United States District Court, C.D. California.

CENTURY SURETY COMPANY

v.

POPELINO’S TRANSPORTATION, INC. et al.

Case No. 5:21-cv-01987-RGK-RAO

|

Filed January 4, 2023

Attorneys and Law Firms

John E. Peer, Douglas A. Greer, Woolls Peer Dollinger and Scher APC, Los Angeles, CA, for Century Surety Company.

Paul M. Mahoney, Richard A. Soll, Mahoney and Soll LLP, Claremont, CA, for D and R Woods Enterprise Corp.

Proceedings: (IN CHAMBERS) Order Re: Motion for Summary Judgment [DE 65]

R. GARY KLAUSNER, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

*1 Century Surety Company (“Plaintiff”) seeks a judgment declaring that it owes no duty to defend or indemnify against claims in two other lawsuits, as well as recoupment of costs already expended. Plaintiff names nine defendants: (1) Jose Popelino; (2) Popelino’s Transportation, Inc.; (3) Popelino’s Green Waste Recycling; (4) Jose Barragan; (5) Rosario Rios; (6) Justice Cuts; (7) Richard Boyd; (8) Elisa Boyd; and (9) D & R Woods Enterprise Corporation (“D & R Woods”). Only D & R Woods has defended the action. Jose Popelino was voluntarily dismissed, and the other defendants have had default entered against them. (See ECF Nos. 18, 20, 52, 60.)

On November 9, 2022, Plaintiff filed a motion, which the Court construes as a motion for summary judgment against D & R Woods and a motion for default judgment against the defendants in default. (ECF Nos. 65, 75.) For the following reasons, the Court GRANTS judgment in favor of Plaintiff on all claims.

II. FACTUAL BACKGROUND

Plaintiff alleges the following:

Plaintiff issued a policy for commercial general liability coverage, insuring Popelino’s Transportation, Inc. (“PTI”) and Barragan as PTI’s president. This policy provided coverage for “sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ … caused by an ‘occurrence’ ….” (Mot., Ex. 6 at 16, ECF No. 65-10.)¹ The policy also included a “Classification Limitation Endorsement,” which “strictly limited” coverage to the classifications and codes listed in the policy. (Mot., Ex. 6 at 54.) The classification assigned to the policy was “Truckers” (code 99793) because Barragan represented on his insurance application that PTI is a “trucking company hauling construction building materials.” (FAC ¶ 19.) Based on this classification, Plaintiff calculated and charged an annual premium of $1,815.

While the policy was in effect, a fire broke out at 1880 Brown Avenue in Riverside, where Barragan operates Popelino’s Green Waste Recycling (“GWR”). The fire spread and burned adjacent properties owned by Rios, Cuts, the Boyds, and D & R Woods. Rios, Cuts, and the Boyds sued PTI and Barragan for their property damage (the “Rios Action”), and D & R Woods sued PTI for similar claims in a separate action (the “D & R Action”). Plaintiff agreed to defend PTI and Barragan, subject to its right to withdraw and seek recoupment of costs should it determine that there is no coverage under the policy. Plaintiff now claims that there is no coverage.

III. JUDICIAL STANDARDS

A. Summary Judgment

Under Federal Rule of Civil Procedure 56(a), a court may grant summary judgment only if “there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). To prevail on a summary judgment motion, the movant must show that there are no genuine issues of material fact as to matters on which it has the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Upon such a showing, the Court may grant summary judgment on all or part of the claim. Fed. R. Civ. P. 56(a).

*2 To defeat a summary judgment motion, the non-moving party may not merely rely on its pleadings or on conclusory statements. See Celotex, 477 U.S. at 324. Nor may the non-moving party merely attack or discredit the moving party’s evidence. Nat’l Union Fire Ins. Co. v. Argonaut Ins. Co., 701 F.2d 95, 96–97 (9th Cir. 1983). The non-moving party must affirmatively present specific evidence sufficient to create a genuine issue of material fact for trial. See Celotex, 477 U.S. at 324. The materiality of a fact is determined by whether it might influence the outcome of the case based on the contours of the underlying substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Disputes over such facts amount to genuine issues if a reasonable jury could resolve them in favor of the nonmoving party. Id.

