CANOPIUS US INSURANCE, INC. v. GRAHAM TRUCKING LLC, et al

Filing 28

OPINION filed. Signed by Judge Freda L. Wolfson on 4/12/2018. (km)

*NOT FOR PUBLICATION*
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
___________________________________
:
CANOPIUS US INSURANCE, INC.,
:
:
Plaintiff,
:
Civil Action No. 17-4616 (FLW) (DEA)
:
v.
:
:
OPINION
GRAHAM TRUCKING, LLC; PATRICK :
GRAHAM; JOHN MONTERO; NEXUS :
MANAGEMENT, LLC; MERIT SERVICE :
SOLUTIONS; NEW JERSEY TRANSIT; :
NEXUS PARKING SYSTEMS; and
:
NEXUS PROPERTIES,
:
:
Defendants.
:
___________________________________ :
WOLFSON, United States District Judge:
Plaintiff Canopius US Insurance, Inc. (“Plaintiff” or “Canopius”) brings this action
seeking a declaratory judgment that it has no duty to defend or indemnify Graham Trucking,
LLC (“Graham Trucking”) and Patrick Graham (collectively with Graham Trucking, the
“Graham Defendants”)1 in an underlying personal injury lawsuit that is currently pending in the
Superior Court of New Jersey, Law Division, Mercer County, captioned John Montero v. Nexus
Management, et al., No. MER-L-95-15 (the “Montero Action”). Presently before the Court is
Plaintiff’s Motion for Summary Judgment, pursuant to Federal Rule of Civil Procedure 56. For
the reasons that follow, Plaintiff’s Motion is granted, insofar as it seeks a declaration that: (1)
Plaintiff has no duty to defend or indemnify the Graham Defendants in connection with the

1

In its Complaint, Plaintiff also names as nominal defendants John Montero, Nexus
Management, LLC, Merit Service Solutions, the New Jersey Transit, Nexus Parking Systems,
and Nexus Properties (collectively, the “Nominal Defendants.”).
1

Montero Action; and (2) Plaintiff is entitled to reimbursement for its fees and costs expended in
defending the Graham Defendants in that action.
I.

BACKGROUND2
On December 10, 2013, John Montero allegedly slipped and fell on a patch of black ice

in the parking lot (the “Parking Lot”) of the Hamilton Train Station in Hamilton, New Jersey,
sustaining personal injuries. Plaintiff’s Statement of Material Facts (“Pl.’s Statement”), ¶¶ 3-4;
Defendants’ Response to Plaintiff’s Statement of Material Facts (“Defs.’ Resp.”), ¶¶ 3-4. On
January 1, 2015, Montero filed the Montero Action in state court, alleging that his injuries were
caused by the negligence of Nexus Management, LLC, Merit Service Solutions, the New Jersey
Transit, Nexus Parking Systems, Nexus Properties, and various fictitiously named individuals
and corporations, in their ownership, supervision, operation, control, management, inspection,
possession, maintenance, and construction of the Parking Lot. Pl.’s Statement at ¶ 1; Defs.’
Resp. at ¶ 1. Montero filed a second amended complaint on August 22, 2016, adding Graham
Trucking, LLC and Patrick Graham as defendants. Pl.’s Statement at ¶ 2; Defs.’ Resp. at ¶ 2.
Graham Trucking was the subcontractor responsible for snow removal at the Hamilton
Train Station on the date of Plaintiff’s fall. Pl.’s Statement at ¶ 8; Defs.’ Resp. at ¶ 8. While the
parties agree that Graham Trucking did in fact perform snow removal services at the Hamilton
Train Station on December 10, 2013, Pl.’s Statement at ¶ 9; Defs.’ Resp. at ¶ 9, they dispute
whether Patrick Graham was personally involved in snow removal on that date. Pl.’s Statement
at ¶ 9; Defs.’ Resp. at ¶ 9. Specifically, although Plaintiff avers that Patrick Graham performed

2

The following facts are undisputed, except where noted, and are viewed in the light most
favorable to the Graham Defendants, the non-moving parties on this Motion for Summary
Judgment. See Jewsevskyj v. Fin. Recovery Servs., Inc., 704 F. App'x 145, 147 (3d Cir. 2017)
(observing that, in reviewing a motion for summary judgment, courts must view facts and make
“all reasonable inferences in the non-movant’s favor.”).
2

snow removal services at the Hamilton Train Station on December 10, 2013, Pl.’s Statement at ¶
9, the Graham Defendants contend that that snow removal was performed by Graham Trucking
without the involvement of Patrick Graham. See Defs.’ Resp. ¶ 9; Certification of Patrick
Graham (“Graham Cert.”), ¶ 7.
At the time of the incident, Graham Trucking was covered under a policy of commercial
general liability insurance (the “Policy”) issued by Canopius, bearing the policy number OUS
009050543, with a policy period of August 1, 2013 through August 1, 2014. Pl.’s Statement at
¶¶ 10-11; Defs.’ Resp. at ¶¶ 10-11; see Policy, Affidavit of Juliana O’Connell (“O’Connell
Aff.”), Ex. 2, ECF No. 10-10. Patrick Graham qualifies as an insured under the Policy. Pl.’s
Statement at ¶ 11; Defs.’ Resp. at ¶ 11. The Policy’s Commercial General Liability Coverage
Declarations (the “Declarations Sheet”) provide as follows:
Business Description:

