ELMITA LOUIS VS. CITY OF NEWARK ANGEL WILLIAMS VS. CITY OF NEWARK NAYYAR AHMED VS. KB INSURANCE LTD. (L-4553-14, L-5028-14 AND L-2770-18, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2172-18T3

ELMITA LOUIS, Administratrix ad
Prosequendum of the ESTATE OF
JEVENS JOSEPH and the ESTATE
OF JEVENA JOSEPH and ELMITA
LOUIS, individually, and JOSNER
JOSEPH, individually,

Plaintiffs,

v.

CITY OF NEWARK, NAYYAR
AHMED, and SH SERVICES, LLC,

Defendants.
_________________________________

ANGEL WILLIAMS, Administratrix
ad Prosequendum of the ESTATE OF
NAZEER BLACKSTON, ANGEL
WILLIAMS, Administratrix ad
Prosequendum of the ESTATE OF
SHELTON ONEAL FREEMAN,
ANGEL WILLIAMS, Administratrix
ad Prosequendum of the ESTATE OF
ANGELICA WILLIAMS, ANGEL
WILLIAMS, Guardian of minor TALIL
FREEMAN, and ANGEL WILLIAMS,
individually,
 Plaintiffs,

v.

CITY OF NEWARK, NAYYAR
AHMED, SH SERVICES, LLC, NEW
LIFE INVESTMENT, LLC, SHAHEER
WILLIAMS, 31 BROOKDALE, LLC,
and CHARLOTTE OVERY,

Defendants.
___________________________________

NAYYAR AHMED,

Plaintiff-Respondent,

v.

KB INSURANCE LTD., US BRANCH,
f/k/a THE LEADING INSURANCE
GROUP,

Defendant-Appellant,

and

CITY OF NEWARK, ELMITA LOUIS,
Administratrix ad Prosequendum of
the ESTATE OF JEVENS JOSEPH and
the ESTATE OF JEVENA JOSEPH,
ELMITA LOUIS, individual,
JOSNER JOSEPH, individually,
ANGEL WILLIAMS, Administratrix
ad Prosequendum of the ESTATE OF
NAZEER BLACKSTON, ANGEL
WILLIAMS, Administratrix ad
Prosequendum of the ESTATE OF

A-2172-18T3
2
SHELTON ONEAL FREEMAN,
ANGEL WILLIAMS, Administratrix
ad Prosequendum of the ESTATE OF
ANGELICA WILLIAMS, ANGEL
WILLIAMS, Guardian of minor TALIL
FREEMAN, and ANGEL WILLIAMS,
individually,

Defendants.
___________________________________

Argued September 10, 2019 – Decided September 26, 2019

Before Judges Ostrer and Vernoia.

On appeal from an interlocutory order of the Superior
Court of New Jersey, Law Division, Essex County,
Docket Nos. L-4553-14, L-5028-14 and L-2770-18.

Jaclyn M. SchianodiCola argued the cause for appellant
(The Chartwell Law Offices, LLP, attorneys; Jaclyn M.
SchianodiCola, on the briefs).

Donna Russo argued the cause for respondent (Russo &
Kieck, attorneys; Donna Russo, on the brief).

PER CURIAM

The sole question in this insurance coverage case, which we consider after

granting leave to appeal, is whether the "businessowners policy" that Kookmin

Best Insurance Company, Ltd. (KBIC) issued to Nayyar Ahmed limited

coverage for bodily injury liability to $1 million per occurrence. A fire at

Ahmed's insured apartment building killed multiple occupants. The decedents'

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estates and other survivors sued Ahmed, the City of Newark, and others. Ahmed

eventually filed a declaratory judgment action, seeking an order that the policy

provided $2 million in coverage. He relies on language in the declarations page

and his reasonable expectations of coverage. The trial court agreed with the

insured and, on cross-motions for summary judgment, entered judgment in his

favor, and against KBIC.

We review de novo the trial court's interpretation of the policy, see

Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt. Osteopathic Med. & Physical

Therapy, 210 N.J. 597, 605 (2012), and its summary judgment order, Templo

Fuente de Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. , 224 N.J.

189, 199 (2016).

We are guided by well-established rules of construction. "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, 224 N.J. at 200 (quoting

Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 273 (2001)). We construe

ambiguous provisions in favor of the insured, but that rule applies "[o]nly where

there is a genuine ambiguity, that is, where the phrasing of the policy is so

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confusing that the average policyholder cannot make out the boundaries of

coverage." Ibid. (citing Hurley, 166 N.J. at 274).

An insurer may create ambiguity by defining coverage one way in a

declarations page, and another way in the policy language. See Lehrhoff v.

Aetna Cas. & Sur. Co., 271 N.J. Super. 340, 346-47 (App. Div. 1994). A

declarations page in a personal lines policy is given "signal importance" because

it is tailored to the insured, who may rely on it without reviewing the policy that

follows. Id. at 346. Even assuming that rule applies with equal force to a

businessowners policy, "separate presentation of an insurance policy's

declarations sheet, definition section, and exclusion section" does not

necessarily create ambiguity. Oxford Realty Group Cedar v. Travelers Excess

and Surplus Lines Co., 229 N.J. 196, 207-08 (2017). The key is whether the

declarations page warns or alerts the insured that subsequent policy language

modifies or amplifies the coverage and limits in the declarations page. See

Zacarias v. Allstate Ins. Co., 168 N.J. 590, 602-03 (2001) (rejecting reliance on

declarations page where it alerted the insured that the coverage and liability

limits were subject to subsequent policy provisions); Lehrhoff, 271 N.J. Super.

at 347 (noting that "the declaration page cannot be contradicted by the po licy's

boilerplate unless the declaration page itself clearly so warns the insured").