B. Default Judgment

The grant or denial of default judgment is within the court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The Ninth Circuit has enumerated the following factors (collectively, the “Eitel factors”) that courts should consider in determining whether to grant default judgment:

(1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.

Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).

In general, once default has been entered by the clerk, all factual allegations in the complaint, except those relating to the amount of damages, will be taken as true. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987).

IV. DISCUSSION

Plaintiff argues that there is no coverage under the policy for two reasons: (1) Barragan’s failure to disclose his recycling business (GWR) allows Plaintiff to rescind the policy; and (2) because the policy limited coverage to trucking operations, the property damage caused by Barragan’s recycling operations are not covered. The Court agrees that there is no coverage because the evidence in the record establishes that Plaintiff is entitled to rescind the policy and therefore owes no duty to defend or indemnify PTI or Barragan.²

A. Rescission and No Duty to Defend/Indemnify

“Concealment, whether intentional or unintentional, entitles the injured party to rescind insurance,” so long as the concealed fact is material. Cal. Ins. Code §§ 331, 334. “Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries.” Cal. Ins. Code § 334. The central question is whether the concealed fact could reasonably influence the insurer in deciding whether to issue the policy, in evaluating the degree of the risk, or in calculating the appropriate premium. Old Line Life Ins. Co. v. Superior Court, 229 Cal. App. 3d 1600, 1605 (1991).

Plaintiff contends that Barragan concealed material information by characterizing PTI as only a trucking company, when in fact the business also engaged in green waste recycling. The record indicates that PTI’s trucking and recycling operations worked together as “one company,” from the same location at 1880 Brown Avenue in Riverside. (Hall Decl., Ex. 1 at 4, ECF No. 65-4.) Notwithstanding this operation, when applying for the policy at issue, Barragan expressly characterized his business solely as a “trucking company hauling construction building materials.” (Ins. Appl., Foreman Decl., Ex. 7 at 1, ECF No. 65-11.) The application materials in the record do not disclose any recycling operations, and no defendant has offered specific evidence indicating otherwise. Therefore, there is no genuine dispute that Barragan’s failure to disclose the recycling operations constitutes concealment. See Cal. Ins. Code § 330 (“Neglect to communicate that which a party knows, and ought to communicate, is concealment.”).

*3 The question therefore becomes whether Barragan’s concealment was material. Plaintiff offers a declaration from an underwriter stating that Plaintiff “would not have issued [the policy] for the premium indicated on the policy if it had been aware of the existence of [GWR] and the operations at the 1880 Brown Avenue property … [Plaintiff] would have charged additional premium based upon the proper classification code for the recycling operations….” (Foreman Decl. ¶¶ 13, 14, ECF No. 65-9.) There is no evidence in the record that contradicts the underwriter’s statements. Because the concealed fact would have influenced how Plaintiff evaluated its risk in issuing the policy, and therefore the premium it charged, it was material.

Plaintiff has therefore satisfied its burden of showing that it is entitled to rescind the policy. And because it is entitled to rescind the policy, Plaintiff owes no duty to defend or indemnify PTI or Barragan in the Rios and D & R Actions. See DuBeck v. Cal. Physicians’ Serv., 234 Cal. App. 4th 1254, 1264 (2015) (“Rescission extinguishes a contract, rendering it void ab initio, as if it never existed.”). Furthermore, having prevailed on the rescission issue, Plaintiff shall refund all premiums paid. See Imperial Casualty & Indemnity Co. v. Sogomonian, 198 Cal. App. 3d 169, 184 (1988) (“The consequence of rescission is not only the termination of further liability, but also the restoration of the parties to their former positions by requiring each to return whatever consideration has been received.”).

Because neither D & R Woods nor any other defendant has offered evidence to create a genuine dispute of fact, the Court grants summary judgment against D & R Woods.