Driveway, Parking Area or Sidewalk Paving or Repaving

Class Code

Class Description

92215

Driveway, Parking Area or Sidewalk Paving or Repaving

49950

Additional Interests

Policy, Commercial General Liability Coverage Part Extension of Supplemental Declarations,
Form CGDSO1-EX (10-01), O’Connell Aff., Ex. 2, Pl.’s Statement at ¶ 12; Defs.’ Resp. at ¶ 12.
Relevant to the instant dispute, the Policy also contains a classification limitation (the
“Exclusion”), which provides as follows:
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ALL SECTIONS OF THIS SEVEN (7) PAGE ART-GL-01 APPLY TO, AND MODIFY,
YOUR POLICY.
ADDITIONAL EXCLUSIONS
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
3

***
EXCLUSION – CLASSIFICATION LIMITATION
The following exclusion is added to COVERAGES A, B, and C (Section I):
This insurance does not apply to “bodily injury”, “Property damage”, “advertising
injury”, “personal injury” or medical payments for operations which are not classified
or shown on the Commercial General Liability Coverage Declarations, its endorsements
or supplements.
Policy, ART-GL-01 (08/11), page 4 of 6, O’Connell Aff., Ex. 2; Pl.’s Statement at ¶ 13; Defs.’
Resp. at ¶ 13. It is undisputed that snow and ice removal operations are neither classified nor
shown on the Declarations Sheet. Pl.’s Statement at ¶ 14; Defs.’ Resp. at ¶ 14.
After receiving notification of Montero’s claim against the Graham Defendants,
Canopius initially denied coverage for the claim, citing the Exclusion in the Policy. Pl.’s
Statement at ¶ 17; Defs.’ Resp. at ¶ 17. However, on October 5, 2016, Canopius offered to
defend the Graham Defendants in the Montero Action, subject to a denial of indemnity coverage
pursuant to the Exclusion. Pl.’s Statement at ¶ 18; Defs.’ Resp. at ¶ 18. In its October 5, 2016
letter, Canopius also reserved its right to seek reimbursement of fees and costs incurred in the
defense of the Graham Defendants in the Montero Action. Pl.’s Statement at ¶ 19; Defs.’ Resp.
at ¶ 19. Patrick Graham, on behalf of himself and Graham Trucking, verbally rejected Canopius’
initial offer of defense, stating that the Graham Defendants had a separate policy of insurance
issued by Preferred Contractors Insurance Company (“PCIC”), which policy afforded snow and
ice removal coverage. Pl.’s Statement at ¶ 20; Defs.’ Resp. at ¶ 20.
On October 25, 2016, Canopius sent a letter to PCIC, requesting that PCIC assume the
defense of the Graham Defendants in the Montero Action. Pl.’s Statement at ¶ 21; Defs.’ Resp.
at ¶ 21; Declaration of Rachelle Shocklee (“Shocklee Decl.”), ¶ 19. However, after PCIC failed

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to timely assume the defense of the Graham Defendants, Pl.’s Statement at ¶ 22; Defs.’ Resp. at
¶ 22, Patrick Graham requested that Canopius reinstate its October 5, 2016 offer of defense.
Pl.’s Statement at ¶ 23; Defs.’ Resp. at ¶ 23.
On November 8, 2016, Canopius reinstated its offer to defend the Graham Defendants in
the Montero Action, subject to the same denial of coverage and reservation of rights set forth in
its October 5, 2016 letter – i.e., subject to a denial of indemnity coverage pursuant to the
Exclusion. Pl.’s Statement at ¶¶ 24-25; Defs.’ Resp. at ¶¶ 24-25; Shocklee Decl. at ¶¶ 22-23.
The offer to defend was also conditioned on an agreement that, in the event PCIC assumed
coverage, the Graham Defendants would permit Canopius to withdraw from any further
coverage with respect to the Montero Action. Pl.’s Statement at ¶ 26; Defs.’ Resp. at ¶ 26.
Finally, Canopius reserved its right to seek reimbursement from the Graham Defendants for the
fees and costs incurred in the defense of any non-covered causes of action and damages in the
Montero Action. Pl.’s Statement at ¶ 27; Defs.’ Resp. at ¶ 27; Shocklee Decl. at ¶ 23. The
Graham Defendants accepted Canopius’ November 8, 2016 offer of defense. Pl.’s Statement at ¶
28; Defs.’ Resp. at ¶ 28.
Ultimately, PCIC did not agree to provide defense or indemnity coverage to the Graham
Defendants in connection with the Montero Action. Pl.’s Statement at ¶ 29; Defs.’ Resp. at ¶ 29.
Thereafter, Canopius requested that the Graham Defendants voluntarily assume their own
defense. Pl.’s Statement at ¶ 30; Defs.’ Resp. at ¶ 30. As of the time that the instant Motion
was filed, the Graham Defendants had not assumed their own defense. Pl.’s Statement at ¶ 31;
Defs.’ Resp. at ¶ 31. Significantly, the parties agree that the only operations of the Graham
Defendants at issue in the Montero Action are snow and ice removal, not their driveway, parking
area, or sidewalk paving or repaving operations. Pl.’s Statement at ¶ 32; Defs.’ Resp. at ¶ 32.

