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Tradesoft Technologies, Inc. v. Franklin Mutual Insurance Company

March 13, 2000


Before Judges Pressler, Landau and Ciancia.

The opinion of the court was delivered by: Pressler, P.J.A.D.


Argued February 1, 2000

On appeal from the Superior Court of New Jersey, Law Division, Morris County.

The opinion of the court was delivered by

This declaratory judgment action arises out of the advertising injury coverage of the casualty and general liability policy issued by defendant The Franklin Mutual Insurance Company, Inc., (Franklin) to plaintiff Tradesoft Technologies, Inc. (Tradesoft). Franklin appeals from the entry of a partial summary judgment declaring its obligation to defend and indemnify Tradesoft in respect of an action brought against Tradesoft in the Federal District Court for the District of New Jersey by EBS Dealing Resources, Inc. and EBS Nominees Limited (collectively EBS) in which they alleged patent and trademark infringement as well as common law causes of action including misappropriation of trade secrets, breach of contract, tortious interference with contract, and unfair competition.

We note at the outset that the judgment appealed from is interlocutory in that it disposed only of Tradesoft's claims for defense and indemnity, reserving for future litigation the remaining five counts of Tradesoft's complaint whereby it alleged causes of action for breach of contract, breach of the duty of good faith and fair dealing, breach of fiduciary duty, unjust enrichment, and bad faith denial of an insurance claim. It need hardly be said at this late date in the development of our appellate jurisprudence that a judgment is not final and hence is not eligible for an appeal as of right unless it disposes of all claims and issues as among all parties. See, e.g., CPC Intern. Inc. v. Hartford Acc., 316 N.J. Super. 351, 365 (App. Div. 1998), certif. denied, 158 N.J. 74 (1999); Stump v. Whibco, 314 N.J. Super. 560, 564-565 (App. Div. 1998); Scalza v. Shop Rite Supermarkets, 304 N.J. Super. 636, 638 (App. Div. 1997).

We are well aware that R. 4:42-2 authorizes the trial court to certify an interlocutory order as final and that the trial court did so here on defendant's motion and over plaintiff's objection. But that authorization is expressly limited by the rule to an order that "would be subject to process to enforce a judgment pursuant to R. 4:59 if it were final and if the trial court certifies that there is no just reason for the delay of such enforcement...." Obviously, this interlocutory order is not subject to enforcement by way of execution and was, therefore, not eligible for certification. We have repeatedly held that piecemeal appeals are ordinarily contrary to the fair and expeditious conclusion of litigation; that the determination of whether the interests of the litigants and the judicial process otherwise requires can only be made by this court on a motion for leave to appeal properly brought pursuant to R. 2:5-6; and that the calendar of this court is not subject to the control of the trial court by way of an improvident finality certification. See, e.g., Golden Estates v. Continental Cas., 317 N.J. Super. 82, 87-88 (App. Div. 1998); DeFelice v. Beall, 274 N.J. Super. 592, 595, n.1 (App. Div.), certif. denied, 138 N.J. 268 (1994); Delbridge v. Jann Holding Company, 164 N.J. Super. 506, 509-510 (App. Div. 1978). While we have the option, therefore, of simply dismissing this appeal as having been taken from an improvidently certified order, see, e.g., Hallowell v. American Honda Motor Co., Inc., 297 N.J. Super. 314, 318 (App. Div. 1997), we have nevertheless elected to grant leave to appeal nunc pro tunc in the interest of substantial justice, particularly because of the inevitable effect of the order appealed from on the remaining claims.

We also point out, by way of preliminary observation, that we were advised shortly before oral argument that the federal action had been terminated by amicable agreement. Although plaintiff declined to inform either defendant or this court of the terms of the settlement, its attorney did advise us at oral argument that under the terms of the settlement, it was not obliged to make any monetary payment to the federal plaintiffs. Accordingly, it is clear, and plaintiff did not suggest to the contrary, that this is no longer a claim for defense or indemnity, but rather a claim for reimbursement of defense costs alone.

We begin by noting that while advertising injury coverage has apparently been considered in this state in only one reported case, FileNet Corp. v. Chubb, 324 N.J. Super. 476 (Law Div. 1997), aff'd o.b., 324 N.J. Super. 419 (App. Div. 1999), that coverage, employing substantially similar language from policy to policy, has received extensive consideration by the federal courts and some of our sister states, and that body of jurisprudence informs our determination of the issues that are novel in this jurisdiction.

It is, of course, well settled that the determination of whether a liability policy entitles the insured to a defense of an action brought against it requires first that the allegations of the complaint be compared with the policy language. "When the two correspond, the duty to defend arises, irrespective of the claim's actual merit." Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 173 (1992). And if there is an ambiguity in the policy language, principles of insurance contract construction require the ambiguity to be resolved in the insured's favor. Id. at 175.

We consider first the policy language. The advertising injury coverage is contained in Section 11 of Part IIB of the policy, entitled "Supplemental Coverages." To the extent applicable here, the supplemental coverage applies only to:

Advertising injury arising out of an offense committed in the course of advertising goods, products, or services of your business-operations ...

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