STATE OF NEW JERSEY VS. FRANKLIN MARINHO(001-20-13, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0689-13T3

CATLIN INSURANCE COMPANY,
INC.,

Plaintiff-Respondent,

v.

FLIGHT LIGHT INC., AND
TRAFFIC SAFETY CORPORATION,

Defendants-Appellants,

and

COUNTY OF MIDDLESEX, BOROUGH
OF METUCHEN, KRISHNA M.
VASIREDDY, ANILA K. VASIREDDY,
MANJU RAWAT, KUNDAN S. RAWAT,
FAI-GON ELECTRIC, INC., ASKCA
INC., AND CARR & DUFF, INC.,

Defendants.
————————————————————————————————————————

Argued May 14, 2014 – Decided July 15, 2014

Before Judges Sapp-Peterson and Hoffman.

On appeal from Superior Court of New Jersey,
Law Division, Middlesex County, Docket No.
L-4608-12.

Kenneth W. Thomas argued the cause for
appellants (Lanza & Lanza, LLP, attorneys;
Mr. Thomas, on the brief).

Timothy G. Hourican argued the cause for
respondents (Brown Gavalas & Fromm, LLP,
attorneys; Robert J. Brown, of counsel and
 on the brief; Patrick R. O'Mea, on the
brief).

PER CURIAM

In this declaratory judgment action, defendants Flight

Light, Inc. (Flight Light) and Traffic Safety Corporation

(Traffic Safety)1 appeal from Law Division orders granting

summary judgment to plaintiff Catlin Insurance Company, Inc.

(Catlin), and denying reconsideration. In granting summary

judgment, the judge determined the insurance policies issued by

Catlin did not require it to defend or indemnify defendants in

an underlying personal injury action. For the reasons that

follow, we affirm.

I.

This matter arises from an accident that occurred on

December 7, 2009, when an automobile struck and injured a

pedestrian as he crossed a public roadway in the Borough of

Metuchen (Metuchen). The pedestrian filed a complaint seeking

damages against various defendants, including Metuchen,

asserting his injuries were caused, in part, by a malfunctioning

1 We refer to Flight Light and Traffic Safety collectively as
defendants but refer to them separately when discussing the
parties to the insurance contract. Additionally, Traffic Safety
is a wholly owned subsidiary of Flight Light.

2 A-0689-13T3
in-pavement crosswalk warning system (System)2 located at the

intersection where the accident occurred. The complaint alleged

the System had failed to operate properly prior to the accident,

and was not repaired, thus creating a dangerous roadway

condition when the System failed to alert motorists to

pedestrians crossing the roadway. On March 19, 2012, Metuchen

filed a third-party complaint against Traffic Safety as the

manufacturer, seller and/or distributor of the allegedly

defective System, seeking contribution, common law

indemnification, and contractual indemnification for the claims

brought by the pedestrian in the underlying action.

Upon receipt of Metuchen's third-party complaint,

defendants notified Catlin and demanded coverage and

indemnification for the claim. Catlin had issued two insurance

policies to Flight Light for the policy period beginning on

August 21, 2009 and ending on August 21, 2010: an "Aviation

Products Liability Policy" (Aviation Products Policy), and a

"Commercial General Liability Aviation Insurance Policy (CGL

Aviation Policy). The policies were issued through Catlin's

agent, W. Brown & Associates Insurance Services.

On April 23, 2012, Catlin issued a reservation of rights

letter to Flight Light advising that the claims asserted against

2 The System consists of flashing lights embedded in a crosswalk
and pedestrian activation control stanchions.

3 A-0689-13T3
Flight Light in the underlying lawsuit may not be covered under

the Aviation Products Policy as its "investigation and the

allegations in the complaint and third-party complaint indicate

that this particular application did not involve aircraft,

airports, heliports, or aviation." Nevertheless, Catlin advised

that it would "provide a defense to defendants, . . . reserving

all of its rights to seek a determination of coverage under all

of the provisions in the policy contract."

