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Jennifer Torres, Individually and As General v. Tamburri Associates

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 3, 2010

JENNIFER TORRES, INDIVIDUALLY AND AS GENERAL ADMINISTRATRIX AND ADMINISTRATRIX AD PROSEQUENDUM OF THE ESTATE OF JUAN CARLOS TORRES, DECEASED, PLAINTIFF,
v.
TAMBURRI ASSOCIATES, INC., DEFENDANT-RESPONDENT, AND PENNTEX CONSTRUCTION CO., INC., DEFENDANT-APPELLANT, AND
TAMBURRI ASSOCIATES, INC., DEFENDANT/THIRD-PARTY PLAINTIFF,
v.
LAMERAIN STEEL, HOLLY CONSTRUCTION, TEVEBAUGH ASSOCIATES, BRANDYWINE REALTY TRUST, VUL-CRAFT AND TAYLOR WEISMAN & TAYLOR, ENGINEERS, THIRD-PARTY DEFENDANTS, AND
PENNTEX CONSTRUCTION CO., INC., DEFENDANT/THIRD-PARTY PLAINTIFF-APPELLANT,
v.
HOLLY STEEL ERECTORS, INC., TUDOR INSURANCE COMPANY, AND NAUTILUS INSURANCE COMPANY, THIRD-PARTY DEFENDANTS- RESPONDENTS, AND NORTH RIVER INSURANCE CO., THIRD-PARTY DEFENDANT.

On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1989-04. Jerald J. Howarth argued the cause for appellant (Howarth & Associates, LLC, attorneys; Mr. Howarth and Purnima D. Ramlakhan, on the brief). John Burke argued the cause for respondent Tamburri Associates, Inc. (Burke & Potenza, attorneys; Mr. Burke, on the brief). Thomas L. Grimm argued the cause for respondents Holly Steel Erectors, Inc. and Tudor Insurance Company (Margolis Edelstein, attorneys; Mr. Grimm, on the brief). Robert F. Ball argued the cause for respondent Nautilus Insurance Company (Wade Clark Mulcahy, attorneys; Mr. Ball, on the brief).

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: April 14, 2010 -- Submitted

Before Judges Cuff, C.L. Miniman and Waugh.

The opinion of the court was delivered by MINIMAN, J.A.D.

Defendant Penntex Construction Co., Inc. (Penntex), appeals from several orders for summary judgment dismissing its claims against defendant Tamburri Associates, Inc. (Tamburri), and third-party defendants Holly Steel Erectors, Inc. (Holly), Tudor Insurance Company (Tudor), and Nautilus Insurance Company (Nautilus). Penntex was the general contractor on a construction site where Juan Carlos Torres was erecting structural steel when he fell to his death. Tamburri was the structural steel supplier for the project; Nautilus was Tamburri's primary general liability carrier; Holly was the steel erector subcontractor; and Tudor was Holly's general liability carrier.*fn1

Penntex claims that its contract with Tamburri contains a contractual indemnification clause and that the duty to indemnify was triggered by Torres's accident because it arose out of and resulted from Tamburri's performance under its subcontract with Penntex. Penntex also claims that Tamburri breached their agreement by failing to add Penntex as an additional insured on the Nautilus policy as required by their agreement. Penntex further claims that the accident arose out of Tamburri's work and Tamburri's operations were ongoing within the meaning of the Nautilus policy; Penntex thus continued to be an additional insured under the Nautilus policy, making summary judgment in favor of Nautilus erroneous. Finally, Penntex claims that it is entitled to implied and contractual indemnification from Holly and that summary judgment dismissing its claims against Tudor was premature because discovery was not complete. We now affirm the summary judgment orders dismissing the claims of Penntex against Holly and Tudor but reverse those dismissing Penntex's claims against Tamburri and Nautilus and remand for further proceedings.

I.

Juan Carlos Torres was employed as an ironworker by Holly at a construction site known as Bishop's Gate in Mount Laurel. On February 16, 2004, Torres fell from the second story of the building, where he was installing the decking for the second floor, and died from a head injury. Brandywine Realty Trust (Brandywine) was the owner of the project.

In the summer of 2003, Penntex and Tamburri had negotiated the terms under which Tamburri would supply steel. On August 20, 2003, Tamburri sent a proposal to Brandywine in which it proposed to furnish and deliver anchor bolts, leveling plates, and elevator sill angles to the construction site, for installation by others. Tamburri also proposed to "fabricate, deliver to job site, unload, and erect" various materials, including 233 tons of structural steel. The proposed contract price was $553,000. On October 10, 2003, Tamburri faxed a new proposal to Brandywine, although the contract was ultimately awarded by Penntex, the general contractor. This proposal limited the labor to be supplied by Tamburri to erection of standard steel pan stairs, one elevator pit ladder, one ship's ladder, and one glass rail. Tamburri proposed that it would furnish and deliver all other materials, including the 233 tons of structural steel, to be installed by others. The new proposed price was $393,000.