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On June 23, 2017, Canopius filed the instant declaratory judgment action against the
Graham Defendants. The Complaint asserts a single count, seeking a declaration, pursuant to 28
U.S.C. § 2201, that, as a result of the Exclusion in the Policy: (1) Canopius has no obligation to
provide defense or indemnity coverage to the Graham Defendants in connection with the
Montero Action; (2) the Graham Defendants owe monetary damages in an amount to be
determined for the fees and costs that Canopius has incurred in connection with its defense of the
Graham Defendants in the Montero Action; and (3) Canopius has no obligation to provide
payment of any judgment that any nominal defendant may obtain against the Graham Defendants
in the Montero Action. Plaintiff filed the instant Motion for Summary Judgment on September
20, 2017. ECF No. 10. The Motion has been fully briefed. ECF Nos. 20, 22.
II.

LEGAL STANDARD
Summary judgment is appropriate where the Court is satisfied that “there is no genuine

issue as to any material fact and that the movant is entitled to a judgment as a matter of law.”
FED. R. CIV. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Orson, Inc. v.
Miramax Film Corp., 79 F.3d 1358, 1366 (3d Cir. 1996). A factual dispute is genuine only if
there is “a sufficient evidentiary basis on which a reasonable jury could find for the non-moving
party,” and it is material only if it has the ability to “affect the outcome of the suit under
governing law.” Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006); see also
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Disputes over irrelevant or
unnecessary facts will not preclude a grant of summary judgment. Anderson, 477 U.S. at 248.
“In considering a motion for summary judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence; instead, the non-moving party's

6

evidence ‘is to be believed and all justifiable inferences are to be drawn in his favor.’” Marino v.
Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (citation omitted).
The moving party bears the burden of demonstrating the absence of a genuine issue of
material fact. Celotex Corp., 477 U.S. at 322. Once the moving party has satisfied this initial
burden, the opposing party must identify “specific facts which demonstrate that there exists a
genuine issue for trial.” Orson, 79 F.3d at 1366; see Gleason v. Norwest Mortg. Inc., 243 F.3d
130, 138 (3d Cir. 2001) (“A nonmoving party has created a genuine issue of material fact if it has
provided sufficient evidence to allow a jury to find in its favor at trial.”). The non-moving party
must present “more than a scintilla of evidence showing that there is a genuine issue for trial.”
Woloszyn v. County of Lawrence, 396 F.3d 314, 319 (3d Cir. 2005). Not every issue of fact is
sufficient to defeat a motion for summary judgment; issues of fact are genuine “if the evidence is
such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S.
at 248. Additionally, the nonmoving party cannot rest upon mere allegations; he or she must
present actual evidence that creates a genuine issue of material fact. See FED. R. CIV. P. 56(e);
Anderson, 477 U.S. at 249. In conducting a review of the facts, the nonmoving party is entitled
to all reasonable inferences and the record is construed in the light most favorable to that party.
See Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). Accordingly,
it is not the Court's role to make findings of fact, but to analyze the facts presented and determine
if a reasonable jury could return a verdict for the nonmoving party. See Brooks v. Kyler, 204
F.3d 102, 105, n.5 (3d Cir. 2000).
III.

DISCUSSION
In its Motion for Summary Judgment, Canopius argues that it has no duty to defend or

indemnify the Graham Defendants in the Montero Action, because the claims at issue in that

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action arise out of the Graham Defendants’ snow and ice removal operations, and the plain
language of the Exclusion limits Canopius’ coverage obligation to claims arising only out of the
Graham Defendants’ driveway, parking area, or sidewalk paving or repaving operations. In
opposition, the Graham Defendants argue the Policy is ambiguous as to whether it affords
coverage for claims related to their snow and ice removal operations. Alternatively, the Graham
Defendants maintain that summary judgment is premature, because discovery has yet to take
place in this case.
At the outset, the instant case requires an evaluation of the principles governing an
insurance carrier’s duties to defend and indemnify its insureds. An insurance carrier “is
contractually obliged to provide the insured with a defense against all actions covered by the
insurance policy.” Abouzaid v. Mansard Gardens Assocs., LLC, 207 N.J. 67, 79 (2011). In
determining whether a duty to defend exists, courts compare “the allegations set forth in the
complainant’s pleading and the language of the insurance policy.” Flomerfelt v. Cardiello, 202
N.J. 432, 444 (2010). If the complaint raises allegations that fall within a risk covered by the
insurance contract, then “the duty to defend arises, irrespective of the claim's actual merit.”
Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 173 (1992). Nonetheless, in determining
whether a duty to defend has been triggered, a court’s analysis “is not necessarily limited to the
facts asserted in the complaint,” Abouzaid, 207 N.J. at 81, and may include “extrinsic facts,
outside of the complaint, which are later revealed in discovery . . . .” S.T. Hudson Engineers,
Inc. v. Pennsylvania Nat. Mut. Cas. Co., 388 N.J. Super. 592, 606 (App. Div. 2006).

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With those principles in mind, the Court notes that the complaint at issue in the Montero
Action broadly alleges that the Parking Lot was “negligently owned supervised, operated,
controlled, managed, inspected, possessed, maintained, repaired, [or] constructed” by all
defendants in that matter, including the Graham Defendants, which negligence resulted in
Montero’s injuries. Second Am. Compl. ¶ 1, Shocklee Decl., Ex. 5. Here, however, the Graham
Defendants do not dispute that the “only activities of [the Graham Defendants] at issue in the
[Montero Action] are [their] snow and ice removal operations, not [their] Driveway, Parking
Area, or Sidewalk Paving or Repaving operations.” Pl.’s Statement at ¶ 32; Defs.’ Resp. at ¶ 32.
Although the underlying complaint does not expressly confine the allegations against the
Graham Defendants to snow or ice removal, in determining Plaintiff’s duty to defend, it is
appropriate to consider these stipulated facts. See Alexander v. Nat'l Fire Ins. of Hartford, 454
F.3d 214, 220 (3d Cir. 2006) (in determining whether a duty to defend is triggered, it “is proper
to consider evidence not set forth in the underlying litigation . . . .”). Indeed, the Graham
Defendants do not argue that the duty to defend in this case is triggered by claims relating to
anything other than their snow and ice removal operations. Accordingly, despite the broad
nature of the underlying complaint, because the parties agree that claims in the state action relate
only to the Graham Defendants’ snow and ice removal operations, the Court’s analysis is
confined to whether the Policy requires Plaintiff to defend or indemnify the Graham Defendants
as to claims arising out of their snow and ice removal services.
A.

