NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-0973-18T1
EDWARD HAMILTON and CAROL HAMILTON, his wife,
Plaintiffs,
v.
MORRIS SCHOOL DISTRICT, FM GLOBAL, and AERCO INTERNATIONAL,
Defendants,
and
MORRIS SCHOOL DISTRICT,
Defendant/Third-Party Plaintiff-Appellant,
KCG, INC., and CITIZENS INSURANCE COMPANY OF AMERICA,
Third-Party Defendants- Respondents/Cross-Appellants. ____________________________________ Submitted December 17, 2019 – Decided January 6, 2020
Before Judges Fisher and Accurso.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1446-16.
Methfessel & Werbel, attorneys for appellant (William Scott Bloom and James Victor Mazewski, on the briefs).
Law Office of Terkowitz & Hermesmann, attorneys for respondent/cross-appellant KCG, Inc. (Jonathan S. Robinson, on the briefs).
Donnelly Minter & Kelly LLC, attorneys for respondent/cross-appellant Citizens Insurance Company of America (David Morgan Blackwell, of counsel and on the briefs; Christin D. Fontanella, on the briefs).
PER CURIAM
Plaintiff tripped and fell at a school and brought this suit against the
property owner – defendant Morris School District (the school district) – and
other parties not relevant here. At the time of the fall, plaintiff was apparently
performing duties for his employer KCG, Inc., which provided maintenance
services for the school district pursuant to a written contract. That contract
included an indemnification provision as well as KCG's promise to add the
school district as an insured on a liability policy issued by Citizens Insurance
Company of America. When, after plaintiff commenced this action, Citizens
A-0973-18T1 2 refused the school district's tender of the defense, the school district filed a third -
party complaint seeking a defense and indemnification from both KCG and
Citizens.
In March 2018, Citizens moved for summary judgment seeking dismissal
of the third-party complaint. By the end of May 2018, KCG and the school
district had also moved for summary judgment on the third-party complaint.
Before these motions could be heard, the case was sent to mandatory, non-
binding arbitration; by agreement, the indemnification dispute was not
arbitrated. The arbitrator "no-caused" plaintiff's claim, and when plaintiff failed
to timely file for a trial de novo, his adversaries moved to confirm the arbitration
award. The defense motion was granted in September 2018. At the conclusion
of the motion hearing, the school district's attorney inquired about the status of
the pending summary judgment motions. The judge responded that she thought
all other pending issues had been "disposed of."
Soon after, counsel wrote to the judge seeking the calendaring of the
summary judgment motions. The motions, however, were neither relisted nor
argued; instead, the judge entered an order on September 25, 2018, that denied
all the summary judgment motions, finding they were mooted by the dismissal
of plaintiff's complaint.
A-0973-18T1 3 The school district appeals, and KCG and Citizens cross-appeal. The
school district argues that the judge erred in declaring its motion moot and seeks
as well our holding that it is entitled to summary judgment. Citizens agrees that
the judge's mootness determination is a question to be decided but takes no
position; instead, Citizen argues the school district's claim for indemnification
is without merit. KCG argues that the judge "properly concluded that the
confirmation of the arbitration award disposed of all issues," but then
inconsistently claims it was entitled to summary judgment on the merits.
We conclude that the school district's third-party action against KCG and
Citizens was not rendered moot by the dismissal of plaintiff's complaint, and we
remand for the judge's disposition of the three summary judgment motions.
Mootness arises when the decision sought "can have no practical effect o n the
existing controversy." Redd v. Bowman, 223 N.J. 87, 104 (2015) (quoting
Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 221-22 (App.
Div. 2011)). We agree with the school district that the disposition of plaintiff's
claim did not end the parties' indemnification dispute. To explain, we briefly
consider – but express no view of – the merits of the parties' summary judgment
motions.
A-0973-18T1 4 In seeking summary judgment against KCG, the school district relied on
their contract's indemnification provision, which obligated KCG to "indemnify,
defend, and save harmless" the school district from all claims "which shall arise
from or result directly or indirectly from the work and/or materials supplied
under this contract and the performance by [KCG] under the contract or by a
party for whom [KCG] is liable." In such instances, KCG was obligated to
indemnify and save the school district harmless from all judgments and
recoveries, "including, but not limited to, attorneys fees." Even though the
disposition of plaintiff's claim against the school district has obviated the school
district's need for indemnification, there remains a colorable argument that
plaintiff's claim arose from KCG's performance of the contract and, because
KCG did not provide a defense, the school district was left to defend itself. If
the school district's interpretation of the contract's provisions is correct, it is
entitled to seek compensation for the injuries sustained as a result of KCG's
alleged breach.
Although the school district's claim against Citizens is based on the terms
of a liability policy, while KCG's liability is based on its contract, the mootness
analysis is similar. Just as with the claim against KCG, Citizens' refusal to
defend the school district – an additional insured under the liability policy issued
A-0973-18T1 5 to KCG – had consequences not limited to Citizens' alleged obligation to pay
any judgment entered against the school district. Citizens allegedly agreed to
defend any claim falling within its insuring clauses, and the school district has
incurred the expense of defending itself. The school district also incurred the
cost of seeking to vindicate its alleged rights under the policy – yet
unadjudicated – to both a defense and indemnification.
