ALMEEN PALMER VS. NEW JERSEY STATE PAROLE BOARD (NEW JERSEY STATE PAROLE BOARD)
A-2427-14T3
| N.J. Super. Ct. App. Div. | Aug 28, 2017Background
- Star issued a commercial general liability policy (July 1, 2007) naming "Newark Public Schools" as the insured; policy extended coverage to persons or organizations "while acting as your real estate manager." The policy did not list the State or State DOE as additional insureds.
- In 2007 six gang members attacked four people in a District schoolyard; three victims died and one survived. Aeriel litigation named the attackers, the District, and the State-appointed superintendent (Dr. Marion Bolden); the Aeriel plaintiffs also su ed the State alleging State liability for maintenance.
- Star defended and indemnified the District and the superintendent in the Aeriel suit; the State asserted for the first time in 2012 that it was covered under the Star policy, Star denied coverage, and the State then sued Star for coverage.
- The trial court granted summary judgment for Star; on appeal the Appellate Division reviewed de novo and affirmed, holding the policy did not cover the State.
- The State advanced three theories of coverage: (1) it qualified as the District’s "real estate manager" under the policy; (2) the policy name "Newark Public Schools" was ambiguous and should be construed to include the State; (3) the State was an "implied insured." The court rejected all three theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the State is covered as the District's "real estate manager" | State: superintendent's statutory authority and State control of the District make the State the real estate manager and thus an insured | Star: policy contains no notice of State relationship; superintendent remained a District employee and District retained property duties; Palmerton (mortgagee) is distinguishable | No — State not a real estate manager under the policy; Palmerton inapposite |
| Whether the named insured phrase is ambiguous such that "Newark Public Schools" includes the State | State: name ambiguity and State control warrant construing coverage to include State | Star: application, RFP, and practice show the insurer expected to insure the District only; no indication bidder should cover the State | No — name not ambiguous; objectively reasonable expectation was District-only coverage |
| Whether the State was an additional insured by implication or course of dealing | State: insurer should be treated as covering State absent express addition | Star: underwriter evidence shows adding State would increase risk and premium; District customarily requested additions expressly | No — implied-insured doctrine inapplicable; State not intended beneficiary; Star would have charged extra premium |
| Whether summary judgment was appropriate | State: factual disputes exist regarding role and control that preclude summary judgment | Star: undisputed record (including superintendent testimony and underwriting practice) shows no coverage for State | Yes — summary judgment for Star affirmed |
Key Cases Cited
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (court reviews summary judgment legal standard and de novo review principles)
- Town of Kearny v. Brandt, 214 N.J. 76 (de novo review of summary judgment; standards for viewing facts in favor of non-movant)
- First Nat'l Bank of Palmerton v. Motor Club of Am. Ins. Co., 310 N.J. Super. 1 (insured-mortgagee in possession can be a "real estate manager" where policy and mortgage put insurer on notice)
- Zacarias v. Allstate Ins. Co., 168 N.J. 590 (policy ambiguity defined by whether average policyholder can discern coverage boundaries)
- Christafano v. N.J. Mfr.'s Ins. Co., 361 N.J. Super. 228 (ambiguity rules and enforcement of policy as written when unambiguous)
- Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt. Osteopathic Med., 210 N.J. 597 (courts owe no deference to trial court's legal interpretation of insurance contracts)