APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." 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-4526-18T3









                   Argued telephonically September 14, 2020 –
                   Decided October 5, 2020

                   Before Judges Messano and Smith.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Burlington County, Docket No. L-1750-16.
            Ryan Milun argued the cause for appellant (The Killian
            Firm, PC, attorneys; Ryan Milun, on the briefs).

            John T. Coyne argued the cause for respondents
            (McElroy, Deutsch, Mulvaney & Carpenter, LLP,
            attorneys; John T. Coyne, on the brief).


      This dispute is before us for a third time. Plaintiff was the general

contractor for several homes that suffered water infiltration and damages after

construction. Bob Meyer Cmtys., Inc. v. James R. Slim Plastering, Inc., No. A-

5581-12 (App. Div. July 21, 2015) (slip op. at 2) (hereinafter Bob Meyer I).1

Defendants American Fire and Casualty Company and Ohio Casualty Insurance

Company issued plaintiff three commercial general liability (CGL) insurance

policies that provided coverage between May 2001 and July 2004.                The

homeowners filed suit against plaintiff, who sought defense and indemnification

from defendants. Defendants denied coverage, and the trial court concluded

"there was no 'property damage' caused by an 'occurrence,' as defined by the

  Although citing an unpublished opinion is generally forbidden, we do so here
to provide a full understanding of the issues presented and pursuant to the
exception in Rule 1:36-3 that permits citation "to the extent required by res
judicata, collateral estoppel, the single controversy doctrine or any other similar
principle of law[.]" See Badiali v. N.J. Mfrs. Ins. Grp., 429 N.J. Super. 121, 126
n.4 (App. Div. 2012), aff'd, 220 N.J. 544 (2015).
policies." Id. at 3. We reversed the trial court’s grant of summary judgment to

defendants. Id. at 8.

      In doing so, we relied upon our then recent decision in Cypress Point

Condominium Ass'n v. Adria Towers, LLC, 441 N.J. Super. 369 (App. Div.

2015), to find that damages allegedly caused by a subcontractor’s faulty

workmanship could constitute an "occurrence" resulting in "property damage"

that was covered by the policies. Bob Meyer I, at 3–6. We specifically "d[id]

not decide whether plaintiff [was] ultimately entitled to insurance coverage

under the policies[,]" noting that "[o]n remand, defendants may raise . . .

arguments . . . to show 'that plaintiff's claims are otherwise excluded under the

terms of the policy.'" Id. at 7 (quoting Cypress Point, 441 N.J. Super. at 375).

      Recognizing that it "ha[d] never addressed questions of coverage for

consequential damages caused by faulty workmanship under the . . . standard

form CGL polic[ies]" at issue, the Court subsequently affirmed our judgment in

Cypress Point. Cypress Point Condo. Ass'n v. Adria Towers, LLC, 226 N.J.

403, 421, 432 (2016).

            We . . . hold that the consequential damages caused by
            the subcontractors' faulty workmanship constitute
            "property damage" and the event resulting in that
            damage—water from rain flowing into the interior of
            the property due to the subcontractors' faulty

            workmanship—is an "occurrence" under the plain
            language of the CGL policies at issue here.

            [Id. at 408 (quoting Cypress Point, 441 N.J. Super. at

      In the interim, faced with defendants' denial of coverage, plaintiff settled

claims made by seven individual homeowners and sought to recover defense

costs and indemnification from defendants. Bob Meyer Cmtys., Inc. v. Ohio

Cas. Ins. Co., No. A-2171-17 (App. Div. May 25, 2018) (slip op. at 2–3)

(hereinafter Bob Meyer II). Because multiple insurance policies, including one

issued by Harleysville Insurance Company, were implicated, the timing of any

"occurrence" and the nature and cause of any damages became critical in

determining coverage under defendants' policies, and defendants successfully

barred plaintiff's expert's opinion on those issues as a net opinion. 2 Bob Meyer

I at 4–6.

      We granted plaintiff leave to appeal and again reversed the Law Division.

Bob Meyer II at 9–10. We concluded that although the expert's opinion about

when the homes' external sheathing became non-functional was a "net

opinion[,]" "there [was] no reason to limit [the expert's] testimony about other

  We are advised that plaintiff settled with Harleysville Insurance Company, a
defendant in the original declaratory judgment action.
damage that occurred to the sheathing or any part of an exterior wall system in

any of the subject homes, and when such damage took place." Ibid.

      Plaintiff and defendants thereafter filed motions for summary judgment.

Among other things, plaintiff sought a declaration that "all of [defendants']

policies . . . [were] triggered for coverage," and "there was property damage

caused by an occurrence within [defendants'] policy periods." Plaintiff also

sought reimbursement "for the reasonable settlements it entered into with the

homeowners . . . [totaling] $994,490." Relying primarily on Griggs v. Bertram,

88 N.J. 347, 364 (1982), plaintiff contended that because defendants

"wrongfully refused coverage[,]" causing plaintiff to defend itself against claims

covered by the policy and ultimately settle those claims, defendants were liable

for the entire settlement amounts if they were "reasonable and . . . made in good


      In a thorough oral decision, the judge granted in part and denied in part

plaintiff's motion. Relying on our decision in Air Master & Cooling, Inc. v.

Selective Insurance Co. of America, 452 N.J. Super. 35 (App. Div. 2017), she

concluded that defendants' policies were implicated and their coverage

triggered.3 However, declining to "read Griggs quite as broadly as plaintiff[,]"

the judge concluded there were material factual disputes as to the reasonableness

of the settlements, both as to the "various liabilities of the insurers [,]" and

whether defendants were "entitled to a diminution of" their share of the

settlements "based on covered claims as opposed to uncovered claims." Plaintiff

moved for reconsideration, which the judge denied in an oral opinion.