On July 3, 2012, Catlin filed a declaratory judgment action

seeking a determination that defendants are not entitled to

insurance coverage under either of the two policies issued to

Flight Light for the third-party claims asserted in the

underlying action. Defendants filed an answer and counterclaim

seeking a declaration of coverage for the underlying action.

The Aviation Products Policy, which only names Flight Light

as an insured, includes "any partner, executive officer,

employee, director or stockholder thereof, while acting within

the scope of his duty as such" within the definition of insured;

notably, this definition does not include separate companies or

affiliates of the named insured. The contractual language

states the policy only covers claims arising from the handling

or use of Flight Light's aircraft products, items used in

connection with an aircraft.

4 A-0689-13T3
 This specific policy insures bodily injury arising out of a

"Products Hazard," which is defined as the "handling or use of

(other than by an Insured) or the existence of any condition in

an aircraft when such aircraft product . . . is not in the

possession of the Insured, and . . . is away from the premises

owned, rented or controlled by the Insured." "Aircraft

Products" are defined as:

aircraft (including missiles or spacecraft
and any ground support or control equipment
used therewith), or any article furnished by
the Insured and installed in aircraft or
used in connection with aircraft or for
spare parts for aircraft or tooling used for
the manufacture thereof, including ground
handling tools and equipment and also means
training aids, instructions, manuals,
blueprints, engineering or other data,
and/or any article in respect of which
engineering or other advice and/or services
and/or labor have been given or supplied by
the Insured relating to any aircraft or
aircraft article.

The Aviation Products Policy also includes a merger clause,

stating the written terms of the policy contain the parties'

entire agreement: "By acceptance of this policy the Insured

agrees that the statements in the Declarations are his

agreements and representations, that this policy is issued in

reliance upon the truth of such representations and that this

policy embodies all agreements existing directly between himself

and the Company relating to this insurance."

5 A-0689-13T3
 The CGL Aviation Insurance Policy provides coverage only

for bodily injury resulting from the insured's "aviation

operations," which are operations relating to the insured's

aviation activities. Specifically, this policy states Catlin

"will pay those sums that the Insured becomes legally obligated

to pay as damages because of bodily injury . . . to which this

insurance applies resulting from your aviation operations."

Aviation operations are defined as "all operations arising from

the ownership, maintenance or use of locations for aviation

activities including that portion of the roads or other accesses

that adjoin these locations. Aviation operations include all

operations necessary or incidental to aviation activities."

The CGL Aviation Policy also contains a merger clause

stating the policy contains the parties' entire agreement:

This policy contains all the agreements
between you and us concerning the insurance
afforded. The first Named Insured shown in
the Declarations is authorized to make
changes in the terms of this policy with our
consent. This policy's terms can be amended
or waived only by endorsement issued by the
Aviation Managers and made a party of this
policy.

On April 17, 2013, Kyle Owens, the principal of Flight

Light and Traffic Safety testified during a video deposition

that Flight Light manufactures and distributes airport lighting

and Traffic Safety manufactures and distributes traffic safety

lighting. Owens further testified neither Flight Light nor

6 A-0689-13T3
Traffic Safety manufactured the crosswalk system involved in the

underlying litigation; Traffic Safety manufactured the

controller and an entity other than Traffic Safety manufactured

the fixtures used in the street. Additionally, he noted the

lighting fixtures used in the crosswalk lighting system sold by

Traffic Safety are the same ones used by Flight Light for

airports.

In Flight Light's commercial insurance application dated

June 30, 2009, Flight Light was the only listed applicant,

although Traffic Safety was listed as a subsidiary that uses

Flight Light's employees. Traffic Safety was further identified

as a company in which Flight Light had controlling stock, which

provides "products for crosswalks at universities and other

commercial buildings."

After limited discovery, Catlin moved for summary judgment.

Following oral argument, Judge Joseph L. Rea granted the motion,

rejecting defendants' argument that Catlin's policies provided

coverage for the underlying claim. The judge found "no

ambiguity at all" in the language of either policy and otherwise

found no basis for coverage.

