Court Opinion

ID: 4697815
Source: CourtListenerOpinion
Date Created: 2021-06-23 14:10:45.974651+00
Date Added: 2024-06-11T08:05:48.624973
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NOT FOR PUBLICATION WITHOUT THE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-3011-18

HOME INSURANCE COMPANY,

          Plaintiff,

v.

CORNELL-DUBILIER
ELECTRONICS, INC., FEDERAL
PACIFIC ELECTRIC COMPANY,
AETNA CASUALTY & SURETY
COMPANY, AIU INSURANCE
COMPANY, AMERICAN
CENTENNIAL INSURANCE
COMPANY, AMERICAN
INSURANCE COMPANY,
AMERICAN INTERNATIONAL
INSURANCE COMPANY,
AMERICAN MOTORISTS
INSURANCE COMPANY,
CALIFORNIA UNION
INSURANCE COMPANY,
COLUMBIA CASUALTY
COMPANY, CONTINENTAL
CASUALTY INSURANCE
COMPANY, EMPLOYERS
MUTUAL CASUALTY
COMPANY, FIREMAN'S FUND
INSURANCE COMPANY, FIRST
STATE INSURANCE COMPANY,
GRANITE STATE INSURANCE
COMPANY, HARTFORD
ACCIDENT & INDEMNITY
COMPANY, HIGHLANDS
INSURANCE COMPANY,
INTERNATIONAL SURPLUS
LINES INSURANCE COMPANY,
LEXINGTON
INSURANCE COMPANY,
LIBERTY MUTUAL INSURANCE
COMPANY, CERTAIN
UNDERWRITERS AT LLOYDS
OF LONDON, LUMBERMAN'S
MUTUAL CASUALTY
COMPANY, MIDLAND
INSURANCE COMPANY,
NORTH RIVER INSURANCE
COMPANY, NORTHWESTERN
NATIONAL INSURANCE
COMPANY, PRUDENTIAL
REINSURANCE COMPANY,
PURITAN INSURANCE
COMPANY, TRANSIT
CASUALTY COMPANY,
WRENFORD INSURANCE
COMPANY,

      Defendants,

and

EXXON MOBIL CORPORATION,

     Intervenor-Respondent.
______________________________

CORNELL-DUBILIER
ELECTRONICS, INC. and

                                     A-3011-18
                                 2
FEDERAL PACIFIC ELECTRIC
COMPANY,

     Plaintiffs,

v.

COLUMBIA CASUALTY
COMPANY and CONTINENTAL
CASUALTY COMPANY,

     Defendants.
____________________________

           Argued January 5, 2021 – Decided June 23. 2021

           Before Judges Yannotti, Mawla and Natali.

           On appeal from the Superior Court of New Jersey, Law
           Division, Mercer County, Docket Nos. L-5192-96, L-
           2773-02, and L-0463-05.

           John C. Sullivan argued the cause for appellant
           Appearing London Market Insurers (Clyde & Co. US
           LLP, Post & Schell, PC, Mendes & Mount, LLP, and
           Mary Ann D'Amato (Mendes & Mount, LLP) of the
           New York bar, admitted pro hac vice, attorneys; John
           C. Sullivan, Daren S. McNally, Rebecca S. Bardach,
           Daniel J. Wityk and Mary Ann D'Amato on the briefs).

           John M. Toriello argued the cause for intervenor-
           respondent (Holland & Knight LLP, attorneys; John M.
           Toriello, Marisa Marinelli, Daniel K. Winters and
           Stosh M. Silivos, on the brief).

PER CURIAM

                                                                  A-3011-18
                                    3
      At issue in this appeal is the applicability of an indemnification provision

contained in a settlement agreement and the appropriate forum to resolve that

dispute. Intervenor-defendant Exxon Mobil Corporation (Exxon) agreed to

indemnify certain London Market insurers, including entities referred to

collectively by the parties as defendant Appearing London Market Insurers

(ALMI), that issued policies to Exxon between 1980 and 1983.

      Exxon intervened in a pending New Jersey declaratory judgment action

involving Cornell-Dubilier Electronics, Inc. (CDE), its former indirect

subsidiary, that addressed insurance coverage claims with regard to CDE's

environmental liabilities. ALMI moved to dismiss Exxon's claims in favor of a

New York City forum, in accordance with the settlement agreement's forum

selection clause.   Exxon opposed the motion and maintained, among other

reasons, that enforcement of the forum selection clause would violate New

Jersey public policy as expressed in the entire controversy doctrine. In a May

18, 2011 Law Division order, the court agreed with Exxon and denied ALMI's

motion.

      Exxon further argued, based on the unique circumstances presented, any

indemnification it owed ALMI was extinguished based on ALMI's failure to

                                                                            A-3011-18
                                        4
tender its indemnity claim in a timely fashion. Exxon also argued it was entitled

to reimbursement of its attorneys' fees.

      ALMI maintained that excusing Exxon's indemnification obligation

would violate the terms of the settlement agreement and governing New York

law. In a December 15, 2017 order, the court disagreed with ALMI and granted

Exxon summary judgment and attorneys' fees.          ALMI filed a motion for

reconsideration, which the court denied in a February 2, 2018 order. On appeal,

ALMI challenges portions of the court's May 18, 2011, December 15, 2017, and

February 2, 2018, orders and January 31, 2019 final judgment.

      We affirm in part and vacate and remand in part. We affirm those portions

of the court's May 18, 2011 order in which the court denied ALMI's motion to

dismiss the New Jersey litigation based on the settlement agreement's forum

selection clause, and its December 15, 2017 order granting Exxon summary

judgment. We also affirm the court's February 2, 2018 order denying ALMI's

motion for reconsideration.

      We vacate, however, the court's December 15, 2017 and January 31, 2019

orders to the extent that they awarded Exxon attorneys' fees, as the court failed

to explain specifically the legal and factual bases for such an award. We

                                                                           A-3011-18
                                           5
accordingly remand for the court to make appropriate findings of fact and

conclusions of law on that limited issue.

                                         I.

        We distill the relevant facts from the trial court proceedings that have

spanned over twenty-four years. Between 1980 and 1983, CDE was an indirect

subsidiary of Exxon.       During this period, multiple subscribing insurers, 1

including ALMI, issued liability policies to Exxon and, in accordance with the

policies' terms and conditions, CDE.

1
    As described by the Fifth Circuit:

              Lloyds [sic] of London is not an insurance company but
              rather a self-regulating entity which operates and
              controls an insurance market. . . .

              The members or investors who collectively make up
              Lloyd's are called "Names" . . . . Names are
              underwriters of Lloyd's insurance and they invest in a
              percentage of the policy risk in the hope of making
              return on their investment. . . . Each Name is exposed
              to unlimited personal liability for his proportionate
              share of the loss on a particular policy that the Name
              has subscribed to as an underwriter.          Typically
              hundreds of Names will subscribe to a single policy,
              and the liability among the Names is several, not joint.

