June 17, 2013
BOBBY ROBINSON, Plaintiff,
TISHMAN CONSTRUCTION CORP. OF NEW JERSEY, AIR JOY HEATING AND COOLING, INC., and PARAMOUNT HOMES AT ASBURY URBAN RENEWAL, LLC, Defendants. TISHMAN CONSTRUCTION CORP. OF NEW JERSEY,
HARLEYSVILLE INSURANCE COMPANY OF NEW JERSEY
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 13, 2012
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-5458-08.
Daniel B. McMeen argued the cause for appellants (Golden, Rothschild, Spagnola, Lundell, Boylan & Garubo, Jr., P.C., attorneys; Philip A. Garubo, of counsel; Mr. Garubo and Mr. McMeen, on the brief).
Dean R. Lospinoso argued the cause for respondent Harleysville Insurance Group (Riker Danzig Scherer Hyland & Perretti, LLP, attorneys; Lance J. Kalik, of counsel and on the brief; Mr. Lospinoso, on the brief).
Peter A. Gaudioso argued the cause for respondent Air Joy Heating and Cooling, Inc. (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. Gaudioso, of counsel and on the brief; Joseph G. Fuoco, on the brief).
Before Judges Graves, Espinosa, and Guadagno.
Third-party plaintiffs Tishman Construction Corporation of New Jersey (Tishman) and Paramount Homes at Asbury Urban Renewal, LLC, (Paramount) appeal from a December 30, 2011 order granting summary judgment in favor of third-party defendant Harleysville Insurance Company of New Jersey (Harleysville). For the reasons that follow, we affirm.
The underlying personal injury action arose from a December 19, 2006 construction site accident involving plaintiff Bobby Robinson, a union worker who fell from a ladder. At the time of the accident, Paramount, the owner of the construction project, had entered into a Construction Management Agreement (the Agreement) with Tishman. Pursuant to the Agreement, Tishman provided Paramount with construction management services for the project and additional insured coverage. The Agreement also stated: "Any Umbrella/Excess Liability Policy issued to Tishman during the term of this project is to afford essentially the same coverage as Additional Insured as the primary policy."
In accordance with the Agreement, Tishman obtained a commercial general liability policy issued by National Union Fire Insurance Company of Pittsburgh (National Union), number 163-58-86, effective January 1, 2006 through January 1, 2007. National Union agreed to insure Paramount as an additional insured in an endorsement attached to the policy. National Union also issued Tishman a workers' compensation policy for the same time period. The National Union policy included the following provision:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. . . . We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result.
Additionally, the National Union policy stated:
This insurance is excess over any of the other insurance whether primary, excess, contingent or on any other basis:
(1) Unless such insurance is specifically purchased to apply as excess of this policy, or
(2) you are obligated by contract to provide primary insurance.
Tishman also entered into a subcontractor agreement dated August 17, 2005, with Air Joy Heating and Cooling, Inc. (Air Joy) for heating, air conditioning, and ventilation work at the project site. The contract between Tishman and Air Joy specified:
Unless otherwise provided for by the attached Insurance Rider, prior to commencement of any work under this contract, and until completion and final acceptance of the Work, the Contractor and each and every subcontractor shall, at its own expense, maintain the following Insurance on its own behalf and for the protection of the Owner, Construction Manager and all other indemnities named in this Contract:
a. Comprehensive General Liability
b. Worker's Compensation
c. Comprehensive Automobile Liability
d. All other insurance protection required by the Owner
All of the above coverages shall comply with the specific requirements contained in the Insurance Rider hereby attached and made a part of this contract.
The attached Insurance Rider dated March 3, 2005, required Air Joy to obtain the following insurance prior to commencement of any work:
B. Commercial General Liability with a combined Bodily Injury and Property Damage limit of not less than Ten Million ($10, 000, 000.00) Dollars per occurrence and in the aggregate. The aggregate must be applicable on a per project basis. Coverage must include the following perils: [The limit may be provided through a combination of Primary and Umbrella/Excess Liability polices]
1. Contractual Liability for liability assumed under this Contract and all other Contracts relative to the project.
7. Endorsement (CG2010 or its equivalent) must be furnished reflecting the inclusion of the Interests of Tishman Construction Corporation of New Jersey and their respective parent companies, corporations and/or partnerships and their owned, controlled, affiliated associated and subsidiary companies, corporations, and/or partnerships and the respective agents, consultants, principals, partners, servants, officers, stockholders, directors and employees of each and all other indemnities.
8. Coverage is to be endorsed to reflect that the insurance provided is to be primary for the Contractor and Owner, and all other Indemnities named in the Contract.
E. The above Insurance shall each contain the following wording verbatim:
Paramount Homes at Asbury Beach Urban Renewal, LLC, Tishman Construction Corporation of New Jersey, Amboy National Bank, and City of Asbury Park are interested in the maintenance of this Insurance and it is agreed that this insurance will not be concealed, materially-changed or not renewed without at least a thirty (30) day advance written notice to Tishman.
