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Gelchion v. Central Parking System of New Jersey

June 4, 2008

KATHLEEN GELCHION AND MICHAEL GELCHION, HER HUSBAND, PLAINTIFFS,
v.
CENTRAL PARKING SYSTEM OF NEW JERSEY, INC.,*FN1 HOUSING AND URBAN DEVELOPMENT OF NEW BRUNSWICK, DEFENDANTS, AND ROBERT WOOD JOHNSON UNIVERSITY HOSPITAL, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT,
v.
LUMBERMENS MUTUAL CASUALTY COMPANY, THIRD-PARTY DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-6456-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 14, 2008

Before Judges S. L. Reisner, Gilroy and Baxter.

Third-party defendant Lumbermens Mutual Casualty Company appeals from the September 9, 2005 order of the Law Division, which granted summary judgment to defendant/third-party plaintiff Robert Wood Johnson University Hospital (the Hospital), directing that Lumbermens: 1) defend and indemnify the Hospital against the personal injury and per quod claims asserted by plaintiffs, Kathleen Gelchion and Michael Gelchion, respectively; and 2) reimburse the Hospital for counsel fees and costs incurred in defense of the action from May 27, 2004, to the conclusion of the matter. Lumbermens also appeals from the order of November 4, 2005, which denied its motion for reconsideration of the September 9, 2005 order, and for summary judgment on the Hospital's third-party complaint for insurance coverage. We affirm.

On December 26, 2002, plaintiff Kathleen Gelchion slipped and fell on a patch of ice on the fourth floor of a parking garage owned by the Hospital and maintained and operated by defendant Central Parking System of New Jersey, Inc. (CPS), pursuant to a management agreement (Agreement) that had previously been entered into between the Hospital and Kinney System Hospital Management, Inc., CPS's predecessor. Paragraph 10 of the Agreement provided that CPS would maintain the general cleanliness of the parking garage, but that the Hospital "shall remove ice and snow" therefrom. Paragraph 12 of the Agreement required CPS to obtain a comprehensive general liability insurance policy, naming the Hospital as an additional insured, and to provide a certificate of insurance to the Hospital on execution of the Agreement and on each anniversary date thereafter.

Paragraph 12E provided that the Hospital would look to the insurance proceeds under CPS's policy: recognizing that both [the Hospital] and [CPS] are insured under the same policies for the payment of claims, liabilities, damages and costs to defend, and [the Hospital] agrees, as a result of the foregoing, that [CPS] shall have no responsibility whatsoever for any claims, damages, judgment, etc., related to the Premises or the Business not covered by the insurance required by this Agreement . . . .

Paragraph 21 of the Agreement provided for mutual indemnification against each other's acts of negligence not covered by insurance.

Pursuant to the Agreement, CPS provided a certificate of insurance through its insurance broker, referencing a policy of comprehensive general liability insurance issued by Lumbermens. The certificate of insurance provided in relevant part: "[t]his certificate is issued as a matter of information only and confers no rights upon the certificate holder." In addition, the certificate provided that coverage was limited to the Hospital "as an Additional Insured . . . only to the extent of the negligent performance of activities for Additional Insured by Named Insured." Further, the certificate provided that "[c]overage is limited by the terms and conditions of any written agreement between Named Insured and Additional Insured, and "in no event shall Named Insured or its insurer be liable for the act(s) or omission(s), negligent or otherwise, of Additional Insured, its agents, servants or employees."

On September 3, 2003, plaintiffs filed a personal injury negligence complaint against CPS. On October 17, 2003, CPS filed its answer and a third-party complaint against the Hospital for contribution and/or indemnification. On April 20, 2004, the Hospital filed its answer to the third-party complaint and asserted a counterclaim for contribution and/or indemnification.

On May 27, 2004, the Hospital sent Lumbermens a letter, demanding that Lumbermens defend and indemnify it pursuant to the terms of the Agreement and the certificate of insurance. On November 5, 2004, after Lumbermens refused to undertake its defense, the Hospital filed a third-party complaint against Lumbermens to compel the insurer to defend and indemnify the Hospital against all damages, and for counsel fees and costs. On February 28, 2005, plaintiffs filed an amended complaint naming the Hospital, CPS, and Housing and Urban Development of New Brunswick*fn2 as defendants.

In June 2005, the Hospital filed a motion for summary judgment against Lumbermens. In support of its motion, the Hospital presented the following evidence: (1) the Agreement's requirement that CPS maintain a policy of comprehensive general liability insurance naming the Hospital as an additional insured; (2) the certificate of insurance; and (3) a copy of the Hospital's own commercial general liability insurance policy issued by Pennsylvania Manufacturers' Association Insurance Company.

Lumbermens was granted three continuances to oppose the motion. However, Lumbermens neither filed opposition to the motion, nor appeared for argument on the motion's return date. On September 9, 2005, the court granted the motion on the papers and ordered Lumbermens to defend and indemnify the Hospital. On September 28, 2005, Lumbermens filed a motion for reconsideration of the order of September 9, 2005, and for summary judgment on the third-party complaint, contending that the Hospital's motion for summary judgment "was inadvertently unopposed" and that the Hospital was the party responsible for the removal of ice and snow from the parking garage. Lumbermens neither raised any insurance coverage issues in support of its motion, nor submitted a copy of its insurance policy to the court. Rather, Lumbermens presented arguments that addressed the Hospital's common law and contractual duty to exercise due care to maintain the parking garage free from ice and snow, and the Hospital's agreement to indemnify CPS for claims caused by the Hospital's own acts of negligence.

Lumbermens's motion was listed for oral argument by the court for November 4, 2005; however, Lumbermens again failed to appear. The trial court denied the motion, explaining that Lumbermens had failed to present any "new evidence" or "new law" that was not before the court on the original motion, and that the court had "put this off three times to allow [Lumbermens] to oppose it. [Lumbermens] never did." A confirming order was entered the same day.

Thereafter plaintiffs settled their claims against the Hospital and CPS for $850,000. Lumbermens paid $680,000 of that settlement on behalf of the Hospital and $170,000 on behalf of CPS. On November 3, 2006, the court entered an order confirming the settlement. On December 13, 2006, Lumbermens filed its notice of appeal of the court's orders granting the ...


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