              [Corfield v. Dallas Glen Hills LP, 355 F.3d 853, 857-
              58 (5th Cir. 2003) (citations omitted).]
                                                                          A-3011-18
                                         6
       In February 1992, the New Jersey Department of Environmental

Protection (DEP) issued a directive and notice to insurers advising CDE of

potential liability related to its release of hazardous materials at its twenty -six-

acre manufacturing facility in South Plainfield, which it operated from

approximately 1932 to 1962. The following month, CDE sent a letter to its

London Market insurers, including ALMI, "claim[ing] coverage . . . under all

other policies which [were] issued on [CDE's] behalf, even if not specifically

listed." In 1994, the United States Environmental Protection Agency (EPA)

became involved with assessing the environmental impact at the South

Plainfield site.

       On December 19, 1996, Home Insurance Company filed a complaint

against CDE, its direct parent company, and thirty of CDE's insurers. The

complaint sought a declaratory judgment adjudicating the rights and obligations

of the parties as to various environmental liability claims against CDE, including

those associated with its South Plainfield facility. Sixteen insurance companies

appeared in the action collectively as "London Market Insurers." ALMI was

included among the London Market Insurers. Exxon, however, was not named

in this suit.

                                                                              A-3011-18
                                         7
      CDE filed a cross-claim in October 1998 against certain of the defendant

insurers and sought a declaration of those insurers' obligations "under [its]

policies issued to CDE," noting it provided notice of the environmental liability

claim with its 1992 letter. In May 1999, CDE propounded discovery requests

upon ALMI requesting, among other information, identification and production

of "all liability insurance policies issued by [ALMI] at any time in which . . .

CDE . . . was a named insured, an additional insured, or otherwise a covered

party (such as a shareholder or subsidiary)." ALMI responded in April 2001,

identifying eleven policies, none of which included policies it issued to Exxon

and which covered CDE.

      In June 2000, Exxon, ALMI, and certain other insurers who issued

liability policies to Exxon, entered into a settlement agreement that resolved an

unrelated environmental enforcement action. The insurers, including ALMI,

paid Exxon a settlement amount and Exxon, in exchange, released ALMI in

Paragraph 3.1 of the agreement from all claims for coverage under their policies

in connection with environmental liability "to assure [ALMI] their peace and

freedom from such claims."

      Central to the issues before us, in Paragraph 4.1, Exxon agreed to:

            [D]efend, indemnify, save, and hold harmless
            [ALMI] . . . from and against all claims, including

                                                                            A-3011-18
                                       8
              claims for indemnity,           defense, subrogation,
              reimbursement, and/or contribution arising out of the
              [policies] and relating to [environmental liability]
              asserted by . . . any former [subsidiary] or [affiliate of
              Exxon].

        Paragraph 4.2 also required the parties to act in good faith "in responding

to and defending against such claims," and in Paragraph 4.3 the parties agreed

that:

              In connection with such defense, [Exxon] shall give
              written notice to [ALMI] of the identity of defense
              counsel. Absent good cause, [ALMI] shall agree to the
              counsel chosen by [Exxon], which counsel shall
              indicate in all pleadings and court filings that it is acting
              on behalf of [Exxon] as the indemnitor of [ALMI] and
              therefore, the positions taken are not necessarily those
              of [ALMI]. [ALMI] may assume control of their own
              defense by providing to [Exxon] written notice of such
              intention, in which case, all subsequent costs associated
              with the defense of the proceeding or litigation shall be
              borne by [ALMI].

        Under Paragraph 10.1, the parties agreed that, in the event a dispute arose

out of the settlement agreement or the insurance policies, they "may mutually

agree to resolve said disputes through binding arbitration." If the parties elected

to file in court, however, they consented in Paragraph 10.2 that any action would

be venued in a New York City court and that the substantive law of the State of

New York would apply.

                                                                              A-3011-18
                                           9
      Unable to resolve the insurance coverage dispute regarding the

environmental liabilities relating to the South Plainfield site, CDE and ALMI

proceeded to a bench trial on February 18, 2004. Exxon was still not named in

the action.

      After considering the testimony and extensive documentary evidence,

Judge Jack M. Sabatino determined that the relevant insurance policies issued

by ALMI and other insurers covered the environmental harm that occurred at

the site. The litigation then turned to the "allocation phase" in which "issues of

exhaustion and/or triggered insurance policies" would be resolved.

      In late 2008, ALMI's expert produced a report that for the first time

referenced the Exxon policies and which ALMI later produced at CDE's request.

CDE filed a motion for sanctions against ALMI for its failure to produce those

policies in response to its original discovery requests in May 1999.

      In a June 23, 2009 written decision, Judge Andrew J. Smithson found that

although ALMI did not have "a design to mislead," it "knew that CDE . . . [was

a] subsidiar[y] of Exxon," CDE "clearly requested all liability policies" issued

by ALMI in which CDE was a subsidiary, and ALMI "knew that a search for

policies applicable to CDE . . . would only uncover policies under which CDE

. . . w[as] '[n]amed [i]nsureds.'" He concluded ALMI "intentionally fail[ed] to

                                                                            A-3011-18
                                       10
diligently engage in discovery." In a corresponding order, Judge Smithson

imposed on ALMI "the cost of all discovery arising as a result of the production

of the Exxon policies."

      CDE also informed ALMI in November 2008 that it was specifically

asserting coverage for the South Plainfield site under the Exxon policies. In a

March 2009 letter to Exxon, ALMI tendered the defense of CDE's claim to

Exxon pursuant to Paragraph 4.1 of the settlement agreement. In May 2010,

after initially disputing the tender, Exxon accepted the defense under a

reservation of rights and noted it would provide a defense pursuant to Paragraph

4.3 of the settlement agreement.

      Exxon then sought to intervene in the New Jersey litigation as a named

party, which a different motion judge granted on September 10, 2010. Exxon

immediately moved to compel arbitration, an application the court denied after

concluding that Exxon's request was untimely. The court also granted, in part,

CDE's motion for summary judgment finding that Exxon's insurance policies

covered CDE.

      In November 2010, Exxon filed a cross-claim against ALMI seeking a

determination that it was excused from its obligations to indemnify ALMI under

the settlement agreement because of ALMI's delayed tender of CDE's coverage

                                                                          A-3011-18
                                      11
claim and its express and implied breaches of the covenants of good faith and

fair dealing. ALMI opposed Exxon's application and filed a cross-claim to

dismiss based on the settlement agreement's forum selection clause.