Harleysville issued a Contractor's Business Owners Policy, number CB-5J7337, to Air Joy effective October 5, 2006 to October 5, 2007 (the Harleysville policy). A Certificate of Liability Insurance (the Certificate) was issued to Tishman, evidencing the coverage afforded to Air Joy. The certificate stated it was "issued as a matter of information only" and did "not amend, extend, or alter" the coverage afforded by the policy.
The Additional Insured Endorsement, CG-7167, in the Harleysville policy provided in relevant part:
WHO IS AN INSURED (Section II) is amended to include as an additional insured any general contractor, subcontractor, or owner whom you are required to add as an additional insured on this policy under a written or additional insured has been issued and received by "us" prior to the date of loss.
The insurance provided to the additional insured is limited as follows:
(a) The additional insured is covered for its vicarious liability for the acts or omissions of the named insured which arise from the named insured's ongoing construction operations. The additional insured is not covered for liability due to its independent acts or for any supervision of "your work" or the work of any other person or organization.
Any coverage provided hereunder shall be excess over other valid and collectible insurance available to the additional insured whether that other insurance is primary, excess, contingent or provided on any other basis.
Additionally, the Harleysville policy contained the following exclusions:
d. Any obligation of the insured under a workers compensation, disability benefits or unemployment compensation law or any similar law.
e. "Bodily injury" to:
(1) An employee of the insured arising out of and in the course of employment by the insured.
Following the accident, Robinson filed an Employee's Claim Petition with the Division of Workers' Compensation dated December 28, 2006, listing Tishman as his employer. Tishman acknowledged in its response to the petition that Robinson "was in [its] employment on the date alleged" and that the injury "arose out of and in the course of employment." On April 23, 2007, Robinson filed a second Employee Claim Petition naming Air Joy as his employer. Air Joy initially denied its status as employer, but Tishman and Air Joy both paid workers' compensation benefits to Robinson pursuant to a settlement agreement.
Robinson filed his personal injury action in November 2008. In the first count of his amended complaint, Robinson alleged he was employed by Air Joy, and "working under the direction of . . . agents, representatives and/or employees of Tishman." Robinson stated he "was assigned the task of utilizing a jack hammer to make holes in the building wall which was in the process of being constructed" and was injured when he fell from a ladder while using the jackhammer. He claimed that no one was holding the ladder, and that Air Joy and Tishman were negligent for failing to provide "appropriate manpower and/or safety apparatus and/or procedures." In the second count, Robinson alleged he was employed by Air Joy, or alternatively, Tishman, and that both defendants had "knowingly and willfully" exposed him "to a known dangerous hazard without justification." In the third count, Robinson alleged Paramount was negligent for failing to maintain the project "in a safe, suitable and proper condition."
In a letter to Harleysville dated April 23, 2010, Tishman stated that it was entitled to coverage as an additional insured under the Harleysville policy and asked Harleysville to provide a defense and indemnification with respect to Robinson's claims. In response, Harleysville explained it would not defend or indemnify Tishman, because: its policy only provided additional insured coverage for the vicarious liability of Tishman arising from Air Joy's ongoing operations, and did not cover the "independent negligence of Tishman" or "its negligent supervision of Air Joy"; exclusion (d) barred coverage for workers' compensation claims; exclusion (e) barred coverage for bodily injury to an employee of "the insured arising out of and in the course of employment by the insured"; and, any coverage afforded would be "on an excess basis."
After Harleysville refused to provide coverage, Tishman and Paramount filed a third-party complaint, asserting contractual indemnification and breach of contract claims against Air Joy. The third-party complaint also sought defense, indemnification, and reimbursement of legal fees from Harleysville.
On January 28, 2011, the trial court found that "Air Joy was a special employer of the plaintiff, Bobby Robinson, " and that Robinson's personal injury claims were barred by the exclusive remedy provision of the Workers' Compensation Act. The court also found that Robinson's claims against Tishman were barred, because Tishman was Robinson's general employer. The court reasoned:
Tishman is the one who hired Bobby Robinson. Tishman is the one who paid Bobby Robinson by way of paycheck. Tishman is the one who ultimately determined that work needed to be done [by] someone such as Bobby Robinson.
Air Joy could not have hired Bobby Robinson because they didn't have the requisite bond . . . in order to hire him directly.
In August 2011, Harleysville filed a motion for summary judgment, and Tishman and Paramount filed a cross-motion for summary judgment for additional insured coverage under the Harleysville policy and sought an adjudication that Air Joy was contractually obligated to defend and indemnify Tishman and Paramount.