The Court also finds that default judgment against the remaining defendants is warranted. It appears that the procedural requirements are satisfied, see Fed. R. Civ. P. 55(b)(2), and the Eitel factors weigh in favor of granting default judgment. Plaintiff would be prejudiced if the Court denies default judgment, because despite prevailing on its claim against D & R Woods, Plaintiff would be left without recourse as to the defendants who have not responded. See Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp.2d 1172, 1177 (C.D. Cal. 2002). The allegations in the complaint are sufficient, and as discussed above, there is no genuine dispute of material facts. Also, there is no evidence of excusable neglect in defendants’ failure to respond to the complaint.

The Court therefore grants judgment in favor of Plaintiff on all claims, as to all defendants.³

B. Recoupment of Costs

Because Plaintiff had no duty to defend the underlying actions, it may recoup the costs incurred in defending those actions. See Buss v. Superior Court, 16 Cal. 4th 35, 50 (1997). As evidence, Plaintiff offers various invoices, which itemize the $50,774.59 in attorneys’ fees and expenses requested. Defendants do not offer any evidence contesting this amount. Accordingly, the Court finds that Plaintiff is entitled to $50,774.59 for reimbursement of defense costs.

V. CONCLUSION

*4 For the foregoing reasons, the Court GRANTS Plaintiff’s motion for summary and default judgment, and hereby DECLARES that Plaintiff owes no duty to indemnify PTI or Barragan in the Rios and D & R Actions. Plaintiff is entitled to rescind the policy at issue and shall duly refund all premiums paid. PTI shall reimburse Plaintiff for defense costs in the amount of $50,774.59.⁴

All pending hearing dates are vacated and taken off calendar.

Plaintiff has until January 11, 2023 to file a proposed final judgment that conforms to the Court’s ruling.

IT IS SO ORDERED.

All Citations

1 The Court incorporates the insurance policy by reference for purposes of default judgment. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (A document “may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff’s claim … for example, when a plaintiff’s claim about insurance coverage is based on the contents of a coverage plan.”).

2 Because Plaintiff prevails on its rescission argument, the Court need not analyze the scope of the policy coverage.

3 Paul M. Mahoney, counsel to D & R Woods, dedicated nearly one third of his opposition brief to grumbling over the Court’s denial of a stipulation to continue the trial. (See D & R Woods’s Opp’n to Mot. at 2, ECF No. 72.) Instead of meaningfully citing to the record to oppose summary judgment, Mr. Mahoney spilled ink lamenting that “the world has changed dramatically for the worst,” as evinced by the Court’s denial of the parties’ stipulation. (Id.) Mr. Mahoney has recently been rebuked by the California Court of Appeal for his incivility and fined $2,000 for impugning the integrity of the court. See In re Mahoney, 65 Cal. App. 5th 376, 380 (2021) (“This kind of over-the-top, anything-goes. devil-take-the-hindmost rhetoric has to stop.”). Nonetheless, Mr. Mahoney appears undeterred. Although his recent filing does not arise to contempt of court, it is still unbecoming, particularly when filed by an attorney whose unprofessional behavior was recently criticized in a published opinion. The Court cautions Mr. Mahoney to exercise better judgment in future filings with this Court and others.

4 The Court also denies Plaintiff’s request for judicial notice (ECF No. 65-2) as moot.

End of Document

Superior Court of New Jersey, Appellate Division.

Kenneth MCDONALD, principal BY his attorney-in-fact, Mary GILYARD, Plaintiffs,

v.

Manuel PARADA, National Retail Systems, Inc., Keystone Freight Corp., National Retail Transportation, Inc., American Maritime Services of N.J., Inc., American Maritime Services of N.J., Inc. and/or Garden State Intermodal Repair d/b/a Integrated Industries, Corp., AGF Marine Consultants, Inc., Mark Anderson, and MHP Trucking. L.L.C., Defendants,

Interpool, Inc., d/b/a TRAC Intermodal, Inc. and TRAC Lease, Inc., Defendants/Third-Party Plaintiffs-Respondents,

v.

