GATEWAY PARK LLC VS. TRAVELERS INSURANCE COMPANY (L-2077-17, UNION 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NOT FOR PUBLICATION WITHOUT THE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
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-1221-18T2

GATEWAY PARK, LLC,

Plaintiff-Appellant,

v.

TRAVELERS INSURANCE
COMPANY,

Defendant-Respondent,

and

STACIE GARRIS, GROUND
EFFECTS CONSTRUCTION,
LLC, and EXAMWORKS, INC.,

Defendants.
_____________________________

Argued November 12, 2019 – Decided April 29, 2020

Before Judges Vernoia and Susswein.

On appeal from the Superior Court of New Jersey, Law
Division, Union County, Docket No. L-2077-17.
 Patrick D. Heller argued the cause for appellant (Law
Offices of Terkowitz & Hermesmann, attorneys;
Patrick D. Heller, on the briefs).

Frank E. Borowsky, Jr., argued the cause for respondent
(Borowsky & Borowsky, LLC, attorneys; Frank E.
Borowsky, of counsel and on the brief; Adam K.
Gallagher, on the brief).

PER CURIAM

In this insurance coverage dispute, plaintiff Gateway Park, LLC sought a

declaratory judgment it is entitled to coverage as an additional insured under a

commercial general liability policy defendant Travelers Insurance Company 1

issued to plaintiff's tenant, ExamWorks, Inc. (ExamWorks). On the parties'

cross-motions for summary judgment on the coverage issue, the court

determined plaintiff was an additional insured under the policy, granted

plaintiff's motion, and denied defendant's motion. The court later granted

defendant's reconsideration motion, determining plaintiff was not an additional

insured, and entered summary judgment for defendant. Based on our review of

1
Defendant asserts its correct name is Travelers Indemnity Company and it was
"improperly impleaded as Travelers Insurance Company." We refer to
defendant by the name in which it was identified in the pleadings before the
motion court.

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the record, we conclude the court erred by granting the reconsideration motion,

and reverse.

I.

The pertinent facts are not disputed. In January 2014, Stacie Garris

slipped and fell on ice in the parking lot adjacent to a commercial office building

plaintiff owned and in which ExamWorks was a tenant. ExamWorks employed

Garris as a temporary worker, and she fell as she approached the building to

begin work after parking her vehicle directly in front of the building's front door.

Garris suffered injuries as a result of her fall, and she filed a personal

injury action against plaintiff, ExamWorks, and plaintiff's snow and ice

remediation contractor, Ground Effects Construction, LLC (Ground Effects).

Prior to trial, Garris settled her claims against plaintiff and Ground Effects. The

court subsequently granted ExamWorks summary judgment dismissing Garris's

complaint and plaintiff's crossclaims against ExamWorks.

Plaintiff filed a declaratory judgment action, asserting ExamWorks's lease

with plaintiff required ExamWorks obtain liability insurance naming plaintiff as

an additional insured. Plaintiff alleged defendant issued a liability policy to

ExamWorks; plaintiff was an additional insured under the policy; and the policy

obligated defendant to defend and indemnify plaintiff for Garris's claim.

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Defendant filed an answer disputing plaintiff's claimed entitlement to coverage

as an additional insured under the ExamWorks policy.

Following discovery, the parties cross-moved for summary judgment.

The parties did not dispute the circumstances surrounding Garris's fall and

injuries. The parties, however, disagreed over the meaning and legal

significance of provisions in ExamWorks's lease with plaintiff and the terms of

ExamWorks's insurance policy with defendant.

More particularly, and in pertinent part, ExamWorks's lease with plaintiff

required ExamWorks maintain general liability insurance including:

such endorsements to the commercial general liability
policy or otherwise obtain insurance to insure all
liability arising from such activity or matter . . . in such
amounts as [plaintiff] may reasonably require[],
insuring [ExamWorks], and adding [plaintiff] . . . as
[an] additional insured[], against all liability for injury
to or death of a person or persons or damage to property
arising from the use and occupancy of the Premises . . .
[(Emphasis added).]

The lease further defined "Premises" as the office space ExamWorks leased in

plaintiff's building.

The lease included an indemnity provision pursuant to which ExamWorks

agreed to "defend, indemnify, and hold harmless [plaintiff] . . . from and against

all claims, demands, liabilities, causes of action, suits, judgments, damages, and

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expenses . . . arising from . . . any injury to or death of any person . . . arising

from any occurrence caused by" ExamWorks's "negligence or willful

misconduct" or failure to perform its lease obligations. The lease required

plaintiff indemnify ExamWorks on the same terms.

