NOT FOR PUBLICATION WITHOUT THE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-4267-15T1
JEANNE FINNEGAN,
Plaintiff,
v.
INDUCTOTHERM CORP.,
Defendant/Third-Party
Plaintiff-Appellant,
v.
GREENTREE FOOD MANAGEMENT,
INC.,
Third-Party Defendant-
Respondent/Fourth Party
Plaintiff,
v.
FRED DUNHOUR and THE DUNHOUR
AGENCY,
Fourth-Party Defendants/
Respondents.
_______________________________________________
Argued May 9, 2017 – Decided August 22, 2017
Before Judges Messano, Espinosa and Grall.
On appeal from the Superior Court of New
Jersey, Law Division, Camden County, Docket
No. L-2886-12.
Robert P. Avolio argued the cause for
appellant Inductotherm Corporation (Avolio &
Hanlon, PC, attorneys; Mr. Avolio and
Catherine M. Brennan, on the briefs).
John P. O'Toole argued the cause for
respondents Greentree Food Management, Inc.,
Fred Dunhour, and The Duhhour Agency (Wilson,
Elser, Moskowitz, Edelman & Dicker, LLP,
attorneys; Mr. O'Toole, on the brief).
PER CURIAM
Plaintiff Jeanne Finnegan, an employee of Greentree Food
Management, Inc. (Greentree), suffered injuries following a slip
and fall at work. Greentree provided cafeteria services to the
employees of Inductotherm Corp. (Inductotherm), in a cafeteria in
Inductotherm's building, pursuant to a written agreement (the
Agreement).
The Agreement lacked any express indemnification provisions
but provided in pertinent part: "Greentree will: Carry
Comprehensive General Liability Insurance to the limits mutually
agreed upon to cover its own operation. Greentree will have
Inductotherm Corp. listed as an additional insured on their General
Liability Policy and shall present at inception and annually
thereafter satisfactory evidence thereof." (Emphasis added). The
Agreement also required every Greentree employee to sign an
2 A-4267-15T1
"agreement" on Greentree's letterhead recognizing his or her "sole
and exclusive remedy w[ould] be under the workmen's (sic)
compensation provided by . . . Greentree."
On the date of plaintiff's fall Greentree maintained a
commercial general liability policy (the CGL policy) with
Harleysville Insurance Company. It is undisputed that Greentree
never added Inductotherm to the policy as an additional insured.
Harleysville refused Inductotherm's tender of its defense,
writing, "Inductotherm is not listed [as] an additional insured
on the [CGL] policy nor does Inductotherm qualify as an insured
under the policy."
Plaintiff filed a negligence complaint against Inductotherm,
which, in turn, filed an answer and third-party complaint against
Greentree, alleging breach of the Agreement, breach of the covenant
of good faith and fair dealing and negligence. Greentree answered
and filed a fourth-party complaint against its insurance broker,
Fred Dunhour, and his company, The Dunhour Agency (collectively,
Dunhour). Inductotherm amended its third-party complaint to
include cross-claims against Dunhour for indemnification, as well
as negligence and breach of contract.
Inductotherm and Greentree moved for summary judgment; the
motion judge granted Greentree's motion and dismissed the third-
party complaint. We granted Inductotherm's motion for leave to
3 A-4267-15T1
appeal, summarily reversed and reinstated the third-party
complaint.1 At some point undisclosed by the record, Inductotherm
settled with Finnegan.
A second Law Division judge then granted Greentree's motion
to dismiss Inductotherm's negligence claim.2 The parties'
subsequent cross-motions for summary judgment were denied.
1
The panel's order provided in pertinent part:
The third-party complaint is reinstated and
the matter is remanded to the trial court for
further proceedings on the respective
liability for negligence of third-party
defendant or third-party plaintiff and breach
of contract. The questions of liability for
creating the dangerous condition causing
plaintiff's accident and any resultant
injuries [are] disputed. Further, the breach
of contract claims are dependent on a
determination of said liability, obviating
summary judgment.