      In a May 18, 2011 order, the court denied ALMI's motion to dismiss. In

an oral decision issued that day, it declined to enforce the forum selection clause

reasoning that although the clause in the settlement agreement demonstrated the

parties' intention to select New York City as the forum to resolve any dispute,

that intent had "to be balanced against the entire controversy doctrine."

      The court explained that it did not even "seem to be a close call, that in

order for there to be a comprehensive and conclusive determination in this case,

the issue of the 2000 settlement agreement need[ed] to be in this case," and to

have it "go to New York would result in piecemeal litigation, and not be in the

interest of judicial efficiency." ALMI thereafter asserted a cross-claim for

indemnification against Exxon.

      In October 2014, CDE entered a consent decree with the EPA and the

State of New Jersey stipulating that it was responsible for the environmental

damage and cleanup costs at the South Plainfield site. CDE further agreed to

use its "best efforts . . . to maximize [all of its] [i]nsurance [p]roceeds" to address

the remediation. In October 2016, CDE, Exxon, and ALMI entered into a

                                                                                A-3011-18
                                         12
settlement agreement resolving CDE's claims under the Exxon policies. The

settlement agreement did not address Exxon and ALMI's cross-claims.

        Exxon and ALMI accordingly filed summary judgment motions on their

competing cross-claims. On December 15, 2017, the court granted Exxon's

application for summary judgment, and denied ALMI's cross-motion.

        In an oral decision, the court initially concluded that under New York

common law as expressed in American Export Isbrandsten Lines v. U.S., 390 F.

Supp. 63 (S.D.N.Y. 1975), "the conduct by the indemnitee which prejudices the

right of the indemnitor, discharges the indemnitor." The court explained that

this common law rule is "not conditioned on an indemnity breach [or an]

express[] contract" and that it was not necessary to establish a tangible economic

harm.    The court also noted that the "indemnitee does have a duty to act

reasonably under all the circumstances to protect the indemnitor against

liability." It found that it was ALMI's "burden to show those rights or defenses

would not have impacted the underlying claim" with "absolute assurance."

        The court concluded Exxon had shown prejudice "by being denied the

opportunity to participate in the proceedings for a significant period of time." It

found Exxon did not have to show the outcome would have been different but

that it was not "able to play a meaningful role" in the proceedings. The court

                                                                             A-3011-18
                                       13
acknowledged that the settlement agreement's indemnification provision did not

state that Exxon had the "sole right" to defend but found that the provision's

language under Paragraphs 4.1 and 4.3 showed it was "clear that they do have

the right to control the defense."

      The court also reasoned that CDE made "broad claims" in 1992 and 1998

against the Exxon policies and that the policies were not part of the trial in 2004

because ALMI breached its discovery obligation. It found that Judge Smithson's

findings that ALMI "intentionally failed to diligently engage in discovery" were

"dispositive" on that point.    That discovery violation, the court concluded,

"resulted in the material deprivation of Exxon's rights to consult in [and control]

the defense," which included the "arbitration provision, the litigation

occurrence, . . . [the] exclusion defenses, and tak[ing] advantage of early

settlement opportunities."

      The court distinguished ALMI's reliance on Unigard Sec. Ins. v. N. River

Ins., 4 F.3d 1049, 1068-69 (2d Cir. 1993) (Unigard II), because unlike the

reinsurer's rights and obligations addressed in that case, Exxon's right to control

was "more significant than a reinsurer's right to associate." 2 Rather, relying on

2
  "Reinsurance is the insurance of one insurer (the reinsured) by another insurer
(the reinsurer) by means of which the reinsured is indemnified for loss under

                                                                             A-3011-18
                                       14
Conergics Corp. v. Dearborn Mid-West Conveyor Co., 144 A.D.3d 516 (N.Y.

App. Div. 2016), the court concluded ALMI "breached the indemnity agreement,

and [that] those breaches were both material and prejudicial" because Exxon lost

the right to control the defense.

      Although the court concluded ALMI's late notice prejudiced Exxon, it

further found Exxon was not required to establish prejudice associated with

ALMI's late notice. 3 The court reasoned that ALMI's "failure to give time[ly]

notice in and of itself discharge[d] Exxon of its indemnity obligation ." It noted

the agreement's "lack of an express notice provision [was] not dispositive"

because Exxon could not exercise its right to control the defense without notice.

As a result, the court found notice was "integrated into the agreement" and that

it was "an implied condition." (citing Greater N.Y. Mutual Ins. v. Farrauto, 136

A.D.2d 598 (N.Y. App. Div. 1988)). The court reasoned the "duty to give

insurance policies issued by the reinsured to the public." In re Union Indem.
Ins. of N.Y., 674 N.E.2d 313, 319 (N.Y. 1996) (internal quotation marks and
citation omitted).
3
   Referred to as the no-prejudice rule, New York courts have recognized a
"limited exception" to a required showing of actual prejudice when notice is a
condition precedent. Am. Home Assur. Co. v. Int'l Ins., 684 N.E.2d 14, 16 (N.Y.
1997).
                                                                            A-3011-18
                                       15
reasonable notice as a condition precedent to recovery is implied in insurance

contracts."

      Finally, the court agreed with Exxon that ALMI breached the covenant of

good faith and fair dealing.    The court reasoned that Judge Smithson had

sanctioned ALMI for intentionally failing to engage in discovery and that

violation led to "significant delay" and "prejudice."

      In its corresponding order, the court ordered ALMI to "reimburse Exxon

for litigation expenses and costs incurred in defending . . . ALMI [from] CDE's

claims against the Exxon policies." On January 8, 2018, ALMI filed a motion

for reconsideration, which the court denied without oral argument in a February

2, 2018 order, and without an accompanying statement of reasons.

      After the court ordered reimbursement and denied reconsideration, the

parties agreed in a January 30, 2018 stipulation and order that judgment in the

amount of $7.8 million should be entered against ALMI "for Exxon's litigation

expenses and costs incurred in the defense of CDE's claims against the Exxon

policies, subject to [ALMI's] appellate rights." 4 The court issued final judgment

4
  The parties did not include a copy of the January 30, 2018 stipulation and
order in the record.
                                                                            A-3011-18
                                       16
on January 31, 2019, certified as a final order under Rule 4:42-2. This appeal

followed.

      On appeal, ALMI first contends that the court erred by denying its motion

to dismiss and effectively overriding the settlement agreement's forum selection

clause. Second, it maintains the court erred in granting Exxon's motion for

summary judgment. ALMI argues the court misapplied New York law and that

its actions in tendering the indemnification claim did not excuse Exxon's

obligations under the settlement agreement. Finally, it contends the court failed

to provide a sufficient basis to grant Exxon attorneys' fees or deny its motion for

reconsideration. We address each of ALMI's arguments seriatim.

                                        II.

