ANTHONY LATTANZIO VS. QUALITY TECHNOLOGIES SERVICES, LLC VS. HULL-VICCI CONSTRUCTION CORP. (L-1143-11, MIDDLESEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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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-5002-15T4
ANTHONY LATTANZIO and
LINDA LATTANZIO,
Plaintiffs,
v.
QUALITY TECHNOLOGIES SERVICES,
LLC, KAJIMA BUILDING AND
DESIGN GROUP, SCHOLES ELECTRIC
CO., KNOBLOCH PLUMBING AND HEATING,
Defendants,
and
QUALITY TECHNOLOGIES
SERVICES, LLC,
Defendant/Third-Party
Plaintiff-Respondent,
v.
HULL-VICCI CONSTRUCTION
CORP.,
Third-Party Defendant/
Appellant.
_______________________________
Submitted September 25, 2017 - Decided August 22, 2018
Before Judges Accurso, O'Connor and Vernoia.
On appeal from Superior Court of New Jersey,
Law Division, Middlesex County, Docket No.
L-1143-11.
Braff, Harris, Sukonek & Maloof, attorneys
for appellant (Jerald F. Oleske and Robert
M. Brigantic, on the briefs).
Margolis Edelstein, attorneys for respondent
(Colleen M. Ready and Thomas L. Grimm, on
the brief).
PER CURIAM
In this breach of contract action, third-party defendant
Hull-Vicci Construction Corp. appeals from a judgment of
$554,833.33 plus pre-judgment interest in favor of third-party
plaintiff Quality Technologies Services, LLC following a bench
trial. Because the factual findings and legal conclusions of
the trial judge are supported by substantial, credible evidence
in the trial record, we affirm.
This appeal arises out of a Hull-Vicci employee's fall from
a scaffold in the course of demolition work for Quality
Technologies in a building Quality occupied in Jersey City.
Following a jury verdict in favor of the construction worker,
Quality, whose negligence the jury found attributed to fifty-
five percent of the worker's losses, paid the entire judgment of
$1,512,500, two-thirds of which was to be reimbursed by its co-
defendants. Quality pursued this action against Hull-Vicci to
recover its one-third share of the judgment and $152,000 in
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defense costs it incurred in defending the suit, based on Hull-
Vicci's failure to obtain the additional insured coverage
specified in the parties' contract.
The contract required Hull-Vicci to procure a CGL policy
"on a coverage form at least as broad as the most recent edition
of Commercial General Liability Coverage Form (CG 00 01) as
published by the Insurance Services Office, Inc.," in the
aggregate limit of at least $3,000,000, naming Quality as an
additional insured "using an endorsement form at least as broad
as the ISO Additional Insured Endorsement Form CG 20 10 11 85."
Hull-Vicci does not dispute that it failed to obtain additional
insured coverage as broad as that provided by Form CG 20 10 11
85, which all agree would provide coverage for Quality's own
negligence. Indeed, the parties stipulated that the policy
language of the two additional insured endorsements Hull-Vicci
had in place at the time of the accident were more restrictive
than the Form CG 20 10 11 85 endorsement and did not comply with
the insurance requirements in the parties' contract.
Specifically, both endorsements limited coverage to injuries
caused in whole or part by Hull-Vicci or those acting on its
behalf. They provided no coverage to Quality for its own
negligence.
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Following the verdict in the underlying action, the parties
cross-moved for summary judgment on Quality's breach of contract
claim. The motion judge had no hesitation finding Hull-Vicci
breached the contract by failing to procure the insurance
clearly and unambiguously specified in the parties' contract.
The judge withheld summary judgment, however, based on a dispute
of fact underlying Hull-Vicci's defense of impossibility of
performance.
Specifically, the parties submitted conflicting
certifications from persons knowledgeable about commercial
insurance regarding the availability of the coverage called for
in the contract. Hull-Vicci's insurance agent averred the
coverage was not available in the New Jersey market at the time
of the accident. He claimed the endorsement was no longer in
existence and it was not possible to procure an equivalent.
Quality's insurance expert certified it was possible to obtain
an additional insured endorsement with coverage equivalent to
the form specified in the contract. Because the conflicting
certifications precluded resolution of Hull-Vicci's
impossibility defense on summary judgment, the motion judge
denied both motions without prejudice and permitted the parties
to take discovery on the issue.
