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Michael R. Beadling, As Administrator Ad Prosequendum of the Estate of v. Rode's Fireside Restaurant and Tavern

September 28, 2012

MICHAEL R. BEADLING, AS ADMINISTRATOR AD PROSEQUENDUM OF THE ESTATE OF NICOLE BEADLING, AND MICHAEL R. BEADLING, INDIVIDUALLY, PLAINTIFFS,
v.
RODE'S FIRESIDE RESTAURANT AND TAVERN, DAVID RODE, JOYCE RODE, EMILY RODE, AND EARL C. RODE, JR., INC., DEFENDANTS.
HARLEYSVILLE INSURANCE COMPANY OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
RODE'S FIRESIDE RESTAURANT AND TAVERN, DAVID RODE, JOYCE RODE, EMILY RODE, EARL C. RODE, JR., INC., NEW JERSEY MANUFACTURERS INSURANCE GROUP, AND MICHAEL R. BEADLING, INDIVIDUALLY AND AS ADMINISTRATOR OF THE ESTATE OF NICOLE BEADLING, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-1757-10.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 19, 2012

Before Judges Parrillo,*fn1 Sabatino and Fasciale.

In this declaratory judgment lawsuit, Harleysville Insurance Company of New Jersey (Harleysville) appeals from three September 7, 2011 orders (1) compelling it to defend and indemnify Rode's Fireside Restaurant and Tavern, David Rode, Joyce Rode, Emily Rode, and Earl C. Rode, Jr., Inc. (the Rode defendants) in an underlying negligence and wrongful death lawsuit; (2) declaring that New Jersey Manufacturers Insurance Group (NJM) had no obligation to defend or indemnify the Rode defendants; and (3) denying Harleysville's request that NJM reimburse Harleysville's defense costs and fees. The judge entered the orders after considering summary judgment motions filed by Harleysville, NJM, and the Rode defendants. We affirm.

In reviewing a grant of summary judgment, we apply the same standard under Rule 4:46-2(c) that governs the trial court. See Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007). We must "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." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Viewed most favorably to plaintiff, the summary judgment record established the following facts.

Nicole Beadling (Beadling) worked as a bartender for the Rode defendants. In November 2008, after reporting for work, she became physically impaired (apparently from intoxication),*fn2 left work early, drove her vehicle, and sustained fatal injuries from an automobile accident.

Beadling's Estate (the Estate) brought suit against the Rode defendants, asserting claims for negligence, Dram Shop Act violations, wrongful death, and survivorship. The complaint alleged that Beadling "reported to work for a regular lunchtime shift as a server and bartender"; that she was "disoriented and visibly impaired"; that "[d]uring the course of her shift, the physical signs of her impairment were obvious"; and that she was "observed making multiple mistakes in connection with her duties." The complaint further alleged that Emily Rode, the restaurant manager, "called [Beadling] into the office to discuss her behavior," but "deemed [her] competent[,] and sent her back to work." The complaint stated that Beadling "asked [Emily] Rode if she could be excused from the rest of her shift so she could go home," and that "despite [Beadling's] erratic behavior and obviously impaired physical condition during the course of her shift, the defendants, their agents, servants and/or employees allowed [her] to leave the premises in her impaired state when they knew or should have reasonably known that [she] would soon drive her vehicle." Apart from these factual and purely narrative references to Beadling's workplace location and to her interactions with her supervisor, the complaint did not allege, either explicitly or in substance, that Beadling's injuries "arose out of and in the course of her employment" with the Rode defendants.

In December 2009, the Rode defendants tendered the defense to Harleysville, its general liability carrier, and NJM, its workers' compensation carrier. Harleysville initially declined to defend the Rode defendants, stating that its policy only extended "coverage for 'bodily injury' that is caused by an 'occurrence,'" and did not provide "coverage for any 'bodily injury' to '(1) [a]n employee of the insured arising out of and in the course of employment by the insured; or (2) [t]he spouse, child, parent, brother or sister of that employee as a consequence of (1)." Harleysville stated that "review of the [c]omplaint reveals that the allegations of injuries to [Beadling] . . . arose out of and in the course of [her] employment." NJM, recognizing that the accident was not jobrelated, declined to defend and indemnify the Rode defendants and claimed that coverage was precluded by a policy exclusion for intentional wrongs.

In April 2010, the Rode defendants asked Harleysville and NJM to reconsider. NJM maintained that its policy denied coverage:

Mere negligence has not been shown to reach the intentional wrong portion of the Workers' Compensation Act and thus there is no defense offered for this type of injury. In the case that the plaintiff has filed, there are mere allegations of negligence against each of the defendants and no statement regarding the substantial certainty which would obligate the carrier to provide a defense to [the Rode defendants]. Thus, the [Estate's] claims which do not rise above the level of negligence are excluded from coverage.

Although Harleysville urged NJM to accept coverage, NJM again declined. Harleysville then defended the Rode defendants and expressly reserved its rights, including the right "to deny coverage to [the Rode defendants], to deny indemnity for the claims asserted against [them], to terminate and withdraw its defense at any time, and to seek reimbursement from [them] for defense costs."

On October 14, 2010, Harleysville filed a complaint for declaratory judgment against NJM and the Rode defendants, seeking a ruling that NJM was obligated to defend and indemnify the Rode defendants and reimburse Harleysville for costs.*fn3

Thereafter, Harleysville, NJM, and the Rode defendants filed motions for summary judgment.

On September 7, 2011, Judge Richard S. Hoffman issued an oral decision and entered the three orders from which ...


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