The lease further provided ExamWorks's "insurance shall provide primary

coverage to [plaintiff] when any policy issued to [plaintiff] provides duplicate

or similar coverage." The parties agreed that where plaintiff's insurance

provided duplicate or similar coverage, plaintiff's "policy will be excess over

[ExamWorks's] policy."

In support of its request for coverage, plaintiff relied on provisions of

ExamWorks's commercial general liability insurance policy with defendant.

Plaintiff claimed coverage for Garris's claim as an additional insured under the

policy, relying on a policy endorsement that added the following to the

definition of "WHO IS AN INSURED":

Any person or organization that is a premises owner,
manager or lessor and that you have agreed in a written
contract or agreement to name as an additional insured
. . . is an insured, but only with respect to liability for
"bodily injury[,]" "property damage[,]" "personal
injury" or "advertising injury" that:

a. Is "bodily injury" or "property damage" caused by
an "occurrence" that takes place, or "personal injury" or
"advertising injury" caused by an offense that is

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 committed, after you have signed and executed that
contract or agreement; and

b. Arises out of the ownership, maintenance or use of
that part of any premises leased to you.

Plaintiff also relied on a provision in the endorsement addressing the

circumstances under which a premises owner's or lessor's insurance coverage is

either primary to, or excess to, the insurance coverage the premise's owner has

as an additional insured under the ExamWorks policy. The endorsement

provides:

The insurance provided to such premises owner,
manager, or lessor is excess over any valid and
collectable other insurance available to such premises
owner, manager or lessor, unless you have agreed in a
written contract for this insurance to apply on a primary
contributory basis.

In support of its summary judgment motion, plaintiff argued it was an

additional insured on Garris's claim under the plain language of the policy

endorsement. Plaintiff asserted it was a premises owner and lessor whose lease

with ExamWorks required ExamWorks obtain general liability insurance.

Plaintiff further argued Garris's accident arose out of the use of ExamWorks's

premises, and, therefore, plaintiff was an additional insured under the

endorsement's plainly stated conditions.

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 In support of its summary judgment motion and in opposition to plaintiff's

cross-motion, defendant relied on our decision in Pennsville Shopping Center

Corp. v. American Motorists Insurance Co., 315 N.J. Super. 519 (App. Div.

1998), arguing it required a denial of coverage because the lease's

indemnification provision, requiring plaintiff indemnify ExamWorks for

plaintiff's negligence, was inconsistent with the provision of coverage to

plaintiff as an additional insured under the policy. Defendant also asserted

Garris's injuries did not arise out of the use of the premises leased to ExamWorks

and, for that reason, plaintiff was not entitled to coverage under the

endorsement's plain language.

After hearing argument, the court determined that, although Garris did not

slip and fall within the physical premises leased by ExamWorks, her injuries

arose out of the use of ExamWorks's premises within the endorsement's plain

meaning. The court rejected defendant's reliance on Pennsville, finding that,

unlike the lease at issue in Pennsville, ExamWorks's lease "does not contain a

caveat excluding the landlord's negligence from landlord's indemnity. " The

court found Pennsville inapposite; determined plaintiff met the endorsement's

requirements as an additional insured; and granted plaintiff summary judgment.

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The court entered an order granting plaintiff summary judgment and denying

defendant's motion.

Defendant filed a reconsideration motion, arguing the court erred in

finding the ExamWorks lease did not include an indemnification provision

similar to the one before the court in Pennsville. The court explained that, upon

reconsideration, it found the indemnification provision in ExamWorks's lease

was "analogous" to the provision considered in Pennsville; plaintiff agreed to

indemnify ExamWorks for plaintiff's negligence; and plaintiff acknowledged it

was responsible for snow and ice removal. The court found that, even though

Garris's accident "arose out of the tenant's use of a leased premise[s,] it was

outside of the reasonable expectations of the lease contract between the parties

that . . . [ExamWorks] would be required to indemnify [plaintiff] for [plaintiff's]

negligence."

The court determined that based on the reasonable expectations of the

parties, as gleaned from the court's review of the lease, plaintiff "should not be

entitled to the additional insured coverage under" the ExamWorks policy. The

court entered an order granting defendant's reconsideration motion, granting

defendant summary judgment, and denying plaintiff's summary judgment

motion. This appeal followed.

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 II.