      ALMI argues the court's May 18, 2011 order denying its motion to dismiss

Exxon's cross-claim was erroneous as the parties agreed that any dispute

regarding the scope and applicability of the indemnification provision would be

litigated in a New York City court. ALMI contends the court erred when it

relied on the entire controversy doctrine to set aside the forum selection clause

in the settlement agreement because its claims against Exxon "involve separate

sets of contracts and separate legal duties." We disagree.

                                                                             A-3011-18
                                       17
      A forum selection clause's enforceability presents a legal issue and, thus,

is an issue we review de novo. Hoffman v. Supplements Togo Mgmt., L.L.C.,

419 N.J. Super. 596, 605 (App. Div. 2011); see also Salovaara v. Jackson Nat'l

Life Ins., 246 F.3d 289, 295 (3d Cir. 2001) (explaining the "interpretation and

enforcement of a forum selection clause is a matter of law" subject to plenary

review). The "trial court's interpretation of the law and the legal consequences

that flow from established facts are not entitled to any special deference."

Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995).

      "[F]orum selection clauses are prima facie valid and enforceable in New

Jersey." Caspi v. Microsoft Network, L.L.C., 323 N.J. Super. 118, 122 (App.

Div. 1999) (citation omitted). However, we have declined to enforce a forum-

selection clause if:   "(1) the clause is a result of fraud or 'overweening'

bargaining power; (2) enforcement would violate the strong public policy of

New Jersey; or (3) enforcement would seriously inconvenience trial." Paradise

Enters., Ltd. v. Sapir, 356 N.J. Super. 96, 103 (App. Div. 2002) (quoting Caspi,

323 N.J. Super. at 122).

      New Jersey courts have declined to enforce forum selection clauses that

violate public policy on several occasions. See Kubis & Perszyk Assocs., Inc.

v. Sun Microsystems, Inc., 146 N.J. 176, 192-93, 195 (1996) (holding "forum-

                                                                           A-3011-18
                                      18
selection clauses in contracts subject to the Franchise Act," N.J.S.A. 56:10 -1 to

-31, "are presumptively invalid" because "general enforcement" of those clauses

would "substantially circumvent the public policy underlying the Franchise

Act"); McNeill v. Zoref, 297 N.J. Super. 213, 222-24 (App. Div. 1997)

(declining to enforce a forum selection clause in a mortgage brokerage services

agreement when enforcement would be contrary to "the strong public policy . . .

found in the entire controversy doctrine which is firmly entrenched in this State"

(citations omitted)); Param Petroleum Corp. v. Com. & Indus. Ins., 296 N.J.

Super. 164, 170-71 (App. Div. 1997) (refusing to give effect to a forum selection

clause in an insurance policy when the insured property was located in New

Jersey and enforcement of the clause would violate the policy that the location

of the insured risk should determine the forum).

      The entire controversy doctrine, codified in Rule 4:30A, "embodies the

principle that the adjudication of a legal controversy should occur in one

litigation in only one court" and requires all parties to "present in that proceeding

all of their claims and defenses that are related to the underlying controversy."

Bank Leumi USA v. Kloss, 243 N.J. 218, 228 (2020) (quoting Wadeer v. N.J.

Mfrs. Ins., 220 N.J. 591, 605 (2015)); see also Kent Motor Cars, Inc. v. Reynolds

& Reynolds, Co., 207 N.J. 428, 443 (2011) (noting that the doctrine finds its

                                                                               A-3011-18
                                        19
support in our State Constitution and the goal "that all matters in controversy

between the parties may be completely determined" (quoting N.J. Const. art. VI,

§ III, ¶ 4)); Pressler & Verniero, Current N.J. Court Rules, cmt. 1 on R. 4:30A

(2021).

      The entire controversy doctrine represents the "long-held preference that

related claims and matters arising among related parties be adjudicated together

rather than in separate, successive, fragmented, or piecemeal litigation." Kent

Motor Cars, 207 N.J. at 443. "The doctrine has three fundamental purposes: '(1)

the need for complete and final disposition through the avoidance of piecemeal

decisions; (2) fairness to parties to the action and those with a material interest

in the action; and (3) efficiency and the avoidance of waste and the reduction of

delay.'" Bank Leumi, 243 N.J. at 228 (quoting DiTrolio v. Antiles, 142 N.J.

253, 267 (1995)).

      When deciding whether multiple claims must be asserted in the same

action, the court's "initial inquiry is whether they 'arise from related facts or the

same transaction or series of transactions.'" Dimitrakopoulos v. Borrus, Goldin,

Foley, Vignuolo, Hyman & Stahl, P.C., 237 N.J. 91, 109 (2019) (quoting

DiTrolio, 142 N.J. at 267). "The doctrine does not mandate that successive

claims share common legal issues in order for the doctrine to bar a subsequent

                                                                               A-3011-18
                                        20
action." Ibid. Rather, "the determinative consideration is whether distinct

claims are aspects of a single larger controversy because they arise from

interrelated facts." Ibid. (quoting DiTrolio, 142 N.J. at 271).

      "However, where claims are 'separate and discrete' from those in the initial

proceeding, the mandatory joinder of claims does not bar the subsequent action."

Allstate N.J. Ins. v. Cherry Hill Pain & Rehab. Inst., 389 N.J. Super. 130, 140

(App. Div. 2006) (quoting Hillsborough Twp. Bd. of Educ. v. Faridy Thorne

Frayta, P.C., 321 N.J. Super. 275, 285 (App. Div. 1999)). If the parties have "a

significant interest in the disposition of a particular claim, one that may

materially affect or be materially affected by the disposition of that claim," then

the distinct claims are part of an entire controversy. DiTrolio, 142 N.J. at 268.

The test for whether the claims are related in such a way that they must be

brought under a single action is:

            [I]f parties or persons will, after final judgment is
            entered, be likely to have to engage in additional
            litigation to conclusively dispose of their respective
            bundles of rights and liabilities that derive from a single
            transaction or related series of transactions, [then] the
            omitted components of the dispute or controversy must
            be regarded as constituting an element of one
            mandatory unit of litigation.

            [Ibid.]

                                                                             A-3011-18
                                       21
      Here, we conclude ALMI's actions, or more precisely inactions,

contravened the significant public policy considerations underlying the entire

controversy doctrine, thereby fully supporting the court's decision. Exxon and

ALMI's dispute regarding the applicability of the indemnification provision was

inextricably connected to CDE's coverage claim. As ALMI acknowledged in its

merits brief before us, "[its] claim for indemnification against Exxon is

predicated on the fact that CDE pursued claims against ALMI in New Jersey."

