Court Opinion

ID: 4197854
Source: CourtListenerOpinion
Date Created: 2017-08-22 13:09:32.963634+00
Date Added: 2024-06-11T13:25:26.675694
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
         parties in the case and its use in other cases is limited. R.1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-4267-15T1

JEANNE FINNEGAN,

        Plaintiff,

v.

INDUCTOTHERM CORP.,

        Defendant/Third-Party
        Plaintiff-Appellant,

v.

GREENTREE FOOD MANAGEMENT,
INC.,

        Third-Party Defendant-
        Respondent/Fourth Party
        Plaintiff,

v.

FRED DUNHOUR and THE DUNHOUR
AGENCY,

     Fourth-Party Defendants/
     Respondents.
_______________________________________________

              Argued May 9, 2017 – Decided August 22, 2017

              Before Judges Messano, Espinosa and Grall.
            On appeal from the Superior Court of New
            Jersey, Law Division, Camden County, Docket
            No. L-2886-12.

            Robert P. Avolio argued the cause for
            appellant Inductotherm Corporation (Avolio &
            Hanlon,   PC,  attorneys;   Mr.  Avolio  and
            Catherine M. Brennan, on the briefs).

            John P. O'Toole argued the cause for
            respondents Greentree Food Management, Inc.,
            Fred Dunhour, and The Duhhour Agency (Wilson,
            Elser, Moskowitz, Edelman & Dicker, LLP,
            attorneys; Mr. O'Toole, on the brief).

PER CURIAM

      Plaintiff Jeanne Finnegan, an employee of Greentree Food

Management, Inc. (Greentree), suffered injuries following a slip

and fall at work.        Greentree provided cafeteria services to the

employees of Inductotherm Corp. (Inductotherm), in a cafeteria in

Inductotherm's building, pursuant to a written agreement (the

Agreement).

      The Agreement lacked any express indemnification provisions

but   provided      in   pertinent   part:     "Greentree      will:     Carry

Comprehensive General Liability Insurance to the limits mutually

agreed upon to cover its own operation.              Greentree will have

Inductotherm Corp. listed as an additional insured on their General

Liability Policy and shall present at inception and annually

thereafter satisfactory evidence thereof."          (Emphasis added).       The

Agreement    also    required   every   Greentree   employee   to   sign      an

                                        2                              A-4267-15T1
"agreement" on Greentree's letterhead recognizing his or her "sole

and   exclusive     remedy        w[ould]   be     under    the    workmen's     (sic)

compensation provided by . . . Greentree."

      On   the    date     of    plaintiff's      fall   Greentree     maintained      a

commercial       general        liability   policy       (the   CGL    policy)     with

Harleysville Insurance Company.                 It is undisputed that Greentree

never added Inductotherm to the policy as an additional insured.

Harleysville       refused        Inductotherm's       tender     of   its   defense,

writing, "Inductotherm is not listed [as] an additional insured

on the [CGL] policy nor does Inductotherm qualify as an insured

under the policy."

      Plaintiff filed a negligence complaint against Inductotherm,

which, in turn, filed an answer and third-party complaint against

Greentree, alleging breach of the Agreement, breach of the covenant

of good faith and fair dealing and negligence.                    Greentree answered

and filed a fourth-party complaint against its insurance broker,

Fred Dunhour, and his company, The Dunhour Agency (collectively,

Dunhour).        Inductotherm       amended      its   third-party     complaint      to

include cross-claims against Dunhour for indemnification, as well

as negligence and breach of contract.

      Inductotherm and Greentree moved for summary judgment; the

motion judge granted Greentree's motion and dismissed the third-

party complaint.         We granted Inductotherm's motion for leave to

                                            3                                  A-4267-15T1
appeal,    summarily    reversed    and   reinstated      the     third-party

complaint.1     At some point undisclosed by the record, Inductotherm

settled with Finnegan.

       A second Law Division judge then granted Greentree's motion

to    dismiss   Inductotherm's     negligence   claim.2         The   parties'

subsequent cross-motions for summary judgment were denied.

1
    The panel's order provided in pertinent part:

            The third-party complaint is reinstated and
            the matter is remanded to the trial court for
            further   proceedings   on   the   respective
            liability for negligence of third-party
            defendant or third-party plaintiff and breach
            of contract. The questions of liability for
            creating the dangerous condition causing
            plaintiff's   accident   and  any   resultant
            injuries [are] disputed. Further, the breach
            of contract claims are dependent on a
            determination of said liability, obviating
            summary judgment.

