TOWNSHIP OF BRIDGEWATER IN SOMERSET COUNTY v. DIAMOND STATE INSURANCE COMPANY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3665-04T23665-04T2

TOWNSHIP OF BRIDGEWATER IN

SOMERSET COUNTY,

Plaintiff-Respondent,

v.

DIAMOND STATE INSURANCE

COMPANY,

Defendant/Third-Party

Plaintiff-Appellant,

v.

STEVEN B. KENNEDY,

Third-Party Defendant.

____________________________________

 

Argued December 14, 2005 - Decided June 20, 2006

Before Judges Wefing and Wecker.

On appeal from the Superior Court of New

Jersey, Law Division, Somerset County, L-611-04.

Andrew L. Indeck argued the cause for

appellant (Scarinci & Hollenbeck, attorneys;

Mr. Indeck, of counsel and on the brief;

Kathleen J. Devlin, on the brief).

Alan Bart Grant argued the cause for

respondent (Mauro, Savo, Camerino & Grant,

attorneys; Mr. Grant, on the brief).

Steven B. Kennedy, respondent pro se, has not

filed a brief.

PER CURIAM

In this insurance coverage dispute, defendant, Diamond State Insurance Co., appeals from a summary judgment declaring that it owes a defense to plaintiff, Bridgewater Township, in a suit brought against the Township by Steven B. Kennedy, a Bridgewater police officer. We affirm.

The underlying facts are not in dispute. Defendant issued a "Claims Made Policy," # LPO 0002560, covering "Public Officials Liability" for the period "1/1/2003 to 1/1/2004." Kennedy filed a complaint against the Township in the Division of Civil Rights on October 7, 2003, alleging that the Township retaliated against him by denying him a transfer or promotion in violation of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 to -49. (LAD). In that 2003 complaint, Kennedy claimed that the Township's adverse employment actions were taken in retaliation against him for previous LAD complaints he filed with the Division alleging the Township's "various acts of discrimination." Retaliation for alleging a violation of the LAD is explicitly prohibited by N.J.S.A. 10:5-12d.

Kennedy's earlier complaints were settled after the Division found probable cause to believe the claimed violations had occurred. The 1996 complaint Kennedy filed with the Division alleged that he had suffered injuries "to his neck, back, and right shoulder," that his doctors recommended that he "return to light duty status as of August 06, 1996, but [the Police Department] . . . refused to accommodate him, in spite of their ability to do so." In 1998, Kennedy amended his complaint to allege that he was "continually subjected to unlawful reprisal in that he has been demoted in rank and was given a punitive job transfer." Specifically, Kennedy alleged that he was demoted "from Detective to Police Officer," and that in his assignment as Identification Evidence Officer, he was "transferred to the records department [and] assigned less desirable and/or nonexistent duties, and replaced by a less qualified [named] individual." And in 2000, Kennedy filed a new complaint, alleging that on January 16, 2000, he was "reassigned . . . to the position of Uniform Patrol Officer" and further alleging a causal connection between his having filed LAD complaints in 1996 and 1998 and being reassigned.

In his 2003 complaint against the Township, Kennedy alleges, in pertinent part:

a. Respondent hired complainant as a Police Officer on or about August 1, 1988 and on or about January 3, 2000, he was promoted to the position of Sergeant.

b. Complainant engaged in an activity protected by the Law Against Discrimination. Specifically, in September 1996, July 18, 1998, and January 27, 2000, Complainant filed charges against Respondent with the New Jersey Division on Civil Rights and the Equal Employment Opportunity Commission alleging that he had been subjected to various acts of discrimination.

c. These activities were known to the employer.

d. Thereafter, Complainant was subjected to an adverse employment action. Specifically, on September 16, 2003, Respondent denied him a transfer/promotion to the position of Detective Sergeant.

e. There is a causal connection between Complainant's protected activity and the employer's adverse action.

Kennedy further alleged that the Chief of Police gave him "no reason as to why he was not awarded the transfer/promotion," and that "the person who was awarded the Detective Sergeant position is less qualified."

Defendant declined any obligation to defend the Township, relying upon this policy exclusion:

This insurance does not apply to any "claim," "suit" and/or payment for any "damage(s)" in connection with such "claim" or "suit" made against any insured based upon, arising out of, in consequence of, or in any way involving:

(1) Any prior and/or pending litigation as of 1/1/1999 including, but not limited to matters before local, state or federal boards, commissions, or administrative agencies, or

(2) Any fact, circumstance, or situation underlying or alleged in such litigation or matter.

[Emphasis added.]

Kennedy's 2003 complaint against the Township unquestionably includes the allegation that the Township retaliated against him, at least in part, for having filed his January 27, 2000 complaint with the Division. We therefore need not reach the question whether the 2003 complaint, insofar as it alleges retaliation for Kennedy's 1996 and 1998 complaints, is a claim "based upon, arising out of, in consequence of, or in any way involving" pre-1999 litigation and therefore subject to the policy exclusion. General principles of law respecting insurance coverage disputes support our conclusion that the policy requires defendant to provide the Township with a defense to the Kennedy complaint. First, the obligation to defend is measured against the allegations of the complaint against the insured. Hartford Accident & Indem. Co. v. Aetna Life & Cas. Ins. Co., 98 N.J. 18, 22 (1984); Charles Beseler Co. v. O'Gorman & Young, Inc., 380 N.J. Super. 193, 196 (App. Div.), certif. granted, 185 N.J. 393 (2005). Second, we read coverage broadly and exclusions narrowly, all in an effort to meet the reasonable expectations of the insured. NAV-ITS, Inc. v. Selective Ins. Co. of Am., 183 N.J. 110, 119 (2005); Search EDP v. American Home Assur., 267 N.J. Super. 537, 542 (App. Div. 1993), certif. denied, 135 N.J. 466 (1994).

Kennedy's October 7, 2003 complaint against the Township alleges a violation of LAD on September 16, 2003, and is clearly a claim made within the policy period. Even if we were to accept defendant's interpretation of the policy exclusion with respect to the relationship between the 2003 complaint and Kennedy's pre-1999 complaints, defendant's interpretation is irrelevant to the alleged retaliatory motive in relation to his 2000 complaint. The express language of the policy exclusion is for "prior and/or pending litigation as of 1/1/1999." Kennedy's 2000 complaint does not fall within that express provision. Kennedy's 2003 complaint alleged that his protected activity the year 2000 a LAD complaint filed with the Division alleging an adverse employment action in 2000 was the reason he was denied the position which was given to an allegedly less qualified person. The policy exclusion does not apply, and the insurer must defend the Township against Kennedy's complaint.

Affirmed.

 

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A-3665-04T2

June 20, 2006