Interpretation of an Insurance Contract Under New Jersey Law

Because this case requires the Court to interpret the Policy, I begin with a statement of
the basic principles governing the interpretation of insurance contracts under New Jersey law.
Under New Jersey law, the determination of “the proper coverage of an insurance contract is a

9

question of law.” Buczek v. Cont'l Cas. Ins. Co., 378 F.3d 284, 288 (3d Cir. 2004) (citing Atl.
Mut. Ins. Co. v. Palisades Safety & Ins. Ass'n, 364 N.J. Super. 599, 604 (App. Div. 2003)). “An
insurance policy is a contract that will be enforced as written when its terms are clear in order
that the expectations of the parties will be fulfilled.” Flomerfelt, 202 N.J. at 441. However,
because insurance policies are contracts of adhesion, they “are subject to special rules of
interpretation,” Longobardi v. Chubb Ins. Co. of New Jersey, 121 N.J. 530, 537 (1990), and
“courts must assume a particularly vigilant role in ensuring their conformity to public policy and
principles of fairness.” Voorhees, 128 N.J. at 175; see Zacarias v. Allstate Ins. Co., 168 N.J.
590, 594 (2001) (“We give special scrutiny to insurance contracts because of the stark imbalance
between insurance companies and insureds in their respective understanding of the terms and
conditions of insurance policies.”). In a dispute over the interpretation of an insurance contract,
the “burden is on the insured to bring the claim within the basic terms of the policy.” Reliance
Ins. Co. v. Armstrong World Indus., Inc., 292 N.J. Super. 365, 377 (App. Div. 1996). However,
where, as here, “the insurance carrier claims the matter in dispute falls within exclusionary
provisions of the policy, it bears the burden of establishing that claim.” Rosario ex rel. Rosario
v. Haywood, 351 N.J. Super. 521, 530 (App. Div. 2002).
The Court’s function in construing policies of insurance, as with any other contract, “is to
search broadly for the probable common intent of the parties in an effort to find a reasonable
meaning in keeping with the express general purposes of the policies.” Royal Ins. Co. v. Rutgers
Cas. Ins. Co., 271 N.J. Super. 409, 416 (App. Div. 1994). In most cases, the best indication of
the parties’ reasonable expectations lies in the language of the insurance policy itself, Moessner,
121 F.3d at 903, and thus, ordinarily, “the words of an insurance policy are to be given their
plain, ordinary meaning.” Zacarias, 168 N.J. at 595. In that regard, “[w]here the express

10

language of the policy is clear and unambiguous, ‘the court is bound to enforce the policy as it is
written.’” Rosario, 351 N.J. Super. at 530 (quoting Royal Ins., 271 N.J. Super. at 416); Chubb
Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (“If the language is
clear, that is the end of the inquiry.”). This governing principle precludes courts from writing
“‘for the insured a better policy of insurance than the one purchased.’” Gibson v. Callaghan,
158 N.J. 662, 670 (1999) (citation omitted).
However, where a genuine ambiguity exists, “a court may look to extrinsic evidence as
an aid to interpretation.” Chubb, 195 N.J. at 238. A genuine ambiguity exists “where the
phrasing of the policy is so confusing that the average policyholder cannot make out the
boundaries of coverage.” Lee v. Gen. Acc. Ins. Co., 337 N.J. Super. 509, 513 (App. Div. 2001);
see Zacarias, 168 N.J. at 601 (“[I]n enforcing an insurance policy, courts will depart from the
literal text and interpret it in accordance with the insured's understanding . . . if the text appears
overly technical or contains hidden pitfalls, cannot be understood without employing subtle or
legalistic distinctions, is obscured by fine print, or requires strenuous study to comprehend.”)
(internal citations omitted). Nonetheless, “[a]n insurance policy is not ambiguous merely
because two conflicting interpretations of it are suggested by the litigants.” Powell v. Alemaz,
Inc., 335 N.J. Super. 33, 44 (App. Div. 2000). Where a genuine ambiguity exists, “courts
interpret the contract to comport with the reasonable expectations of the insured, even if a close
reading of the written text reveals a contrary meaning.” Zacarias, 168 N.J. at 595; see Gibson,
158 N.J. at 671 (“[I]nsurance policies must be construed to comport with the reasonable
expectations of the insured.”).
Additionally, in the context of an insurance policy, “[e]xclusionary clauses are
presumptively valid and are enforced if they are ‘specific, plain, clear, prominent, and not

