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Jennifer Torres, Individually and As General v. Tamburri Associates

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 ...


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