      This is not a situation in which Exxon's indemnification obligations are

"separate and discrete," Allstate N.J. Ins., 389 N.J. Super. at 140, as it is not a

case where there would be "no replication of proofs," but rather would require a

trial court to "retrac[e] ground that had already been covered." Hillsborough

Twp., 321 N.J. Super. at 286. Indeed, the relevant claims and defenses require

a comprehensive review and consideration of ALMI and Exxon's actions

throughout the course of the wider dispute over environmental liability

regarding the South Plainfield site. At bottom, these claims and defenses arise

from the same "series of transactions." DiTrolio, 142 N.J. at 268.

      Although we recognize our courts' general deference to the parties' choice

of forum, the unique facts here support the court's refusal to enforce that

provision. The court's decision properly considered New Jersey public policy

                                                                             A-3011-18
                                       22
as expressed in the entire controversy doctrine, and that doctrine's fundamental

purposes of fairness and judicial efficiency.            As discussed infra, ALMI's

inexplicable delay in notifying Exxon caused it harm by preventing its timely

participation as an indemnitor. The protracted and multifaceted nature of the

litigation involving CDE, ALMI, and other non-appealing underwriter

intervenors, had spanned years and was still ongoing when Exxon became

involved in the action. To enforce the forum clause would result in the duplicity

of litigation and violate our state's public policy. 5

      When ALMI moved to dismiss Exxon's claim, seven years after its bench

trial, CDE had yet to resolve its claims for coverage under the Exxon policies.

Thus, the practical effect of enforcing the parties' forum selection clause would

have been to require Exxon to adjudicate CDE's coverage claims in New Jersey,

and litigate its claims under the settlement agreement in New York. As noted

by the court, such an outcome would violate the "long-held preference," Kent

Motor Cars, 207 N.J. at 443, to adjudicate related claims together as it would

5
  Further demonstrating the intertwined facts between the CDE litigation and
the claims in this matter, as well as support for avoiding piecemeal decisions, is
the involvement and actions of additional underwriters who had been involved
in the CDE litigation, but did not initially appear in this action. Those
underwriters intervened in this matter, asserted the same indemnification-related
crossclaims as ALMI, and have not appealed the final judgment entered in this
case.
                                                                              A-3011-18
                                         23
result in improper fragmentation of litigation involving common facts and

parties contrary to the fundamental goals of fairness and efficiency.

                                      III.

      ALMI further argues that the court erred in granting Exxon's motion for

summary judgment. Specifically, it argues the court erred in concluding ALMI's

actions: 1) actually prejudiced Exxon, 2) violated the no-prejudice rule, 3)

breached the covenant of good faith and fair dealing, and 4) contravened

common law principles as expressed in American Export, 390 F. Supp. 63.6 We

disagree with ALMI's first three points and conclude, to the extent the court

relied on American Export, any error does not warrant reversal of the court's

December 15, 2017 order.

      At the outset, we note that although the settlement agreement at issue is

to be interpreted under New York law in accordance with the parties' choice-of-

law provision, the disposition of a summary judgment motion is governed by the

6
   ALMI contends the court erred in relying on American Export for the
proposition that it must establish with "absolute assurance" that Exxon was not
prejudiced by late notice. ALMI argues, citing CIH Int'l Holdings v. BT U.S.,
LLC, 821 F. Supp. 2d 604, 612 (S.D.N.Y. 2011), that New York law requires a
plaintiff, not defendant, to establish that a breach caused prejudice. ALMI
further points out that neither American Export, a federal maritime dispute, nor
any subsequent New York case established an "absolute assurance" test for
indemnification.
                                                                          A-3011-18
                                      24
procedural law of the forum state. See N. Bergen Rex Transp. v. Trailer Leasing

Co., 158 N.J. 561, 569 (1999) (citations omitted) (stating "the procedural law of

the forum state applies even when a different state's substantive law must

govern"). Our review of a ruling on summary judgment is de novo, applying the

same legal standard as the trial court. Townsend v. Pierre, 221 N.J. 36, 59

(2015).

      Summary judgment must be granted if the court determines "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). The court 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. of Am., 142 N.J. 520, 540 (1995).

We accord no special deference to the trial judge's conclusions on issues of law.

Nicholas v. Mynster, 213 N.J. 463, 478 (2013).

      A. Prejudice

      ALMI argues that the trial court erred in finding its conduct deprived

Exxon of its right to defend because, relying on CIH, 821 F. Supp. 2d at 612,

and Unigard II, 4 F.3d at 1068-1069, Exxon needed to show that late notice

                                                                           A-3011-18
                                      25
resulted in a tangible economic injury or different litigation outcome to excuse

its indemnification obligations. In support, it notes the settlement agreement

lacked any language that granted Exxon the "sole right" to defend, "the right to

control," or the "right to settle," and that it reserved with ALMI the right to

"assume control of [its] own defense." Even if CIH is not applicable, it argues

the trial court erred in concluding Exxon was materially deprived and prejudiced

by ALMI's delay in notice and that such a holding is contrary to the purpose of

the settlement agreement. We disagree with these contentions.

      Under New York law, it is a "general contract law principle that a breach

will excuse performance only if it is material or demonstrably prejudicial."

Unigard Sec. Ins. v. N. River Ins., 594 N.E.2d 571, 584 (1992) (N.Y. App. Div.

1992) (Unigard I). A "technical failure or immaterial breach" does not excuse

performance. Fiserv Sols., Inc. v. XL Specialty Ins., 94 A.D.3d 456, 460-61

(N.Y. App. Div. 2012).

      In Hovdestad v. Interboro Mut. Indemnification Ins., 135 A.D.2d 783

(N.Y. App. Div. 1997), the New York Appellate Division held that an insurer

was not required to indemnify its insured after the insurer failed to notify the

insurer for four years and after pre-trial discovery occurred. The court held that

even if the contract's notice requirement was not violated, the insured still would

                                                                             A-3011-18
                                       26
have been relieved of indemnification because this was sufficient to show

prejudice. Id. at 784. The Hovdestad court further explained that by the insured

"initially assuming the defense of the counterclaim, the plaintiff's attorneys

effectively deprived the defendant of the opportunity to participate in pretrial

discovery proceedings when such would have been meaningful." Ibid.; see also

Wainco Funding v. First Am. Title Ins. of N.Y., 219 A.D.2d 598, 599 (N.Y.

App. Div. 1995) (holding a twenty-month delay in notice actually prejudiced a

party because it was materially deprived of "the opportunity to participate" in

proceedings).

