On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, C-406-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges R. B. Coleman and Sapp-Peterson.
This is an appeal and cross-appeal of the December 30, 2005 order entered by the Chancery judge ordering third-party defendant Sirius American Insurance Company (Sirius) to defend and indemnify its insured, defendant/third-party plaintiff Ramapo Ridge Condominium Association Phase II, Inc. (Ramapo), and denying Ramapo's motion for leave to amend its third-party complaint to assert a claim of negligent administration of its claim against Sirius. We affirm.
The salient facts are not disputed. Ramapo is a nonprofit corporation that manages a condominium community in Mahwah, New Jersey. On March 17, 2003, a water pipe burst in one of the condominium units whose owner had abandoned the unit prior to the incident. An adjacent unit owner notified Ramapo and township officials of the incident. The township declared the unit unsafe.
At the time of the incident, Ramapo was insured under a property damage and general liability policy by Sirius, effective July 26, 2002, through July 26, 2003. Sirius agreed to undertake repairs and remediation of the damaged property and retained contractors to analyze the nature and scope of the work to be performed. Sirius ultimately settled Ramapo's claim for $16,537. The unit was subsequently sold in a foreclosure sale to East Coast Acquisitions (East Coast), which made additional repairs and upgrades to the unit.
On May 20, 2004, plaintiff signed a contract to purchase the unit. Prior to closing, plaintiff learned that the unit had sustained prior water damage and mold. Plaintiff discussed the prior damage with East Coast, who retained a mold testing company to inspect the unit for mold and, in the event mold was detected, agreed, at its own expense, to remediate.
Plaintiff closed on the property on July 16, 2004. She subsequently retained a plumber to install a flexible vent line for her clothes dryer. To vent the dryer, the plumber opened a hole in the wall next to the dryer and discovered a crawl space that allegedly contained mold. It is undisputed that the crawl space is part of the common areas of the building.
On November 16, 2004, plaintiff filed a complaint against East Coast, as the unit's seller, various contractors, and Ramapo. Plaintiff alleged that Ramapo breached a duty of care it owed to plaintiff by "failing to ensure that the repairs [it] undertook to have made to the townhouse were made properly and completely."
Ramapo tendered the policy to Sirius, demanding defense and indemnification. Because plaintiff did not own the property during the policy period, Sirius denied coverage, citing to the policy language in Coverage E, "Liability to Others[,]" paragraph A, the language found under "Occurrence[,]" and the language found under "Property Damage" respectively.
COVERAGE E [-] LIABILITY TO OTHERS
A. We pay for the benefit of insureds, up to the applicable limit(s) of liability (See Part II D) shown in the Declarations, those sums that insureds become legally liable to pay as damages ...