October 25, 2011
BEVERLY BURSEY, PLAINTIFF,
497 COMMUNIPAW AVENUE CORP., D/B/A BG'S TAVERN, DEFENDANT-APPELLANT, AND UNITED STATES LIABILITY INSURANCE GROUP, DEFENDANT-RESPONDENT, AND ROBERT D. VENABLE, DEFENDANT.
497 COMMUNIPAW AVENUE CORP., D/B/A BG'S TAVERN, THIRD-PARTY PLAINTIFF,
H. ROSCO TAYLOR JR. INSURANCE AGENCY, THIRD-PARTY DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Dccket No. L-5100-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 27, 2011
Before Judges Reisner and Simonelli.
In this insurance coverage dispute, 497 Communipaw Avenue Corp. (Communipaw) appeals from an August 31, 2010 order denying its motion to amend two prior orders. The first was a May 18, 2010 order granting summary judgment in favor of Mount Vernon Fire Insurance Company (Mount Vernon)*fn1 and the second was a July 19, 2010 order dismissing the case based on the settlement of the underlying personal injury complaint. We affirm.
This is what happened. Communipaw, which owned a bar in Jersey City, purchased a commercial general liability (CGL) and property insurance policy from Mount Vernon. The first page of the declarations section of the policy specifically indicated that liquor liability coverage was not included. Thus, there was no coverage for claims based on serving alcohol to minors or visibly intoxicated patrons. The second page of the declarations section listed a series of exclusions and definitions. Among them was an "Expanded Definition of Bodily Injury" and an "Assault or Battery Exclusion." The CGL portion of the policy contained an exclusion for expected or intended injury, defined as bodily injury or property damage "expected or intended from the standpoint of the insured." By its terms this exclusion did "not apply to 'bodily injury' resulting from the use of reasonable force to protect persons or property."
However, as indicated in the declarations section of the policy, there were also separate endorsements with additional exclusions. The "ASSAULT or BATTERY EXCLUSION," which appeared as an endorsement to the policy, specifically stated: "This Endorsement modifies insurance provided under" the CGL policy, the business owners coverage, the commercial umbrella policy, and the excess liability policy. The endorsement excluded coverage for:
Any claim, demand or suit based on "assault" or "battery", or out of any act or omission in connection with the prevention or suppression of any "assault" or "battery", including the use of reasonable force to protect persons or property, whether caused by or at the instigation or direction of an insured, its "employees", agents, officers or directors, patrons or any other person [Emphasis added.]
A dispute over the proper interpretation of the policy arose between Communipaw and Mount Vernon, after a bar patron named Beverly Bursey sued Communipaw for injuries she allegedly incurred during an altercation on the premises. According to Bursey's October 15, 2008 complaint, she was attacked by other bar patrons. Bursey's complaint named Communipaw, the bar's manager Robert Venable, and Mount Vernon, contending that they failed to provide a safe environment or adequate security and they served alcohol to minors and intoxicated persons. Mount Vernon declined to provide Communipaw with a defense, relying on the assault and battery and liquor liability exclusions in the policy. Communipaw then filed a cross-claim against the insurer demanding defense and indemnification, and also sued its insurance agent for professional negligence and consumer fraud.
During discovery, Venable testified at a March 2009 deposition that Bursey instigated the fight, tried to knee Venable in the groin, and then led a group of her friends in a second attempted assault on him. Venable testified that he successfully fought off Bursey's attempted assault, punched her, and detained her until the police arrived. In March 2010, Bursey moved, on notice to all parties, for leave to amend the complaint to specifically accuse Venable of assaulting her. The motion was granted and she filed the amended complaint on April 14, 2010.
On the same day that Bursey filed her amended complaint, Mount Vernon filed a motion for summary judgment, citing the assault and battery exclusion of the policy and Bursey's deposition testimony that Venable assaulted her. Despite knowing that Mount Vernon was invoking the assault and battery exclusion in its motion, Communipaw did not file opposition. On May 18, 2010, the motion judge signed the insurer's proposed form of order dismissing the coverage claims, including Bursey's complaint and Communipaw's cross-claim.*fn2
Meanwhile, Mount Vernon had filed an answer to the amended complaint on May 11, 2010. On June 7, 2010, Communipaw and Venable filed an answer to the amended complaint and a cross-claim against Mount Vernon, asserting that Venable acted in self-defense and was entitled to coverage under the policy. Mount Vernon answered the cross-claim on July 12, 2010. On June 28, the judge entered an order granting summary judgment in favor of the insurance agent. Thereafter, Bursey and Communipaw reached a settlement of the underlying personal injury action, and on July 19, 2010, a second judge, who had not handled any of the prior motions, issued an order dismissing the entire case as settled.