The parties and the trial judge understandably were confused
by the order's contemplation of a trial on Greentree's and
Inductotherm's "respective liability for negligence." Absent an
express indemnity provision, "[b]y virtue of the exclusive remedy
provisions of the Workers' Compensation Act . . . an employer is
immune from suit by an employee, and may not be sued for
contribution by a third-party tortfeasor." Kane v. Hartz Mountain
Indus., Inc., 278 N.J. Super. 129, 145 (App. Div. 1994) (citing
Ramos v. Browning Ferris Indus. of S. Jersey, Inc., 103 N.J. 177,
184 (1986)), aff'd o.b., 143 N.J. 141 (1996).
2
Inductotherm has not appealed that decision. As a result, we
consider the points raised on appeal only in the context of
Inductotherm's breach of contract and breach of the implied
covenant of good faith claims.
4 A-4267-15T1
On April 25, 2016, the parties appeared for trial. After an
off-the-record conference in chambers, the judge held oral
argument on the record to consider legal arguments raised by
Inductotherm and Greentree. Relying on Pennsville Shopping Center
Corp. v. American Motorist Insurance Co., 315 N.J. Super. 519
(App. Div. 1998), certif. denied, 157 N.J. 647 (1999), the judge
reasoned that even if Inductotherm had been added as an additional
insured on Greentree's CGL policy, there nonetheless would be no
coverage for plaintiff's claim because "the additional insured
status has to be taken [to be] coextensive with . . . Greentree's
liability." He determined that Greentree could not be liable for
plaintiff's injuries because of the workers' compensation bar,
N.J.S.A. 34:15-8, and pursuant to Ramos, supra, Inductotherm could
not seek contribution from Greentree. The judge granted summary
judgment and dismissed Inductotherm's claims against Greentree and
Dunhour. This appeal followed.
Inductotherm argues it was reversible error for the judge,
without formal notice or motion, to grant summary judgment on the
day of trial after earlier denying the parties' cross-motions
seeking the same relief. We do not necessarily condone the
procedure employed by the judge. See, e.g., Klier v. Sordoni
Skanska Constr. Co., 337 N.J. Super. 76, 84 (App. Div. 2001)
("[P]laintiff came to court prepared to pick a jury, but rather
5 A-4267-15T1
was required to defend a motion, brought by the court sua sponte,
to dismiss his complaint."). However, because we are reversing
on other grounds, and because the record fails to reveal that
Inductotherm ever objected to the judge's consideration of what
was a purely legal issue, Inductotherm's argument in this regard
warrants no further discussion.3
Inductotherm also argues the judge misconstrued Pennsville
and Ramos and erred as a matter of law by applying those cases to
its breach of contract claim. Inductotherm contends the CGL policy
would have provided it with coverage for plaintiff's claim had
Greentree and Dunhour properly added Inductotherm as an additional
insured. It urges us to reverse and enter summary judgment as to
liability on its breach of contract claim.
We agree with Inductotherm that the judge misconstrued
Pennsville, which has little application to these facts. We
reverse and remand for further proceedings consistent with this
opinion.
3
Inductotherm never sought reconsideration in the trial court.
On appeal, and without seeking permission to supplement the record,
its counsel included a certification in Inductotherm's appendix.
Generously read, the certification explains counsel's surprise
that the judge, instead of picking a jury, entertained legal
argument and dismissed the complaint. Notably, the certification
does not state that counsel ever objected to the judge's course.
6 A-4267-15T1
"The interpretation of a contract is subject to de novo review
by an appellate court." Kieffer v. Best Buy, 205 N.J. 213, 222
(2011) (citations omitted). "Accordingly, we pay no special
deference to the trial court's interpretation and look at the
contract with fresh eyes." Id. at 223.
We interpret contractual terms by considering "their plain
and ordinary meaning." Ibid. (quoting M.J. Paquet, Inc. v. N.J.
Dep't of Transp., 171 N.J. 378, 396 (2002)). "The judicial task
is simply interpretative; it is not to rewrite a contract for the
parties better than or different from the one they wrote for
themselves." Ibid. However, "[i]f the terms of the contract are
susceptible to at least two reasonable alternative
interpretations, an ambiguity exists." Chubb Custom Ins. Co. v.
Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (citing Nester
v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997)).
It is undisputed that the Agreement required Greentree to add
Inductotherm as an additional insured on its CGL policy. Its
failure to do so was a breach of the agreement. See, e.g.,
Antenucci v. Mr. Nick's Mens Sportswear, 212 N.J. Super. 124, 131
(App. Div. 1986) ("[T]he lessee contracted to provide liability
insurance coverage for the landlord. Because of its breach of
that covenant it was liable for the losses sustained by the
landlord flowing from that breach.").