     The parties and the trial judge understandably were confused
by the order's contemplation of a trial on Greentree's and
Inductotherm's "respective liability for negligence." Absent an
express indemnity provision, "[b]y virtue of the exclusive remedy
provisions of the Workers' Compensation Act . . . an employer is
immune from suit by an employee, and may not be sued for
contribution by a third-party tortfeasor." Kane v. Hartz Mountain
Indus., Inc., 278 N.J. Super. 129, 145 (App. Div. 1994) (citing
Ramos v. Browning Ferris Indus. of S. Jersey, Inc., 103 N.J. 177,
184 (1986)), aff'd o.b., 143 N.J. 141 (1996).
2
  Inductotherm has not appealed that decision. As a result, we
consider the points raised on appeal only in the context of
Inductotherm's breach of contract and breach of the implied
covenant of good faith claims.

                                     4                                 A-4267-15T1
     On April 25, 2016, the parties appeared for trial.       After an

off-the-record   conference   in   chambers,   the   judge   held   oral

argument on the record to consider legal arguments raised by

Inductotherm and Greentree.   Relying on Pennsville Shopping Center

Corp. v. American Motorist Insurance Co., 315 N.J. Super. 519

(App. Div. 1998), certif. denied, 157 N.J. 647 (1999), the judge

reasoned that even if Inductotherm had been added as an additional

insured on Greentree's CGL policy, there nonetheless would be no

coverage for plaintiff's claim because "the additional insured

status has to be taken [to be] coextensive with . . . Greentree's

liability."   He determined that Greentree could not be liable for

plaintiff's injuries because of the workers' compensation bar,

N.J.S.A. 34:15-8, and pursuant to Ramos, supra, Inductotherm could

not seek contribution from Greentree.     The judge granted summary

judgment and dismissed Inductotherm's claims against Greentree and

Dunhour.   This appeal followed.

     Inductotherm argues it was reversible error for the judge,

without formal notice or motion, to grant summary judgment on the

day of trial after earlier denying the parties' cross-motions

seeking the same relief.      We do not necessarily condone the

procedure employed by the judge.       See, e.g., Klier v. Sordoni

Skanska Constr. Co., 337 N.J. Super. 76, 84 (App. Div. 2001)

("[P]laintiff came to court prepared to pick a jury, but rather

                                   5                            A-4267-15T1
was required to defend a motion, brought by the court sua sponte,

to dismiss his complaint.").       However, because we are reversing

on other grounds, and because the record fails to reveal that

Inductotherm ever objected to the judge's consideration of what

was a purely legal issue, Inductotherm's argument in this regard

warrants no further discussion.3

     Inductotherm also argues the judge misconstrued Pennsville

and Ramos and erred as a matter of law by applying those cases to

its breach of contract claim. Inductotherm contends the CGL policy

would have provided it with coverage for plaintiff's claim had

Greentree and Dunhour properly added Inductotherm as an additional

insured.    It urges us to reverse and enter summary judgment as to

liability on its breach of contract claim.

     We    agree   with   Inductotherm   that   the   judge   misconstrued

Pennsville, which has little application to these facts.                  We

reverse and remand for further proceedings consistent with this

opinion.

3
  Inductotherm never sought reconsideration in the trial court.
On appeal, and without seeking permission to supplement the record,
its counsel included a certification in Inductotherm's appendix.
Generously read, the certification explains counsel's surprise
that the judge, instead of picking a jury, entertained legal
argument and dismissed the complaint. Notably, the certification
does not state that counsel ever objected to the judge's course.

                                    6                              A-4267-15T1
     "The interpretation of a contract is subject to de novo review

by an appellate court."      Kieffer v. Best Buy, 205 N.J. 213, 222

(2011) (citations omitted).          "Accordingly, we pay no special

deference to the trial court's interpretation and look at the

contract with fresh eyes."      Id. at 223.

     We interpret contractual terms by considering "their plain

and ordinary meaning."      Ibid.    (quoting M.J. Paquet, Inc. v. N.J.

Dep't of Transp., 171 N.J. 378, 396 (2002)).          "The judicial task

is simply interpretative; it is not to rewrite a contract for the

parties better than or different from the one they wrote for

themselves."   Ibid.    However, "[i]f the terms of the contract are

susceptible    to      at    least        two   reasonable   alternative

interpretations, an ambiguity exists."          Chubb Custom Ins. Co. v.

Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (citing Nester

v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997)).