Judge Rea noted the Aviation Products Policy expressly

states coverage applies only to aircraft products and found the

plain language to require Catlin to insure only claims caused by

7 A-0689-13T3
an occurrence "arising out of the product's hazard." The court

continued:

What's a product hazard? It means the
handling or use other than by the insured or
the existence of any condition is an
aircraft product when such aircraft product
is not in the possession of insured or is
away from premises owned, rented or
controlled by the insured.

Then we get into what's an aircraft
product. . . . [I]t tells you . . . [we
are] going to cover this product under a
certain type of occurrence. It has to be
. . . an occurrence related to an aircraft
product, that's clear on the face of it.

The court noted the aircraft product "has to be used in

connection with [an] aircraft in order to qualify as an aircraft

product" under the plain language of the policy.

Noting both policies apply to aviation operations, Judge

Rea concluded the underlying action did not involve aviation

operations because aviation operations are "operations necessary

or incidental to aviation activities . . . [like] runways, not

crosswalks." Accordingly, Judge Rea granted plaintiff's motion,

finding Catlin "not obligated to defend or indemnify defendants

. . . with respect to any of the claims asserted in the

(underlying) action." Defendants filed a motion for

reconsideration, which the court denied. This appeal followed.

II.

8 A-0689-13T3
 In an appeal from the grant of summary judgment, we review

the decision de novo, Heyert v. Taddese, 431 N.J. Super. 388,

411 (App. Div. 2013), and utilize "'the same standard [of

review] that governs the trial court.'" Mem'l Props., LLC v.

Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012) (alteration in

original) (quoting Henry v. N.J. Dep't of Human Servs., 204 N.J.

320, 330 (2010)). Thus, the evidence must be viewed "in the

light most favorable to the non-moving party" and must be

analyzed to determine "whether the moving party was entitled to

judgment as a matter of law." Ibid. (citing Brill v. Guardian

Life Ins. Co. of Am., 142 N.J. 520, 523 (1995)).

Further, contract interpretation is "ordinarily a legal

question for the court and may be decided on summary judgment

unless there is uncertainty, ambiguity or the need for parol

evidence in aid of interpretation. . . ." Celanese Ltd. v.

Essex Cnty. Improvement Auth., 404 N.J. Super. 514, 528 (App.

Div. 2009) (citation and internal quotation marks omitted).

Accordingly, the court interprets the terms of a contract, as a

matter of law, "unless the meaning is both unclear and dependent

on conflicting testimony." Ibid. (citation and internal

quotation marks omitted).

Contracts are read as a whole "'in a fair and common sense

manner.'" Porreca v. City of Millville, 419 N.J. Super. 212,

233 (App. Div. 2011) (quoting Hardy ex. rel. Dowdell v. Abdul-

9 A-0689-13T3
Matin, 198 N.J. 95, 103 (2009)). As such, "[a] contract should

not be interpreted to render one of its terms meaningless."

Ibid. (citation and internal quotation marks omitted). The

interpretation of contract terms is "decided by the court as a

matter of law unless the meaning is both unclear and dependent

on conflicting testimony." Bosshard v. Hackensack Univ. Med.

Ctr., 345 N.J. Super. 78, 92 (App. Div. 2001).

Insurance contracts are considered "contracts of adhesion,

[and] such policies are subject to special rules of

interpretation." Longobardi v. Chubb Ins. Co., 121 N.J. 530,

537 (1990) (citing Meier v. New Jersey Life Ins. Co., 101 N.J.

597, 611 (1986). We will often construe insurance policies

liberally in favor of the insured so "that coverage is afforded

'to the full extent that any fair interpretation will allow.'"

Ibid. (quoting Kievit v. Loyal Protective Life Ins. Co., 34 N.J.

475, 482 (1961)). Nevertheless, "[a]n 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);

see also Zurich, supra, 210 N.J. at 525 (holding that generally,

an insurance policy should be interpreted in accordance with the

plain and ordinary meaning of its terms). Therefore, a court

must first decide if an ambiguity exists.