7 A-4267-15T1
As already noted, the judge accepted Greentree's argument
that our decision in Pennsville compelled dismissal of
Inductotherm's complaint. There, we concluded a shopping center
tenant's insurance policy did not provide coverage to the landlord-
owner for injuries suffered by a patron who fell in the parking
lot. Pennsville, supra, 315 N.J. Super. at 523. The lease
obligated the tenant to indemnify the landlord for injuries
occurring on the demised premises and to name the landlord as an
additional insured on the tenant's liability policy. Id. at 521.
The lease, however, obligated the landlord to maintain the common
areas of the shopping center and to indemnify the tenant against
any claim that resulted from the landlord's failure to do so. Id.
at 521-22.
We held, "[u]nder the terms of the lease . . . , tenant bore
responsibility only for damages incurred on the demised premises.
Its undertaking to name landlord as an additional insured must be
taken to be coextensive with the scope of tenant's own liability."
Id. at 523. Importantly, we also held, "the question whether a
party is insured at all may be a separate matter susceptible of
resolution by reference to any relevant matter such as an
underlying contract, here the lease agreement, which clarifies the
intendments of the parties in apportioning responsibility and
providing for insurance coverage." Ibid.
8 A-4267-15T1
Here, however, there was no indemnification provision in the
Agreement, much less cross-indemnification commitments between
Greentree and Inductotherm that limited each party's
responsibilities for conditions on the premises, as did the lease
in Pennsville. Additionally, the panel in Pennsville never
discussed the particular terms of the additional insured
endorsement of the tenant's policy.
We have since cautioned against over reading Pennsville's
holding, recognizing
the court in Pennsville relied upon the lease
in concluding that the additional insured
endorsement in the tenant's policy only
provided coverage to the landlord for any
claim arising out of an accident occurring on
the demised premises. Although the court did
not quote the additional insured endorsement
in the tenant's policy, the language of that
endorsement was presumably ambiguous.
Therefore, the court resorted to the terms of
the lease to resolve the ambiguity, which is
an appropriate use of extrinsic evidence in
construing an insurance policy.
[Jeffrey M. Brown Assocs., Inc. v. Interstate
Fire & Cas. Co., 414 N.J. Super. 160, 171 (App.
Div.) (emphasis added), certif. denied, 204
N.J. 41 (2010).]
As Judge Skillman noted,
[a]n insurance policy is a contract between
the insurer and the insured. Thus, the extent
of coverage . . . is controlled by the relevant
policy terms, not by the terms of the
underlying trade contract that required the
named insured to purchase coverage.
9 A-4267-15T1
[Id. at 171-72 (quoting Bovis Lend Lease LMB,
Inc. v. Great Am. Ins. Co., 855 N.Y.S.2d 459,
464 (N.Y. App. Div. 2008)).]
The only remaining issue is whether Inductotherm suffered
damages as a proximate result of Greentree's breach. In Robinson
v. Janay, we held, "[t]he damages which may be recovered for breach
of an agreement to furnish an insurance policy is the loss
sustained by reason of the breach, 'the amount that would have
been due under the policy provided it had been obtained.'"
105 N.J. Super. 585, 591 (App. Div.) (quoting 43 Am. Jur. 2d,
Insurance, § 174, p. 231), certif. denied, 54 N.J. 508 (1969).
Therefore, we must determine whether the CGL policy would
have provided Inductotherm with a defense and indemnification
against plaintiff's suit. The principles we apply to contracts
generally apply in equal force to insurance contracts. "In
attempting to discern the meaning of a provision in an insurance
contract, the plain language is ordinarily the most direct route."
Chubb, supra, 195 N.J. at 238 (citing Zacarias v. Allstate Ins.
Co., 168 N.J. 590, 594-95 (2001)). "If the language is clear,
that is the end of the inquiry." Ibid. (citing Zacarias, supra,
168 N.J. at 594-95). "[I]n the absence of an ambiguity, a court
should not 'engage in a strained construction to support the
imposition of liability' or write a better policy for the insured
10 A-4267-15T1
than the one purchased." Ibid. (quoting Progressive Cas. Ins. Co.
v. Hurley, 166 N.J. 260, 272-73 (2001)).