Hartford Fire Insurance Company, Ace American Insurance Company, and Hanover Insurance Company, Third-Party Defendants,

and

Darwin National Assurance Company, Third-Party Defendant-Appellant,

American Maritime Services of N.J., Inc. d/b/a Integrated Industries and Garden State Integrated Industries, and Garden State Intermodal Repair, Third-Party Plaintiffs,

v.

Darwin National Assurance Company/Allied World, Markel Insurance Company, Evanston Insurance Company, Navigators Insurance Company, JBL Trinity Group Ltd., and Capacity Marine Corporation, Third-Party Defendants.

DOCKET NO. A-2494-20

Argued December 21, 2022

Decided January 11, 2023

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-0208-14.

Attorneys and Law Firms

Charles D. Cole, Jr. (Newman, Myers, Kreines, Harris, PC) argued the cause for appellant (Charles D. Cole, Jr., on the briefs).

John J. Levy argued the cause for the respondents (Montgomery, McCracken, Walker & Rhoads, LLP, attorneys; John J. Levy and Jack K. Hagerty, on the brief).

Before Judges Mayer, Enright and Puglisi.

Opinion

PER CURIAM

*1 Third-party defendant Darwin National Assurance Company (Darwin) appeals from an August 23, 2022 order entering summary judgment after finding Darwin had a duty to defend and indemnify third-party plaintiff TRAC Lease, Inc. (TRAC) against the claims asserted in a personal injury lawsuit filed on behalf of plaintiff Kenneth McDonald (McDonald). Darwin also appeals from an August 23, 2022 amended judgment awarding litigation costs and fees to TRAC. We affirm the order and judgment.

This case returns to us after we vacated a February 20, 2017 order and an April 23, 2018 judgment. See McDonald v. Parada, Nos. A-4414-17 and A-4547-17 (App. Div. Oct. 19, 2019). We remanded the matter for the judge to provide findings of fact and conclusions of law supporting his determination that Darwin had a duty to defend and indemnify TRAC.

On remand, in a December 4, 2020 written decision, the judge found Darwin had a duty to defend and indemnify TRAC and awarded $342,661 in litigation fees and costs to TRAC. On April 23, 2021, a different judge entered a judgment against Darwin, in the amount of $342,661, representing fees and costs awarded to TRAC.

Darwin appealed the April 23, 2021 judgment. In reviewing Darwin’s appeal, we noted there was no order memorializing the judge’s December 4, 2020 written decision. As a result, we issued an August 3, 2022 order temporarily remanding the matter to the trial court to address two issues. First, to “issu[e] an order that expressly incorporate[d] the factual findings and legal conclusions [the motion judge] made in his December 4, 2020 written [f]indings of [f]act[ ] and [c]onclusions of [l]aw.”¹ Second, to “issu[e] an amended [j]udgment on TRAC’s application for litigation costs.” We retained jurisdiction, allowing Darwin to file an amended notice of appeal within fifteen days of the remand proceeding.

In an August 23, 2022 order, the remand judge “memorialize[d] and incorporate[d] by reference the written [f]indings of [f]acts and [c]onclusions of [l]aw made by the [retired judge] on December 4, 2020.” The judge also issued an August 23, 2022 amended judgment awarding $342,661 to TRAC. Attached to the August 23, 2022 order and amended judgment was the December 4, 2020 written findings of fact and conclusions of law, the February 20, 2017 order, and the April 27, 2018 judgment awarding litigation costs to TRAC. Darwin filed an amended notice of appeal on August 23, 2022.

Having recited the procedural history, we summarize the facts in McDonald’s personal injury action leading to the insurance coverage dispute between Darwin and TRAC.

On February 20, 2013, McDonald was struck by a wheel assembly that separated from the chassis of a passing tractor trailer and suffered serious injuries. McDonald then filed a personal injury action against several defendants, including Manuel Parada (Parada), TRAC, National Retail Transportation, Inc. (NRT), and American Maritime Services of NJ d/b/a Integrated Industries (AMS).

*2 TRAC owned the chassis and NRT owned the tractor trailer. TRAC leased its chassis to NRT. On the date of McDonald’s accident, Parada, an employee of NRT, drove the tractor trailer with the attached chassis.