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Another judge eventually heard two days of testimony to
resolve the issue reserved on the motion, that is, whether Hull-
Vicci should be relieved of the obligation it undertook in the
contract to obtain the additional insured endorsement specified,
by virtue of the impossibility of performance. The judge also
heard testimony on Hull-Vicci's additional defenses, that the
claim should be dismissed for failure to join an indispensable
party, that the contract had not been signed prior to the
accident and thus was not in force on that date, that Quality
waived provision of an additional insured endorsement ISO Form
CG 20 10 11 85 or its equivalent, that Hull-Vicci did not breach
the contract, that Pennsville Shopping Center Corp. v. American
Motorists Ins. Co., 315 N.J. Super. 519 (App. Div. 1998) bars
the claim and that Quality had no damages.
Six witnesses testified, the vice president of Hull-Vicci,
who executed the contract on its behalf; Quality's vice
president of facilities, who executed the contract for Quality;
Quality's facility manager and its assistant manager responsible
for obtaining certificates of insurance confirming additional
insured coverage provided to Quality; the customer service
representative of Hull-Vicci's insurance agent; and the agency's
vice president of commercial lines, who testified about the
coverage available in the market at the time of the accident but
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was not offered as an expert. We highlight only those portions
of the testimony required to provide context for our decision.
Hull-Vicci's vice president testified the company had
performed general contracting work for Quality at various
locations over a period of more than twenty years and did so
both before and after the accident. He maintained he was the
only person at Hull-Vicci to have reviewed the contract before
he signed it; that he could not recall whether he read or
reviewed the provisions relating to Hull-Vicci's obligation to
obtain insurance coverage for Quality before signing; that he
was not aware at that time as to whether Hull-Vicci's CGL policy
with Penn National had an additional insured endorsement; and
that he never sought the opinion of legal counsel or any
insurance agent about the contract's insurance requirements. He
also testified he did not sign the contract until well after the
accident, although he acknowledged the contract provides it was
made and entered into on a date preceding the accident, and that
when Hull-Vicci began its work on the project, he believed it
was performing the work referenced in the contract.
Quality's vice president of facilities testified that
Quality's counsel drafted the contract, and that Hull-Vicci did
not raise any questions or concerns about its terms or
conditions. He claimed Hull-Vicci did not seek to negotiate the
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terms and never asked to condition the contract on Hull-Vicci's
ability to procure the insurance specified. He did not remember
the date he signed the contract but noted its effective date was
printed on the first page.
Quality's assistant facilities manager testified he sent
Hull-Vicci sample certificates of insurance it was to use, one
for Quality and one for its landlord, asking that the company
update the certificates using "the verbiage" on each sample. He
claimed he received a completed certificate for Quality from
Hull-Vicci's insurance agent with limits $2,000,000 below that
required. He accordingly sent an email to Hull-Vicci's vice
president returning the certificate provided for Quality,
explaining the discrepancy as to limits and asking that the
certificate be corrected and reissued. He wrote: "the verbiage
on the [certificate of insurance] is fine, it's only the limits
amount that need to be updated."
The customer services representative for Hull-Vicci's
insurance agent testified she was the representative assigned to
Hull-Vicci's account and had issued certificates of insurance at
its request for many years. She prepared a certificate of
insurance for Quality at Hull-Vicci's request, relying solely on
information supplied by the company, and sent it to the
assistant facilities manager at Quality. She testified she was
7 A-5002-15T4
not provided with either a copy of the contract or its insurance
requirements. She simply issued the certificate using the
sample Hull-Vicci provided. She further testified she reissued
the certificate at Hull-Vicci's request, clarifying that the
company maintained a $1,000,000 primary policy and a $2,000,000
umbrella, for a combined total of $3,000,000.
The most significant testimony was offered by the vice
president of the commercial lines department of Professional
Insurance Associates, Inc., Hull-Vicci's insurance agent.
Employed as an insurance agent licensed to place commercial
general liability insurance for thirty-eight years, he testified
he was both familiar with Hull-Vicci and the coverage available
under CGL policies with an additional insured endorsement. He
testified that to his knowledge at the time of the accident in
2010, the only additional insured endorsement available for
purchase from insurers was the 2004 edition of CG 20 10, which
would not have provided coverage for Quality's own negligence.
He claimed the 1985 version of the endorsement was no longer in
use after 1995.
The agent conceded, however, that Hull-Vicci never asked
him to secure the coverage provided by the 1985 version of the
endorsement and he never tried to do so. When asked by the
court about the availability of a manuscript endorsement as
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broad as the coverage provided in the 1985 version, he replied,
"I suppose that could be done," and "I guess somebody would do
that." He conceded he did not know how much such coverage would
cost, but agreed with Hull-Vicci's counsel that it was
"presumably" expensive, estimating it might be more than triple
the cost.
