July 12, 2012
MARY BANAR, ADMINISTRATRIX AD PROSEQUENDUM FOR THE ESTATE OF PAUL BANAR (DECEASED), PLAINTIFFS,
RENDEK INC./REGENT SHOP CENTER, SUPER STOP & SHOP SHOPPING CENTER, RENDEK INC./REGENT SHOP CENTER CONSTRUCTION DIVISION, EUROTECH MASONRY AND CONCRETE, L.L.C., DEMARCO'S CATERING AND DELI, BED BATH & BEYOND, DIETZ AND ASSOCIATES, L.L.C., AND MENLO ENGINEERING ASSOCIATES, INC., DEFENDANTS.
GREATER NEW YORK MUTUAL INSURANCE COMPANY, PLAINTIFF-RESPONDENT,
REGENT SHOPPING CENTER AND REGENT SHOP CENTER CONSTRUCTION DIVISION, DEFENDANTS-APPELLANTS, AND RENDEK,INC./SUPER STOP & SHOP SHOPPING CENTER, EUROTECH MASONRY AND CONCRETE, L.L.C., DEMARCO'S CATERING AND GOURMET DELI, AND BED BATH & BEYOND, DEFENDANTS.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket Nos. L-5756-08 and L-3211-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 4, 2012 --
Before Judges Sabatino and Ashrafi.
Defendants Regent Shopping Center and Regent Shop Center Construction Division (Regent) appeal from a June 24, 2011 order for summary judgment declaring that plaintiff Greater New York Mutual Insurance Company (GNY) is not required to provide a defense and indemnification to Regent in a wrongful death action brought on behalf of the estate of Paul Banar. The trial court concluded that the accident that allegedly caused Banar's death arose out of construction at the shopping center and was therefore excluded from coverage by a construction exclusion clause of the insurance policy issued by GNY. We affirm.
Viewed most favorably to Regent, see R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), the summary judgment record revealed the following facts. At about noon on January 18, 2007, Paul Banar, eighty-two years old, fell off a raised sidewalk in front of the business premises of a tenant of Regent, DeMarco's Catering & Gourmet Deli. Banar's fall caused visible injuries to his face, and his wife took him to his doctor. At an unspecified later time, Banar died. His widow filed a wrongful death lawsuit against Regent and others alleging that their negligence was the cause of Banar's fall and subsequent death.
At the time of the accident, DeMarco's Deli was not open for business. The interior of the store was being refitted after the space had been divided from a larger retail space.
The new front entrance to the store was higher than the level of the parking lot and the sidewalk adjacent to other stores, and an elevated sidewalk with an inclined ramp on one side and steps on the other had to be constructed to reach the deli's entrance.
The shopping center as a whole had been undergoing renovations and construction since 2005. The construction project involved both common areas under the control of Regent for purposes of insurance coverage - such as the building facades, the parking lot, and sidewalks - and some of the interior store spaces under the control of individual tenants.
Regent sought coverage from GNY for the wrongful death lawsuit pursuant to its comprehensive general liability policy. GNY provided a defense temporarily but later filed a declaratory judgment action seeking a judgment that it was not required to defend or indemnify Regent for the accident. GNY relied on the Basic Construction Exclusion endorsement of its liability policy, which states in relevant part:
This insurance does not apply to "bodily injury" . . . arising out of construction . . . operations which are performed by or on behalf of the Named Insured in the course of any job which involves the new construction . . . of any load bearing . . . floor . . . or structure, provided, however, that nothing herein limits, prohibits or restricts insurance coverage for the repair, alteration, maintenance or refurbishing of a load bearing . . . floor.
On GNY's summary judgment motion, the trial court considered the evidential record and concluded that the quoted exclusionary clause applies to the accident and permits GNY to decline coverage. Regent appeals that decision, arguing that evidence in the record shows that construction of the common areas of the shopping center had been completed before the date of Banar's accident and the only ongoing construction at that time was for interior refitting work to which the policy and its exclusion do not apply.
The interpretation of an insurance policy upon established facts is a question of law for the court to determine. Simonetti v. Selective Ins. Co., 372 N.J. Super. 421, 428 (App. Div. 2004). Our standard of review is plenary. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). "Generally, '[w]hen interpreting an insurance policy, courts should give the policy's words their plain, ordinary meaning.'" Nav-Its, Inc. v. Selective Ins. Co. of Am., 183 N.J. 110, 118 (2005) (quoting President v. Jenkins, 180 N.J. 550, 562 (2004)). Courts must give effect to the parties' reasonable expectations in contracting for insurance coverage. Flomerfelt v. Cardiello, 202 N.J. 432, 441 (2010).