      In CIH, as explained by the New York Appellate Division:

            [T]he plaintiff sellers of a corporation agreed to
            indemnify the defendant buyer for certain tax
            losses. . . . [T]he CIH agreement required the buyer to
            provide prompt notice of tax claims . . . and entitled the
            seller to "control the conduct" and settlement of
            proceedings involving tax claims subject to
            indemnification, but provided that the buyer's failure to
            provide such notice would not defeat the sellers'
            indemnification obligation except to the extent the
            seller was "actually prejudiced" thereby. Relying
            solely on Unigard II, the CIH court concluded that the
            plaintiff seller must demonstrate "tangible economic
            injury" as a result of the late notice [to establish
            prejudice] because "[a]n indemnitor's loss of the right
            to associate in the defense of claims is insufficient to
            constitute prejudice."

                                                                          A-3011-18
                                       27
             [Conergics, 144 A.D.3d at 527 n.10 (citations
             omitted).]

       In Conergics, however, the parties entered an agreement for plaintiff to

sell its company, which indemnified defendant with the "sole right" to defend

any audit and noted the failure to give written notice did not affect

indemnification unless "[the indemnifying party] is actually prejudiced." Id. at

518.    Ten years after acquisition, the company was audited subject to

indemnification, but defendant did not notify plaintiff until twenty-one months

after the audit began. Id. at 519. During those twenty-one months, defendant

undertook its own defense and was issued an adverse determination, two months

before it sought indemnification from plaintiff. Id. at 520-21.

       On appeal, the New York Appellate Division agreed that plaintiffs were

not obligated to indemnify the defendants. Id. at 523-24. The court noted that

plaintiff's "sole right" to control the defense was more analogous to a primary

insurer's right to control the investigation and defense of a claim, "than to a

reinsurer's more limited right to associate." Id. at 526-27. Unlike a primary

insurer's right to control, a "reinsurer is not responsible for providing a defense,

for investigating the claim[,] or for attempting to get control of the claim in order

to effect an early settlement." Id. at 525 (quoting Unigard I, 594 N.E.2d at 583);

see also Am. Home Assur., 684 N.E.2d at 18 (applying the same analysis to

                                                                               A-3011-18
                                        28
excess insurers because they "have most of the rights and obligations of primary

insurers" in that "[t]hey have the right to investigate claims and to participate in

settlement negotiations").

      The Conergics court distinguished CIH, finding it was "not persuaded" by

CIH's "contrary holding" which failed to consider the differences between the

right to associate with "the contractual right of the indemnitor to 'control the

conduct' and settlement of the proceedings at issue." Conergics, 144 A.D.3d at

527 n.10. As a result, the court found it did not need to determine whether the

Second Circuit's decision in Unigard II, which held that prejudice must be

demonstrated by "tangible economic injury," was required in the reinsurance

context. Id. at 526-27.

      The Conergics court also found the indemnitor "cannot be expected to

show precisely what the outcome would have been had timely notice been

given." Id. at 530 (quoting Am. Ins. v. Fairchild Indus., Inc., 56 F.3d 435, 440-

41 (2d Cir. 1995)). Comparing to the insurance context, it noted the uncertainty

of the outcome is the result of the insured's failure to comply with the contract

and the insured "should not be permitted to use that uncertainty as a weapon

against the insurer." Ibid. (quoting Fairchild, 56 F.3d at 440-41).

                                                                              A-3011-18
                                        29
      Rather, the court concluded "it suffices for an indemnitor afforded the

right to control the defense of an indemnifiable claim to show that it was

deprived of its right to exercise that right for a material portion of the

proceedings on the claim." Id. at 524. Applying this standard, the court found

that the twenty-one-month period, which included an adverse decision, "more

than [met] the standard of a material deprivation of the right to control the

defense of the audit." Ibid.

      Here, although the settlement agreement does not explicitly state that

Exxon had the "sole right" to defend, it makes clear that default defense

responsibilities laid with Exxon. Under Paragraph 4.1, Exxon was obligated to

"[d]efend, indemnify, save, and hold harmless" ALMI from environmental

liability claims. Paragraph 4.3 also obligated ALMI, after Exxon provided the

identity of defense counsel, to accept Exxon's counsel "[a]bsent good cause,"

and allowed ALMI to "assume control of their own defense" only after giving

Exxon written notice. Even ALMI acknowledges in its merits brief that Exxon

had the "duty . . . to defend." ALMI, therefore, had no responsibility to defend

unless so elected and, even if it assumed its defense, that did not obviate Exxon's

initial, primary defense responsibilities.

                                                                             A-3011-18
                                       30
      Similar to the Conergics court's reasoning, Exxon's duty to defend is more

akin to a primary insurer's sole right to defend, and ALMI's right to participate

in its defense is more comparable to a reinsurer's right to associate since

reinsurers are "not responsible for providing a defense." 144 A.D.3d at 525. As

such, we reject ALMI's reliance on CIH, 821 F. Supp. 2d at 612, and Unigard

II, 4 F.3d at 1068-69, and find that New York law does not require Exxon to

show tangible economic harm to satisfy a finding of material deprivation of

rights.

      Further, CDE plainly provided notice of its claim of coverage related to

the South Plainfield site to ALMI, at the latest, in its 1998 cross-claim against

ALMI in which it sought a declaration "under [ALMI's] policies issued to CDE."

Even if there was excusable delay in discovering the Exxon policies because of

the complexity of the issues, the latest Exxon's policies should have been

discovered is April 2001, when ALMI responded to CDE's discovery requests.

The only reason ALMI did not actually know of these policies was because, as

Judge Smithson found, it "intentionally fail[ed] to diligently engage in

discovery." ALMI did not tender notice to Exxon until its March 2009 letter.

      This approximately eight-year gap in notice, far from timely, materially

deprived Exxon of its rights by preventing it from participating in the

                                                                           A-3011-18
                                      31
proceedings for a significant amount of time. It also precluded Exxon from

pursuing certain defense strategies no longer available to it, such as arbitration.

      By the time ALMI notified Exxon, Judge Sabatino had already found the

relevant insurance policies covered environmental harm that occurred at the

South Plainfield site, and which prevented Exxon from engaging in its own

defense against such coverage. Exxon also lost early settlement opportunities.

Indeed, other claimants had already successfully settled with numerous other

defendant insurance companies. As such, we agree with the court that ALMI

materially deprived Exxon of its rights under the settlement agreement and

excused its indemnification performance to provide ALMI with "peace and

freedom" in connection to environmental liability claims.

      B. No-Prejudice Rule

      ALMI also contends the trial court erred in finding that the no-prejudice

rule applied, and that Exxon's indemnification was excused because notice was

an implied condition precedent under the settlement agreement. Even if there

was an implied notice requirement, ALMI contends it did not breach it because:

1) CDE's 1992 letter to ALMI cannot reasonably constitute notice of a claim

under the Exxon policies, 2) CDE did not assert broad claims for coverage prior

to 2008, 3) the 2001 discovery violation cannot constitute a breach that excused

                                                                             A-3011-18
                                       32
Exxon's performance, and 4) Exxon's repeated tender rejections show that Exxon

did not believe CDE asserted a claim that triggered ALMI's obligation under the

agreement until 2008. We reject all of these arguments.