It is elementary that an insurer is obligated to provide its insured with a
defense against all actions covered by the policy. Hartford Acc. & Indemn. Co.
v. Aeta Life & Cas. Ins. Co., 98 N.J. 18, 22 (1984). That duty is triggered by
the mere filing of a complaint alleging a covered claim, Voorhees v. Preferred
Mut. Ins. Co., 128 N.J. 165, 173 (1992), and is unaffected by the plaintiff's
ultimate success or failure, even when the claim is found to be "groundless,
false, or fraudulent," Danek v. Hommer, 28 N.J. Super. 68, 77 (App. Div. 1953),
aff'd o.b., 15 N.J. 573 (1954); see also Abouzaid v. Mansard Gardens Assocs.,
LLC, 207 N.J. 67, 81 (2011).
Free access — add to your briefcase to read the full text and ask questions with AI
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-0973-18T1
EDWARD HAMILTON and CAROL HAMILTON, his wife,
Plaintiffs,
v.
MORRIS SCHOOL DISTRICT, FM GLOBAL, and AERCO INTERNATIONAL,
Defendants,
and
MORRIS SCHOOL DISTRICT,
Defendant/Third-Party Plaintiff-Appellant,
KCG, INC., and CITIZENS INSURANCE COMPANY OF AMERICA,
Third-Party Defendants- Respondents/Cross-Appellants. ____________________________________ Submitted December 17, 2019 – Decided January 6, 2020
Before Judges Fisher and Accurso.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1446-16.
Methfessel & Werbel, attorneys for appellant (William Scott Bloom and James Victor Mazewski, on the briefs).
Law Office of Terkowitz & Hermesmann, attorneys for respondent/cross-appellant KCG, Inc. (Jonathan S. Robinson, on the briefs).
Donnelly Minter & Kelly LLC, attorneys for respondent/cross-appellant Citizens Insurance Company of America (David Morgan Blackwell, of counsel and on the briefs; Christin D. Fontanella, on the briefs).
PER CURIAM
Plaintiff tripped and fell at a school and brought this suit against the
property owner – defendant Morris School District (the school district) – and
other parties not relevant here. At the time of the fall, plaintiff was apparently
performing duties for his employer KCG, Inc., which provided maintenance
services for the school district pursuant to a written contract. That contract
included an indemnification provision as well as KCG's promise to add the
school district as an insured on a liability policy issued by Citizens Insurance
Company of America. When, after plaintiff commenced this action, Citizens
A-0973-18T1 2 refused the school district's tender of the defense, the school district filed a third -
party complaint seeking a defense and indemnification from both KCG and
Citizens.
In March 2018, Citizens moved for summary judgment seeking dismissal
of the third-party complaint. By the end of May 2018, KCG and the school
district had also moved for summary judgment on the third-party complaint.
Before these motions could be heard, the case was sent to mandatory, non-
binding arbitration; by agreement, the indemnification dispute was not
arbitrated. The arbitrator "no-caused" plaintiff's claim, and when plaintiff failed
to timely file for a trial de novo, his adversaries moved to confirm the arbitration
award. The defense motion was granted in September 2018. At the conclusion
of the motion hearing, the school district's attorney inquired about the status of
the pending summary judgment motions. The judge responded that she thought
all other pending issues had been "disposed of."
Soon after, counsel wrote to the judge seeking the calendaring of the
summary judgment motions. The motions, however, were neither relisted nor
argued; instead, the judge entered an order on September 25, 2018, that denied
all the summary judgment motions, finding they were mooted by the dismissal
of plaintiff's complaint.
A-0973-18T1 3 The school district appeals, and KCG and Citizens cross-appeal. The
school district argues that the judge erred in declaring its motion moot and seeks
as well our holding that it is entitled to summary judgment. Citizens agrees that
the judge's mootness determination is a question to be decided but takes no
position; instead, Citizen argues the school district's claim for indemnification
is without merit. KCG argues that the judge "properly concluded that the
confirmation of the arbitration award disposed of all issues," but then
inconsistently claims it was entitled to summary judgment on the merits.
We conclude that the school district's third-party action against KCG and
Citizens was not rendered moot by the dismissal of plaintiff's complaint, and we
remand for the judge's disposition of the three summary judgment motions.
Mootness arises when the decision sought "can have no practical effect o n the
existing controversy." Redd v. Bowman, 223 N.J. 87, 104 (2015) (quoting
Deutsche Bank Nat'l Trust Co. v. Mitchell, 422 N.J. Super. 214, 221-22 (App.
Div. 2011)). We agree with the school district that the disposition of plaintiff's
claim did not end the parties' indemnification dispute. To explain, we briefly
consider – but express no view of – the merits of the parties' summary judgment
motions.
