NOT FOR PUBLICATION WITHOUT THE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-3554-17T2
MARITIME PARK, LLC,
a/k/a MARITIME PARC, LLC,
a New Jersey limited liability
corporation, d/b/a MARITIME
PARC,
Plaintiff-Appellant,
v.
NOVA CASUALTY COMPANY,
Defendant-Respondent.
________________________________
Submitted March 11, 2019 – Decided March 29, 2019
Before Judges Sabatino and Mitterhoff.
On appeal from Superior Court of New Jersey,
Chancery Division, Middlesex County, Docket No. C-
000024-16.
Lee Law Firm, LLC, attorneys for appellant (Edward
H. Lee, on the brief).
LeClair Ryan, PC, attorneys for respondent (John P.
Malloy, on the brief).
PER CURIAM
Plaintiff is the owner of a restaurant in Liberty State Park that was
temporarily closed for several weeks after Superstorm Sandy. Although
plaintiff’s insurer paid it for certain losses stemming from the closure, pla intiff
sought additional coverage benefits under a "civil authority" provision set forth
in the insurance policy.
The trial court denied plaintiff’s claims for such additional benefits,
construing the policy language to disallow coverage under the factual
circumstances presented. Plaintiff now appeals that ruling.
For the reasons that follow, we affirm.
I.
A.
Plaintiff's Restaurant and Its Location Within Liberty State Park
Maritime Park, LLC is the owner of Maritime Parc ("Maritime") a self-
described "high-end" restaurant on Audrey Zapp Drive within Liberty State Park
in New Jersey. The restaurant is located on the waterfront within the Park in an
area known as the Liberty Landing Marina. The Marina is situated on the
Hudson River and has over 500 in-water boat slips, in addition to above-ground
dry dock storage. Two restaurants are located within the Marina area: Maritime
A-3554-17T2
2
and Liberty House. Maritime and Liberty House are adjacent to each other and
share a parking lot.
B.
Superstorm Sandy and the DEP Closure Order
On October 28, 2012, at approximately 3:00 p.m., the Commissioner of
the New Jersey Department of Environmental Protection ("DEP") issued an
order closing the Park in anticipation of Superstorm Sandy. Superstorm Sandy
made landfall in New Jersey the following day on October 29. Robert
Rodriguez, the Park's area manager during the time and current its
superintendent, testified that all buildings within the Park were closed pursuant
to the DEP's order. In addition, police blocked access to the Park.
As a result of Superstorm Sandy, the Park remained closed to the public
until November 16, 2012. 1 In response to Maritime's request for information to
facilitate its insurance claim, Rodriguez described the damage2 to the Park in a
January 14, 2015 letter as follows:
The Park roads, specifically Audrey Zapp Drive,
Morris Pesin Drive and Freedom Way were closed at
1
The record is inconsistent about this Park reopening date, but was clarified by
Rodriguez during his deposition. We adopt the November 16 date utilized by
the motion judge in his opinion.
2
The letter also described damage to other areas of the Park that are not relevant
to the case at bar.
A-3554-17T2
3
interval times due to flooding and debris. Floodwaters
and force winds carried and deposited debris all over
the [P]ark but especially on the roads of the [P]ark.
Debris included boats and yachts, trees, garbage of
varying types, paverstones, chemicals and building
materials. Some of the debris included vegetative but
also household waste such as furniture, outdoor
backyard equipment, playground equipment,
computers, chairs, clothing, etc. It took a considerable
amount of time to allow for the flood waters to recede
(approx., 2-3 weeks) and to remove the debris from the
roads. Debris removal from [the Park] amounted to
over 1,000 tons. Audrey Zapp Drive was reopened to
the public and vehicles on November 16, 2012.
[(Emphasis added).]
Rodriguez explained in his deposition that the rising flood waters moved
boats from the Marina to other areas of the Park. Rodriguez specifically recalled
seeing "boats across the street from the Marina, on Audrey Zapp Drive." He
also recalled seeing "a really large piece of a barge" on "Johnson Avenue, [a
roadway which] turns into Audrey Zapp Drive." Rodriguez recalled Audrey
Zapp Drive "being under water for days, maybe even a week or two."
In his January 14, 2015 letter, Rodriguez detailed the post-storm damage
to the sewer system that services the Marina, Maritime, and Liberty House.
According to his letter, the "electrical and mechanical systems that service the
sewage system . . . [were] damaged from flooding and wind. For several weeks
the sewage system was inoperable[,] forcing all employees to utilize pot-a-sans
A-3554-17T2
4
toilets." According to Rodriguez, the damage to the sewer system was the result
of "a combination" of flooding and wind.
On November 19, 2012, power was restored to Maritime. 3 Maritime
alleges that after the Park reopened, its hours of operation were curtailed.
