On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-3378-08.
The opinion of the court was delivered by: Lisa, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lisa, Baxter and Alvarez.
The issue in this case is whether either the business or rental exclusions in a homeowner's policy issued by appellant Homesite Insurance Company (Homesite) defeat coverage for the insured homeowner, defendant Susan Hindman. On cross-motions for summary judgment in Homesite's declaratory judgment action, the trial court found that neither exclusion applied and accordingly granted Hindman's motion and denied Homesite's. We agree with the trial court and affirm.
In 1994, Hindman inherited from her mother a single family home in Sea Girt. Hindman took occupancy of the home in 1998. At all relevant times, Hindman was employed as a teacher's aide in a school. In 1998, she took in as boarders a longtime friend and work colleague, Mary Romano, and her newborn son, John Romano. Mary Romano and John Romano remained in the home continuously as boarders until March 6, 2006, when Hindman's dog bit John Romano and injured him. This is the incident for which Hindman sought coverage from Homesite. At the time of the accident, Mary Romano was paying Hindman $300 per month in rent, plus one-half of the utilities. After the accident, Mary Romano and John Romano continued to live with Hindman as boarders.
We provide additional facts regarding other boarders in Hindman's home because they are relevant to the arguments of the parties and the interpretation of the exclusions upon which Homesite relies. In addition to Mary Romano and John Romano, Charissa Cautero was a boarder from 1998 until approximately 2002. Between 2003 and 2004, Ron Kwon was a boarder. Shortly after Kwon moved out in 2004, Marian Henderson moved in; she remained for five months and then moved out before the end of 2004 at Hindman's request for nonpayment of rent. While Henderson was living in Hindman's house, a man named Antonio also lived there for two months; Hindman apparently took him in because he was destitute, and she did not request rent from him, although he insisted on paying her $200 per month. Like Henderson, Antonio also moved out before the end of 2004.
Hindman purchased the Homesite policy that is the subject of this appeal on August 25, 2005. It was a one year policy. Accordingly, throughout the entire time the policy was in effect, Hindman had only two boarders, Mary Romano and John Romano.
As we previously stated, Hindman's dog bit John Romano on March 6, 2006. On March 7, 2008, Mary Romano, on behalf of her son, sued Hindman, seeking recovery for his injuries. On July 15, 2008, Homesite filed a declaratory judgment action against Hindman, seeking a declaration that there was no coverage because by renting the premises Hindman engaged in a business and was therefore barred from coverage under the business exclusion, and that she was also barred from coverage under the rental exclusion.*fn1 Both parties moved for summary judgment. The court concluded that neither the business exclusion nor the rental exclusion applied. The court therefore granted Hindman's summary judgment motion and ordered Homesite to defend Hindman in the underlying litigation. The court denied Homesite's motion. This appeal by Homesite followed.
The policy contained the following exclusions for business activities and rental:
1. Coverage E - Personal Liability... to Others do[es] not apply to "bodily injury"...
b. Arising out of or in connection with a "business" engaged in by an "insured." This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or ...