     It is undisputed that the Agreement required Greentree to add

Inductotherm as an additional insured on its CGL policy.              Its

failure to do so was a breach of the agreement.              See, e.g.,

Antenucci v. Mr. Nick's Mens Sportswear, 212 N.J. Super. 124, 131

(App. Div. 1986) ("[T]he lessee contracted to provide liability

insurance coverage for the landlord.            Because of its breach of

that covenant it was liable for the losses sustained by the

landlord flowing from that breach.").

                                      7                          A-4267-15T1
       As already noted, the judge accepted Greentree's argument

that    our    decision      in   Pennsville     compelled       dismissal      of

Inductotherm's complaint.         There, we concluded a shopping center

tenant's insurance policy did not provide coverage to the landlord-

owner for injuries suffered by a patron who fell in the parking

lot.     Pennsville, supra, 315 N.J. Super. at 523.                    The lease

obligated     the   tenant   to   indemnify    the    landlord   for    injuries

occurring on the demised premises and to name the landlord as an

additional insured on the tenant's liability policy.               Id. at 521.

The lease, however, obligated the landlord to maintain the common

areas of the shopping center and to indemnify the tenant against

any claim that resulted from the landlord's failure to do so.                  Id.

at 521-22.

       We held, "[u]nder the terms of the lease . . . , tenant bore

responsibility only for damages incurred on the demised premises.

Its undertaking to name landlord as an additional insured must be

taken to be coextensive with the scope of tenant's own liability."

Id. at 523.     Importantly, we also held, "the question whether a

party is insured at all may be a separate matter susceptible of

resolution     by   reference     to   any   relevant   matter    such    as    an

underlying contract, here the lease agreement, which clarifies the

intendments of the parties in apportioning responsibility and

providing for insurance coverage."            Ibid.

                                        8                                A-4267-15T1
      Here, however, there was no indemnification provision in the

Agreement, much less cross-indemnification commitments between

Greentree     and    Inductotherm        that     limited      each   party's

responsibilities for conditions on the premises, as did the lease

in   Pennsville.     Additionally,   the        panel   in   Pennsville     never

discussed    the    particular   terms     of     the    additional   insured

endorsement of the tenant's policy.

      We have since cautioned against over reading Pennsville's

holding, recognizing

            the court in Pennsville relied upon the lease
            in concluding that the additional insured
            endorsement in the tenant's policy only
            provided coverage to the landlord for any
            claim arising out of an accident occurring on
            the demised premises. Although the court did
            not quote the additional insured endorsement
            in the tenant's policy, the language of that
            endorsement    was   presumably    ambiguous.
            Therefore, the court resorted to the terms of
            the lease to resolve the ambiguity, which is
            an appropriate use of extrinsic evidence in
            construing an insurance policy.

            [Jeffrey M. Brown Assocs., Inc. v. Interstate
            Fire & Cas. Co., 414 N.J. Super. 160, 171 (App.
            Div.) (emphasis added), certif. denied, 204
            N.J. 41 (2010).]

As Judge Skillman noted,

            [a]n insurance policy is a contract between
            the insurer and the insured. Thus, the extent
            of coverage . . . is controlled by the relevant
            policy terms, not by the terms of the
            underlying trade contract that required the
            named insured to purchase coverage.

                                     9                                    A-4267-15T1
                [Id. at 171-72 (quoting Bovis Lend Lease LMB,
                Inc. v. Great Am. Ins. Co., 855 N.Y.S.2d 459,
                464 (N.Y. App. Div. 2008)).]

       The only remaining issue is whether Inductotherm suffered

damages as a proximate result of Greentree's breach.                    In Robinson

v. Janay, we held, "[t]he damages which may be recovered for breach

of   an    agreement    to    furnish   an    insurance    policy      is   the   loss

sustained by reason of the breach, 'the amount that would have

been      due   under   the   policy    provided    it    had   been    obtained.'"

105 N.J. Super. 585, 591 (App. Div.) (quoting 43 Am. Jur. 2d,

Insurance, § 174, p. 231), certif. denied, 54 N.J. 508 (1969).

       Therefore, we must determine whether the CGL policy would

have provided Inductotherm with a defense and indemnification

against plaintiff's suit.           The principles we apply to contracts

generally apply in equal force to insurance contracts.                            "In

attempting to discern the meaning of a provision in an insurance

contract, the plain language is ordinarily the most direct route."

Chubb, supra, 195 N.J. at 238 (citing Zacarias v. Allstate Ins.

