NEW JERSEY January 2015
Named
Insured Endorsements
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Appellate Division Finds Two of Four Named Insured Endorsements
Obviate Coverage
Newport Assocs. Phase I Developers Ltd. P'ship v. Travelers Cas.
& Sur. Co., 2015
N.J. Super. Unpub. LEXIS 103 (App. Div. Jan. 16, 2015)
The Appellate Division examined several named insured policy
endorsements from different policy years and found that the plain language of
two of them could not support a finding of coverage for subsidiaries of
holding company insureds and that the plain language of two others created
enough ambiguity to require remand to the trial court for a trial.
Subsidiaries to a holding company faced
environmental liability stemming from coal tar emanating from property they
owned in tandem with other partners. The subsidiaries brought a declaratory
judgment action against insurers who had issued policies covering the holding
company. The Law Division granted summary judgment to the insurers, and the
subsidiaries appealed to the Appellate Division, arguing that they qualified
as "insureds" under the policy and that the policy's absolute
pollution exclusion clause did not apply.
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Policy
Exclusions
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Appellate Division Finds No Coverage under Fungus
Exclusions
Hurst v. Am. Zurich Ins. Co., 2014 N.J. Super. Unpub. LEXIS 2866
(App. Div. Dec. 11, 2014)
New Jersey Appellate Division finds fungus exclusion operates to obviate
coverage. The Court decided that the exclusion - - which stated it
applied to "Bodily Injury and Property Damage Liability" - -
applied to coverage under the products-completed operation provision, as the
broad "Bodily Injury" term encompassed the more narrow
products-completed operations term.
Teachers were injured after being
exposed to mold in their classrooms, and they brought suit against the
classroom unit's designer. After the designer defendant defaulted, the
plaintiffs brought a declaratory judgment action against two of the
designer's commercial general liability insurers - - one of whom had issued a
policy effective September 1, 2003 through September 1, 2004, while the other
had issued a policy effective September 1, 2004 through September 1, 2005.
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Subrogation
Rights
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Appellate Division Remands to Allow Participation of
Necessary Party in Subrogation Dispute
Nucci v. The Am. Ins. Co., 2014 N.J. Super. Unpub. LEXIS 2859
(App. Div. Dec. 11, 2014)
New Jersey Appellate Division determines
that novel dispute regarding whether plaintiff insured's settlement with
tortfeasor co-defendants interfered with the insurer co-defendant's
subrogation rights could not proceed without participation of settling
tortfeasors.
The insured sought coverage under her
homeowner's policy for damage she claimed was caused by blasting operations
conducted during construction on an adjacent property. The insurer
disclaimed coverage, so the insured brought suit, seeking coverage from the
insurer and recovery in tort from the entities involved in the blasting and
construction. The insured eventually settled with the non-insurer
co-defendants, though she alleged the agreement did not fully compensate for
her loss.
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Anti-Concurrent/Anti-Sequential
Clause
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Anti-Concurrent/Anti-Sequential Clause Bars Coverage for
Loss with Both Covered and Excluded Causes
Ashrit Realty, LLC, Bhavika Realty, LLC
v. Tower National Insurance Company, 2015 N.J. Super. Unpub. LEXIS 107
(January 20, 2015)
New Jersey Appellate Division holds that
when two events, one covered under an insurance policy and the other
excluded, contribute to a single property loss, coverage for the loss is
excluded when the policy includes an anti-concurrent/anti-sequential cause.
The claim arose from damage sustained to
the insured's gas station and convenience store. The property incurred some
damage during a storm on August 14, 2011, and then more extensive damage
during Hurricane Irene two weeks later. Specifically, after the hurricane a
large pipe that ran underneath the property collapsed, causing a large hole
to form. The collapsed pipe also caused substantial leaking, which in turn
led to soil erosion that caused the rear portion of a building on the
property to collapse.
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Non-Cumulation
Clause
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New York Court of Appeals Finds Insurer's Maximum
Liability is Limited to a Single Policy Limit for Successive Exposure to Lead
Paint
Nesmith v Allstate Ins. Co., 2014 N.Y. LEXIS 3350 (N.Y. Nov. 25,
2014)
The New York Court of Appeals found a
noncumulation clause contained in a homeowner's policy limited the insurer's
maximum total liability in a case where members of different families were
successively exposed to lead paint in the same apartment.
Residents of a two family home sought to
recover from their landlord for personal injuries caused by lead
exposure. The first family resided in the home from November 1992 until
September 1993 with the second family inhabiting the same apartment
thereafter. The basis for the lead exposure was a July 1993 Department
of Health violation notification regarding elevated blood lead level in one
of the children - - that was corrected by the landlord - - and a similar
December 1994 violation. The landlord's insurer settled the first
family's claim for $350,000 and the second family's claim for $150,000 noting
that it had exhausted the policy limits. The second family brought the
present action arguing that the $500,000 limit applied to each family's claim
as each was a separate loss "because they did not result 'from
continuous or repeated exposure to the same general conditions.'"
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Late
Notice / Additional Insured
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Court of Appeals Finds that Insured
Could not Establish Sufficient Relationship with Broker to Avoid
Non-compliance with Notice Provision
Strauss Painting, Inc. v Mt. Hawley Ins.
Co., 2014 N.Y. LEXIS 3347
(N.Y. Nov. 24, 2014)
The Metropolitan Opera Association, Inc.
(the "Met") entered into a contract with Strauss/Creative to
perform work at the Met's premises. Strauss/Creative are separately
owned entities with the same address and share employees with Strauss
handling non-unions jobs and Creative handling union jobs. Thus, since
the contract required union work, Straus (the "Contractor") acted
as the contractor and subcontracted the work to Creative (the
"Subcontractor"). The contract contained the following
insurance and indemnity provisions: (1) workers' compensation insurance; (2)
owners and contractors protective liability ("OCP") insurance with
a combined single limit of $5 million and specifies that "[l]iability
should add [the Met] as an additional insured and should include contractual
liability and completed operations coverage"; and (3) comprehensive
general liability (CGL) insurance, with combined coverage for property and
bodily injury with a minimum single limit of $5 million. The Met was provided
with a certificate of insurance for a CGL policy issued to the Subcontractor,
stating that the Met and Strauss were additional insureds under the policy. The
court noted that the Met was never provided with an OCP policy and that
neither the Contractor or Subcontractor purchased such coverage.
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