Contending that the coverage issue was still undecided, because the amended complaint and cross-claim remained pending, Communipaw filed a motion to (a) alter or amend the May 18, 2010 judgment "to reflect that Summary Judgment is only granted as to the original Complaint" and not as to "the Amended Complaint" or the "Cross Claim to the Amended Complaint," and (b) vacate the July 16 dismissal order. In a letter brief responding to the insurer's opposition, Communipaw's counsel specifically requested oral argument. However, the original motion judge decided the matter without oral argument. A handwritten notation on the August 31, 2010 order indicated that the "above motion is denied substantially for reasons stated in the opposition. Additionally, the allegation of self-defense does not trigger coverage under the applicable policy."
We review the denial of a motion to alter or amend a judgment for abuse of discretion. Capital Fin. Co. of Del. Valley, Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div.), certif. denied, 195 N.J. 521 (2008). On the other hand, our review of a summary judgment order is de novo. Prudential Property Ins. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Using the same standard employed by the trial court, we determine whether there are material factual disputes and, if not, whether the undisputed evidence, viewed in the light most favorable to the non-moving party, nonetheless requires judgment for the moving party as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Likewise, our review of the trial court's legal determinations, including its construction of an insurance contract, is de novo. Polarome International v. Greenwich Ins. Co., 404 N.J. Super. 241, 260 (App. Div. 2008), certif. denied, 199 N.J. 133 (2009).
We begin with a few procedural observations. Technically, the settlement of the underlying personal injury lawsuit between Communipaw and Bursey should not have resulted in an order dismissing the entire case, because there was an unresolved pleading setting forth insurance coverage claims against Mount Vernon. Perhaps this procedural confusion resulted because the case was handled by two different judges, but the settling parties should have highlighted the ongoing coverage dispute when they advised the court of the personal injury settlement.
We also agree with Communipaw that the motion judge should not have decided the motion to amend the judgment without oral argument. Communipaw was entitled to oral argument "as of right" upon its attorney's request. R. 1:6-2(d). Further, as a final, appealable disposition, the August 31, 2010 order should have been accompanied by the judge's factual findings and legal analysis. See R. 1:6-2(f); R. 1:7-4.
Merely incorporating by reference a party's "reasons stated in the opposition" to the motion is unhelpful. "[I]t is preferable that in the granting or denial of a new trial (or any other motion) a judge states his or her reasons with particularity. . . . [W]e should not be forced to examine the moving papers and attempt to glean the judge's reasons." Vartenissian v. Food Haulers, Inc., 193 N.J. Super. 603, 612 (App. Div. 1984). Cf. Allstate, Ins. Co., supra, 408 N.J. Super. at 301; Pressler & Verniero, Current N.J. Court Rules, comment 1 on R. 1:7-4 (2012) ("[T]he clearly better practice is for the court to make its own statement [of reasons]").
However, based on our de novo review of the record, including the unambiguous terms of the insurance policy, we conclude that the coverage suit against Mount Vernon was barred by the assault and battery endorsement. The cross-claim was properly dismissed in the first summary judgment motion, which Communipaw did not oppose, and the amended complaint and answer did not give rise to a new, viable coverage claim. Therefore, we conclude that the trial court reached the correct result in declining to modify the May 18, 2010 summary judgment order and in refusing to vacate the July 19, 2010 order dismissing the entire case with prejudice. Accordingly, as further explained below, we affirm the August 31, 2010 order.
We begin by considering the following fundamental principles applicable to the construction of insurance contracts:
[I]nsurance policy exclusions are narrowly construed and the insurer has the burden of establishing the exclusion. However, the "words of an insurance policy should be given their ordinary meaning, and in the absence of an ambiguity, a court should not engage in a strained construction to support the imposition of liability." . . . Although insurance policies should be construed in favor of the insured, courts "should not write for the insured a better policy of insurance than the one purchased." While courts "should not ignore an exclusion's clear meaning, if there is another fair interpretation, the court must construe the insurance policy in favor of coverage and against the insurer, adopting the interpretation supporting coverage." However, "[t]his does not mean . . . that any far-fetched interpretation of a policy will be sufficient to create an ambiguity requiring coverage." [Boddy v. Cigna Prop. & Cas. Cos., 334 N.J. Super. 649, 658-59 (App. Div. 2000) (citations omitted).]