11

contrary to public policy.’” Flomerfelt, 202 N.J. at 441 (quoting Princeton Ins. Co. v.
Chunmuang, 151 N.J. 80, 95 (1997)). Because the burden is on the insurer to bring the case
within an exclusion, Chunmuang, 151 N.J. at 95, “exclusions are ordinarily strictly construed
against the insurer, and if there is more than one possible interpretation of the language, courts
apply the meaning that supports coverage rather than the one that limits it.” Flomerfelt, 202 N.J.
at 442 (internal citation omitted). Nonetheless, “[i]f the words used in an exclusionary clause are
clear and unambiguous, ‘a court should not engage in a strained construction to support the
imposition of liability.’” Id. (quoting Longobardi, 121 N.J. at 537). In that regard, courts cannot
“disregard the ‘clear import and intent’ of a policy exclusion,” Am. Motorists Ins. Co. v. L-C-A
Sales Co., 155 N.J. 29, 41 (1998) (citation omitted), and “[f]ar-fetched interpretations of a policy
exclusion are insufficient to create an ambiguity requiring coverage.” Essex Ins. Co. v. New
Jersey Pan-African Chamber of Commerce & Indus., Inc., No. A-1237-14T3, 2017 WL
4051726, at *3 (N.J. Super. Ct. App. Div. Sept. 14, 2017). “Rather, courts must evaluate
whether, utilizing a ‘fair interpretation’ of the language, it is ambiguous.” Flomerfelt, 202 N.J. at
442 (quoting Stafford v. T.H.E. Ins. Co., 309 N.J. Super. 97, 105 (App. Div. 1998)).
B.

Plaintiff has no Duty to Defend or Indemnify the Graham Defendants

Here, Plaintiff argues that the Policy clearly and unambiguously provides that Plaintiff is
not obligated to defend or indemnify the Graham Defendants for claims arising out of their snow
and ice removal operations, because those operations are not listed in the Declarations Sheet.
The Graham Defendants counter that the Policy is ambiguous with respect to coverage for snow
and ice removal operations, because the Policy does not expressly list snow removal as a noncovered operation and the Exclusion is presented on a different page from the Declarations
Sheet. Alternatively, the Graham Defendants argue that Patrick Graham reasonably expected

12

that the Graham Defendants’ snow and ice removal operations would be covered under the
Policy.
Here, the Court finds that Plaintiff does not have a duty to defend the Graham Defendants
in the Montero Action, because the plain language of the Exclusion renders the Policy
inapplicable to personal injury claims arising out of snow or ice removal. To that end, the
Exclusion provides that “[t]his insurance does not apply to ‘bodily injury’, ‘Property damage’,
‘advertising injury’, ‘personal injury’ or medical payments for operations which are not
classified or shown on the Commercial General Liability Coverage Declarations, its
endorsements or supplements.” Policy, ART-GL-01 (08/11) (emphasis in original). And,
significantly, the only operations listed in Declarations Sheet are the Graham Defendants’
“Driveway, Parking Area or Sidewalk Paving or Repaving” operations. Policy, Commercial
General Liability Coverage Part Extension of Supplemental Declarations, Form CGDSO1-EX
(10-01) (emphasis in original). In short, the Exclusion explicitly disclaims coverage for claims
related to operations not listed on the Declarations Sheet, and the only operations listed in
Declarations Sheet are the Graham Defendants’ paving or repaving operations. The Court need
not depart from the literal text of the Exclusion, because the language of the Exclusion is “direct
and ordinary,” set forth in large, italic font, and can “be understood without employing subtle or
legalistic distinctions.” Zacarias, 168 N.J. at 601. Thus, because snow and ice removal
operations are not listed on the Declarations Sheet, the Court will enforce the Exclusion and find
that Plaintiff has no duty to defend the Graham Defendants in the Montero Action.
Additionally, contrary to the Graham Defendants’ argument, a genuine ambiguity is not
created by the fact that the Policy does not contain a specific provision indicating that it does not
cover claims arising out of snow and ice removal operations. As the Court has already observed,

13

the Exclusion clearly and unambiguously provides that Plaintiff’s duty to defend is not triggered
by claims arising out of operations not listed in the Declarations Sheet. Various courts have
enforced similar exclusionary provisions, finding that an insurance carrier is not obligated to
defend its insured for claims arising out of operations not listed in the policy’s declarations.3
See, e.g., Am. W. Home Ins. Co. v. Donnelly Distribution, Inc., 523 F. App'x 871, 874 (3d Cir.
2013) (enforcing a policy provision limiting coverage to operations necessary or incidental to the
insured’s premises); Colony Nat. Ins. Co. v. Hing Wah Chinese Rest., 546 F. Supp. 2d 202, 20709 (E.D. Pa. 2008) (finding that a classification limitation limiting coverage to operations listed
in the policy’s declarations was enforceable); Atl. Cas. Ins. Co. v. C.A.L. Const. Corp., No. 064036, 2008 WL 2946060, at *5 (E.D.N.Y. July 30, 2008) (finding that an insurance carrier had
no duty to defend its insured in connection with an underlying negligence action, where the
policy included an exclusionary provision barring coverage for “any injuries or claims resulting
from ‘operations which are not classified or shown on the Commercial General Liability
Coverage Declarations, its endorsements or supplements,’” and the underlying action did not
arise from an operation listed in the policy’s declarations).
For example, in Donnelly Distribution, an insurance carrier brought a declaratory
judgment action against its insured, a newspaper distribution firm, seeking a declaration that it
had no duty to defend or indemnify the insured in connection with a state court action filed by an
individual who slipped and fell on plastic ties distributed by the insured. 523 F. App'x at 872-73.
The policy at issue restricted coverage “to bodily injuries ‘arising out of . . . [t]he ownership,
maintenance or use’ of 1301–05 N. Howard Street, Philadelphia, Pennsylvania 19122 and