Co., 168 N.J. 590, 594-95 (2001)).                 "If the language is clear,

that is the end of the inquiry."              Ibid. (citing Zacarias, supra,

168 N.J. at 594-95).           "[I]n the absence of an ambiguity, a court

should not 'engage in a strained construction to support the

imposition of liability' or write a better policy for the insured

                                         10                                  A-4267-15T1
than the one purchased."   Ibid. (quoting Progressive Cas. Ins. Co.

v. Hurley, 166 N.J. 260, 272-73 (2001)).

     The CGL policy provided coverage to the "Named Insured" listed

on the declarations page, and "any other person or organization

qualifying as a Named Insured under this policy." The declarations

page listed Greentree alone as the insured.

     The CGL policy provided coverage for all bodily injury claims

"that the insured becomes legally obligated to pay."    It included

an exclusion, however, for "'bodily injury' to . . . (1) [a]n

'employee' of the insured arising out of and in the course of: (a)

[e]mployment by the insured; or (b) [p]erforming duties related

to the conduct of the insured's business."      The "Separation Of

Insureds" section of the policy provided, "this insurance applies:

a. [a]s if each Named insured were the only Named Insured; and b.

[s]eparately to each insured against whom claim is made or 'suit'

is brought."

     Had Inductotherm been an additional insured under the CGL

policy, the exclusion would not have applied because plaintiff was

not an employee of Inductotherm.     This result is consistent with

the reasoning of two of our reported cases that construed similar

contractual provisions, Erdo v. Torcon Construction Co., 275 N.J.

Super. 117, 121-23 (App. Div. 1994), and Maryland Casualty Co. v.

New Jersey Manufacturers Casualty Insurance Co., 48 N.J. Super.

                                11                          A-4267-15T1
314, 323-26 (App. Div.), aff'd, 28 N.J. 17 (1958), both of which

were     comprehensively      summarized    by     the   Third    Circuit    in

ArcelorMittal Plate, LLC v. Joule Technical Services, Inc., 558

F. App'x. 205, 209 (3d. Cir. 2014) ("Two New Jersey appellate

courts, having considered the issue in considerable depth, have

concluded that an employee exclusion does not bar coverage for

claims against one insured by a different insured's employees.").

We need not expound further.         The CGL policy presumably would have

provided Inductotherm with a defense.

       We hesitate to reach that conclusion as a matter of law given

the record before us.            Because the CGL policy did not include

Inductotherm as an additional insured, we cannot say whether any

additional insured endorsement would have included limitations or

exclusions to the general insuring provisions of the policy.                 For

example, the CGL policy in the record includes an endorsement

naming    the    lessor     of    Greentree's     "[p]remises,"    "Maplewood

Apartment & Jager Management," as an additional insured.                    That

endorsement added the lessor as "an insured . . . but only with

respect to liability arising out of the ownership, maintenance or

use of that part of the premises leased to [Greentree]."

       Dunhour   was      deposed,    but   his    testimony     provides    no

information in this regard.            The record fails to reveal any

discovery taken from Harleysville's representative that might shed

                                      12                              A-4267-15T1
light on the precise terms of any additional insured endorsement,

or    whether    Inductotherm's      addition      to    the    CGL    policy    as    an

additional insured would have been without any limitation of

coverage.

       In   short,    we   reverse    the    order      under   review,    reinstate

Inductotherm's third-party complaint and remand the matter for

further proceedings.          Although Inductotherm urges us to reverse

and    enter     summary   judgment     in   its     favor,     Inductotherm        must

establish that if it had been added as an additional insured on

the CGL policy, the policy would have provided a defense and

potentially indemnification.            We hasten to add that if, after

adding Inductotherm as an additional insured, the CGL policy

contained        no   other    coverage       limitations         or     exclusions,

Inductotherm is entitled to summary judgment as to its claims that

Greentree breached the Agreement, and Inductotherm would have

received     a   defense    to,   and   indemnification          for,    plaintiff's

claims.     Erdo, supra, 275 N.J. Super. at 121-23; Maryland Cas.,

supra, 48 N.J. Super. at 323-26.              However, Inductotherm did not

submit any proof of the damages it claimed were the proximate

consequences of the breach, nor did the parties or the trial court

address the issue.         That shall also be a subject of the remand

proceedings.

                                        13                                      A-4267-15T1
     Finally, at the Law Division hearing, Inductotherm agreed

that because the judge granted summary judgment to Greentree, its

claims against Dunhour were properly dismissed.      We reinstate

those claims.

     Reversed and remanded for further proceedings consistent with

this opinion.   We do not retain jurisdiction.

                               14                          A-4267-15T1