On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-5777-06, L-2829-07, L-7191-07.
The opinion of the court was delivered by: Coburn, P.J. A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Coburn, Fuentes and Chambers.
Defendant Burlington Insurance Company ("Burlington"), a surplus lines insurer, issued general liability policies to American Wrecking Corp. Under those policies, "an insured" included others for whom American Wrecking was "performing operations."
These consolidated declaratory judgment actions concern claims for insurance coverage by American Wrecking and these additional insureds for whom American Wrecking was performing demolition: DSM Nutritional Products, Inc. ("DSM"), Torcon, Inc., New Jersey Economic Development Authority ("NJEDA"), and Technology Center of New Jersey ("TCNJ").
The underlying personal injury claims were filed by three workers who alleged that they were injured while employed by Island Scrap Metal ("Island") or SECO American Wrecking Corp. ("SECO"), both sister companies of American Wrecking, and both also additional insureds under the policies. Two of the workers alleged they were injured on DSM's worksite due to the negligence of DSM and American Wrecking. The other worker alleged that he was injured at the NJEDA/TCNJ worksite, where Torcon was the general contractor, as a result of the negligence of those parties and American Wrecking.
The insurance polices in force when the accidents occurred contained a "cross liability" coverage exclusion for, among other things, personal injury to an "employee of any insured." On cross-motions for summary judgment, orders were entered requiring Burlington to provide coverage despite the "cross liability" exclusion. The trial court found the exclusion unambiguous but inconsistent with the insureds' reasonable expectations and public policy. We reverse and remand for entry of summary judgment in favor of Burlington.
American Wrecking is a New Jersey corporation involved in high-risk demolition projects. Burlington is a surplus lines insurer. In 2001, Burlington issued a comprehensive general liability ("CGL") policy to American Wrecking. This insurance was obtained by American Wrecking's agent, NIA Insurance Group ("NIA"), a licensed insurance broker in New Jersey, through a surplus lines agent, Partners Specialty Group ("PSG"), that represented Burlington. Coverage under this policy, which did not include the "cross-liability" exclusion, ended on November 14, 2002.
On October 14, 2002, NIA sent an application to PSG for renewal of the CGL policy. On November 18, 2002, PSG provided NIA with a "QUOTE" for issuance of the policy which listed a number of exclusions, including an exclusion for "cross suits." Negotiations ensued during which NIA asked for a number of changes, including deletion of the "cross suits" exclusion. Although PSG agreed to a number of NIA's requested changes, ultimately reducing the premium from about $133,000 to $85,000, it refused to delete the "cross suits" exclusion. The "QUOTE" emphasized that copies of all of the insurance company's forms would be made "available upon request." Had NIA requested the "cross suits" form it would have received the form entitled "cross liability." After the policy was issued, NIA continued to negotiate for and obtain changes in the coverage provided. This policy provided coverage, with a subsequent extension, from November 24, 2002 to December 24, 2003.*fn1
The "cross liability" exclusion reads, in pertinent part, as follows:
EXCLUSION - CROSS LIABILITY
This endorsement modifies insurance provided under ...