On December 4, 2003, Penntex and Tamburri entered into an AIA Standard Form of Agreement between contractor and subcon-tractor pursuant to which Tamburri would supply steel to Penntex at the construction site. Article 8.1 of the contract specified that the work performed pursuant to the contract would be "[i]n accordance with contract drawings and specs dated 7/2/03 and [Tamburri's] attached proposal dated 10/10/03." The contract also included an indemnification provision in Article 4.6.1, which read in pertinent part:

To the fullest extent permitted by law, the Subcontractor shall indemnify and hold harmless the . . . Contractor . . . from and against claims, damages, losses and expenses, including but not limited to attorney's fees, arising out of or resulting from performance of the Subcontractor's Work under this Subcontract, provided that any such claim, damage, loss or expense is attributable to bodily injury . . . , but only to the extent caused by the negligent acts or omissions of the Subcontractor, the Subcontractor's Sub-subcontractors, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder.

Article 13.1 of the contract required Tamburri to purchase and maintain several types of insurance and specified that "Penntex Construction should be listed as additional insured." Article 13.2 stated, "Coverages . . . shall be maintained without interruption from date of commencement of the Subcontractor's Work until date of final payment . . . ."

Tamburri thereafter secured insurance coverage in which Nautilus was the primary insurer and North River was the excess insurer. The Nautilus policy was effective on November 9, 2003, and expired on November 9, 2004. Penntex was named an additional insured on the Nautilus policy pursuant to an additional-insured endorsement. That endorsement amended the terms of the original policy 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 completed.

The endorsement further specified certain exclusions of coverage with respect to the insurance afforded an additional insured, stating that the insurance did not apply to:

b. "Bodily injury" or "property damage" occurring after:

(1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the site of the covered operations has been completed[.]

Similar to Tamburri, Holly secured an insurance policy from Tudor for work it agreed to perform at Bishop's Gate effective between April 1, 2003, and April 1, 2004. The additional-insured endorsement amended Section II, "WHO IS AN INSURED," effective April 1, 2003, "but only with respect to liability arising out of [Holly's] ongoing operations performed for that insured." As such, an insured included:

Any Person or organization that is an owner of Real Property or Personal Property on which you are performing operations, or a contractor on whose behalf you are performing operations, and only at the specific written request of such person or organization to you, wherein such request is made prior to commencement of operations, and for which a certificate of insurance naming such person or organization as additional insured is on file with Tudor Insurance Company.

A Certificate of Liability Insurance was issued to Penntex on March 5, 2004, confirming the coverage secured by Holly.

Holly's involvement in the project began in earnest after Tamburri advised Penntex on December 29, 2003, that it needed to issue purchase orders to Holly, and Penntex then submitted a purchase order directly to Holly on January 7, 2004, for the erection of the structural steel. In doing so, Penntex made Holly its subcontractor without requiring it to execute a standard form AIA subcontractor agreement as it did with Tamburri.

Penntex and Tamburri were in frequent contact after execution of their agreement. On December 18, 2003, Tamburri requested Change Order No. 1 for labor and material to add eighty-three "moment connections at roof and adding pre-cast connections to steel" for $14,600.00. On December 30, 2003, Tamburri sent a fax transmittal to Penntex confirming that it sent Penntex the erection plans. On January 9, 2004, Tamburri sent Penntex a letter in which it discussed certain manufacturing issues and corrections to the steel to be made in the field by Holly. On January 28, 2004, Tamburri requested dimensions on the building so that it could "install the steel at the correct dimensions."*fn2 In a February 4, 2004, letter, Tamburri advised Penntex that "the stairwell and elevator shaft present a safety hazard for personnel working on the second and third floors." Holly wanted the openings covered with plywood even though it was installing cables around the openings.

Immediately after the February 16, 2004, accident, Tamburri sent its insurance company a letter stating that Holly worked directly for Penntex and that Tamburri was only a material supplier but did supply the deck for the project. Tamburri enclosed an accident report indicating that Torres fell while he was spreading deck material.

On April 15, 2004, Tamburri requested an executed change order from Penntex regarding the addition of eighty-three "moment connections" for the building's roof. In the letter, Tamburri stated, "We added this material to our scope of work in good faith and erected the building without incident."