A-2172-18T3
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 The declarations page in Ahmed's policy lists the "Limits of Insurance"

for four separate categories of policy coverage, including the "Liability and

Medical Expense" coverage that pertains to the fire victims' claims.

Limits of Insurance
Liability and Medical Expenses / $1,000,000 / $2,000,000
General Aggregate
Medical Expenses $5,000 Per person

Products / Completed $2,000,000
Operations Aggregate
Fire Legal Liability $50,000 Any one fire or explosion

Ahmed highlights that the declarations page does not expressly limit

"Liability and Medical Expenses" coverage to $1,000,000 "per occurrence." By

contrast, "Fire Legal Liability" coverage is limited to "any one fire or

explosion." Also, the declarations page lists other forms of coverage in terms

of "per occurrence" limits, such as coverage for employee dishonesty, and

outdoor signs, although Ahmed did not purchase those coverages. Ahmed

essentially argues that if the insurer meant to limit the liability coverage to "per

occurrence" it should have said so. He contends the coverage for the multiple

deaths and injuries was an "aggregate" of $2,000,000. He does not say what he

understood the $1,000,000 limit to cover, if not each occurrence.

A-2172-18T3
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 However, the above-quoted policy coverages and limits were preceded by

an explicit warning, referring the insured to two provisions of the policy:

Except for Fire Legal Liability, each paid claim for the
following liability coverages reduces the amount of
insurance we provide during the applicable annual
period. Please refer to Paragraph D.4 of the
Businessowners Liability Coverage Form or Section II-
Liability in the Businessowners Coverage Form and
any attached endorsements.

These referenced provisions clarify that the policy imposed a $1,000,000

per occurrence limit. "Section II – Liability" states that the insurer would cover

liability for bodily injury "[b]ut . . . [t]he amount we will pay for damages is

limited as described in Paragraph D – Liability and Medical Expenses Limits of

Insurance . . . ." In turn, Paragraph D expressly explains that the $1,000,000 of

"Liability and Medical Expenses" coverage was "per occurrence," and the

$2,000,000 of "General Aggregate" coverage was the total amount of coverage

that the policy provided for all occurrences in a single year. Paragraph D begins

by explaining that the "Liability and Medical Expenses Limits" apply regardless

of the number of claimants:

D. Liability And Medical Expenses Limits Of
Insurance

1. The Limits of Insurance of Section II –
Liability shown in the Declarations and the

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 rules below fix the most we will pay
regardless of the number of:

a. Insureds;

b. Claims made or "suits" brought; or

c. Persons or organizations making
claims or bringing "suits".

The policy then goes on to introduce the concept that the $1,000,000 limit of

"Liability and Medical Expenses" set forth on the declarations page is the per

occurrence limit:

2. The most we will pay for the sum of all
damages because of all:

a. "Bodily Injury", "property damage"
and medical expenses arising out of
any one "occurrence"; and

b. "Personal and advertising injury"
sustained by any one person or
organization;

is the Liability and Medical Expenses limit
shown in the Declarations.

[(Emphasis added).]

Paragraph 4 then explains that the total amount the insurer will pay for

liability and medical expenses in a policy year is $2,000,000 – "twice the

Liability and Medical Expense limit" of $1,000,000.

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 4. Aggregate Limits

The most we will pay for:

....

b. All:

(1) "Bodily injury" or "property
damage" . . .

(2) Plus medical expenses;

(3) Plus all "personal and
advertising injury" caused by
offenses committed;

is twice the Liability and Medical
Expenses limit.

In sum, although the declarations page did not expressly state that the

$1,000,000 limit of "Liability and Medical Expenses" coverage was a "per

occurrence" limit, and that the $2,000,000 figure was an aggregate annual

coverage limit, the policy language did so state. And, the declarations page

directed the insured to that policy language. Therefore, we are obliged to

enforce the policy as written.

We also reject Ahmed's argument that we should find $2,000,000 in

coverage for the fire because that was his "reasonable expectation" grounded in

the declarations page. The reasonable expectations doctrine is "less applicable

A-2172-18T3
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to commercial contracts" of insurance. Oxford Realty, 229 N.J. at 208. Even

assuming the doctrine applies with full force to Ahmed's businessowners policy,

Ahmed failed to establish that he had a reasonable expectation of $2,000,000 in

coverage for a single occurrence.

"The expectations of coverage must be real . . . [and] the expectations

must be 'objectively reasonable.'" Abboud v. Nat'l Union Fire Ins. Co. of

Pittsburgh, Pa., 450 N.J. Super. 400, 410 (App. Div. 2017) (quoting Templo

Fuente, 224 N.J. at 210). "In assessing whether the expectations are objectively

reasonable, a court will consider communications regarding the coverage

between the insured or its broker and the insurer or its agent that relate to the

insured's expectations." Ibid.

Notably, Ahmed provides no certification presenting his expectations of

coverage. Rather, the record includes his application for the insurance policy,

which sought $1,000,000 of coverage for "Each Occurrence" and $2,000,000 of

"General Aggregate" coverage. 1 If anything, the evidence reflects that Ahmed

got what he expected.

1
We reject Ahmed's argument that his application was inadmissible hearsay.
Based on a KBIC employee's certification, the application was kept in the usual
course of business, see N.J.R.E. 803(c)(6); Ahmed's statements within the
application are statements of a party-opponent, see N.J.R.E. 803(b)(1); and the

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 Reversed and remanded. We do not retain jurisdiction.

KBIC employee asserted upon personal knowledge and her review of business
records, that KBIC issued the policy in response to Ahmed's application.
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