Prior to the accident, TRAC signed a Depot Agreement (Agreement) with AMS to repair, maintain, and periodically inspect TRAC’s chassis. Less than a month before the accident, AMS inspected the chassis that injured McDonald. AMS agreed to indemnify and hold TRAC harmless for any liability arising out of AMS’s obligations under the Agreement. Further, the Agreement provided AMS was “solely liable for” losses, damages, costs, and legal fees “arising out of [AMS’s] storage, use, repair, or possession of [TRAC’s equipment] and arising out of [AMS’s] performance of th[e] Agreement.”

The Agreement also required AMS to maintain insurance “covering … all [e]quipment under [AMS’s] control.” AMS agreed to name TRAC as an additional insured under its insurance policy. AMS obtained the required insurance coverage from Darwin and named TRAC as an additional insured (Darwin policy).

The Darwin policy included a provision entitled “Coverage B [-] Contractual Liability Coverage.” Under Coverage B, Darwin agreed to provide coverage for liability arising out of “any oral or written contract or agreement relating to the conduct of [AMS’s] business.” After McDonald’s accident, TRAC sought coverage under this section of the Darwin policy.

The Darwin policy also contained an “Additional Insured” provision. The provision stated:

[a]ny person or organization to whom you become obligated to include as an additional insured under this policy, as a result of any contract or agreement you enter into which requires you to furnish insurance to that person or organization of the type provided by this policy, is an insured, but only with respect to liability arising out of your operations or premises owned by or rented to you.

Additionally, the Darwin policy included an endorsement, which specified its insurance was primary if the following conditions were met: 1) the liability arose out of work performed by AMS, and 2) the policy “is required of the insured by a written contract to provide coverage on a primary basis.”

In his personal injury action, McDonald asserted negligence claims against NRT, TRAC, and AMS. TRAC demanded that Darwin defend and indemnify it as an additional insured under the Darwin policy. Darwin refused. TRAC then filed a third-party complaint against Darwin asserting the Darwin policy afforded it insurance coverage for McDonald’s personal injury claims.

TRAC subsequently moved for summary judgment on the insurance coverage issue. Darwin also filed a motion for a declaratory judgment that it was not obligated to defend or indemnify TRAC for McDonald’s personal injury claims.

On January 20, 2017, the motion judge heard argument on the motions. In a February 20, 2017 order, the judge denied Darwin’s motion and granted TRAC’s motion. The judge concluded Darwin had a duty to defend and indemnify TRAC against McDonald’s personal injury claims.

McDonald subsequently settled his claims against all defendants. As part of the settlement, in July 2017, TRAC and McDonald executed a confidential release.

*3 On December 15, 2017, TRAC filed a motion seeking attorney’s fees and costs against Darwin for failing to comply with the prior order compelling Darwin to defend and indemnify TRAC. TRAC’s application for fees and costs included sums incurred in defending against McDonald’s personal injury claims and prosecuting its insurance coverage claim against Darwin.

On April 27, 2018, a different judge entered a $342,661 judgment against Darwin, representing counsel fees and costs incurred by TRAC. The judge noted Darwin did not contest the “counsel fees or cost sought” by TRAC.

Darwin appealed the February 20, 2017 order denying its motion for summary judgment and granting TRAC’s motion for summary judgment. Darwin also appealed the April 27, 2018 judgment. Based on our review of the record on appeal, we remanded for the motion judge to provide findings of fact and conclusions of law.

On remand, the motion judge found Darwin had a duty to indemnify TRAC under Coverage B. He stated the Darwin policy clearly and unambiguously compelled Darwin to provide coverage for the personal injury claims against TRAC because McDonald’s claims were based on AMS’s obligation under the Agreement to maintain, repair, and inspect TRAC’s chassis. The judge concluded “the Darwin policy provide[d] primary coverage … because; 1) the liability [arose] out of work performed by the insured, AMS; and 2) the Darwin policy was required of AMS by a written contract to provide coverage on a primary basis through the … Agreement.” The judge held “[t]he allegations in [McDonald]’s complaint obligated Darwin to indemnify TRAC.” Additionally, the judge determined Coverage B “did not require reciprocal indemnification, i.e., that TRAC also indemnify AMS.”