On April 6, 2004, Jennifer Torres, individually and as the administratrix of the estate of Juan Carlos Torres, filed suit against Tamburri and Penntex seeking compensatory and punitive damages in connection with her husband's death. In its answer filed July 19, 2004, Penntex denied liability and asserted cross-claims against Tamburri for contribution and indemnification. Penntex later filed a third-party complaint against Holly, Tudor, Nautilus, and North River on November 14, 2005, in which it sought indemnification and coverage as an additional insured. Tamburri later filed a third-party action against Lamerain Steel (the steel supplier), Holly, Tevebaugh Associates (the architect), Brandywine, Vulcraft, and Taylor, Weisman & Taylor after Penntex filed its answer.*fn3

Several depositions were taken during discovery, including those of Dominic Tamburri; James Martin, a Penntex representative; and Harry Kitchin, a representative of Holly. The deposition testimony differs regarding the extent of Tamburri's involvement at the construction site. According to Martin, Tamburri was the steel provider and erector and was involved with anything done on the site relating to steel such that Tamburri was managing Holly. Martin also testified that Tamburri contracted to erect certain miscellaneous steel only, and Holly contracted with Penntex to erect the rest of the steel.

Kitchin testified that Holly billed Penntex directly and that Penntex paid Holly directly. Kitchin also stated that Holly decided how to put on the deck from which Torres fell. Dominic Tamburri testified that Tamburri "solely supplied steel"; steel erection was not something arising out of its work; and Tamburri did not get involved with installation of the work. He further asserted that Tamburri's first bid included erection of the building, but Brandywine rejected the bid and Tamburri subsequently re-bid without steel erection as part of the bid, except for the miscellaneous steel.

Two expert reports were generated during the discovery phase. Vincent A. Gallagher, Safety Research, Inc., delivered the first report on July 16, 2007, on behalf of plaintiff. Gallagher opined that Penntex acted unreasonably by failing to implement accident-prevention measures. He pointed out that the Brandywine-Penntex contract required Penntex to "be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the performance of the contract." It further provided that "[t]he contractor shall take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss" to employees on the worksite. He noted there was no fall protection in place, such as a fall arrest system, and Penntex's failure to have such protection was the cause of Torres's death. Gallagher did not address the responsibility or culpability of Tamburri, Holly, or any party other than Penntex in Torres's death.

Henry R. Naughton, Affiliated Engineering Laboratories, Inc., issued an expert report on May 1, 2008, for Penntex. Naughton opined that Torres's death was not caused by a lack of reasonable care by Penntex because it abided by applicable OSHA*fn4 construction safety standards and project erection drawings. He acknowledged that OSHA investigators had concluded that Tamburri did not violate any OSHA regulations; however, he noted that Tamburri had involved itself in the safety aspects of the structural-steel erection when it requested in a letter dated February 4, 2004, that Penntex cover certain floor openings in the building with plywood. Tamburri stated in that letter to Penn-tex that "[t]he erector, [Holly,] is requesting that the openings [for the stairwell and elevator shaft] be covered with plywood as a safeguard to prevent his employees from falling through these openings." Furthermore, Naughton said that Tamburri's work "was ongoing at the time of the accident." He asserted that Holly, as Torres's employer, had sole responsibility for workplace safety. Naughton ultimately concluded that Torres's death was a result of his failure to exercise reasonable care when installing the decking.

II.

Before discovery expired, Holly and Tudor filed a motion for summary judgment returnable on May 11, 2007. Penntex argued that the purchase order issued to Holly was subject to the agreements between Brandywine and Penntex, requiring contractual indemnification. It also argued that discovery was not complete as to Tudor because the Certificate of Liability Insurance had been issued after the accident, and it was not clear whether the amendment to the definition of named insured was the one in effect on the date of the accident.

Holly responded that it was not a party to the Brandywine-Penntex contract and was not bound by any of its terms, working only under a purchase order that did not mention indemnification. As to Tudor, it was only obligated to provide insurance coverage where Holly was obligated by contract to provide such insurance to the other party, and here, there was no such contractual requirement. Further, the issue of a missing endorsement was irrelevant because there was no contract requiring Holly to provide insurance coverage to Penntex.

The motion judge granted this motion on the return date, dismissing the claims of Penntex and Tamburri against Holly and Tudor. He found nothing that would obligate the moving parties to provide insurance coverage. The certificate of insurance, the only certificate of insurance[,] was issued after the date of accident. The only contract, being the purchase order, is void of any language that in any way could be construed or argued gives rise to insurance coverage. And the Worker[s'] Compensation Act bars any direct or indirect claim, except for contractual indemnity, and there is no contractual indemnity.

On October 29, 2007, the motion judge addressed a number of pending motions. The ones at issue here are: (1) Tamburri's motion for summary judgment dismissing Penntex's cross-claims against it; (2) Penntex's cross-motion for indemnification from Tamburri and for breach of contract based on Tamburri's failure to procure insurance covering Penntex; and (3) Nautilus's motion for summary judgment against Penntex to dismiss Penntex's third-party claims against it.

