On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-6674-03.
The opinion of the court was delivered by: Payne, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Axelrad and Payne.
In this homeowner's insurance coverage action, we must determine whether the policy's business pursuits exclusion applies to the resident son of the named insureds, thereby barring any obligation by the insurer to defend or indemnify him from alleged liability for injuries sustained by an infant when bitten by the son's dog while the infant was receiving day care provided by the son's mother, a named insured.
When on premises owned by Linda and Joseph Brady and under the care of Linda Brady, Vincent Argent, a minor, was bitten in the face by a dog. Suit was filed by Linda Argent on behalf of herself and her son against the Bradys. The Bradys sought a defense and indemnification from their homeowner's carrier, New Jersey Manufacturers Insurance Company (NJM). When NJM denied coverage on the basis of the policy's business pursuits exclusion, the Bradys instituted a third-party declaratory judgment action against their carrier. On motion for summary judgment, the motion judge found an issue of fact to exist as to whether Linda Brady was engaged in the business of providing day care services, since there was a dispute as to whether she was being paid for such services or just reimbursed for her expenses when she accepted Argent's weekly payment on behalf of Vincent.*fn3
Because discovery disclosed that the dog may have been owned by the Bradys' son Michael, who lived with them, an amended complaint was filed by Argent in her dog bite case naming him as a defendant. When Michael proffered his defense to NJM, it denied coverage to him, as well, as the result of the business pursuits exclusion, despite the fact that Michael was not personally engaged in any business allegedly conducted by his mother. Michael has also filed a claim against NJM in this litigation.
In answers to the amended complaint, both the parents and Michael denied ownership of the dog. Thereafter, a summary judgment motion was filed by Michael's parents seeking dismissal of the claims against them on the basis of their lack of ownership of the dog that had injured Vincent. Summary judgment was denied "for reasons set forth on the record" by order dated April 4, 2005. A transcript of those reasons has not been provided.*fn4
Following consideration of a motion by Michael seeking a judgment against NJM for defense and indemnification pursuant to the terms of NJM's coverage, the court entered an order in Michael's favor, finding in a written opinion that Michael was an insured, and that the severability clause of NJM's policy operated to remove him from the purview of the business pursuits exclusion by creating an ambiguity as to the applicability of the exclusion. NJM moved for leave to file an interlocutory appeal, claiming that a final resolution of the coverage issue operated as an impediment to settlement of the action. We granted its motion. We now reverse.
The contested exclusion from liability coverage provided:
1. Coverage E - Personal Liability and Coverage F - Medical Payments to Others do not apply to bodily ...