10 A-0689-13T3
 Ambiguity in a contract exists "'if the terms of the

contract are susceptible to at least two reasonable alternative

interpretations. . . . To determine the meaning of the terms of

an agreement by the objective manifestations of the parties'

intent, the terms of the contract must be given their 'plain and

ordinary meaning.'" Nester v. O'Donnell, 301 N.J. Super. 198,

210 (App. Div. 1997) (alteration in original) (quoting Kaufman

v. Provident Life and Cas. Ins. Co., 828 F. Supp. 275, 283

(D.N.J. l992), aff'd, 993 F.2d 877 (3d Cir. 1993)). Therefore,

in "interpreting a contract, a court must try to ascertain the

intention of the parties as revealed by the language used, the

situation of the parties, the attendant circumstances, and the

objects the parties were striving to attain." Celanese Ltd.,

supra, 404 N.J. Super. at 528. Indeed, the court should examine

the document as a whole but, importantly, the "'court should not

torture the language of [a contract] to create ambiguity.'"

Nester, supra, 301 N.J. Super. at 210 (alteration in original)

(quoting Stiefel v. Bayly, Martin & Fay, Inc., 242 N.J. Super.

643, 651 (App. Div. 1990)).

It is only where a contract's language is ambiguous that a

court may rely upon extrinsic or parol evidence to determine the

intent of the parties; where the language of the contract is

clear, extrinsic evidence may not be considered. Chubb Custom

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

11 A-0689-13T3
("If the language is clear, that is the end of the inquiry.");

see also Schor v. FMS Financial Corp., 357 N.J. Super. 185, 191

(App. Div. 2002) (holding if language in the contract is "not

free from doubt as to its meaning, the party is permitted to

introduce proof of extrinsic circumstances bearing on the

alleged proper interpretation of the language used"). Further,

the parol evidence rule "operates to prohibit the introduction

of oral promises to alter or vary an integrated written

instrument." Filmlife, Inc. v. Mal "Z" Ena, Inc., 251 N.J.

Super. 570, 573 (App. Div. 1991).

This tenant is especially true when the agreement itself

contains an integration clause. Harker v. McKissock, 12 N.J.

310, 321-22 (1953) ("The essence of voluntary integration is the

intentional reduction of the act to a single memorial; and where

such is the case the law deems the writing to be the sole and

indisputable repository of the intention of the parties.").

However, "when considering ambiguities and construing a policy,

courts cannot 'write for the insured a better policy of

insurance than the one purchased.'" Flomerfelt, supra, 202 N.J.

at 441 (quoting Walker Rogge, Inc. v. Chelsea Title & Guar. Co.,

116 N.J. 517, 529 (1989)); see also Progressive Cas. Ins. Co. v.

Hurley, 166 N.J. 260, 273 (2001) (finding "absence of an

ambiguity in the language of an insurance policy, a court should

not engage in a strained construction to support the imposition

12 A-0689-13T3
of liability"). Finally, "the insured has the burden 'to bring

the claim within the basic terms of the policy.'" S.T. Hudson

Eng'rs, Inc. v. Pa. Nat'l Mut. Cas. Co., 388 N.J. Super. 592,

603 (App. Div. 2006) (quoting Reliance Ins. Co. v. Armstrong

World Indus., Inc., 292 N.J. Super. 365, 377 (App. Div. 1996)),

certif. denied, 189 N.J. 647 (2007).

III.

Defendants argue they are entitled to coverage under

Catlin's insurance policies, claiming they are ambiguous on

their face. We disagree.

Because insurance policies should be enforced as written

where contract terms are clear and unambiguous, and because we

discern no room for interpretation, we conclude Judge Rea

correctly interpreted the language of the Aviation Products

Policy as only covering aircraft-related products, and not the

crosswalk lighting system at issue here. See Kampf v. Franklin

Life Ins. Co., 33 N.J. 36, 43 (1960); B.D. v. Div. of Med.

Assistance & Health Servs., 397 N.J. Super. 384, 391 (App. Div.