      As noted, actual prejudice is not required under the no-prejudice rule when

notice is a condition precedent. Am. Home Assur., 684 N.E.2d at 16; see also

Conergics, 144 A.D.3d at 523 (distinguishing the no-prejudice rule from

whether late notice results in actual prejudice). "[A] condition precedent is 'an

act or event, other than a lapse of time, which, unless the condition is excused,

must occur before a duty to perform a promise in the agreement arises.'"

Accadia Site Contracting, Inc. v. Erie Cty. Water Auth., 115 A.D.3d 1351, 1352

(N.Y. App. Div. 2014) (alteration in original) (quoting MHR Cap. Partners LP

v. Presstek, Inc., 912 N.E.2d 43, 47 (N.Y. 2009)). "[T]he duty to give reasonable

notice as a condition of recovery is implied in all insurance contracts." Structure

Tone v. Burgess Steel Prods. Corp., 249 A.D.2d 144, 145 (N.Y. App. Div. 1998)

(citations omitted).

      However, a party "to a contract cannot rely on the failure of another to

perform a condition precedent where [the party] has frustrated or prevented the

occurrence of the condition." VXI Lux Holdco S.A.R.L. v. SIC Holdings, LLC,

171 A.D.3d 189, 195 (N.Y. App. Div. 2019) (citation omitted). First created for

                                                                             A-3011-18
                                       33
when "primary insurance requires notice 'as soon as practicable' after an

occurrence," the no-prejudice rule discharges an insurer's performance in the

absence of timely notice and "[n]o showing of prejudice is required." 7 Argo

Corp. v. Greater N.Y. Mut. Ins., 827 N.E.2d 762, 764 (N.Y. 2005) (citations

omitted). This rule was extended to liability insurance policies that required

notice "as soon as practicable" because "[a] liability insurer, which has a duty

to indemnify and often also to defend, requires timely notice of lawsuit in order

to be able to take an active, early role in the litigation process and in any

settlement discussions and to set adequate reserves." Id. at 765.

      Applied in the context of an indemnity contract, the New York Appellate

Division previously held an indemnitee that does not notify the indemnitor

"proceeds at his own risk with regard to any judgment or settlement which may

ultimately ensue." L.B. Kay Assocs., Ltd. v. Libov, 139 A.D.2d 440, 440 (N.Y.

App. Div. 1988); see also Farrauto, 136 A.D.2d at 599 (holding an

indemnification obligation was excused because the "insured's failure to provide

timely notice of an occurrence vitiates the insurance contract . . . regardless of

7
  The New York Legislature abrogated this common law rule and now requires
a showing of prejudice for insurance policies issued after January 17, 2009, well
after when the Exxon policies were issued, and settlement agreement entered.
See Waldron v. N.Y. Cent. Mut. Fire Ins., 88 A.D.3d 1053, 1054 (N.Y. App.
Div. 2011) (citing N.Y. Ins. Law § 3420(a)(5)).
                                                                            A-3011-18
                                       34
whether the [insurance] policy contains a provision expressly warning the

insured that failure to honor the condition requiring notice may result in a

forfeiture of coverage").

      Here, the court did not err in concluding the no-prejudice rule applied and

that there was an implied condition precedent requiring notice in the settlement

agreement. Although not an express condition, Exxon required notice of a claim

from ALMI to fulfill its indemnification obligations under the contract and

assume control of the defense strategy. The settlement agreement, therefore,

included an implied notice condition to trigger Exxon's indemnification

obligations.

      As noted, the approximately eight-year gap between when ALMI should

have discovered the Exxon policies and when it actually notified Exxon, was far

from timely. Further, since Exxon's indemnification obligation, which arises

from a contract settling disputes over insurance policies, is more comparable to

a primary insurer's "right to control" than a reinsurer's "right to associate," see

Conergics, 144 A.D.3d at 526-27, the court did not err in applying Farrauto, 136

A.D.2d at 599. When ALMI proceeded to trial against CDE in 2004, it did so

"at [its] own risk with regard to any judgment or settlement which may

ultimately ensue." L.B. Kay Assocs., 139 A.D.2d at 440. Without timely notice,

                                                                             A-3011-18
                                       35
Exxon could not "take an active, early role in the litigation process and in any

settlement discussions [or] set adequate reserves." Argo, 827 N.E.2d at 765.

      C. Good Faith and Fair Dealing

      ALMI further asserts the court erred in finding that it breached the duty

of good faith and fair dealing because the court's ruling: 1) misinterpreted

contract law in concluding its lack of diligence supported a finding of bad faith,

2) created an independent obligation beyond those agreed upon in the settlement

agreement, and 3) was based on the same facts as its finding that ALMI breached

the contract and thus had no independent basis. Again, we disagree.

      "Every contract contains an implied covenant of good faith and fair

dealing." P.T. & L. Contracting Corp. v. Trataros Const., Inc., 29 A.D.3d 763,

764 (N.Y. App. Div. 2006). The covenant "is breached when a party acts in a

manner that would deprive the other party of the right to receive the benefits of

their agreement." 1357 Tarrytown Rd. Auto, LLC v. Granit Props., LLC, 142

A.D.3d 976, 977 (N.Y. App. Div. 2016). The breaching action is not required

to be "expressly forbidden by any contractual provision." P.T. & L. Contracting

Corp., 29 A.D.3d at 764.      This covenant "includes any promises which a

reasonable promisee would be justified in understanding were included," but

                                                                            A-3011-18
                                       36
there may be no implied obligation "that would be inconsistent with other terms

of the contractual relationship." 1357 Tarrytown Rd. Auto, 142 A.D.3d at 977.

      An action alleging breach of the covenant of good faith and fair dealing

"must allege facts which tend to show that the defendant sought to prevent

performance of the contract or to withhold its benefits from the plaintiff."

Aventine Inv. Mgmt., Inc. v. Canadian Imperial Bank of Com., 265 A.D.2d 513,

514 (N.Y. App. Div. 1999) (citation omitted). In this regard, bad faith can be

shown by "evasion of the spirit of the bargain, lack of diligence and slacking

off, willful rendering of imperfect performance, abuse of a power to specify

terms, and interference with or failure to cooperate in the other party's

performance." Stevens v. Publicis, S.A., 50 A.D.3d 253, 256 (N.Y. App. Div.

2008) (quoting Restatement (Second) of Contracts § 205, cmt. d (Am. Law Inst.

1981)). Pleading a breach of the implied covenant also "plead[s] a valid cause

of action for breach of contract." 511 W. 232nd Owners Corp. v. Jennifer Realty

Co., 773 N.E.2d 496, 501 (N.Y. 2002).