Following oral argument, the court granted Harleysville's motion for summary judgment and denied the cross-motion filed by Tishman and Paramount. In a statement of reasons attached to the orders entered on December 30, 2011, the court stated:
Tishman and Paramount are not entitled to additional insured coverage under the Harleysville policy because the scope of additional insured coverage does not extend to liability caused by "independent acts" or "supervision" of Air Joy's work; Tishman is not entitled to additional insured coverage due to exclusion[s] contained in the Harleysville policy for bodily injury caused to an employee of an insured and for any obligation of the insured to provide workers' compensation benefits; and the "other insurance" provisions of the Harleysville policy and policies available to Tishman and Paramount render additional insured coverage under the Harleysville policy excess.
Pursuant to exclusion (e) of the Harleysville policy, there is no coverage for "bodily injury" sustained by "employees of an insured arising out of and in the course of employment." Exclusion (d) bars coverage for "any obligation of the insured under a workers compensation . . . law." Therefore, exclusions (e) and (d) preclude coverage to Tishman.
The additional insured endorsement contained in the Harleysville policy states that it is excess. Paramount is entitled to primary insurance under the commercial general liability policy issue to Tishman. Thus, there is no duty to defend Paramount. As argued, since the defense of Paramount was never tendered, there is no duty to reimburse defense costs. Tishman is afforded coverage under the workers compensation policy which is primary for Tishman.
Additionally, the court denied the motion by Tishman and Paramount for a defense and indemnification from Air Joy. The court stated: "[T]he contract does not require Air Joy to indemnify Tishman or Paramount for their own fault or negligence. Therefore, Air joy has no obligation to reimburse Tishman or Paramount for their counsel fees."
Tishman and Paramount submit the following arguments on appeal:
THE COURT ERRED IN DETERMINING THAT TISHMAN AND PARAMOUNT WERE NOT ENTITLED TO COVERAGE UNDER THE HARLEYSVILLE POLICY OF INSURANCE.
THE TRIAL COURT ERRED IN DETERMINING THAT THE EXCLUSIONS CONTAINED IN THE POLICY PRECLUDE COVERAGE AS TO TISHMAN AND PARAMOUNT.
THE OTHER INSURANCE PROVISIONS OF THE POLICY ARE AGAINST THE REASONABLE EXPECTATIONS OF TISHMAN AND PARAMOUNT.
THE COURT ERRED IN FAILING TO HOLD AIR JOY IN BREACH.
We conclude from our examination of the record and the applicable law that these arguments are without merit, Rule 2:11-3(e)(1)(E), and only require the following comments.
Summary judgment is appropriate where the pleadings and evidence "show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). As stated by the Court:
[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to 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. The "judge's function is not himself [or herself] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial."
[Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (alteration in original) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202, 212 (1986)).]
When reviewing an order granting summary judgment, we utilize the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J.Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We first determine "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Brill, supra, 142 N.J. at 536 (quoting Liberty Lobby, supra, 477 U.S. at 251-52, 106 S.Ct. at 2512, 91 L.Ed.2d at 214). If there is no genuine issue of material fact, we must then decide whether the trial court's application of the law was correct. Walker v. Atl. Chrysler Plymouth, Inc., 216 N.J.Super. 255, 258 (App. Div. 1987).
"An insurance policy is a contract that will be enforced as written when its terms are clear in order that the expectations of the parties will be fulfilled." Flomerfelt v. Cardiello, 202 N.J. 432, 441 (2010). "In considering the meaning of an insurance policy, we interpret the language 'according to its plain and ordinary meaning.'" Ibid. (quoting Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 175 (1992)). "An insurer's duty to defend an action brought against its insured depends upon a comparison between the allegations set forth in the complainant's pleading and the language of the insurance policy." Id. at 444. Additionally, the Court has stated "absent explicit contractual language to the contrary, an indemnitee who has defended against allegations of its own independent fault may not recover the costs of its defense from an indemnitor." Mantilla v. NC Mall Assocs., 167 N.J. 262, 275 (2001).
In this case, the Additional Insured Endorsement of the Harleysville policy expressly stated that it only covered the additional insured for "its vicarious liability for the acts or omissions of [Air Joy], " and it did not afford coverage for the additional insured's "independent acts, " including its supervision of Air Joy's work. Furthermore, Robinson alleged he was employed by "Air Joy, working under the direction of . . . agents, representatives and/or employees of the defendant Tishman, " and he sustained injuries because the defendants "were careless, reckless and/or negligent."
Under these circumstances, we find that the Harleysville policy is not ambiguous and does not provide coverage for liability resulting from either Tishman's or Paramount's independent acts or omissions. Coverage for such claims rests with Tishman's and Paramount's own liability insurers. See Travelers Cas. & Sur. Co. v. Dormitory N.Y., 732 F.Supp.2d 347, 358-59 (S.D.N.Y. 2010) (finding the identical endorsement under a Harleysville policy governed by New Jersey law was "not ambiguous" and the additional insured was not "entitled to coverage")
The trial court determined there was no genuine factual dispute and that Harleysville was entitled to summary judgment as a matter of law We agree with the trial court's analysis and affirm substantially for the reasons stated by Judge Honora O'Brien Kilgallen on December 30 2011.