"Motions for reconsideration are governed by Rule 4:49-2, which provides

that the decision to grant or deny a motion for reconsideration rests within the

sound discretion of the trial court." Pitney Bowes Bank, Inc. v. ABC Caging

Fulfillment, 440 N.J. Super. 378, 382 (App. Div. 2015). We therefore review a

decision on a motion for reconsideration under the abuse of discretion standard.

Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996). An abuse of

discretion occurs "when a decision is 'made without a rational explanation,

inexplicably departed from established policies, or rested on an impermissible

basis.'" U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467-68 (2012)

(quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)).

Plaintiff argues the motion court abused its discretion by ignoring the

policy's plain language and relying on the terms of ExamWorks's lease to

determine whether plaintiff was an additional insured under the policy. Plaintiff

contends Garris's injuries arose out of the use of the premises leased by

ExamWorks and, as a result, plaintiff is an additional insured entitled to a

defense and indemnification under the policy. Plaintiff also argues the

Pennsville decision is inapposite, and the court erred by relying on it to support

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its decision to grant defendant's reconsideration motion and enter summary

judgment in defendant's favor.

The court's determination on reconsideration—that plaintiff is not entitled

to coverage under the policy as a matter of law—therefore requires our

consideration of its decision on the cross-motions for summary judgment. This

court "appl[ies] the same standard the judge applied in ruling on summary

judgment." Wear v. Selective Ins. Co., 455 N.J. Super. 440, 453 (App. Div.

2018). We must determine whether there are any genuine issues of material fact

when the evidence is viewed in the light most favorable to the non-moving party,

Rowe v. Mazel Thirty, LLC, 209 N.J. 35, 38-41 (2012), and whether, based on

the undisputed facts, the moving party "must prevail as a matter of law," Brill

v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (quoting Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)). This court reviews the trial

court's determination of legal issues de novo. Globe Motor Co. v. Igdalev, 225

N.J. 469, 479 (2016); Manalapan Realty, LP v. Twp. Comm. of Manalapan, 140

N.J. 366, 378 (1995).

Neither party argues there were fact issues precluding a proper award of

summary judgment on the cross-motions. They agree the issue presented to the

court was whether, based on the undisputed facts, plaintiff was an additional

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insured under the ExamWorks policy as a matter of law. Thus, the issue decided

by the court on the cross-motions for summary judgment and reconsideration

motion was a question of law that we review de novo "independent of the

[motion] court's conclusions." Thompson v. James, 400 N.J. Super. 286, 291

(App. Div. 2008) (quoting Simonetti v. Selective Ins. Co., 372 N.J. Super. 421,

428 (App. Div. 2004)); see also Wear, 455 N.J. Super. at 453 (explaining "[t]he

interpretation of an insurance policy upon established facts is a question of law

for [this] court to determine").

Our interpretation of an insurance contract is guided by well-established

principles. "[T]he basic rule is to determine the intention of the parties from the

language of the policy, giving effect to all parts so as to give a reasonable

meaning to the terms." Simonetti, 372 N.J. Super. at 428. We must "give the

policy's words 'their plain, ordinary meaning,'" Wear, 455 N.J. Super. at 453

(quoting Nav-Its, Inc. v. Selective Ins. Co., 183 N.J. 110, 118 (2005)), and we

"cannot make a better [or different] contract for [the] parties than the one" to

which they agreed, Simonetti, 372 N.J. Super. at 428. In sum, we "must enforce

the contract as written." Simonetti, 372 N.J. Super. at 428.

Generally, "policies should be construed liberally in . . . favor [of the

insured] to the end that coverage is afforded 'to the full extent that any fair

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interpretation will allow.'" Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475,

482 (1961) (citation omitted). When the parties dispute the interpretation of the

policy, "it is the insured's burden to bring the claim within the basic terms of the

policy." Polarome Int'l, Inc. v. Greenwich Ins. Co., 404 N.J. Super. 241, 258

(App. Div. 2008) (quoting Rosario v. Haywood, 351 N.J. Super. 521, 529 (App.

Div. 2002)).

Courts will ordinarily resolve ambiguities in an insurance policy in favor

of the insured. Cruz-Mendez v. ISU/Ins. Servs. of S.F., 156 N.J. 556, 571

(1999). However, where there is no ambiguity in the policy, the court "may not

engage in a strained construction to impose a duty on the carrier that is not

contained in the policy." Polarome, 404 N.J. Super. at 259.