A-0973-18T1 4 In seeking summary judgment against KCG, the school district relied on
their contract's indemnification provision, which obligated KCG to "indemnify,
defend, and save harmless" the school district from all claims "which shall arise
from or result directly or indirectly from the work and/or materials supplied
under this contract and the performance by [KCG] under the contract or by a
party for whom [KCG] is liable." In such instances, KCG was obligated to
indemnify and save the school district harmless from all judgments and
recoveries, "including, but not limited to, attorneys fees." Even though the
disposition of plaintiff's claim against the school district has obviated the school
district's need for indemnification, there remains a colorable argument that
plaintiff's claim arose from KCG's performance of the contract and, because
KCG did not provide a defense, the school district was left to defend itself. If
the school district's interpretation of the contract's provisions is correct, it is
entitled to seek compensation for the injuries sustained as a result of KCG's
alleged breach.
Although the school district's claim against Citizens is based on the terms
of a liability policy, while KCG's liability is based on its contract, the mootness
analysis is similar. Just as with the claim against KCG, Citizens' refusal to
defend the school district – an additional insured under the liability policy issued
A-0973-18T1 5 to KCG – had consequences not limited to Citizens' alleged obligation to pay
any judgment entered against the school district. Citizens allegedly agreed to
defend any claim falling within its insuring clauses, and the school district has
incurred the expense of defending itself. The school district also incurred the
cost of seeking to vindicate its alleged rights under the policy – yet
unadjudicated – to both a defense and indemnification.
It is elementary that an insurer is obligated to provide its insured with a
defense against all actions covered by the policy. Hartford Acc. & Indemn. Co.
v. Aeta Life & Cas. Ins. Co., 98 N.J. 18, 22 (1984). That duty is triggered by
the mere filing of a complaint alleging a covered claim, Voorhees v. Preferred
Mut. Ins. Co., 128 N.J. 165, 173 (1992), and is unaffected by the plaintiff's
ultimate success or failure, even when the claim is found to be "groundless,
false, or fraudulent," Danek v. Hommer, 28 N.J. Super. 68, 77 (App. Div. 1953),
aff'd o.b., 15 N.J. 573 (1954); see also Abouzaid v. Mansard Gardens Assocs.,
LLC, 207 N.J. 67, 81 (2011). Whether a duty to defend has been triggered is
determined by placing the complaint "alongside the policy" so that the claimant's
allegations may be compared with the insuring provisions. The Ohio Cas. Ins.
Co. v. Flanagin, 44 N.J. 504, 512 (1965). If the claim falls within a risk insured
against, the duty to defend is triggered. Voorhees, 128 N.J. at 175, 180. When,
A-0973-18T1 6 in invoking this test, the court determines that the reach or meaning of the policy
is ambiguous or uncertain, the court should construe the policy "liberally in
favor of the insured and strictly against the insurer." W9/PHC Real Estate LP
v. Farm Family Cas. Ins. Co., 407 N.J. Super. 177, 191 (App. Div. 2009); see
also Mazzilli v. Acc. & Cas. Ins. Co. of Winterthur, 35 N.J. 1, 8 (1961) (holding
that courts "are bound to protect the insured to the full extent that any fair
interpretation will allow"). And when the complaint "does not state facts with
sufficient definiteness to clearly bring the claim within or without" the policy,
that doubt too is resolved so as to trigger the duty to defend. Abouzaid, 207 N.J.
at 81 (quoting Robert R. Keeton & Alan L. Widiss, Insurance Law, A Guide to
Fundamental Principles, Legal Doctrines and Commercial Practices 1020-21
(1988) (footnotes omitted)). In this sense, it is often said that the duty to defend
is broader than the duty to indemnify. See Polarome Int'l, Inc. v. Greenwich Ins.
Co., 404 N.J. Super. 241, 272 (App. Div. 2008); Rosario ex rel. Rosario v.
Haywood, 351 N.J. Super. 521, 534 (App. Div. 2002); Robert W. Hayman, Inc.
v. Acme Carriers, Inc., 303 N.J. Super. 355, 357-58 (App. Div. 1997). So, even
though plaintiff's complaint was dismissed, if it is ultimately determined that the
claim fell within the policy's four corners, Citizen would be liable for the cost
to the school district in defending itself, Hebela v. Healthcare Ins. Co., 370 N.J.
A-0973-18T1 7 Super. 260, 274 (App. Div. 2004), and in seeking a defense and indemnification,
R. 4:42-9(a)(6). See also Occhifinto v. Olivo Constr. Co., LLC, 221 N.J. 443,
453 (2015).
For these reasons, we conclude that the controversy that exists between
and among the school district, KCG and Citizens is not moot.
We, lastly, decline the parties' invitation to determine whether any of them
are entitled to summary judgment. True, our review of a trial judge's disposition
of a summary judgment is de novo, Globe Motor Co. v. Igdalev, 225 N.J. 469,
479 (2016), but that doesn't mean we are required to do that which the trial judge
should have done in the first instance, Estate of Doerfler v. Fed. Ins. Co., 454
N.J. Super. 298, 302 (App. Div. 2018). We, therefore, reverse the order that
denied the parties' summary judgment motions on mootness grounds and remand
so the judge may schedule and rule on those motions. We, of course, remand
for all other purposes as well, since the disposition of the summary judgment
motions may leave unresolved issues between or among the remaining parties.
Reversed and remanded. We do not retain jurisdiction.
A-0973-18T1 8