Hull-Vicci's annual premium for the CGL policy in effect at
the time of the accident was under $20,000 according to
documents admitted into evidence at the hearing. The parties
stipulated that ISO Form CG 20 10 11 85 was not illegal, was
never withdrawn per the New Jersey Department of Banking and
Insurance and "can still be used" in New Jersey. Counsel for
Hull-Vicci explained at the outset of the hearing that the
company was not contending it was impossible to obtain the
endorsement but was "not conceding impracticality."
After hearing the testimony, the judge issued a written
opinion finding the contract clear and unambiguous and rejecting
each of Hull-Vicci's defenses to performance. Specifically, the
judge found our holding in Pennsville, that an additional
insured endorsement in a shopping center tenant's policy
provided no coverage for the landlord for a slip-and-fall claim
in the parking lot in light of the express disavowal of the
tenant's liability for such claims in the lease, 315 N.J. Super.
9 A-5002-15T4
at 521, 523, had no applicability here. The judge found Hull-
Vicci's reliance on Pennsville "ignores the clear language of
the contract requiring an additional insured endorsement of Form
85 or equivalent," expressing the parties' explicit intent that
Hull-Vicci provide "coverage to [Quality] for its 'concurrent
and sole negligence,'"1 (quoting the contract, emphasis added).
See Franklin Mut. Ins. Co. v. Sec. Indem. Ins. Co., 275 N.J.
Super. 335, 340-41 (App. Div. 1994).
The judge dismissed Hull-Vicci's arguments as to the
effective date of the contract and waiver as unsupported by the
1
The exact language of the contract provides:
III. GENERAL PROVISIONS (APPLICABLE TO
ABOVE)
. . . .
D. Additional Insured. The CGL and
Business Automobile Liability policies each
must name the Owner and the other
Indemnified Parties identified in Section 7
of the Agreement, as Additional Insureds,
using an endorsement form at least as broad
as the ISO Additional Insured Endorsement
Form CG 20 10 11 85 or ISO Additional
Insured Endorsement CG 20 10 10 01 if used
with ISO Form 20 37 10 01 (or their combined
equivalent). It is the intent of the
parties to this Contract that this
Additional Insured status shall include
coverage for complete operations and for the
Owner's concurrent and sole negligence.
[Emphasis supplied.]
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evidence. He found the contract effective as of the June 7,
2010 date specified in the contract, consistent with the
testimony of the individuals who signed it, Hull-Vicci's vice
president and Quality's vice president for facilities. See
State Troopers Fraternal Ass'n v. State, 149 N.J. 38, 49 (1997)
(holding determination of the date controlling application of a
contract "must be derived from the intent of the parties, and if
no subjective intent is apparent or ascertainable, that intent
must be based on the objective language of the contract").
As to waiver, the judge found there was no view of the
parties' dealings that would support Quality having relinquished
its right to ISO Additional Insured Endorsement Form CG 20 10 11
85 by its acceptance of the certificates of insurance provided
by Hull-Vicci.2 See Cty. of Morris v. Fauver, 153 N.J. 80, 104-
05 (1998) (noting waiver presupposes full knowledge of a right
and its intentional surrender). The judge found the testimony
made clear the individuals dealing with the certificates for the
parties, Hull-Vicci's vice president and Quality's assistant
facilities manager, "were unaware of insurance niceties and
2
We note the certificate Hull-Vicci relies on to support its
waiver argument on appeal is not the one for Quality but the one
for Quality's landlord. Given counsel's obvious familiarity
with the file, it is hard to accept the error was one of
inadvertence.
11 A-5002-15T4
inexperienced in insurance." He found they "had little
understanding of insurance requirements" and "were unfamiliar
with the insurance provisions, endorsements and forms referred
to in the contract," and thus the facts could not support
waiver.
The judge found the testimony of Hull-Vicci's insurance
agent made plain beyond any doubt that Hull-Vicci's performance
under the parties' contract was neither impossible nor
impracticable. See Petrozzi v. City of Ocean City, 433 N.J.
Super. 290, 302 (2013) (quoting Connell v. Parlavecchio, 255
N.J. Super. 45, 49 (App. Div. 1992)) (noting either circumstance
a complete defense "where a fact essential to performance is
assumed by the parties but does not exist at the time for
performance"). Noting the Model Jury Charge on impossibility
required a defendant to show four things: first, that the event
defendant claims made performance impossible actually occurred;
second, that it made keeping defendant's promise impossible;
third, that neither party reasonably foresaw the event when they
made the contract; and fourth, that the event making performance
impossible was beyond defendant's control and was not its fault,
see Model Jury Charges (Civil), 4.10N, "Affirmative Defenses"
(approved Nov. 1999), the judge found Hull-Vicci could prove
none of them.