The New Jersey Supreme Court has endorsed examining “how other courts have interpreted the
same or similar language in standardized contracts to determine what the parties intended . . . .”
Chubb, 195 N.J. at 238.
3

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operations ‘necessary or incidental’ to those premises.” Id. at 872. On appeal, the Third Circuit
held that the carrier had no duty to defend the insured in the underlying matter, because the
policy unambiguously limited coverage to operations that were necessary or incidental to the
insured premises, not the entirety of [the insured’s] business operations.” Id. at 874. To that
end, in rejecting the insured’s argument that the disposal of plastic ties at a location other than
the insured’s premises was covered under the policy, the court noted that “[h]ad the parties
intended to provide for business-wide coverage, they surely would have found a clear way to say
so, rather than by including an oblique reference to one particular . . . distribution center.” Id.
Similarly, in Hing Wah, an insurance carrier brought a declaratory judgment action
seeking a declaration that it had no duty to defend or indemnify an insured restaurant in an
underlying action involving a car accident with one of the restaurant’s delivery drivers. 546 F.
Supp. 2d at 204. The policy at issue contained a classification limitation provision that is similar
to the Exclusion in this case, providing that “[c]overage under this policy is specifically limited
to those operations described in the declarations under ‘Classification.’ No other operations by
the insured or by anyone for whose actions the insured is responsible are covered.” Id. at 206.
The classifications listed on the declarations page simply stated “restaurant.” Id. at 207. The
insurance carrier moved for summary judgment, arguing that because the declarations page of
the policy did not include food delivery, it had no duty to defend the restaurant in the underlying
matter. Id. In that connection, the insurance carrier maintained that although the policy was
silent as to “food delivery, the restaurant classification section typically describes the operations
the restaurant engages in, rather than operations the restaurant does not engage in,” and thus, that
no coverage existed for food delivery. Id. The court granted summary judgment in favor of the
insurance carrier, finding that the omission of food delivery from the declarations page suggested

15

that “the parties did not contemplate that food delivery would be covered by the Policy.” Id. To
that end, the court found that the term “restaurant” was not ambiguous, and thus, that the plain
language of the classification limitation was enforceable. Id. at 209.
Here, as in Donnelly Distribution and Hing Wah, the Court finds that the Exclusion, by
its plain terms, only contemplates coverage for claims arising out of the Graham Defendants’
driveway, parking area or sidewalk paving or repaving operations, as opposed to the entirety of
the Graham Defendants’ business operations. As the parties agree, the Montero Action only
implicates the Graham Defendants’ snow and ice removal operations, which are unrelated to the
Graham Defendants’ paving or repaving operations. Had the parties intended to provide
“business-wide coverage” for the Graham Defendants, including coverage for their snow and ice
removal services, they could have included a broad reference to all operations of the Graham
Defendants in the Declarations Sheet, rather than a specific reference to their paving and
repaving operations. See Donnelly Distribution, 523 F. App'x at 874. Additionally, that the
Declarations Sheet is silent as to snow and ice removal operations is of no moment; to find
otherwise would impose an undue burden on insurance carriers by requiring them to list every
non-covered operation within the confines of an insurance policy. Accordingly, the Court finds
that the plain language of the Exclusion unambiguously provides that Canopius is not obligated
to defend the Graham Defendants for claims arising from their snow and ice removal services.
Nor does the fact that the Exclusion is contained on a separate page from the Declarations
Sheet render the Policy ambiguous. The New Jersey Supreme Court rejected a similar argument
in Zacarias, 168 N.J. at 603. In Zacarias, an insured submitted a claim to his boat insurance
carrier, seeking coverage under a policy of insurance for personal injuries that his wife sustained
in a boating accident. Id. at 593-94. After the carrier disclaimed coverage on the basis of an

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intra-family exclusion contained in the policy, the insured filed a declaratory judgment action,
seeking, inter alia, a declaration that the intra-family exclusion was void and that he was entitled
to indemnification. Id. at 594. Both the trial court and the appellate court granted summary
judgment in favor of the carrier, finding that the intra-family exclusion was enforceable. Id. On
appeal, the insured argued that the intra-family exclusion was ambiguous, because it was listed
on a separate page from the policy’s declarations. Id. at 602-03.
The New Jersey Supreme Court rejected the insured’s argument, holding that that intrafamily exclusion was enforceable. Id. at 603. Specifically, in finding that the separation of the
intra-family exclusion from the declarations sheet did not render the policy ambiguous, the Court
explained:
We do not . . . interpret Lehrhoff to require an insurer to include an intra-family exclusion
on the policy's declarations sheet in all cases. . . . In this case, . . . we find no ambiguity,
inconsistency, or contradiction between the declarations sheet and the body of plaintiff's
policy. As noted, the declarations sheet alerts the insured that the coverages and limits of
liability are subject to the provisions of the policy, one of which is the intra-family
exclusion. Also as noted, the exclusion itself is written in direct and ordinary terms.
***
In sum, an insurance contract is not per se ambiguous because its declarations sheet,
definition section, and exclusion provisions are separately presented. A rule of
construction forcing insurers to avoid all cross-referencing in policies would require them
to reprint the entire definition section on each page of the policy, or to define each term
every time it is used. That proliferation of fine print would itself demand strenuous study
and run the risk of making insurance policies more difficult for the average insured to
understand.
Id. at 602-03.
Similarly, here, the Court finds no ambiguity or contradiction between the Declarations
Sheet and the Exclusion, and thus, the fact that the Exclusion is not expressly listed within the
Declarations Sheet does not render the Policy ambiguous. Significantly, the Exclusion is cross-