Penntex argued that it had not yet had time to serve an expert report responding to Gallagher's report because it had been waiting for plaintiff to serve such a report as she was required to do first by the various case management orders.

Penntex argued that Tamburri was not entitled to summary judgment because there was a lot of evidence that it did much more than just drop off the steel. In fact, the certification and deposition testimony from James Martin demonstrated that Tamburri's operations continued until all the steel was erected, and that evidence was corroborated by contemporaneous documentation. Tamburri responded that it was not involved in the erection of the steel and had no direct or indirect responsibility for the happening of the accident based on the description of its work in the contract. Penntex responded that the reality of the working relationship, including expressing concerns for workplace safety, belied such a narrow involvement.

The motion judge found that Tamburri "was a conduit, if you will, in the sense that Holly asked them to ask Penntex to do things, and while it appears that they made certain suggestions, certainly the accident did not occur as a result of the work of Tamburri, the fabricating and delivery." He found there was no evidence that Tamburri actually erected the steel, which was done exclusively by Holly. He further noted:

The plaintiff does not point to anything that Tamburri has done, and I agree with [counsel for Tamburri] that no amount of expert's reports can change the facts and - or change the contract. They were not part of this. There is no evidence that they were even there on the day the man fell. There is no evidence that they erected the steel from which he fell.

So the motion for summary judgment by Tamburri will be granted. Motion for indemnity from Tamburri will be denied.

Penntex reminded the judge that it had also sought summary judgment for breach by Tamburri of its contractual obligation to procure liability insurance covering Penntex. Nautilus responded that it was not denying such coverage and admitted that it had Penntex as an additional insured. Penntex rejoined that the contract required the coverage to remain in place until final payment was made, which did not occur until the project was over. Nautilus responded that the policy endorsement ended when Tamburri's operations for Penntex were completed.

The judge observed, "Even assuming that [Tamburri kept insurance in place until final payment], based on my determination that the accident didn't arise out of Tamburri's work, even if that insurance was in place there would be no claim, no basis for a claim." Penntex disagreed with this ruling because there would be insurance in place arising out of Tamburri's work. Penntex then protested that these rulings were being made before it had an opportunity to obtain an expert's report, and the motion judge stated that his rulings would "be in effect at the end of 90 days" so that Penntex would have time to produce an expert report. Nautilus then reminded the judge that he had not ruled on its motion for summary judgment, and the judge responded that its motion was granted subject to the same proviso. Despite these clear judicial determinations, no orders were entered at the time of the argument on October 29, 2007, or ninety days later disposing of these motions.

On March 20, 2008, the second judge handling the case entered a case management order requiring defendants and third-party defendants to serve all expert reports by April 30, 2008; to complete all expert depositions by May 31, 2008; and to file all dispositive motions by June 30, 2008. No orders had yet been entered on the first judge's October 29, 2007, rulings.

On July 10, 2008, Nautilus filed another motion for summary judgment dismissing the third-party complaint of Penntex or, in the alternative, ordering that the previous summary judgment in favor of Nautilus dated October 29, 2007, be finalized. At the August 29, 2008, argument, Nautilus argued that there were no new facts in the report of Penntex's expert that would preclude entry of the summary judgment as to Nautilus that the first judge ordered. Penntex reargued the significance of Martin's deposition and certification.

The judge noted that this had all been considered by the first motion judge, and the law of the case governed. Penntex responded that there were additional documents before the judge as well as the expert's opinion that fabricators do not just fabricate but are facilitators between the general contractor and the steel erector in order to ensure that the steel is cut properly. Further, on the day of the accident, Holly and Tamburri were on the telephone discussing a delivery of steel. The judge, however, stated that he did not see anything that was truly new and expressed that he was not impressed by the phone call on the day of the accident or the other documents presented on this motion. He concluded that the law of the case compelled entry of an order granting the motion for summary judgment as to Tamburri. This decision finalized the summary judgment granted by the first judge on October 29, 2007.

When Penntex inquired if the judge was dismissing its breach of contract and indemnification claims against Tamburri, the judge replied that he was. When Penntex argued that the summary judgment as to Nautilus involved an entirely different issue from summary judgment as to Tamburri, that is, whether Penntex was an additional insured under the Nautilus policy and entitled to coverage, the judge replied that the first motion judge had ruled on all of those claims and that was the law of the case. On September 11, 2008, the second judge entered an order granting summary judgment in favor of Tamburri dismissing Penntex's cross-claims with prejudice.

On October 3, 2008, Penntex filed a notice of motion for reconsideration of the rulings in favor of Tamburri and Nautilus. This motion was heard on December 5, 2008, without oral argument. The judge placed an oral decision on the record that day denying the motion on the ground that there was either any evidence he failed to consider nor any mistake of law requiring reconsideration. The order entered that day was amended on January 14, 2009.