According to Maritime, the Park was only open "from 6:00 a.m. until dusk."
Maritime maintains that "having to close [its] property at dusk in November and
December of 2012, when it gets dark at approximately 5:00 p.m. – 6:00 p.m.,
does not make for a profitable dinnertime at a restaurant on the Hudson River."
C.
Maritime's Insurance Policy
During the relevant time frame, Maritime was insured by defendant Nova
Casualty Company ("Nova" or "the insurer") under a policy with an inception
date of November 24, 2011, and an expiration date of November 24, 2012.
Several different portions of Maritime's insurance policy are implicated in this
case.
3
Marc Haskell, one of the owners of Maritime, testified that he recalled
reopening the restaurant "after Thanksgiving" on either "November 29 or
November 30." According to his recollection, Maritime opened after
Thanksgiving because the restaurant did not have full power, the sewer system
was not working, and the Park was not yet open. However, during this litigation,
Maritime admitted in a counterclaim answer that its power was restored before
Thanksgiving, on November 19, 2012.
A-3554-17T2
5
1.
Utility Services
The utility services provision is part of the "Restaurant Enhancement"
endorsement included in the Policy. Subsection "u" of the endorsement states:
u. Utility Service
(1) We will pay for loss or damage caused directly or
indirectly by the failure of power or other utility service
supplied to the described premises, however caused, if
the failure occurs away from the premises and the
failure does not result in a Covered Cause of Loss.
(2) The most we will pay for loss or damage under this
coverage is $100,000 in any one occurrence, unless a
different limit is shown for Utility Service in the
Supplemental Schedule. Coverage begins 24 hours
after the failure of the utility service commences.
Nova paid $82,318 to Maritime under this provision. The loss period ran from
October 31, 2012 (twenty-four hours after power service was interrupted) until
November 18, 2012 (since power was restored the next day on November 19,
2012).
A-3554-17T2
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2.
Civil Authority
The Civil Authority provision is included in the "Business Income"
provision of the Policy. Under subsection 5 of this provision, titled "Additional
Coverages," the Policy provides:
a. Civil Authority
When a Covered Cause of Loss causes damage to
property other than property at the described premises,
we will pay for the actual loss of Business Income you
sustain and necessary Extra Expense caused by action
of civil authority that prohibits access to the described
premises, provided that both of the following apply:
(1) Access to the area immediately surrounding
the damaged property is prohibited by civil authority as
a result of the damage, and the described premises are
within that area but are not more than one mile from the
damaged property; and
(2) The action of civil authority is taken in
response to dangerous physical conditions resulting
from the damage or continuation of the Covered Cause
of Loss that caused the damage, or the action is taken
to enable a civil authority to have unimpeded access to
the damaged property.
Civil Authority Coverage for Business Income will
begin 72 hours after the time of the first action of civil
authority that prohibits access to the described premises
and will apply for a period of up to four consecutive
weeks from the date on which such coverage began.
A-3554-17T2
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Civil Authority Coverage for Extra Expense will begin
immediately after the time of the first action of civil
authority that prohibits access to the described premises
and will end:
(1) Four consecutive weeks after the date of that
action; or
(2) When your Civil Authority Coverage for
Business Income ends; whichever is later.
[(Emphasis added).]
Under the civil authority provision, the prohibition on access to the property
experienced by the insured must be the result of damage caused by a "covered
cause of loss." The introductory words of the provision notably state, "When a
covered cause of loss causes damage . . . ." (Emphasis added).
The Policy defines, in turn, the pivotal concept of a "Covered Causes of
Loss" as:
A. Covered Causes of Loss
When Special is shown in the Declarations, Covered
Causes of Loss means Risks of Direct Physical Loss
unless the loss is:
1. Excluded in Section B., Exclusions; or
2. Limited in Section C., Limitations.
[(Emphasis added).]
A-3554-17T2
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3.
Water Exclusion
Section B of the Policy delineates the types of claims that are excluded
from the Policy. Among other things, Section B provides in pertinent part:
B. Exclusions
1. We will not pay for loss or damaged caused directly
or indirectly by any of the following. Such loss or
damage is excluded regardless of any other cause or
event that contributes concurrently or in any sequence
to the loss.
[(Emphasis added).]
One of the exclusions listed under Section B is for "water." That term is
described in the water exclusion endorsement, as follows:
B. Water
(1) Flood, surface water, waves (including tidal wave
and tsunami), tides, tidal water, overflow of any body
of water, or spray from any of these, all whether or not
driven by wind (including storm surge);
(2) Mudslide or mudflow;
(3) Water that backs up or overflows or is otherwise
discharged from a sewer, drain, sump, sump pump or
related equipment;
(4) Water under the ground surface pressing on, or
flowing or seeping through:
A-3554-17T2
9
(a) Foundations, walls, floors or paved surfaces;
(b) Basements, whether paved or not; or
(c) Doors, windows or other openings; or
(5) Waterborne material carried or otherwise moved by
any of the water referred to in Paragraph 1., 3. or 4., or
material carried or otherwise moved by mudslide or
mudflow.
