On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-1288-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 6, 2009
Before Judges Wefing, Parker and LeWinn.
Plaintiffs Daniel and Jean Sherwood appeal from the November 16, 2007 order of the trial court granting summary judgment to defendant Essex Insurance Co. (Essex) dismissing their complaint with prejudice. For the reasons that follow, we affirm.
The pertinent factual background may be summarized as followed.*fn1 On August 5, 2003, Daniel Sherwood, an employee of Building Inspectors Underwriters, Inc., was performing an electrical inspection in the basement of a Dunkin' Donuts that was undergoing renovation. Defendant Kelido, Inc., the owner of the building, had contracted the renovation work to Mark Drewniak, owner of Drewniak Building & Management, L.L.C. (DBM), who served as general contractor. Drewniak in turn hired Ben Sowizral of Top of the Line Construction (TOL) as an employee of DBM to serve as foreman and subcontractor; Sowizral was uninsured at the time of hire.
As Sherwood prepared to ascend the stairs from the basement, one of the walls caved in and covered him in mud, debris and cinderblocks. As a result, plaintiff sustained numerous serious injuries to his legs and knees.
Plaintiffs initially sued Kelido, Dunkin' Donuts of Madison, New Jersey, DBM, Drewniak and others. Plaintiffs then amended their complaint to include Essex, which had issued a general liability coverage policy to DBM.
Essex's policy provided liability coverage of $2,000,000, but included a subsidence exclusion endorsement that stated:
This policy does not apply to any liability for "Bodily Injury", "Personal Injury", disease or illness, including death . . . directly or indirectly arising out of, caused by, resulting from, contributed to or aggravated by the subsidence, settling, sinking, slipping, falling away, caving in, shifting, eroding, mud flow, rising, tilting, bulging, cracking, shrinking or expansion of foundations, walls, roofs, floors, or ceilings, or any other movements of land or earth, regardless of whether the foregoing emanates from, or is attributable to, any operations performed by or on behalf of any insured. The foregoing applies regardless of whether the first manifestation of same occurs during the policy period or prior or subsequent thereto.
It is further agreed that there is no coverage nor defense under this policy for any claims, loss, costs, or expense arising from any allegations against any insured resulting from or contributing to or aggravated by subsidence as described in the first paragraph of this endorsement.
Plaintiffs participated in private binding arbitration with DBM and Sowizral. Essex did not participate but had counsel present to observe the arbitration.
The arbitrator found that the collapse of the basement wall was caused by "the negligent backfilling of excessively watered soil without compl[iance] with standards regarding composition of fill and tamping." The arbitrator further found that DBM was "directly attributable" for the collapse because it had failed "to take appropriate remedial action" despite being aware of the "dangerous condition of the foundation wall before the accident . . . ." Therefore, the arbitrator concluded that DBM had engaged in "negligent conduct."
The arbitrator also found, based upon the medical proofs, that Daniel Sherwood had suffered numerous injuries to his lumbar region, right hip and both knees and legs, which required him to undergo six separate surgeries, and caused permanent "significant pain, weakness, restriction of motion and scarring[.]" The arbitrator determined that these injuries had a "substantial" negative impact on Daniel Sherwood's "peace of mind and ability to cope with daily life," resulting in the onset of depression. The arbitrator awarded plaintiffs $3,000,000.
Plaintiffs thereafter filed a motion for summary judgment against Essex seeking to enforce the arbitration award. Drewniak and DBM assigned their rights to all "contractual and/or bad faith claims under the [p]olicy relating to the amount of the ...