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Transcontinental Contracting, Inc. v. Burlington Insurance Co.

August 23, 2010

TRANSCONTINENTAL CONTRACTING, INC., D/B/A TRANSCONTINENTAL STEEL, PLAINTIFF-RESPONDENT,
v.
THE BURLINGTON INSURANCE COMPANY, DEFENDANT-APPELLANT, AND SCOTTSDALE INSURANCE, DALE GROUP AND CRC INSURANCE SERVICES, INC., DEFENDANTS-RESPONDENTS, AND SKANSKA USA BUILDING, INC., PLAINTIFF/INTERVENOR-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-265-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 4, 2010

Before Judges Wefing, Messano and LeWinn.

Plaintiff, Transcontinental Contracting, Inc. (Transcontinental), is engaged in private and public construction projects in New York and New Jersey. In September 2003, Transcontinental was awarded a construction contract with the New York City Economic Development Corporation (EDC) to perform work on a project at the St. George Ferry Terminal on Staten Island. Skanska USA Building, Inc. (Skanska) was the construction manager of the project. The construction contract contained the following indemnification provision, which is pertinent to our decision:

The Contractor shall defend, indemnify and hold harmless EDC and the City, the Construction Manager, the Architect/Engineer, and their respective parent companies . . . from any and all claims, damages, judgments, liabilities and causes of action whatsoever . . . to which they may be subject arising out of (i) the act or omissions of the Contractor, its Subcontractors, agents, employees or material suppliers, and any and all persons on the Work Site or in connection with the Contract Work or (ii) any negligence, fault or default of the Contractor, its Subcontractors, agents, employees or material suppliers.

The obligation of the Contractor to indemnify, defend and hold harmless the Indemnified Parties shall include but not be limited to the payment of any and all actual costs and actual legal fees as may be incurred by the Indemnified Parties.

Through the Dale Group, a retail insurance broker, and CRC Insurance Services, Inc., a wholesale broker, Transcontinental obtained three successive one-year surplus lines policies from defendant, Burlington Insurance Company (Burlington). Each policy contained the identical Cross-Liability Exclusion, which provided:

This Insurance does not apply to any actual or alleged "bodily injury", "property damage", "personal injury", or "advertising injury" to:

1. Any business enterprise in which any insured owns an interest, is a partner, or which is a parent, affiliate, subsidiary or sister company of any insured;

2. Any business enterprise directly or indirectly controlled operated or managed by a business enterprise described in 1 above;

3. A present, former, future or prospective partner, officer, director, stockholder or employee of any insured;

4. Any insured; or

5. The spouse, child, parent or sibling of any of the above as a consequence ...


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