By then, plaintiff had settled her claims with Penntex on December 8, 2008, which resolved all of plaintiff's claims against any defendant. Thus, plaintiff is no longer a party to this action. However, the parties stipulated that the settlement did not resolve Penntex's cross-claims against Tamburri and its third-party complaint against Nautilus, which would remain viable. On February 17, 2009, Brandywine and Penntex settled and dismissed their cross-claims, which disposed of all issues as to all parties. This appeal followed.

In this appeal, Penntex challenges the orders entered on May 11, 2007, dismissing the third-party claims of Penntex against Holly and Tudor; on January 7, 2008, denying Penntex's motion for summary judgment on the issue of liability; on August 29, 2008, granting summary judgment to Nautilus; on September 11, 2008, granting summary judgment to Tamburri dismissing all claims against it; and on January 14, 2009, denying Penntex's motion for reconsideration.*fn5

In reviewing a ruling on a summary-judgment motion, we apply the same standard as that governing the trial court. Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998); Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989).

Summary judgment "is designed to provide a prompt, businesslike and inexpensive method of [resolving cases]." Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 74 (1954). Summary judgment is appropriate if "there is no genuine issue as to any material fact" in the record. R. 4:46-2(c).

The judgment or order sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law.

[Ibid.]

Brill v. Guardian Life Insurance Co. of America, 142 N.J. 520, 540 (1995), outlined the standard for deciding a summary-judgment motion:

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.

Therefore, the motion must be considered on the basis that the non-moving parties' assertions of fact are true and "grant all the favorable inferences to the non-movant." Id. at 536. The determination is whether the evidence "'is so one-sided that one party must prevail as a matter of law.'" Ibid. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).

"If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a 'genuine' issue of material fact for purposes of Rule 4:46-2." Id. at 540 (citation omitted). "However, an opposing party who offers no substantial or material facts in opposition to the motion cannot complain if the court takes as true the uncontradicted facts in the movant's papers." Baran v. Clouse Trucking, Inc., 225 N.J. Super. 230, 234 (App. Div.) (citation omitted), certif. denied, 113 N.J. 353 (1988). Assertions that are conclusive and self-serving are insufficient to defeat a summary-judgment motion. Puder v. Buechel, 183 N.J. 428, 440-41 (2005).

As to the appeal from the ruling on the reconsideration motion, a decision on whether to grant or deny a motion for reconsideration is addressed to the trial judge's discretion. Fusco v. Newark Bd. of Educ., 349 N.J. Super. 455, 462 (App. Div.), certif. denied, 174 N.J. 544 (2002); Marinelli v. Mitts & Merrill, 303 N.J. Super. 61, 77 (App. Div. 1997); Cummmings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996). Thus, an order granting a motion for reconsideration is reviewed for an abuse of that discretion. Cummings, supra, 295 N.J. Super. at 389. A trial court decision will constitute an abuse of discretion where "the 'decision [was] made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" United States v. Scurry, 193 N.J. 492, 504 (2008) (alteration in original) (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).

III.

Penntex first contends that the motion judges erred in granting Tamburri's motion for summary judgment and in denying its motion for summary judgment on its cross-claims against Tamburri. Further, Penntex asserts that the second motion judge erred in denying its motion for reconsideration of these rulings. In resolving these issues, we must determine whether Tamburri had an obligation to indemnify Penntex pursuant to the terms of the AIA contract they executed, and if so, whether that duty to indemnify was triggered by the facts of this case.

There can be little doubt that Tamburri agreed to indemnify Penntex pursuant to the indemnification clause in their contract. That clause required Tamburri to indemnify and hold Penntex harmless from any claims "arising out of" or "resulting from" Tamburri's performance of its work under the contract. This clause is enforceable even in the face of Penntex's negligent acts or omissions. See Mautz v. J.P. Patti Co., 298 N.J. Super. 13, 21 (App. Div.), certif. denied, 151 N.J. 472 (1997). The dispute that exists between the parties is whether, viewing the evidence in the light most favorable to Penntex and drawing all inferences in its favor, Tamburri was entitled to a judgment dismissing the claims of Penntex for indemnification.

Penntex urges that the motion judge erred in finding that Tamburri had concluded its contracted work prior to the accident because it only fabricated and delivered steel. Rather, Penntex maintains that Tamburri's work at the site was ongoing at the time of the accident, or at the very least, a factual issue exists such that summary judgment was improper. Penntex contends that Tamburri, at Brandywine's request, sought out bids for the steel erection and that it was Tamburri that selected Holly and instructed Tamburri to specify in the purchase order that Holly had to supply and install OSHA cables at the building perimeter. It was Tamburri that provided the plans to Holly. The contract between Penntex and Tamburri required Tamburri in Article 4.3.1 to "take reasonable safety precautions with respect to performance of this Subcontract." Tamburri set the price for the steel erection, drew the erection drawings, and sent them to Holly. Holly raised safety issues with Tamburri, which in turn forwarded those concerns to Penntex. In fact, Martin testified that Tamburri was managing Holly despite the direct purchase order from Penntex to Holly.

