February 29, 2012
JILLIAN ACKLEY, CAROLYN AGRUSTI, LISA AHRENDT, CAMILLE ALMERINI, LINDA ANGERSON, YVETTE ATKINS, MARIANNE AUPPERLEE, GLORIA AZARIAN, TRACY BOEHM, AUSTIN AND ASHLEY CANTONE, MINORS, BY MICHAEL AND CHERYL CANTONE, MARISSA CASPER, BROOKE CAULFIED, MARIA CIUCCIO, CYNTHIA CLARK-MC NAMARA, DANIELLE CRIBIER, ANNE CUVIELLO, DOROTHY D'AMICO, MELISSA DAVIS, PAIGE DE FELICE, PATRICIA DI DONATO, KATHLEEN ASHWORTH DONNEL, MELISSA DAWSON, HERB DREYER, JEAN DUFFY, SUSAN DZIOB, DELORES ELIASSEN, ANN E. FEIGAN, JULIE FIALKOW, DORIS DIANA FLACCOMIO, ADELE FLANNELLY, KATHY FLANNELLY, DIANE FOGEL, NANCY FOX, ROSEMARY GALLO, JAMES GAROFALO, CATHY GAYNOR, JANET GAYNOR-MATONTI, MARIA GIAMPIETRO, LARRY GOODMAN, GINA HERRING, JOAN HUCHAN, JACKIE JANSEN, ELAINE JENKINS, JUDITH K. JOYCE, JOANNE KAPR, PATRICIA KHANIAN, JUSTINA KIERNAN, NICOLE KIERNAN, TARA KIERNAN, A MINOR, BY JOHN AND JOANNE KIERNAN, TRAVIS KIERNAN, KATHLEEN KREJSA, LUNINDA LAU, KEVIN C. LYDON, NICOLE MAGLIANDIT, STEVE MAIETTA, THERESA A. MELLO, SHARI MENDELSON, EILEEN MOORACHANIAN, KAREN A. MYERS, JAIME NACHT, BY STEVE NACHT, POA, DANIELLE NACHT, A MINOR, BY STEVE NACHT, HEATHER NALBANDIAN, KATHLYN MUNSON NEUBERT, SUSAN O'BRIEN, PATRICIA O'KEEFFE, GEORGE PAROWSKI, KAREN PETERSON, SUSAN PICARIELLO, JOSEPH QUILES, EVELYN ROCCO, ISAAC B. ROSENBERG, LAUREN RUSH, WAYNE SCHWARTZ, DEBORAH A. SCUILLA, JOHN T. SKORSKI, WILLIAM AND ELIZABETH SMERDON, LAUREN STRAUSS, HAYLEY TALLEY, A MINOR, BY MALLARY AND TRACY TALLEY, JOHN THOMSEN, JENNIFER TOMASKOVIC, JOANNA TRAHANAS, ERIN VAN BUREN, KENNETH D. VAN VALEN, DEBORAH WEINSTEIN, MI YU, DINA ZITO, JOSEPHINE ZNUTAS, PLAINTIFFS,
PARAMUS BOARD OF EDUCATION, BOROUGH OF PARAMUS, DEFENDANTS, AND PARAMUS BOARD OF EDUCATION, THIRD-PARTY PLAINTIFF-RESPONDENT,
ACE USA, ILLINOIS UNION INSURANCE COMPANY, THIRD-PARTY DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-4653-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges R. B. Coleman and Sapp-Peterson.
Third-party defendants Ace USA and Illinois Union Insurance Company (collectively ILU) appeal from a December 10, 2010 order of the Law Division granting summary judgment in favor of defendant/third-party plaintiff Paramus Board of Education (the Board). That order, entered by the court after it had considered cross-motions by the parties, declared that ILU is obligated, under the terms of a 2006-2007 premises pollution liability insurance policy issued to the School Alliance Insurance Fund (SAIF) on behalf of the Board, to defend and indemnify the Board with respect to alleged bodily injury claims and remediation costs arising out of pesticide contamination discovered at West Brook Middle School in Paramus. We have considered the arguments of the parties in light of the undisputed facts and applicable law, and we affirm.
The undisputed facts reveal that ILU issued a series of consecutive pollution liability insurance policies to SAIF and the Board, including a policy for the period July 1, 2006 to July 1, 2007 (the Policy). The Insuring Agreement of the Policy provides that [t]he Insurer agrees to pay on behalf of the "Insured" for Coverage(s) Provided, as Identified in Item 3. of the Declaration for:
A. "Remediation costs" . . . arising out of "pollution conditions" on, at or under the "Covered Location(s)" . . . provided such "pollution conditions" are first discovered during the "Policy Period" and reported to the Insurer, in writing, during the "Policy Period[.]"
B. Monetary award, judgment, or settlement of compensatory damages . . . resulting from a "claim" for "bodily injury" or "property damage" arising out of "pollution conditions" on, at, under, or migrating from the "Covered Location(s)" listed in the Declarations, where such "claim" is first made against the "Insured" during the "Policy Period" and reported to the Insurer, in writing, during the "Policy Period[.]"
C. Monetary award, judgment, or settlement of compensatory damages . . . which the "insured" becomes legally obligated to pay, resulting from a "claim" for "bodily injury" or "property damage" arising out of "pollution conditions" resulting from "Covered Operations," where such "claim" is first made against the "Insured" during the "Policy Period" and reported to the Insurer, in writing, during the "Policy Period[.]"
D. "Legal defense expense" . . . arising from a "claim" under Insuring Agreements B. or C. above, to which this Policy applies. The Insurer shall have the right and the duty to defend the "insured" against any "claim" to which this Policy applies. The Insurer shall have no duty to defend the "Insured" against any "claim" to which this Policy does not apply.
The parties agree the Board qualifies as an additional "Named Insured" under Endorsement No. 3 of the Policy and that the coverage afforded under that Endorsement is limited by the following provision:
[T]he "insured" and the Insurer agree that this Policy shall not apply to any "claims," "remediation costs," or "legal defense expense" based upon or arising out of "pollution conditions" existing prior to the Retroactive Date(s) shown for the specific Named Insured(s) . . . .
The Policy specifies that the "Retroactive Date" for the Board is July 1, 2005, and it defines "pollution condition" as follows:
"Pollution condition" means the discovery, discharge, dispersal, release, escape, migration, or seepage of any solid, liquid, gaseous or thermal irritant including smoke, soot, vapors, fumes, acids, alkalis, chemicals, hazardous substances, hazardous materials, or waste materials, on, in, into, or ...
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