An ambiguity exists only if the terms are reasonably susceptible to at least

two interpretations. Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 191 (App.

Div. 2002). However, the ambiguity itself must arise out of the four corners of

the contract. See Rena, Inc. v. Brien, 310 N.J. Super. 304, 321 (App. Div. 1998)

(stating coverage is determined by the terms of the insurance contract).

The additional insured endorsement to the ExamWorks policy is plainly

written and unambiguous according to well-settled judicial interpretation. In

pertinent part, it first provides that a "premises owner, manager or lessor," such

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as plaintiff, which the tenant "agree[s] in a written contract or agreement to name

as an additional insured . . . is an insured . . . with respect to liability for 'bodily

injury' . . . caused by an 'occurrence' that takes place . . . after," the tenant

"sign[s] and execute[s] that contract or agreement" (emphasis added). The

undisputed facts establish plaintiff satisfied these requirements. As noted,

plaintiff was the owner and lessor of the premises leased by ExamWorks; in

ExamWorks's lease with plaintiff, ExamWorks agreed to name plaintiff as an

additional insured in its commercial general liability policy; and Garris's

accident occurred after the lease was executed.

The only remaining condition in the endorsement for plaintiff's

qualification as an additional insured is whether Garris's bodily injury "[a]rise[s]

out of the ownership, maintenance or use of that part of any premises leased to "

ExamWorks. Again, the facts related to Garris's fall are not disputed.

ExamWorks leased office space from plaintiff in a building plaintiff owned.

Garris, who was employed by ExamWorks, drove her vehicle to the building to

work in ExamWorks's leased premises and fell after she exited her vehicle in the

parking lot adjacent to the building's front door and walked toward the building

to go to work.

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 Defendant argues Garris's fall did not arise out of the "use of" the part of

the premises—the space within the building—leased by ExamWorks, and, for

that reason, plaintiff does not qualify as an additional insured. Plaintiff contends

that under well-established case law, Garris's fall while attempting to walk into

the building to work for ExamWorks is an occurrence arising out of the use of

the premises ExamWorks leased, and, as a result, the final condition for

plaintiff's qualification as an additional insured was satisfied.

The term "arising out of" is not capable of a precise definition, Harrah's

Atlantic City, Inc. v. Harleysville Insurance Co., 288 N.J. Super. 152, 157 (App.

Div. 1996), but it is interpreted "in a broad and comprehensive sense to mean

'originating from the use of' or 'growing out of the use of' the leased premises, "

ibid (quoting Franklin Mut. Ins. Co. v. Security Indem. Ins. Co., 275 N.J. Super.

335, 340 (App. Div. 1994)). For an occurrence to arise out of the use of leased

premises, it is not necessary to demonstrate the occurrence occurred within the

leased premises. In Harrah's, we explained that "[b]y using the 'arising out

of . . .' phrase, the insurer . . . necessarily understood . . . it was providing

coverage to the landlord against accidents occurring outside of the leased

premises." 288 N.J. Super. at 157.

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 To establish an occurrence arises out of the use of leased premises, there

must be shown "a substantial nexus between the occurrence and the use of the

leased premises in order for the coverage to attach." Liberty Vill. Assocs. v. W.

Am. Ins. Co., 308 N.J. Super. 393, 399 (App. Div. 1998) (quoting Franklin Mut.

Ins. Co., 275 N.J. Super. at 340-41). "Physical proximity between the leased

premises and the scene of the accident" is not essential for coverage. Liberty

Vill. Assocs., 308 N.J. Super. at 401. Instead, all that is required is a showing

the incident originated from the use of the leased premises and "fell within the

landscape of risk" that is reasonably expected to be insured against. Ibid.;

Harrah's, 288 N.J. Super. at 159. "[W]here the landlord can trace the risk

creating its liability directly to the tenant's business presence, . . . it can be truly

said that the accident originated from or grew out of the leased premises."

Harrah's, 288 N.J. Super. at 158-59.

Under this standard, Garris's accident arose out of ExamWorks's use of

the premises it leased from plaintiff. Indeed, Garris traveled to the building for

the sole purpose of working at ExamWorks's leased premises, and she fell after

exiting her vehicle and walking to the building for the singular purpose of

working within the leased premises. Plaintiff's liability is directly tied to

ExamWorks's leased space within plaintiff's building; Garris was on plaintiff's

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property exclusively for the purpose of working within the leased premises.