The CGL policy provided coverage to the "Named Insured" listed
on the declarations page, and "any other person or organization
qualifying as a Named Insured under this policy." The declarations
page listed Greentree alone as the insured.
The CGL policy provided coverage for all bodily injury claims
"that the insured becomes legally obligated to pay." It included
an exclusion, however, for "'bodily injury' to . . . (1) [a]n
'employee' of the insured arising out of and in the course of: (a)
[e]mployment by the insured; or (b) [p]erforming duties related
to the conduct of the insured's business." The "Separation Of
Insureds" section of the policy provided, "this insurance applies:
a. [a]s if each Named insured were the only Named Insured; and b.
[s]eparately to each insured against whom claim is made or 'suit'
is brought."
Had Inductotherm been an additional insured under the CGL
policy, the exclusion would not have applied because plaintiff was
not an employee of Inductotherm. This result is consistent with
the reasoning of two of our reported cases that construed similar
contractual provisions, Erdo v. Torcon Construction Co., 275 N.J.
Super. 117, 121-23 (App. Div. 1994), and Maryland Casualty Co. v.
New Jersey Manufacturers Casualty Insurance Co., 48 N.J. Super.
11 A-4267-15T1
314, 323-26 (App. Div.), aff'd, 28 N.J. 17 (1958), both of which
were comprehensively summarized by the Third Circuit in
ArcelorMittal Plate, LLC v. Joule Technical Services, Inc., 558
F. App'x. 205, 209 (3d. Cir. 2014) ("Two New Jersey appellate
courts, having considered the issue in considerable depth, have
concluded that an employee exclusion does not bar coverage for
claims against one insured by a different insured's employees.").
We need not expound further. The CGL policy presumably would have
provided Inductotherm with a defense.
We hesitate to reach that conclusion as a matter of law given
the record before us. Because the CGL policy did not include
Inductotherm as an additional insured, we cannot say whether any
additional insured endorsement would have included limitations or
exclusions to the general insuring provisions of the policy. For
example, the CGL policy in the record includes an endorsement
naming the lessor of Greentree's "[p]remises," "Maplewood
Apartment & Jager Management," as an additional insured. That
endorsement added the lessor as "an insured . . . but only with
respect to liability arising out of the ownership, maintenance or
use of that part of the premises leased to [Greentree]."
Dunhour was deposed, but his testimony provides no
information in this regard. The record fails to reveal any
discovery taken from Harleysville's representative that might shed
12 A-4267-15T1
light on the precise terms of any additional insured endorsement,
or whether Inductotherm's addition to the CGL policy as an
additional insured would have been without any limitation of
coverage.
In short, we reverse the order under review, reinstate
Inductotherm's third-party complaint and remand the matter for
further proceedings. Although Inductotherm urges us to reverse
and enter summary judgment in its favor, Inductotherm must
establish that if it had been added as an additional insured on
the CGL policy, the policy would have provided a defense and
potentially indemnification. We hasten to add that if, after
adding Inductotherm as an additional insured, the CGL policy
contained no other coverage limitations or exclusions,
Inductotherm is entitled to summary judgment as to its claims that
Greentree breached the Agreement, and Inductotherm would have
received a defense to, and indemnification for, plaintiff's
claims. Erdo, supra, 275 N.J. Super. at 121-23; Maryland Cas.,
supra, 48 N.J. Super. at 323-26. However, Inductotherm did not
submit any proof of the damages it claimed were the proximate
consequences of the breach, nor did the parties or the trial court
address the issue. That shall also be a subject of the remand
proceedings.
13 A-4267-15T1
Finally, at the Law Division hearing, Inductotherm agreed
that because the judge granted summary judgment to Greentree, its
claims against Dunhour were properly dismissed. We reinstate
those claims.
Reversed and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
14 A-4267-15T1
JEANNE FINNEGAN VS. INDUCTOTHERM CORPORATION VS. GREENTREE FOOD MANAGEMENT INC. VS. FRED DUNHOUR (L-2886-12, CAMDEN COUNTY AND STATEWIDE)
Combined Opinion