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referenced in the Declarations Sheet,4 alerting the insured that coverage is limited by that
provision of the Policy. Additionally, the page of the Policy containing the Exclusion is
contained in the form directly following the Declarations Sheet, a mere four pages from the
Declarations Sheet. Under these circumstances, the Court cannot find that the Policy is
ambiguous.
Finally, the Court is not persuaded that Patrick Graham reasonably expected the Policy to
provide coverage for snow removal operations. In the first instance, as the Court has already
explained, because the language of the Exclusion is clear and unambiguous, the Court need only
consider the plain language of the Policy in resolving this coverage dispute, without resorting to
the reasonable expectations of the insured. Chubb, 195 N.J. at 238. Moreover, even if the Court
were to conclude that the Policy was ambiguous as to coverage for snow and ice removal
services, there is nothing in the record to suggest that Patrick Graham – or Graham Trucking –
reasonably expected that the Policy would cover snow and ice removal operations. To the
contrary, Patrick Graham’s assertions are belied by the fact that, in initially rejecting Plaintiff’s
verbal offer of defense, Patrick Graham stated that the Graham Defendants had a separate policy
of insurance through PCIC that afforded snow and ice removal coverage. Pl.’s Statement at ¶ 20;
Defs.’ Resp. at ¶ 20. Additionally, Patrick Graham’s contention is undermined by the absence of
snow and ice removal services from the Declarations Sheet, “the one page of the policy tailored
to the particular insured and not merely boilerplate, which must be deemed to define coverage

4

Specifically, the Declarations Sheet provides:
Form(s) and Endorsement(s) made a part of this policy at time of issue:
. . . ART-GL-01 (08-11) . . . .
Policy, Commercial General Liability Coverage Part Extension of Supplemental Declarations,
Form CGDSO1-EX (10-01).

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and the insured’s expectation of coverage. Lehrhoff v. Aetna Cas. & Sur. Co., 271 N.J. Super.
340, 347 (App. Div. 1994). Furthermore, the Graham Defendants do not argue that the terms
“Driveway, Parking Area or Sidewalk Paving or Repaving” operations are generally understood
to encompass snow and ice removal services. Rather, in conceding that the only activities at
issue in the Montero Action are their “snow and ice removal operations, not [their] Driveway,
Parking Area or Sidewalk Paving or Repaving operations,” Pl.’s Statement at ¶ 20; Defs.’ Resp.
at ¶ 20, the Graham Defendants explicitly distinguish snow and ice removal operations from the
operations covered under the Policy. As such, there is no genuine issue of material fact
regarding Patrick Graham’s reasonable expectations. Accordingly, the Court’s finding that the
Policy unambiguously excludes coverage for the claims at issue in the Montero Action is not
inconsistent with the reasonable expectations of Patrick Graham.
In sum, the Court finds that Plaintiff has no duty to defend the Graham Defendants in the
Montero Action, because the Exclusion clearly and unambiguously limits coverage under the
Policy to claims arising out of operations listed in the Declarations Sheet, and the only operations
at issue in the Montero Action – the Graham Defendants’ snow and ice removal operations – are
not listed in the Declarations Sheet. And, because an insurance carrier’s duty to defend is
broader than its duty to indemnify, Gen. Acc. Ins. Co. of Am. v. State, Dep't of Envtl. Prot., 143
N.J. 462, 465 (1996), it necessarily follows that because Plaintiff has no duty to defend the
Graham Defendants in the Montero Action, Plaintiff also has no duty to indemnify the Graham
Defendants for any judgment obtained in that action.5 See Ramara, Inc. v. Westfield Ins. Co.,

In its Motion for Summary Judgment, Plaintiff also seeks a declaration that it “has no
obligation to provide payment of any judgment that the nominal defendants may obtain against
the Graham Defendants in the [Montero Action].” Pl.’s Br. at 17. In light of this Court’s finding
that Plaintiff has no duty to defend or indemnify the Graham Defendants with respect to the
Montero Action, the Court also finds that Plaintiff has no duty to pay any judgment that the
5

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814 F.3d 660, 673 (3d Cir. 2016) (“Because an insurer's duty to defend its insured in a lawsuit is
broader than its duty to indemnify, it necessarily follows that it will not have a duty to indemnify
an insured for a judgment in an action for which it was not required to provide defense.”);
Columbus Farmers Mkt., LLC v. Farm Family Cas. Ins. Co., No. 05-2087, 2006 WL 3761987, at
*15 (D.N.J. Dec. 21, 2006) (observing that, under New Jersey law, when there is no duty to
defend, there can be no duty to indemnify). Accordingly, the Court finds that Plaintiff has no
obligation to defend or indemnify the Graham Defendants in connection with the Montero
Action.
C.