To establish this proposition, Penntex points to a January 28, 2004, fax from Tamburri transmitting a sketch for the floor openings to Penntex and requesting the required dimensions so that "we," meaning Tamburri and Holly, could install the steel at the correct dimensions. It contends that Tamburri supplied the deck material from which Torres fell, although this was denied at the time of the accident by Tamburri. Tamburri continued to work thereafter issuing purchase orders on February 18, and 23 and March 1, 2004, and requesting a quote on March 2, 2004. Subsequently, the work continued with Metal Structures, Inc., sending Tamburri an April 30, 2004, proposal for furnishing and installing metal roofing for the Bishop's Gate project.

Additionally, Martin testified on behalf of Penntex that Tamburri did more than drop off material at the site. Rather, it was at the site and involved in the steel erection, requesting changes in the radius portion of the building and managing Holly's performance. This is demonstrated by Tamburri's letter of April 15, 2004, to Penntex regarding the first change order stating, "We added this material to our scope of work in good faith and erected the building without incident." (Emphasis added.) Naughton opined that it was common in the steel business for fabricators to become involved in the erection process, Tamburri's contracted work was ongoing at the time of the accident, and Tamburri was involved in the erection process.

According to Penntex, the phrase "arising out of" in the indemnification clause is triggered when there is a "substantial nexus" between the injury or claim and the activities encompassed in the contract. Penntex believes Tamburri "played an intimate role" in the steel-erection process but acknowledges that Tamburri "may not have physically erected the steel or entered into a contract to physically erect the steel."

Nonetheless, Penntex argues that Tamburri should be held liable because it was on site, was involved in hiring the steel erector, drafted steel-installation drawings, handled safety issues, established safety measures, and managed the day-to-day progress of the erection process. Based on the letters, testimony, and reports outlined above, Penntex claims that there is a factual issue on this point and requests reversal of the summary judgment entered September 11, 2008.

Tamburri responds that the motion judges correctly ruled that it had no obligation to indemnify Penntex, and the summary judgment should be affirmed. Tamburri first takes issue with Penntex's characterization of the facts, claiming that Penntex has obfuscated the facts and that it did not "choose" or "direct" Penntex to issue a purchase order to Holly. Tamburri further alleges that the other services it provided were "isolated," saying they were "incidental and clearly performed as a favor in response to a client's request." Finally, Tamburri avers that installation of the structural steel was not part of the "Work of this Subcontract" as that term was defined, and erection was therefore "not within the ambit of the indemnity clause" in the contract.

An indemnity agreement is interpreted in accordance with general rules of contract construction. Ramos v. Browning Ferris Indus., Inc., 103 N.J. 177, 191 (1986). In determining the meaning of an indemnity provision, the clause "is to be strictly construed and not extended to things other than those therein expressed." Longi v. Raymond-Commerce Corp., 34 N.J. Super. 593, 603 (App. Div. 1955) (citing George M. Brewster & Son, Inc. v. Catalytic Constr. Co., 17 N.J. 20 (1954)). An ambiguity exists where "the terms of the contract are susceptible to at least two reasonable alternative interpretations." Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (citing Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997)). We find no such ambiguity here. The terms are entirely clear. The real issue is whether the claim arose out of or resulted from Tamburri's work under its contract with Penntex.

The phrase "arising out of" has been interpreted in many New Jersey cases. For example, in Vitty v. D.C.P. Corp., 268 N.J. Super. 447, 450 (App. Div. 1993), we examined a contract containing a provision requiring a towing company to defend and indemnify the New Jersey Highway Authority for claims "arising out of" the license agreement. We accorded the phrase its "common and ordinary meaning" and, as such, reasoned it referred "to a claim 'growing out of' or having its 'origin in' the subject matter of the towing agreement." Id. at 452-53 (citations omitted). Under this interpretation, we held that "there need be shown only a substantial nexus between the property damage or injury alleged in the claim and the activities encompassed in the towing contract." Id. at 453.

We further developed this line of reasoning in Leitao v. Damon G. Douglas Co., 301 N.J. Super. 187 (App. Div.), certif. denied, 151 N.J. 466 (1997). In Leitao, the plaintiff argued that his claim was one "'arising out of or resulting from the performance of the subcontractor[]'s work,' within the meaning of the indemnity clause." Id. at 193 (alteration in original). Noting our previous interpretation in Vitty and other cases, we interpreted the phrase "as requiring only a substantial nexus between the claim and the subject matter of the subcontractor's work duties." Ibid. (citations omitted). We found that the plaintiff was injured while performing the subcontracted work and his claim thus fell squarely within the indemnity clause. Id. at 195.