Ibid. Thus, there is a substantial nexus between the occurrence of Garris's

accident and the leased premises, and the accident and her injuries arose out of

the use of ExamWorks's leased premises within the plain and established

meaning of the insurance policy. See, e.g., Liberty Vill. Assocs., 308 N.J. Super.

at 405 (finding an individual's slip and fall as she approached the door to the

tenant's store constituted an occurrence arising out of the use of the tenant's

leased premises); Harrah's, 288 N.J. Super. at 159 (finding a tenant's customer's

slip and fall in the landlord's parking lot after leaving the tenant's store was an

occurrence arising out of the use of the tenant's premises); Franklin Mut. Ins.

Co., 275 N.J. Super. at 340 (finding a tenant's customer's slip and fall on steps

leading from the leased premises constituted an occurrence arising out of the

tenant's use of the premises).

We are convinced the undisputed facts establish plaintiff is an additional

insured under the policy's plain language. ExamWorks had a written

agreement—the lease with plaintiff—requiring it obtain commercial liability

insurance naming plaintiff as an additional insured; there was an occurrence—

Garris's fall and resulting injuries—after the lease was signed; and Garris's fall

was an occurrence arising out of the use of ExamWorks's leased premises.

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Under the insurance policy's plain language, and according to well-settled

judicial interpretation, each condition required for plaintiff to obtain coverage

as an additional insured was satisfied.

The court initially determined plaintiff was an additional insured, but on

defendant's motion for reconsideration the court relied on the lease between

ExamWorks and plaintiff, concluding plaintiff "should not be entitled to the

additional insured coverage under" the policy. In doing so, the court erred by

failing to give effect to the policy's plain language, and by incorrectly relying

on the lease to define the coverage under the policy.

"If the language [of an insurance policy] is clear, that is the end of the

inquiry." Jeffrey M. Brown Assocs., Inc. v. Interstate Fire & Cas. Co., 414 N.J.

Super. 160, 165 (App. Div. 2010) (quoting Chubb Custom Ins. Co. v. Prudential

Ins. Co., 195 N.J. 231, 238 (2008)). A court is permitted to consider "'extrinsic

evidence as an aid to interpretation' only if there is ambiguity in the language of

the insurance policy." Ibid. (quoting Chubb Custom Ins. Co., 195 N.J. at 238).

Where, as here, there is no ambiguity in the additional insured endorsement to

the policy, and the undisputed facts establish its express conditions are satisfied,

the court could not properly rely on the lease between ExamWorks and plaintiff

to define the coverage under the policy. As we noted in Jeffrey M. Brown

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Assocs., "the extent of coverage . . . is controlled by the relevant policy terms,

not by the terms of the underlying . . . contract that required the named insured

to purchase coverage," id. at 171 (quoting Bovis Lend Lease LMB, Inc. v. Great

Am. Ins. Co., 855 N.Y.S.2d 459, 464 (N.Y. App. Div. 2008)), and "[a]n insurer's

duties are defined by what it contracted to do, not by what the insured contracted

to do," id. at 172 (citation omitted).

We reject defendant's claim our decision in Pennsville requires a different

result. In Pennsville, the plaintiff landlord sought coverage as an additional

insured under a tenant's policy where the tenant's customer filed a claim against

the landlord for injuries suffered when the customer fell in the parking lot. 315

N.J. Super. at 521. The court relied on the lease between the landlord and tenant

to determine that coverage under the tenant's policy's additional insured

endorsement was limited to claims occurring only on the leased premises . Id. at

523.

As we explained in Jeffrey M. Brown Assocs., the court in Pennsville

appropriately resorted to extrinsic evidence—the lease between the landlord and

tenant—to interpret the policy because, although the court "did not quote the

additional insured endorsement in the tenant's policy, the language of that

endorsement was presumably ambiguous." 414 N.J. Super. at 171. Thus, the

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Pennsville decision is inapposite here; the additional insured endorsement is

unambiguous, and, on reconsideration, the court erred by relying on the terms

of ExamWorks's lease with plaintiff to define the coverage provided under the

policy. See id. at 171-72; see also W9/PHC Real Estate LP v. Farm Family Cas.

Ins. Co., 407 N.J. Super. 177, 193 (App. Div. 2009) (explaining an insurer's duty

arises from the policy terms, not the insured's promise in a separate

indemnification agreement).

We reverse the court's order granting defendant's motion for

reconsideration of the order granting plaintiff summary judgment and den ying

defendant's motion for summary judgment.

Reversed.

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