This exclusion applies regardless of whether any of the
above, in Paragraphs 1, through 5, is caused by an act
of nature or is otherwise caused. An example of a
situation to which this exclusion applies is the situation
where a dam, levee, sea-wall or other boundary or
containment system fails in whole or in part, for any
reason, to contain the water. . . .
[(Emphasis added).]
D.
Maritime's Coverage Claims
Although it sustained other forms of physical damage from the storm,
Maritime suffered no water damage or flooding in the interior of its building.
Haskell, who checked on the restaurant two days after the storm had passed,
testified that "most of the damage was contained to the exterior of the building
and exterior patio area." Haskell stated most of the physical damage occurred
to Maritime's outdoor patio, which contained an outdoor bar and seating.
Meanwhile, Nova described the damage as "relatively minor wind damage and
the loss of electrical power."
A-3554-17T2
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After the storm, Maritime retained the services of a licensed public
insurance adjuster, who filed a property insurance claim on its behalf with Nova
for "losses of business personal property and business income and extra
expenses as such losses are defined in said policy of insurance." The claim was
categorized under the policy category of "wind and hail" and was described as
"Hurricane Sandy – Wind/water damage to insured location."
Upon investigating the claim, Nova determined that Maritime sustained
wind damage, and loss of electrical power from October 29 to November 19,
2012 which resulted in Maritime being unable to operate. Nova consequently
paid Maritime the following sums on portions of its claims: $25,000 for food
spoilage; $63,111.24 for damage to property; and the aforementioned $82,318
for loss of business income and extra expense under the "utility services" portion
of the Policy.
Maritime originally claimed an aggregate loss of business income of
$385,226.08. Therefore, it maintained that the $82,318 payment by Nova for
lost income was insufficient. Pursuant to a procedure set forth in the Policy,
Maritime requested an appraisal of this business income claim. 4
4
As described by Nova, "[u]nder this process, Maritime and Nova each select
an appraiser. The two appraisers then select a neutral third appraiser , to
comprise a panel of three. A decision by two of the three appraisers on the
A-3554-17T2
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The parties disagreed over the appropriate scope of an appraisal. Nova
maintained that Maritime was entitled to coverage only for the loss of income
under the utility service provision, i.e., for loss associated with the loss of
electrical power to the restaurant. Therefore, Nova sought to limit the appraisal
to the issue of the amount of income lost during the specific period the restaurant
was without power. Maritime disagreed with that scope, contending that it was
separately entitled to coverage for loss of business income under the Civil
Authority provision. Nova had denied coverage under that provision, finding it
inapplicable.
E.
The Litigation
In March 2016, Maritime filed a complaint in the Chancery Division
against Nova to pursue its claims for additional coverage. The complaint sought,
among other things, a declaratory judgment that Nova was required to proceed
to an appraisal on Maritime's claim for civil authority coverage. 5 Nova denied
amount of the loss is binding as to the amount of loss, but not whether coverage
exists."
5
The complaint also includes counts for: judgment declaring Maritime’s claim
for business income and extra expense are insured under the Policy (second
count); violation of N.J.S.A. 56:8-2, the Consumer Fraud Act (third count); and
breach of the implied duty of good faith and fair dealing (fourth count).
Maritime does not appeal from the entry of summary judgment on these claims,
A-3554-17T2
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liability, and asserted a counterclaim seeking a judicial declaration that the
utility services portion of the policy was the only portion subject to an appraisal.
F.
The Motion Practice
Nova moved for summary judgment, and Maritime cross-moved for
summary judgment. Both parties agreed the factual record did not require any
further development in order to resolve the coverage issues.
After hearing oral argument, Judge Arnold L. Natali, Jr., granted Nova's
motion for summary judgment, and denied plaintiff's motion. The judge
expressed his reasons in a detailed oral decision dated February 28, 2018. In
particular, Judge Natali determined that Maritime was not entitled to coverage
under the Civil Authority provision of the Policy.
This appeal followed.
II.
On appeal, Maritime argues the trial court erred in rejecting its claim for
additional coverage under the insurance policy's Civil Authority provision. We
consider that argument de novo because the interpretation of an insurance policy
as its appellate brief contains no argument challenging the trial court’s decision
on these counts. See R. 2:6-2(a); see also Morris v. T.D. Bank, 454 N.J. Super.
203, 206 n.2 (App. Div. 2018) ("An issue that is not briefed is deeme d waived
upon appeal.").