Applying Leitao's substantial-nexus examination to the facts viewed in the light most favorable to Penntex, and drawing all inferences in its favor, we cannot say as a matter of law that there was no substantial nexus between the accident and the actual work Tamburri performed pursuant to its understanding of the requirements of the AIA agreement with Penntex. Although the "subject matter" of the Penntex-Tamburri contract was clearly fabrication and delivery of the steel, it nonetheless provided other services beyond mere fabrication and delivery. Indeed, the contract in Article 8.1 specified that Tamburri's work included "all labor, materials, equipment, services and other items required to complete such portion of the Work, except to the extent specifically indicated in the Subcontract Documents to be the responsibility of others." In addition, Naughton explained that it was common in the industry for fabricators to become involved in the erection of the steel they furnish. Penntex and Tamburri were aware of the risk that workers might fall from the steel structure. As a consequence, there was a substantial nexus between the claim and Tamburri's work under the contract. See Franklin Mut. Ins. Co. v. Sec. Indem. Ins. Co., 275 N.J. Super. 335, 340-41 (App. Div.), certif. denied, 139 N.J. 185 (1994). Because the facts viewed in a light most favorable to Penntex would support an order requiring indemnification, the motion judges erred in granting summary judgment to Tamburri.

IV.

We next consider whether the motion judges erred in granting summary judgment to Nautilus. Penntex claims that the accident "arose out of" Tamburri's "ongoing operations" for PennteX and Penntex is therefore an additional insured under the insurance policy Nautilus issued to Tamburri. Penntex seeks to establish that Tamburri's operations were ongoing at the time of the accident by pointing to the interactions and contact Tamburri had with Penntex and Holly. Penntex claims that Tamburri was "intimately involved" in erecting the steel; it addressed safety issues raised by Holly; and it "was 'managing' Holly." Penntex therefore seeks reversal of the order granting Nautilus summary judgment.

Nautilus contends that Tamburri's responsibilities at Bishop's Gate were only to fabricate and deliver the structural steel. Nautilus notes that the endorsement at issue provides additional insured coverage to Penntex based on Penntex's contract with Tamburri. Citing the policy language, Nautilus posits that this endorsement did not extend beyond the point in time at which Tamburri's work for Penntex ended. Nautilus claims that Tamburri's work under the contract ended once the steel was delivered at some unspecified date before the accident, and the motion judges therefore properly concluded that the policy did not extend coverage to Penntex as an additional insured at the time of the accident.

Insurance policies are interpreted according to their plain and ordinary meaning. Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530, 537 (1990). "[P]olicies should be construed liberally in . . . favor [of the insured] to the end that coverage is afforded 'to the full extent that any fair interpretation will allow.'" Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475, 482 (1961) (citation omitted). "[I]n the absence of an ambiguity in the language of an insurance policy, a court should not engage in a strained construction" to impose a duty on the carrier that is not contained in the policy. Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 273 (2001) (citations omitted). Clear policy terms are enforced as written. Stone v. Royal Ins. Co., 211 N.J. Super. 246, 248 (App. Div. 1986); Flynn v. Hartford Fire Ins. Co., 146 N.J. Super. 484, 488 (App. Div.), certif. denied, 75 N.J. 5 (1977). The court may not make a better policy for the parties than the one they purchased. Flynn, supra, 146 N.J. Super. at 488.

No one suggests that the language of this policy is ambiguous nor do we find it so. Rather, the parties differ as to whether the operations of Tamburri were ongoing at the time of Torres's accident. The endorsement at issue clearly provides that Penntex is an additional insured "only with respect to liability arising out of [Tamburri's] ongoing operations." The endorsement further states that a party's status as an additional insured ends when Tamburri's operations are completed.

The issue, therefore, is whether the accident "arose out of Tamburri's ongoing operations" or whether those operations were completed prior to February 16, 2004.

Although Nautilus urges that Tamburri's work was finished before the accident in question, the date when its work was actually completed cannot be discerned from the record before us. Certainly Tamburri was still acting with respect to the Bishop's Gate project for several months after the accident. It is obvious that the date when Tamburri's "operations" ended is a factual predicate without which summary judgment could not be granted. That judgment was in error. It cannot be determined at this time whether Penntex was an additional insured under the Nautilus policy on February 16, 2004.

Penntex next argues that Tamburri breached the parties' contract by failing to procure insurance on behalf of Penntex as an additional insured from the date of commencement of Tamburri's work under the subcontract "until date of final payment." Penntex claims that if we determine that it was not covered under Tamburri's policy with Nautilus, then "Tamburri must be found to be in breach of contract." Tamburri has not responded to this point in its brief.