On appeal, Darwin argues TRAC is not insured under Darwin’s policy because TRAC did not agree to indemnify AMS or any other entity under the Agreement. Darwin also contends TRAC failed to prove its costs and attorney’s fees through competent and admissible evidence.

Darwin raises several additional arguments on appeal not presented to the trial court. Darwin now contends its policy does not constitute primary insurance coverage because the word “primary” does not appear in the Agreement. In another newly asserted argument, Darwin claims that even if it did provide primary insurance coverage to TRAC, it should only pay a portion of the judgment because TRAC had other primary insurance. Darwin also asserts TRAC waived coverage by “compromising its claims against [the trucking company] and [its insurance carrier]” when it settled with McDonald. We reject Darwin’s arguments.

We review a trial court’s grant or denial of summary judgment de novo. Branch v. Cream-O-Land Dairy, 244 N.J. 567, 582 (2021). A motion for summary judgment must be granted “if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law.” R. 4:46-2(c).

“To decide whether a genuine issue of material fact exists, the trial court must ‘draw[ ] all legitimate inferences from the facts in favor of the non-moving party.’ ” Friedman v. Martinez, 242 N.J. 450, 472 (2020) (alterations in original) (quoting Globe Motor Co. v. Igdalev, 225 N.J. 469, 480 (2016)). The key inquiry is whether the evidence presented, when viewed in the light most favorable to the non-moving party, “[is] sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.” Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

*4 The interpretation of a contract is subject to a de novo review. Kieffer v. Best Buy, 205 N.J. 213, 223–24 (2011). The starting point when interpreting an insurance contract is the plain meaning of the contractual language. Oxford Realty Grp. Cedar v. Travelers Excess & Surplus Lines Co., 229 N.J. 196, 207 (2017). “If the language is clear, that is the end of the inquiry.” Ibid. (quoting Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008)).

Regarding an award of counsel fees, “[a]lthough New Jersey generally disfavors the shifting of attorneys’ fees, a prevailing party can recover those fees if they are expressly provided for by statute, court rule, or contract.” Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 440 (2001) (citations omitted). “[A] reviewing court will disturb a trial court’s award of counsel fees ‘only on the rarest of occasions, and then only because of a clear abuse of discretion.’ ” Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009) (quoting Collier, 167 N.J. at 444).

We first address Darwin’s argument that TRAC is not insured under the policy “because no covered claim … was pleaded against it.” Darwin asserts there was no contractual liability claim pleaded against TRAC by AMS or McDonald to trigger Coverage B under the Darwin policy.

Darwin contends Coverage B is available only “when two conditions are satisfied: (1) the insured assumes a liability under a contract and (2) the contract relates to the named insured’s business.” According to Darwin, TRAC must be an indemnitor under the Agreement to satisfy the first condition and TRAC never agreed to indemnify AMS under the Agreement. Because TRAC was not sued under a contractual liability theory, Darwin argues TRAC is not entitled to coverage under its policy. We disagree.

Under the Agreement, AMS contracted to indemnify TRAC “against any and all liability, loss, damage, cost and expense, including, but not limited to, attorney’s fees … arising out of [AMS’s] storage, use, repair, or possession of [TRAC’s equipment] and arising out of [AMS’s] performance of th[e] Agreement.” As part of its performance obligation under the Agreement, AMS inspected TRAC’s chassis less than one month prior to McDonald’s accident. Coverage B of the Darwin policy provided coverage for liability arising out of “any oral or written contract or agreement relating to the conduct of [AMS’s] business.”

Here, TRAC satisfied the conditions necessary to trigger coverage under the Darwin policy. The Agreement specifically required AMS to indemnify TRAC “against any and all liability” related to AMS’s performance under the Agreement, which included inspection of TRAC’s chassis. Nowhere in the Agreement, or in the Darwin policy, is there any reciprocal indemnification requirement for TRAC to indemnify AMS. Certainly, Darwin had the ability to include such a provision in its policy but did not do so. To read such a provision into the Darwin policy would impermissibly alter the terms of a clearly worded and unambiguous insurance contract. An unambiguous indemnity provision is strictly construed against the indemnitee. See Kieffer, 205 N.J. at 224.