Summary Judgment is Not Premature

In their Opposition brief, the Graham Defendants also argue that summary judgment is
premature at this juncture, because discovery has not yet taken place, and the Nominal
Defendants filed answers as late as October 13, 2017. Contrary to the Graham Defendants’
argument, however, the Court has already found that summary judgment in favor of Plaintiff is
warranted, because no genuine dispute of fact exists in this case based upon the language of the
Policy, and Plaintiff is entitled to judgment as a matter of law on the issue of its duties to defend
and indemnify the Graham Defendants in connection with the Montero Action. Indeed, outside
of disputing whether Patrick Graham was individually involved in snow and ice removal on the
date of Montero’s alleged injury – a fact irrelevant to the determination of Plaintiff’s duty to
defend or indemnify the Graham Defendants – the Graham Defendants agree with every other
assertion listed in Plaintiff’s Statement of Material Facts. Accordingly, because the Graham
Defendants have failed to meet their burden, as the nonmoving party, of presenting “specific

Nominal Defendants may obtain against the Graham Defendants in the Montero Action, insofar
as such a judgment arises out of the Graham Defendants’ snow and ice removal services.
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facts that show there is a genuine issue for trial,” Lawson v. Haupt, 677 F. App'x 43, 44 (3d Cir.
2017), summary judgment in favor of Plaintiff is warranted.
Moreover, the Graham Defendants have failed to meet their burden of showing that
additional discovery is required to properly oppose Plaintiff’s Motion. “It is well established that
a court ‘is obliged to give a party opposing summary judgment an adequate opportunity to obtain
discovery.’” Doe v. Abington Friends Sch., 480 F.3d 252, 257 (3d Cir. 2007) (citation omitted).
“A party that opposes summary judgment on the grounds of insufficient discovery has the ability
to do so through [Federal Rule of Civil Procedure] 56(d).” Malouf v. Turner, 814 F. Supp. 2d
454, 459 (D.N.J. 2011). Rule 56(d) provides:
If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot
present facts essential to justify its opposition, the court may:
(1) defer considering the motion or deny it;
(2) allow time to obtain affidavits or declarations or to take discovery; or
(3) issue any other appropriate order.
FED. R. CIV. P. 56(d).
In the Third Circuit, a motion for additional discovery under Rule 56(d) will ordinarily be
granted if the moving party submits an affidavit including the following information: “what
particular information is sought; how, if uncovered, it would preclude summary judgment; and
why it has not previously been obtained.” Pennsylvania Dep't of Pub. Welfare v. Sebelius, 674
F.3d 139, 157 (3d Cir. 2012) (quoting Dowling v. City of Philadelphia, 855 F.2d 136, 139 (3d
Cir. 1988)). The information sought through further discovery must include “specific facts” that
will be revealed through discovery; “[v]ague or general statements of what a party hopes to gain
through a delay for discovery under Rule 56(d) are insufficient.” Malouf, 814 F. Supp. 2d at
460; see also J. Josephson, Inc. v. Crum & Forster Ins. Co., 293 N.J. Super. 170, 204 (App. Div.
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1996) (“When the incompleteness of discovery is raised as a defense to a motion for summary
judgment, that party must establish that there is a likelihood that further discovery would supply
the necessary information.”).
In the case at bar, the Graham Defendants vague and general statement that Plaintiff’s
Motion for Summary Judgment should be denied as premature, because discovery has not yet
taken place, is insufficient to meet the requirements of Rule 56(d). To that end, the Graham
Defendants have failed to submit an affidavit articulating what particular information or facts
they would seek through discovery, and how, if uncovered, that discovery would preclude
summary judgment in this case. Pastore v. Bell Tel. Co. of Pennsylvania, 24 F.3d 508, 511 (3d
Cir. 1994). Indeed, because the Court’s summary judgment ruling rests on the language of the
Policy itself and the undisputed facts in this case, Plaintiff’s claims can be adjudicated based on
those documents and facts without the need for factual discovery. See Hancock Indus. v.
Schaeffer, 811 F.2d 225, 230 (3d Cir. 1987) (“Because the [plaintiffs’] antitrust claim was
properly resolved as a matter of law on the basis of stipulated facts, factual discovery was
unnecessary.”). Accordingly, Plaintiff’s Motion for Summary Judgment is not premature, and
the Court grants summary judgment in favor of Plaintiff on the issues of its duty to defend and
indemnify.
D.

Reimbursement of Defense Fees and Costs

In its Motion for Summary Judgment, Plaintiff also seeks a declaration that it is entitled
to reimbursement for the fees and costs it has expended in defending the Graham Defendants in
the Montero Action. “The right of reimbursement exists in cases where an insurer honored its
duty to defend but sought reimbursement from an insured for fees incurred in defending a noncovered claim ‘because the insured would be unjustly enriched in benefiting by, without paying

22

for, the defense of a non-covered claim.’” U.S. Specialty Ins. Co. v. Sussex Airport, Inc., No. 145494, 2016 WL 2624912, at *4 (D.N.J. May 9, 2016) (quoting Hebela v. Healthcare Ins. Co.,
370 N.J. Super. 260, 279 (App. Div. 2004)). Having found that Plaintiff has no duty to defend
the Graham Defendants in the Montero Action, the Court also finds that Plaintiff is entitled to
reimbursement for the fees and costs incurred in defending the Graham Defendants in that case.
Plaintiff shall file a supplemental certification, within thirty (30) days of the date of the Order
accompanying this decision, setting forth its reasonable fees and costs incurred in defending the
Graham Defendants.
IV.

CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Summary Judgment is granted, as

follows: (1) Plaintiff has no obligation to defend or indemnify the Graham Defendants in
connection with the Montero Action; and (2) Plaintiff is entitled to reimbursement for the fees
and costs that it incurred in defending the Graham Defendants in the Montero Action. Plaintiff
shall file a supplemental certification, within thirty (30) days of the date of the Order
accompanying this decision, detailing the fees and costs expended in defending the Montero
Action.

Dated: April 12, 2018

/s/ Freda L. Wolfson
Hon. Freda L. Wolfson
United States District Judge

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