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Most important, the judge found the agent's testimony made
clear "no supervening event occurred after the contract was
executed" because "[t]he status of Form 85 was the same before
and after [Hull-Vicci's] contractual undertaking." The court
noted "[n]othing happened regarding Form 85 after the contract
was signed." Based on the testimony of Hull-Vicci's own
insurance agent, the judge found "[t]he defense of impossibility
of performance lacks merit."3
The judge rejected Hull-Vicci's claim of mutual mistake
because the contract unambiguously required Hull-Vicci to secure
additional insured coverage at least as broad as that provided
by ISO Additional Insured Endorsement Form CG 20 10 11 85, and
there was no evidence presented at the hearing "that any party
had any understanding different from the clear terms of
contract, no evidence that [Quality] was laboring under any
3
Hull-Vicci's assertion that the trial judge's rejection of its
"primary substantive defense to this claim, i.e., impossibility"
was premised on the opinion of an expert who did not testify
based on a stray remark in the opinion is contrary to the
record. The judge detailed his several reasons for finding
Hull-Vicci could not establish the defense of impossibility of
performance, including its own stipulations that the coverage
was not impossible to obtain, that ISO Form CG 20 10 11 85 was
not illegal, was never withdrawn per the New Jersey Department
of Banking and Insurance and "can still be used" in New Jersey.
The court's passing reference to an expert's opinion included in
a trial brief but ultimately not called to testify, is an
inconsequential flaw in an otherwise sound opinion.
13 A-5002-15T4
misapprehension of fact, and no evidence of fraud or
unconscionable conduct." The judge found "[o]ne need not
understand insurance arcana to be bound to the clear meaning of
a contract containing such terms. . . . [T]here was no mutual
mistake."
The judge likewise rejected Hull-Vicci's argument that the
contract was internally contradictory as it required the most
recent ISO CGL form but an "outdated and unavailable" additional
insured endorsement, and that because Hull-Vicci maintained two
"additional insured endorsements in current ISO form" it could
not be considered in breach. The judge found no inherent
ambiguity in the contract because the provision requiring Hull-
Vicci to maintain comprehensive general liability insurance is
plainly "separate and distinct from the provision for additional
insurance." Because the two additional insured endorsements
Hull-Vicci maintained did not provide the additional insured
coverage it promised to Quality, and the court had already found
its performance was not excused by impossibility,
impracticability or mutual mistake, the judge deemed this claim
as without merit.
Finally, the judge dispatched as utterly without merit
Hull-Vicci's arguments that the claim should be dismissed
because Quality had failed to name an indispensable party, Hull-
14 A-5002-15T4
Vicci's CGL carrier, Penn National, and could not show damages.
The judge noted Hull-Vicci provided no support for its novel
argument that Quality's breach of contract claim "is more aptly
characterized as a challenge to Penn's coverage determination"
requiring Penn National's participation in this action. As to
damages, the judge found Quality proved Hull-Vicci breached its
contract, causing Quality to be without defense or indemnity for
Lattanzio's suit; resulting in damages of $554,833.33, one-third
of the aggregate loss, plus pre-judgment interest. Hull-Vicci's
assertion that Quality's co-defendants are obligated to pay
Quality more than their two-thirds share of the aggregate loss
finds no support in the record.
Hull-Vicci appeals, reprising the arguments it made to the
trial court. We find none of these arguments of sufficient
merit to warrant discussion in a written opinion. See R. 2:11-
3(e)(1)(E). A review of the hearing testimony makes plain that
none of Hull-Vicci's defenses to this straightforward claim has
any merit and several border on frivolous. As to its primary
defense, impossibility of performance, Hull-Vicci explicitly
conceded at trial that it was not asserting that additional
insured coverage equivalent to the ISO Additional Insured
Endorsement Form CG 20 10 11 85 specified in the contract was
impossible to obtain and it put on no proofs as to the
15 A-5002-15T4
impracticability of performance. Its insurance witness, not
presented as an expert, conceded a manuscript endorsement
matching the coverage was possible and Hull-Vicci presented
nothing to suggest the premium was in any way cost prohibitive
or unaffordable.
Moreover, as the trial judge found, nothing changed as to
the availability of that coverage following the effective date
of the contract. We agree with the court that the absence of
any supervening event renders the defense unavailable to Hull-
Vicci. See Facto v. Pantagis, 390 N.J. Super. 227, 231 (App.
Div. 2007).
Because a review of the transcript reveals substantial
evidence supporting the court's findings and conclusions, see
Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011),
we affirm, substantially for the reasons expressed in Judge
Paley's written opinion of June 10, 2016.
Affirmed.
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