The opinion of the court was delivered by: ANNE THOMPSON, Senior District Judge
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] MEMORANDUM & ORDER
This matter comes before the Court on Plaintiff's Motion for
Summary Judgment pursuant to Fed.R.Civ.P. 56. The Court has
decided this motion based on the submissions of the parties.
Pursuant to Fed.R.Civ.P. 78, no oral argument was heard. For
the following reasons, Plaintiff's motion is granted in part and
denied in part.
On January 16, 2003, George and Stacy DePoe instituted a
lawsuit against Veronica and Timothy Hessler, trading as Coastal
Painting and Restoration Co. (hereinafter "Coastal"), in the
Superior Court of New Jersey, Law Division, Monmouth County
(hereinafter referred to as the "underlying action"). In the
underlying action, Mr. and Mrs. DePoe seek a judgment for bodily
injury and property damage resulting from alleged exposure to
lead, toxic fumes and dust. The DePoes claim that after contracting with Coastal to paint the
exterior of their home, Coastal negligently performed the job
causing the aforementioned exposure.
As a result of the underlying action, Coastal sought a legal
defense and indemnification under their insurance policy with
Merchants Insurance Co. of New Hampshire (hereinafter
"Merchants"). Merchants agreed to provide a defense in the
underlying action, but reserved the right to seek judicial
resolution of the coverage issues in a declaratory judgment
action pursuant to the terms of a Non-Waiver agreement. On
December 11, 2003, Merchants filed this instant action against
Coastal seeking declaratory relief. Specifically, Merchants'
Complaint seeks a judgment: (1) that the insurance policy between
it and Coastal does not cover the claims alleged in the
underlying action; (2) that Merchants owes no duty to provide a
defense on behalf of Coastal in the underlying action; (3) and
that Merchants owes no duty to indemnify Coastal in the event
that an award or judgment is rendered against it in the
The insurance policy between Merchants and Coastal contains
several noteworthy exclusions precluding coverage. The first is a
total pollution exclusion endorsement, which provides as follows:
This insurance does not apply to
(1) "Bodily Injury" or "property damage" which would
not have occurred in whole or in part but for the
actual, alleged or threatened discharge, dispersal,
seepage, migration, release or escape of "pollutants"
at any time.
(2) Any loss, cost or expense arising out of any:
(a) Request, demand, order or statutory or regulatory
requirement that any Insured or others test for,
monitor, clean up, remove, contain, treat, detoxify
or neutralize, or in any way respond to, or assess
the effects of "pollutants"; or
(b) Claim or suit by or on behalf of a governmental
authority for damages because of testing for,
monitoring, cleaning up, removing, containing,
treating, detoxifying or neutralizing, or in any way
responding to, or assessing the effects of,
(Pl.'s Br. Ex. D.) The policy also contained an exclusion for
liability due to lead, which stated:
This insurance does not apply to:
"Bodily Injury" caused in whole or in part, either
directly or indirectly, by lead paint or lead
contamination, or arising out of or incidental to the
inhalation, ingestion, use, handling or contact with
lead paint or lead contamination.
Id. Third, the insurance policy excludes injuries and property
damage "expected or intended from the standpoint of the insured."
Further, the policy contains a provision excluding from coverage
"`[b]odily injury' or `property damage' for which the insured is
obligated to pay damages by reason of the assumption of liability
in a contract or agreement." Id. Lastly, the insurance policy
contains a number of business risk exclusions relating to damages
arising from Coastal's "work product."
Merchants claims that no coverage under the policy exists
because the allegations in the underlying complaint against
Coastal concern claims of lead exposure, and exposure to
hazardous substances. As such, according to Merchants, summary
judgment is appropriate.
I. Summary Judgment Standard
A party seeking summary judgment must "show that there is no
genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law." Fed.R.Civ.P. 56;
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Orson,
Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366 (3d Cir. 1996). An issue involving a material fact is
genuine "if the evidence is such that a reasonable jury could
return a verdict for the non-moving party." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). In reviewing motions for
summary judgment, the evidence is viewed in the light most
favorable to the non-moving party. InterVest, Inc. v. Bloomberg,
L.P., 340 F.3d 144, 159-60 (3d Cir. 2003).
A motion for summary judgment is designed to go beyond the
pleadings. Celotex, 477 U.S. at 322. Consequently, to defeat a
motion for summary judgment, a party must do more than restate
the initial allegations of the complaint, or provide unsupported
conclusions of fact. Id. A non-moving party must point to
concrete evidence in the record which supports each element of
the claim. Id. Failure of the non-moving party to provide such
evidence entitles the moving party to judgment as a matter of
law. Fed.R.Civ.P. 56.
II. Interpretation of Insurance Policies
New Jersey Courts recognize that insurance policies are
adhesion contracts. See e.g., Voorhees v. Preferred Mutual
Ins. Co., 128 N.J. 165, 175 (1992). Therefore, "courts must
assume a particularly vigilant role in ensuring [that insurance
policies conform] to public policy and principles of fairness."
Id. To that end, while courts will give an insurance policy's
words their plain, ordinary meaning, "[i]f the policy is
ambiguous, the policy will be construed in favor of the insured."
Nav-Its, Inc., v. Selective Ins. Co. of Am., 183 N.J. 110, 118
(2005). Additionally, exclusions within an insurance policy are
narrowly interpreted, and construed in "accord with the
objectively reasonable expectations of the insured." Id. at
118; see also Princeton Ins. Co. v. Chunmuang, 151 N.J. 80,
In the present matter, the issue is whether the complaint in
the underlying action alleges claims that are covered under Coastal's insurance policy with
Merchants. "Whether an insurer has a duty to defend is determined
by comparing the allegations in the complaint with the language
of the policy. When the two correspond, the duty ...