      However, "[a] cause of action to recover damages for breach of the

implied covenant of good faith and fair dealing cannot be maintained where the

alleged breach is 'intrinsically tied to the damages allegedly resulting from a

breach of the contract.'" Deer Park Enters., LLC v. Ail Sys., Inc., 57 A.D.3d

                                                                         A-3011-18
                                     37
711, 712 (N.Y. App. Div. 2008) (quoting Canstar v. Jones Constr. Co., 212

A.D.2d 452, 453 (N.Y. App. Div. 1995)). Nor can the allegations be duplicative

of those forming the breach of contract cause of action. Elmhurst Dairy, Inc. v.

Bartlett Dairy, Inc., 97 A.D.3d 781, 784-85 (N.Y. App. Div. 2012); see also J.

Kokolakis Contracting Corp. v. Evolution Piping Corp., 998 N.Y.S.2d 788, 791

(Sup. Ct. 2014) (stating that a breach of the covenant of good faith and fair

dealing is generally only actionable "where wrongs independent of the express

terms of the contract are asserted and demands for the recovery of separate

damages not intertwined with the damages resulting from a breach of a contract

are advanced" (citations omitted)).

      Here, the court did not err in finding that ALMI breached both the implied

and express covenant of good faith and fair dealing embedded in the settlement

agreement. As Judge Smithson already concluded, ALMI "intentionally fail[ed]

to diligently engage in discovery." This ultimately deprived Exxon of "the right

to receive the benefits of their agreement," 1357 Tarrytown Rd. Auto, 142

A.D.3d at 977, by preventing it from fulfilling its duty to defend the action and

engaging in early settlement agreements.

      Under these unique facts, ALMI's obligation to diligently address in

CDE's discovery requests overlapped with its independent duty to "respond[]

                                                                           A-3011-18
                                      38
and defend[]" against such environmental liability claims under the settlement

agreement. We agree with the court that ALMI's failure of diligence did not

need to be "expressly forbidden by any contractual provision" to constitute a

breach. P.T. & L. Contracting Corp., 29 A.D.3d at 764. Further, while Exxon

asserts violations of the covenant of good faith and fair dealing using the same

facts as its claim for prejudice, an independent basis is only needed if Exxon

was asserting a separate claim for damages in addition to a breach of contract

claim, which it is not. See Deer Park Enters., 57 A.D.3d at 712.

      In light of our decision that the court correctly found that ALMI's untimely

notice actually prejudiced Exxon, violated the no-prejudice rule, and breached

the covenant of good faith and fair dealing, we need not address whether it

incorrectly applied common law principles as expressed in American Export,

390 F. Supp. 63. In summary, we conclude the court did not err in granting

Exxon's motion for summary judgment and excusing its indemnification

obligations under the settlement agreement.

                                       IV.

      Finally, ALMI argues the court committed error when it required ALMI

to reimburse Exxon for litigation expenses and costs because:          1) Exxon

accepted tender of the defense without a right to reimbursement, 2) the issue

                                                                            A-3011-18
                                      39
was not addressed at oral arguments, and 3) the court did not set forth any

reasons for its attorneys' fees award. It also contends the court improperly

denied its motion for reconsideration by failing to set forth the reasons for

denial.

      We reject ALMI's arguments to the extent they maintain a remand is

necessary to resolve its motion for reconsideration as we find no merit to ALMI's

reconsideration application. We agree, however, that the court did not provide

a sufficient basis for its award of attorneys' fees to Exxon. We accordingly

remand for further factual findings consistent with Rule 1:7-4.

      Our review of an award of attorneys' fees is deferential, Packard-

Bamberger & Co., 167 N.J. at 444, and "fee determinations by trial courts will

be disturbed only on the rarest occasions, and then only because of a clear abuse

of discretion." Rendine v. Pantzer, 141 N.J. 292, 317 (1995). "A trial court

decision will constitute an abuse of discretion where the decision [was] made

without a rational explanation, inexplicably departed from established policies,

or rested on an impermissible basis." Saffos v. Avaya Inc., 419 N.J. Super. 244,

271 (App. Div. 2011) (internal quotation marks and citations omitted); see also

Curtis v. Finneran, 83 N.J. 563, 569 (1980) (stating a trial court's role in a non-

                                                                             A-3011-18
                                       40
jury civil action "is to find the facts and state conclusions of law" (citing R. 1:7-

4)).

       Further, "[t]he decision to deny a motion for reconsideration falls 'within

the sound discretion of the [trial court], to be exercised in the interest of justice.'"

In re Belleville Educ. Ass'n, 455 N.J. Super. 387, 405 (App. Div. 2018)

(alteration in original) (quoting Cummings v. Bahr, 295 N.J. Super. 374, 384

(App. Div. 1996)). The trial court should grant motions for reconsideration only

in those cases "which fall into that narrow corridor in which either (1) the [c]ourt

has expressed its decision based upon a palpably incorrect or irrational basis, or

(2) it is obvious that the [c]ourt either did not consider, or failed to appreciate

the significance of probative, competent evidence." Ibid.

       Here, while the parties' January 30, 2018 stipulation resolved the quantum

of fees and costs potentially owed to Exxon, it was only after the court ordered

ALMI to reimburse Exxon for any such expenses in its December 15, 2017

order, and subsequent to denying ALMI's motion for reconsideration on January

8, 2018. The court did so without an oral or written statement of reasons.

       Although the parties agreed to the amount of any fee award, in light of the

court's decision obligating ALMI to reimburse Exxon, a remand is necessary for

the court to explain the legal and factual bases supporting its decision. We

                                                                                 A-3011-18
                                          41
therefore vacate Exxon's award of attorneys' fees in the December 15, 2017

order and January 31, 2019 final judgment, and remand for the court to make

appropriate findings of fact and conclusions of law consistent with Rule 1:7-

4(a). We express no opinion as to whether a fee award is appropriate in this

matter.

      With regard to ALMI's challenge to the court's denial of its

reconsideration application, we agree that the court's February 2, 2018 order

failed to include a statement of reasons as required by Rule 1:7-4. We disagree,

however, that a remand is necessary as we have addressed the merits of ALMI's

appeal, see supra Part III, and affirm the court's grant of summary judgment to

Exxon. Under the circumstances, we find no principled reason to remand the

matter for the court to provide its reasons for denying ALMI's motion.

      To the extent we have not addressed ALMI's remaining arguments it is

because we have determined that they are without sufficient merit to warrant

discussion in a written opinion. See R. 2:11-3(e)(1)(E).

      Affirmed in part, vacated in part, and remanded for further proceedings

consistent with this opinion. We do not retain jurisdiction.

                                                                          A-3011-18
                                      42