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Employers Insurance Company of Wausau v. Harleysville Insurance Company

August 26, 2008


The opinion of the court was delivered by: Hillman, District Judge


Presently before the Court are the parties' cross-motions for summary judgment in plaintiff's action for a declaration of insurance coverage and reimbursement of attorneys' fees and costs. For the reasons expressed below, plaintiff's motion will be granted and defendant's motion will be denied.


Plaintiff, Employers Insurance Company of Wausau ("Wausau"), has brought this action against Defendant, Harleysville Insurance Company of New Jersey ("Harleysville"), seeking a declaration that Harleysville has a duty to defend and indemnify Wausau's insured in an personal injury action that was brought in New Jersey state court. Wausau is also seeking reimbursement of its attorneys' fees and costs associated with defending the state court action as well as bringing this action. Harleysville is seeking a determination that it had no duty to defend or indemnify Wausau's insured.

These cross-motions are the parties' second summary judgment filings. When considering the parties' first set of cross-motions, the Court denied the motions without prejudice and stayed the case pending the outcome of the underlying state court tort action brought by a personal injury plaintiff against Wausau's and Harleysville's insureds. That course was taken because the parties' motions required the Court to rule on an unsettled area of New Jersey law that the state court in the underlying action was also required to consider. The parties were directed to notify the Court when the underlying state court action was resolved, so that this action could be re-activated and the parties' motions decided. The state court action has now concluded, and the parties' motions are ripe for decision.


The following background was included in the Court's prior opinion, and is helpful to restate here.

A. State Court Action

On January 21, 2003, Michael Johnson, an employee at Seaman's Furniture, was injured when he slipped and fell on ice and snow when he was taking out trash to the dumpster behind the store. On December 1, 2004, Johnson filed an action in the New Jersey Superior Court against Ackrik Associates ("Ackrik"), owner of the shopping center on Route 38 in Cherry Hill, New Jersey where Seamans was located, and ABC Corporations, the unknown entities responsible for the removal of snow and ice from the shopping center's parking lots, driveways and walkways. On April 27, 2005, Johnson amended his complaint to specifically assert claims against Excell Maintenance Services, Inc. ("Excell"), which was under contract with Ackrik to provide snow and ice removal services. The state court action has now settled.

B. Contract between Ackrik and Excell

In September 2002, Ackrik and Excell entered into a contract regarding snow removal services for the Route 38 Shopping Center. The contract provided that "You [Excell] will plow snow, as needed at your [Excell's] sole discretion and responsibility, in the entire parking lot, roadways, sidewalks and loading docks during any and all snow fall. . . . Salt will be spread when and where needed." (Pl.'s Ex. 2.) The contract also provided that Excell "maintain proper Workmen's Compensation Insurance as required by law," as well as "maintain General Liability Coverage of One Million ($1,000,000) Dollars and Automobile Insurance Coverage of Five Hundred Thousand ($500,000) Dollars." The contract further required that Excell provide Ackrik "with Certificates of Insurance evidencing such coverage within ten (10) days after the execution of this Contract naming Ackrik Associates on the policy as additional insured." The contract term was "November 1, 2002 through March 31, 2003."

C. Insurance Policies

1. Harleysville Policy

Excell fulfilled its duty under the contract to obtain general liability coverage and name Ackrik as an additional insured. Excell obtained insurance from Harleysville, Commercial Package Policy No. MPA-8E6323, with a policy period from May 1, 2002 to May 1, 2003. The insuring clause in the policy provides, in relevant part,

We [Harleysville] will pay those sums that the insured [Excell] becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages.

(Pl.'s Ex. 11.)

The policy also contains an additional insured endorsement, which provides,

Who Is An Insured is amended to include as an insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. Such person or organization is an additional insured only with respect to liability arising out of your ongoing operations performed for that insured. A person's or organization's status as an insured under this endorsement ends when your operations for that insured are complete.


The policy also contains an "Other Insurance" provision that provides that "[t]his insurance is primary," but it will be considered excess ...

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