Exclusions in insurance policies are construed narrowly.
Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95 (1997). They will be enforced if the language is "'specific, plain, clear, prominent, and not contrary to public policy,'" Ibid. (quoting Doto v. Russo, 140 N.J. 544, 559 (1995)). Because an insurance policy is a contract of adhesion, ambiguous policy language is interpreted in favor of the insured to give effect to the insured's reasonable expectations. Doto, supra, 140 N.J. at 555-56. Ambiguity is present when "the phrasing . . . is so confusing that the average policyholder cannot make out the boundaries of coverage." Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979). However, "[i]f the words used in an exclusionary clause are clear and unambiguous, 'a court should not engage in a strained construction to support the imposition of liability.'" Flomerfelt, supra, 202 N.J. at 442 (2010) (quoting Longobardi v. Chubb Ins. Co., 121 N.J. 530 (1990)). "[T]he burden is on the insurer to bring the case within the exclusion." Ibid. (quoting Am. Motorists Ins. Co. v. L-C-A Sales Co., 155 N.J. 29, 41 (1998)).
Here, we find no relevant ambiguity in the language of the construction exclusion we have quoted. To prove that Regent's claim fell under the construction exclusion, GNY was required to demonstrate that Banar's injuries arose out of construction operations by or on behalf of Regent in the course of new construction of a load bearing floor or structure. The question of contract interpretation is whether Banar's injury "arose out of construction," or whether, viewing the facts most favorably to Regent, the construction had been completed at the time of the accident.
Regent relies on undisputed construction documents, photographs, and deposition testimony it submitted in opposition to the summary judgment motion to argue that construction of the load bearing sidewalk had been completed some months earlier, as well as other common area improvements at the shopping center. It contends that only interior refitting work was continuing at the time of the accident. It argues that the construction exclusion does not apply to interior refitting work of the shopping center's tenants.
Regent does not dispute that the site of Banar's fall was within the common areas it controlled, or that its construction project was new construction that involved more than repair, alteration, maintenance, or refurbishing of its premises. It does not dispute that the elevated sidewalk was a load bearing floor that had been constructed as part of the project. Nor does Regent dispute that a protective railing was to be constructed at the site of Banar's fall but had not yet been installed. Banar's wrongful death suit alleged that the absence of a railing and Regent's failure to warn of the danger of the unprotected elevated sidewalk were part of the negligence that caused his accident and injuries.
Regent argues that the delay in installing a railing was intended only to accommodate movement of equipment and materials for the refitting work continuing in the interior of DeMarco's Deli. Regent contends that the absence of a railing does not mean that the sidewalk was still under construction, and the factual issue of whether or not it was should be determined at a trial, not by summary judgment.
Although the summary judgment record may demonstrate some disputed facts pertaining to completion or continuation of the construction project as to the common areas of the shopping center, those disputed facts are not relevant to the issue on appeal. They do not affect the basis upon which the trial court concluded that no genuine issue of material fact existed as to whether construction of the load bearing sidewalk was complete or ongoing and therefore still excluded from the insurance policy.
Regent or its contractors had attempted to block access to the elevated sidewalk with barrels and possibly construction tape.*fn1 DeMarco's Deli was not open for business, and the sidewalk without the railing was not intended to be used at that time by the public. The question is whether the absence of a railing means that the sidewalk was still under construction and, therefore, the exclusion of the policy still applies.
The reason for the delay in installing a railing is not determinative of whether the sidewalk was still under construction. The undisputed fact is that the railing was part of the exterior sidewalk construction and its absence was an alleged cause of the fall. Construction of the load bearing sidewalk was not yet completed because the railing had not been installed. In fact, DeMarco's Deli did not obtain a temporary certificate of occupancy until several months after the accident and after a railing was installed. The time that a certificate of occupancy was issued is not dispositive of when construction of the sidewalk was completed, but it is relevant evidence that the court could consider within the totality of all the evidence on the summary judgment record.
We conclude that the trial court correctly interpreted the insurance policy and its exclusion.*fn2 It did not err in granting summary judgment to GNY on the factual record presented.