage case arising out of an incident which occurred on July 1, 1982. On that date, Ronald Rogers, an infant, accompanied his mother to Lou Rocco's Shoe Store in Bloomfield, New Jersey. Ronald wandered from his mother, left the public portion of the store and entered a non-public room attached to the store. While in the room, Ronald came into contact with an open container of sulfuric acid and suffered severe personal injuries. It is alleged that the acid was marketed under the trade name Drain Snake as a chemical useful in the plumbing industry. Ronald and his mother filed a complaint seeking damages against Lou-Rocco Shoes, Inc., Rocco Sinopoli individually, Louis Maiocco individually, Rocco Sinopoli and Louis Maiocco t/a Lou Rocco Shoes and others.
It appears from the record that Sinopoli and Maiocco each owned 49% of the stock of Lou Rocco Shoes, Inc. (the corporation). Their wives each owned 1% of the stock. The corporation owned the building in which the shoe store was located, and it was insured under a commercial liability policy issued by the General Accident Insurance Group (General). General has deposited the $500,000 limit of its liability policy into court to settle the Rogers' claim. The Rogers, alleging that their damages
exceed $500,000, have refused to accept that amount in full settlement.
Faced with a claim in excess of the corporation's liability policy, Rocco Sinopoli commenced this declaratory judgment action against Cumberland Mutual Insurance Company (Cumberland), the issuer of a homeowner's insurance policy to Sinopoli and his wife, and against North River Insurance Company (North River), the issuer of an excess liability insurance policy to the Sinopolis.
The parties concede that the North River policy does not cover claims which are not covered by scheduled underlying insurance, i.e., the Cumberland policy. The parties agree that if the Cumberland policy does not cover Sinopoli for the Roger's incident, then there is no excess coverage under North River's policy. The parties also agree that there is coverage under the Cumberland policy unless exclusions A.3 and A.5 apply.
Exclusion A.3 provides that Cumberland does not cover any loss under its personal liability coverage
For bodily injury or property damage:
3. Arising out of any business activities of an insured, except:
b. Those within the term business ...