Additionally, the Agreement established TRAC as an additional insured, triggering coverage under the Additional Insured provision of the Darwin policy. In the Agreement, AMS agreed to name TRAC as an additional insured. The Darwin policy’s Additional Insured provision provided coverage to TRAC for AMS’s “liability arising out of [AMS’s] operations,” which included servicing and inspecting TRAC’s chassis.

*5 We next consider Darwin’s arguments raised for the first time on appeal. Darwin’s newly raised arguments were not presented to the motion judge. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (declining to consider questions or issues not properly presented to the trial court unless the matter is addressed to the jurisdiction of the trial court or concerns matters of great public interest). Darwin’s new arguments do not relate to the jurisdiction of the trial court or concern matters of great public interest. Therefore, we need not consider them.

However, because the judge’s December 4, 2020 written decision stated the Darwin policy provided “primary” insurance coverage, even though that issue does not appear to have been argued as part of the summary judgment motions, we address the argument that the Darwin policy does not afford primary insurance coverage to TRAC.

According to Darwin, it became obligated to provide primary insurance coverage only if “this policy is required of the insured by a written contract to provide coverage on a primary basis.” Because the Agreement does not contain the phrase “primary insurance,” Darwin contends its policy is not primary.

We are satisfied the clear and unequivocal language in the Agreement establishes that the Darwin policy provides primary coverage rather than excess coverage to TRAC. Under the Agreement, AMS was liable to TRAC for AMS’s negligent inspection of TRAC’s chassis. AMS agreed to be “solely liable” for “any and all” liability claims asserted against TRAC. The use of the word “solely” signified that the Darwin policy would be the primary insurance policy because there was no mention of any additional policies or coverages to be applied before the Darwin policy would be triggered. Nor did the Agreement or the Darwin policy state AMS would only be partially or conditionally liable for claims asserted against TRAC.

We next address Darwin’s argument that TRAC is not entitled to attorney’s fees and costs incurred in defending against McDonald’s personal injury claims and pursuing the insurance coverage claim. Darwin contends that TRAC failed to provide appropriate admissible evidence in support of the requested attorney’s fees and costs. According to Darwin, TRAC’s counsel failed to include the invoices paid by TRAC to defend against McDonald’s personal injury claims and to prosecute the insurance coverage dispute. Thus, Darwin asserts the judge should have denied the application for costs and fees. We are not persuaded by Darwin’s arguments.

The judges issuing the original judgment and the amended judgment considered and rejected Darwin’s arguments in opposition to the award of TRAC’s fees and costs. They noted that Darwin never contested the amount of fees and costs requested by TRAC. Rather, Darwin simply disputed the admissibility of the documents submitted by TRAC in support of the application.

A trial court may grant attorneys’ fees “[i]n an action upon a liability or indemnity policy of insurance, in favor of a successful claimant.” R. 4:42-9(a)(6). Under Rule 4:42-9(c), “[a]ll applications for the allowance of fees shall state how much had been paid to the attorney … and what provision, if any, has been made for the payment of fees to the attorney in the future.”

Here, TRAC submitted an attorney certification with a twenty-six-page spreadsheet documenting the dollar amounts TRAC paid to its attorneys. The spreadsheet identified the dates of the legal services, described the services provided by TRAC’s attorneys, and stated the exact dollar amount of those services. Nothing in Rule 4:42-9(b) or (c) required TRAC to provide copies of ledgers, invoices, or canceled checks in support of its motion for fees and costs.

*6 We will reverse a judgment awarding fees and cost only where the motion judge’s determination amounted to a clear abuse of discretion. Here, TRAC provided ample support for the awarded fees and costs. We are satisfied the amount awarded in the judge’s August 23, 2022 amended judgment was not an abuse of discretion.

Affirmed.

All Citations

1 The judge who issued the December 4, 2020 written decision retired prior to our review of the case.

End of Document