A-3554-17T2
13
provision, and its application to record facts, is essentially a legal analysis. See,
e.g., Simonetti v. Selective Ins. Co., 372 N.J. Super. 421, 428 (App. Div. 2004)
("[T]he interpretation of an insurance contract is a question of law which we decide
independent of the trial court's conclusions.").
The insurance contract is "construed in accordance with principles that govern
the interpretation of contracts." Mem'l Properties, LLC v. Zurich Am. Ins. Co., 210
N.J. 512, 525 (2012). Accordingly, an insurance policy will be enforced as written
when its terms are clear and unambiguous. Simonetti, 372 N.J. Super. at 428. "If
the plain language of the policy is unambiguous, we will 'not engage in a strained
construction to support the imposition of liability or write a better policy for the
insured than the one purchased.'" Templo Fuente De Vida Corp. v. Nat'l Union Fire
Ins. Co. of Pittsburgh, 224 N.J. 189, 200 (2016) (quoting Chubb Custom Ins. Co. v.
Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008)). In addition, we afford no
special deference to a trial court in reviewing a decision rendered on summary
judgment. W.J.A. v. D.A., 210 N.J. 229, 237-38 (2012).
Having applied these principles here, we affirm the trial court's summary
judgment ruling, substantially based upon the well-reasoned oral opinion of
Judge Natali. We add only a few comments by way of amplification.
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Succinctly stated, the Policy furnishes Civil Authority coverage when: (1)
a "covered cause" of loss causes damage; (2) the damage is to property at a
location other than the insured location, but located within a mile of it; and (3)
the action of a civil authority prohibits access to the described premises. For
purposes of the coverage analysis, Maritime argues that the act of "civil
authority" here is the DEP Commissioner's October 28, 2012 order closin g the
Park in anticipation of Superstorm Sandy.
As the motion judge correctly recognized, even if the Commissioner's
closure order restricting access to the Park due to the storm is deemed a cause
of Maritime's loss of business revenue, Maritime cannot be paid under the Civil
Authority provision unless the circumstances involve a "covered claim of loss."
As we have highlighted above, the Policy's definition of a "covered claim
of loss" contains various exclusions in Section B that operate to nullify
coverage. In particular, the Policy makes clear that Nova "will not pay for loss
or damage caused directly or indirectly" by any of Section B's listed exclusions,
including water infiltration, sewage back-up or overflow and waterborne
material that has been carried or moved. (Emphasis added).
Importantly, the Policy states "[s]uch loss or damage is excluded
regardless of any causes or events that constitutes concurrently or in any
A-3554-17T2
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sequence to the loss." This language is commonly known as an "anti-concurrent
causation clause." The clause bars coverage when two identifiable causes – one
covered and one not covered – contributes to a single loss. See, e.g., Wear v.
Selective Ins. Co., 455 N.J. Super. 440, 454-55 (App. Div. 2018) (enforcing such
an anti-concurrent causation clause); Simonetti, 372 N.J. Super. at 431 (same);
see also Assurance Co. of Am., Inc. v. Jay-Mar, Inc., 38 F.Supp.2d 349, 352-54
(D.N.J. 1999) (same).
Judge Natali correctly applied the Policy's anti-concurrent causation
clause in this case. The record clearly shows that one of the reasons the Park
was kept closed for several weeks – if not the sole reason – was the flood waters
that overflowed portions of the Park. This was confirmed by Rodriguez's
January 2015 letter, as well as his subsequent deposition testimony. The flood
waters, combined with wind and other factors, caused debris to be moved about
the Park, including large objects on Audrey Zapp Drive that impeded safe access
to Maritime.
It is inconsequential that Maritime's property itself was not damaged by
flooding. Due to the anti-concurrent cause provision, the Civil Authority
language affords no coverage where the restrictions on Park access were
produced, at least in part, by flooding. Moreover, it is immaterial that the Park
A-3554-17T2
16
was not actually flooded when it closed in anticipation of the storm on October
28. The Civil Authority provision specifically provides that coverage begins
only "72 hours after the time of the first action of civil authority that prohibits
access to the described premises." (Emphasis added).
Because the terms of the Policy language are clear and ambiguous, the
trial court appropriately did not "engage in a strained construction to . . . write
a better policy for the insured than the one [Maritime] purchased." Templo
Fuente De Vida Corp., 224 N.J. at 200.
The remaining arguments raised by Maritime on appeal lack sufficient
merit to warrant any further comment. R. 2:11-3(e)(1)(E).
Affirmed.
A-3554-17T2
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MARITIME PARK, LLC, ETC. VS. NOVA CASUALTY COMPANY (C-000024-16, MIDDLESEX COUNTY AND STATEWIDE)
Combined Opinion