2007); see also Great Atl. & Pac. Tea Co., Inc. v. Checchio, 335

N.J. Super. 495, 502 (App. Div. 2000) (Construction of a written

contract normally presents a legal question, but where there is

"uncertainty, ambiguity or the need for parol evidence in aid of

interpretation, then the doubtful provision should be left to

the jury.").

13 A-0689-13T3
 The Aviation Products Policy provides Flight Light with

coverage for bodily injury caused by a "product hazard" in its

"aircraft products." Based upon the definitions provided in the

insurance policy, this plainly means plaintiff will defend and

indemnify Flight Light for any claims of bodily injury arising

from the handling or use of Flight Light's "aircraft products."

Aircraft products are "any article(s) furnished by the Insured

and installed in aircraft or used in connection with

aircraft . . . ." Therefore, according to the plain language of

the policy, Catlin insured Flight Light for injuries arising

from aircraft products installed on an aircraft or used in

connection with an aircraft.

Here, the complaint in the underlying action described the

System as a "pedestrian crossway lighting system consisting in

part of flashing lights embedded in the subject crosswalks and

pedestrian activation control stanchions." The System cannot be

considered an "aircraft product" within the meaning of the

Aviation Products Policy because it is completely unrelated to

an aircraft. Instead, the product at issue was used in a

crosswalk on a borough street rather than in connection with an

aircraft or aircraft application.

Therefore, inasmuch as the product giving rise to the

claims in the underlying action is not an "aircraft product,"

the claims arising from this product are not covered by the

14 A-0689-13T3
Aviation Products Policy. Accepting defendants' interpretation

of the policy would rewrite the policy to afford more coverage

than originally intended. See Flomerfelt, supra, 202 N.J. at

441.

We next consider defendants' assertion the CGL Aviation

Policy is also ambiguous. While defendants have failed to

articulate why we should find coverage under the CGL Aviation

Policy, it is clear the terms of the CGL Aviation Policy are

unambiguous and do not provide coverage for the underlying

claim. According to the plain language of the

Coverages/Insuring Agreement section of the CGL Aviation Policy,

Catlin will provide coverage for "bodily injury or property to

which this insurance applies resulting from [Flight Light's]

aviation operations[,]" which is defined as "all operations

necessary or incidental to aviation activities," including "all

operations arising from the ownership, maintenance, or use of

locations for aviation activities . . . ." Thus, the policy

clearly requires some connection between the underlying claim

and "aviation." The record contains no evidence of such a

connection.

Here, the claims in the underlying action involve personal

injuries sustained in an automobile accident at a downtown

suburban crosswalk. As such, there is no reasonable connection

between the claims in the underlying action and "aviation

15 A-0689-13T3
operations" as defined in the policy that could trigger

coverage. Therefore, based upon the unambiguous language of the

CGL Aviation policy, it is clear the claims against defendants

in the underlying action are not covered by the CGL Aviation

Policy.

Finally, we reject defendants' claim that Judge Rea erred

by failing to consider probative, extrinsic evidence. We note

the "distinction between the use of evidence of extrinsic

circumstances to illuminate the meaning of a written contract,

which is proper, and the forbidden use of parol evidence to vary

or contradict the acknowledged terms of an integrated contract."

YA Global Inv., L.P. v. Cliff, 419 N.J. Super. 1, 12 (App. Div.

2011) (quoting Garden State Plaza Corp. v. S. S. Kresge Co., 78

N.J. Super. 485, 497 (App. Div. 1963)). Defendants' proffered

parol evidence, including the deposition testimony of its

principal and a certification of its insurance agent, was not

presented to illuminate the meaning of Catlin's insurance

policies but rather to vary and contradict the plain language of

the policies. Finally, where a contract includes a merger

clause, as both policies here, such a clause is meant to reflect

the full intention of the parties. See Harker, supra, 12 N.J.

at 321-22. Therefore, we conclude Judge Rea correctly

interpreted the plain language of the policy in granting

Catlin's motion for summary judgment.

16 A-0689-13T3
Affirmed.

17 A-0689-13T3