If a policy provision is ambiguous, we construe the provision in favor of the insured, considering the insured's reasonable expectations. DiOrio v. New Jersey Mftrs. Ins. Co., 79 N.J. 257, 269 (1979). However, if a provision is not ambiguous or otherwise misleading, we need not consider the "objectively reasonable expectation of the average policyholder" in interpreting the policy. Id. at 270; Weedo v. Stone-E-Brick, 81 N.J. 233, 247 (1979); Argent v. Brady, 386 N.J. Super. 343, 351 (App. Div. 2006). "Language in a policy of insurance is genuinely ambiguous only if the 'phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage.'" Id. at 352 (citation omitted).
The existence of an ambiguity is a legal issue, as to which expert opinion is generally neither required nor helpful to the court. Boddy, supra, 334 N.J. Super. at 659. "It is well-established that '[e]xpert witnesses simply may not render opinions on matters which involve a question of the law.'" Ibid. (quoting Healy v. Fairleigh Dickinson Univ., 287 N.J. Super. 407, 413 (App. Div.), certif. denied, 145 N.J. 372, cert. denied, 519 U.S. 1007, 117 S. Ct. 510, 136 L. Ed. 2d 399 (1996)).
Applying these principles to the Mount Vernon insurance policy, we find no ambiguity. The assault and battery exclusion was not hidden in fine print within the policy. The endorsement was clearly listed on page two of the declarations. See Zacarias v. Allstate Ins. Co., 168 N.J. 590, 603 (2001); DiOrio, supra,
79 N.J. at 270. Although the text of the endorsement appeared later in the policy, it was in large print, plainly worded, and clearly understandable to any reasonable business person reading the policy. By its terms, the provision plainly excluded coverage for bar fights and physical attempts to suppress them.
Despite the clear terms of the assault and battery endorsement, Communipaw argues that an exception to a different policy exclusion created an ambiguity in the policy. Relying on the self-defense exception contained within the intentional acts exclusion, Communipaw contends that the policy provided coverage for bodily injuries caused by an insured who was acting in self-defense. It then contends that the self-defense exception in the intentional acts exclusion, read together with the absolute exclusion of "self-defense" coverage in the assault and battery endorsement, created an ambiguity. We cannot agree.
In construing an endorsement to an insurance policy, the endorsement and policy must be read together. The policy remains in full force and effect except as altered by the words of the endorsement. Conversely the endorsement modifies, to extent of the endorsement, the terms and conditions of the original insurance contract.
The endorsement is considered to supersede the printed formal policy provisions because it is generally perceived that the endorsement is a more complete recital of the intention of the parties. [Appleman on Insurance § 20.1 (footnotes omitted).]
By its specific wording, the assault and battery endorsement modified the provisions of the CGL policy. Further, it modified those provisions in absolute and unambiguous language, excluding:
Any "b", or out of any act or omission in connection with the prevention or suppression of any "assault" or "battery", including the use of reasonable force to protect persons or property . . . [Emphasis added.]
This endorsement plainly excluded all claims based on alleged assaults, even if the assaults were performed in self-defense or to break up a fight. See Stafford v. T.H.E. Ins. Co., 309 N.J. Super. 97, 105 (App. Div. 1998). Therefore, it overrode the coverage, provided in the body of the policy, for bodily injury resulting from acts of self-defense.*fn3
Communipaw's expert report, concerning the purported ambiguity in the policy, was entitled to no consideration because it addressed an issue of legal interpretation. Boddy, supra, 334 N.J. Super. at 659. And, even if the policy were ambiguous, Communipaw did not present any legally competent evidence of a reasonable expectation that this policy would cover injuries due to bar fights or their suppression.
In light of our construction of the policy, we need not address Communipaw's additional arguments concerning Venable's claim that he acted in self-defense. Due to the assault and battery endorsement, that claim would not give rise to coverage.