During the October 29, 2007, hearing, Penntex made this argument, but the judge observed that Nautilus insured PennteX as an additional insured for claims arising out of Tamburri's work, and he agreed with Nautilus's counsel that Penntex's status as an additional insured ended when Tamburri's work for Penntex ended. The judge then stated that, based on his determination that the accident did not arise out of Tamburri's work, there would be no basis for a claim even if the insurance was in place. The motion judges thus denied Penntex's motion.

The failure of a party to an agreement to procure insurance pursuant to its contractual obligations can sustain a claim for breach of contract by the non-breaching party. See Antenucci v. Mr. Nick's Mens Sportswear, 212 N.J. Super. 124, 130-31 (App. Div. 1986); Robinson v. Janay, 105 N.J. Super. 585, 591 (App. Div.), certif. denied, 54 N.J. 508 (1969). The quantum of damages recoverable for breach of an agreement to procure insurance is the "loss sustained by reason of the breach, the amount that would have been due under the policy provided it had been obtained." Robinson, supra, 105 N.J. Super. at 591 (citation and internal quotation marks omitted).

The flaw in the judges' reasoning is that had the Nautilus policy complied with the Penntex-Tamburri contract, the additional-insured endorsement could not have been limited to Tamburri's ongoing operations. It seems rather clear that Tamburri breached the contract by failing to procure insurance through the date of final payment on the contract. What is not at all clear is whether Penntex has been damaged as a result. If Nautilus is required to defend and indemnify Penntex, then it will not suffer any damages as a consequence of the breach. The issue must abide trial.

V.

In its final point, Penntex argues that the motion judges erred in granting summary judgment in favor of Holly because Holly owes Penntex implied and contractual indemnification. Penntex asserts that if a jury determines that Holly was solely at fault, and Penntex is only vicariously liable, then an implied duty to indemnify will arise. Additionally, Penntex claims that the indemnity provision in the Brandywine-Penntex agreement should be imposed on Holly because Holly was aware that all subcontractors owed Penntex the same obligations Penn-tex owed Brandywine. Penntex maintains that Holly's compliance with the insurance obligations imposed on other subcontractors constitutes a ratification of its duties under the Brandywine-Penntex contract.

After carefully reviewing the record in the light of the written and oral arguments advanced by the parties, we conclude that the issues presented by Penntex are without sufficient merit to warrant extensive discussion in this opinion, R. 2:11-3(e)(1)(E). We add the following brief comments.

Penntex knew of its subcontracting obligations under the Brandywine-Penntex contract*fn6 and chose to contract with Holly through a simple purchase order. We will not make a better contract for a party than the one it made for itself. See Flynn, supra, 146 N.J. Super. at 488. Where a party drafts a contract and fails to include certain terms in the contract, we will construe the agreement against the draftsman. Jacobs v. Great Pac. Century Corp., 104 N.J. 580, 584 (1986); In re Estate of Miller, 90 N.J. 210, 221 (1982). Penntex is not entitled to contractual indemnification.

Neither is it entitled to implied indemnification in the context of an employer's immunity under the Workers' Compensation Act, N.J.S.A. 34:15-1 to -142, absent a special relationship. Ramos, supra, 103 N.J. at 188-89 ("[A] third party may recover on a theory of implied indemnity from an employer only when a special legal relationship exists between the employer and the third party, and the liability of the third party is vicarious." (citations omitted)).

Penntex also contends that the first motion judge erred in granting summary judgment in favor of Tudor because discovery was incomplete since depositions of Tudor's representatives had not been taken, and additional discovery had been requested regarding the Holly-Tudor insurance policy. Penntex claims that further discovery is needed because the additional-insured endorsement of the policy is designated as "Form B," but the Declarations page of the policy contains no corresponding reference. Penntex reasons that this incongruity "raises the obvious question as to what 'Form A'" provides and why "Form A" would not be applicable here. Penntex concludes that further discovery on this issue was needed, and summary judgment was therefore premature.

We also find no need to address this contention at length, R. 2:11-3(e)(1)(E), because each and every endorsement to the policy is listed in the "Forms and Endorsements," including the additional-insured endorsement attached to the policy, and no other additional-insured endorsement is listed in the "Forms and Endorsements" comprising the policy. Penntex was clearly not an additional insured under the Tudor policy because Penntex failed to comply with the Brandywine-Penntex contract by requiring Holly to be bound to its contract with Brandywine, as it did with Tamburri. "[D]iscovery need not be undertaken or completed if it will patently not change the outcome." Minoia v. Kushner, 365 N.J. Super. 304, 307 (App. Div.) (citations omitted), certif. denied, 180 N.J. 354 (2004). That is clearly the case here.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.


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