The New Jersey Appellate Division unanimously affirms Ford Marrin's summary judgment victory on behalf of its client, Mt. Hawley Insurance Company, and rejects an attempt by another insurer to obtain reimbursement or contribution for defense costs and indemnity of over $1M to settle an underlying personal injury action against a mutual insured.

In the underlying action, plaintiff, the employee of a subcontractor, was injured when he fell into a refrigeration pit while working on the construction of a supermarket. The underlying plaintiff then brought suit against the general contractor, to whom Mt. Hawley had issued a $1M primary GL policy. The general contractor was also added as an additional insured on the subcontractor's primary GL policy, issued by QBE Insurance Company. After accepting Mt. Hawley's tender of the general contractor's defense and indemnity, and after defending the general contractor for more than four years in the underlying action, QBE brought a declaratory judgment action against Mt. Hawley, seeking a declaration that Mt. Hawley's coverage was primary to QBE based on a claim that the underlying accident did not arise out of the subcontractor's work.

Significantly, the Appellate Division held that the mutual insured's liability arose out of the subcontractors' operations, thereby entitling the mutual insured to additional insured coverage pursuant to the terms of the subcontractor's policy. The court rejected the appellant's argument that the scope of additional insured coverage was limited to the scope of the subcontractor's indemnification obligations. The court also accepted our argument that QBE would be estopped to deny coverage anyway after accepting Mt. Hawley's tender, without reservation, and after controlling the insured's defense for more than five years.

Partner Joseph D'Ambrosio and Associate John Mattoon successfully represented the client in this matter.