On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-4929-93.
Before Judges Skillman, Coburn and Wells.
The opinion of the court was delivered by: Wells, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 23, 2003
Plaintiff, Cycle Chem, Inc., (Cycle Chem), appeals from the entry of a final judgment that dismissed its declaratory judgment action seeking coverage under two policies of insurance issued by the defendant, Lumbermens Mutual Casualty Company (LMC). The judgment under appeal came upon LMC's motion for summary judgment which the judge granted.
From the late 1960's to the mid-1980's, Cycle Chem*fn1 distilled, sold, and distributed chemical solvents for use in dry cleaners and various types of manufacturing operations. During that time, Cycle Chem owned, operated, and insured only one premises, located at 217 South First Street, Elizabeth, New Jersey. It purchased from LMC two special multi-peril (SMP) insurance policies -- 7HT 096 835, effective May 1, 1977 to May 1, 1980, and 0HT 096 835, effective May 1, 1980 to May 1, 1982. Each of the policies contained the following insuring clause:
The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental to the business of the named insured conducted at or from the insured premises, and the Company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage....
The policies provided limits of $500,000 each occurrence for property damage and $1 million each occurrence for bodily injury. Cycle Chem also purchased policies from other insurance carriers.
Several property owners and municipalities brought actions against Cycle Chem, alleging that chemical solvents distributed by Cycle Chem caused water and soil contamination. In addition, Cycle Chem was identified as a potentially liable party in administrative actions to compel the remediation of Superfund sites located in Carlstadt and Edison, New Jersey and Elkton, Maryland. The foregoing claims precipitated Cycle Chem's declaratory judgment action.
Neither Cycle Chem nor LMC have been able to locate or produce the policies at issue. Following a hearing on the issue, the parties were, nonetheless, able to arrive at stipulations to much of the contents thereof. In addition to the insuring clause quoted above, the parties agreed that both policies contained a special multi-peril (SMP) jacket cover, and that policy number 7HT 096 835 contained SMP liability insurance coverage form MLB-200, now MP-200. A 1977 circular issued by Insurance Services Office, Inc. (ISO)*fn2 describes MP-200 as a premises-operations form that"provides a combined single limit for bodily injury, property damage and optional coverage for medical payments at a declared premises." Policy number 0HT 096 835 contained a similar premises-operations form.
In addition, the parties stipulated that classification code 65121 was listed on both policies. Code 65121 is an ISO general liability classification code for"Buildings or Premises -- office." According to Cycle Chem's expert, Richard Biondi, an ISO classification code provides a premium rate, which when multiplied by the square footage of the premises being insured, yields the premium for basic limits coverage.
LMC charged a premium of $154 for policy number 7HT 096 835 and $208 for policy number 0HT 096 835. It is not clear whether the above premiums were charged on an annual basis or whether they covered the entire policy period.
On August 5, 1980, Cycle Chem submitted a certificate of insurance to the New Jersey Department of Environmental Protection (DEP) in response to a request for"evidence of the establishment of financial responsibilities arising out of injury to persons or property."*fn3 The certificate was prepared by its agent, Americas Insurance Center (AIC), and listed LMC as a company affording comprehensive general liability coverage. The president of AIC later testified that, in the normal course of business, AIC sends a copy of the certificate of insurance to the insurer for purposes of inspection and verification.
On June 6, 1993, plaintiff Cycle Chem, Inc. filed a complaint in the Superior Court, Union County, against five liability insurance providers. The complaint sought a declaration that the insurers had a duty to defend and indemnify Cycle Chem for the ...