      Thereafter, the parties entered into a "high-low" settlement agreement.

Pursuant to a June 12, 2019 consent order for judgment, plaintiff reserved the

right to appeal the summary judgment and reconsideration orders "to the extent

those orders permit[ted defendants] to seek substantive and temporal allocation

of [defendants'] coverage obligations," and, hence, defendants' indemnification

obligations for the settlements plaintiff entered into with the homeowners.

Pursuant to the consent judgment, if we affirm the judge's ruling in whole or in

part, defendants must pay the lower amount to plaintiff, and if we reverse the

ruling in its entirety, defendants must pay plaintiff the higher amount .

  In Air Master, we held that "a 'continuous trigger' theory of insurance coverage
may be applied . . . to third-party liability claims involving progressive damage
to property caused by an insured's allegedly defective construction work[,]" and
"the 'last pull' of that trigger—for purposes of ascertaining the temporal end
point of a covered occurrence—happens when the essential nature and scope of
the property damage first becomes known, or when one would have sufficient
reason to know of it." 452 N.J. Super. at 38.
      Plaintiff describes the appeal as asking us to decide a purely legal

question: "the single issue for consideration . . . is what are [defendants']

coverage obligations related to the settlements entered by [plaintiff] with the

various homeowners." In other words, having denied coverage, must defendants

pay the full settlement amounts if reasonable and entered in good faith? Or,

despite their denial of coverage under the policies, are defendants entitled to an

allocation determination, both temporally and substantively, i.e., whether the

homeowners' claims were for "property damage" covered under the policies?

We conclude plaintiff misconstrues longstanding precedent and affirm. 4

      "Neither the duty to defend nor the duty to indemnify 'exists except with

respect to occurrences for which the policy provides coverage.'"         Wear v.

Selective Ins. Co., 455 N.J. Super. 440, 455 (App. Div. 2018) (quoting Hartford

Accident & Indem. Co. v. Aetna Life & Cas. Ins. Co., 98 N.J. 18, 22 (1984)).

"By permitting the dispute of uncovered claims, courts protect both parties by

ensuring that the insurer does not incur responsibility for uncovered claims, and

that the insured is entitled to both defense and indemnity if the dispute is

  A consent judgment is generally not appealable. Winberry v. Salisbury, 5 N.J.
240, 255 (1950). However, our review of an interlocutory order may be
permitted as of right if an "economic stake" hinges on resolution of the appeal,
see Janicky v. Point Bay Fuel, Inc., 410 N.J. Super. 203, 207 (App. Div. 2009),
as it does in this case.
resolved in its favor." Passaic Valley Sewerage Comm'rs v. St. Paul Fire &

Marine Ins. Co., 206 N.J. 596, 617 (2011) (citing N.J. Mfrs. Ins. Co. v. Vizcaino,

392 N.J. Super. 366, 370 (App. Div. 2007)).

      Before us, as it did before the motion judge, plaintiff relies upon Griggs.

There, "[t]he principal issue . . . [was] whether the insurance carrier, having

failed for a substantial period of time to notify its insured of the possibility of

noncoverage, was estopped to deny coverage of the claim against its insured."

Griggs, 88 N.J. at 355. The Court held that "[u]nreasonable delay in disclaiming

coverage, or in giving notice of the possibility of such a disclaimer, even before

assuming actual control of a case or a defense of an action, can estop an insurer

from later repudiating responsibility under the insurance policy." Id. at 357.

      After concluding that the insurer had unreasonably delayed informing its

insured that it was denying coverage, the Court addressed "whether [the insurer]

is responsible under the policy for the payment of the settlement between [the

third-party claimant and the insured] since [the insurer] did not participate in the

settlement negotiations." Id. at 364. The Court reiterated:

            Where an insurer wrongfully refused coverage and a
            defense to its insured, so that the insured is obliged to
            defend himself in an action later held to be covered by
            the policy, the insurer is liable for the amount of the
            judgment obtained against the insured or of the
            settlement made by him. The only qualifications to this

            rule are that the amount paid in settlement be
            reasonable and that the payment be made in good faith.

            [Ibid. (quoting Fireman's Fund Ins. Co. v. Sec. Ins. Co.
            of Hartford, 72 N.J. 63, 71 (1976).]

The Court concluded that even though the personal injury action against its

insured "was not one later found to be covered by the policy," the insurer was

"estopped on equitable grounds from denying policy coverage[.]" Ibid.

      Plaintiff seizes on the language we block quoted above and claims that

defendants were obligated to provide full reimbursement for the settlements

plaintiff reached with the affected homeowners, subject only to a judicial

determination that the settlements were reasonable and entered in good faith.

However, plaintiff fails to realize the narrow holding in Griggs. Unlike the

insurer in Griggs, defendants here issued a timely denial of coverage citing

specific provisions of the policies upon which the decision was based.

Defendants were initially successful in their argument, leading to a grant of

summary judgment. In Bob Meyer I, we specifically left open the issue of

whether there was, in fact, coverage under the policies. In short, there was no

basis to apply equitable principles of estoppel to bar defendants' challenge to

coverage, including a temporal and substantive allocation of covered and

uncovered claims. See Wear, 455 N.J. Super. at 458 ("[A] good-faith challenge

to coverage is not a breach of an obligation to defend." (citing Passaic Valley,

206 N.J. at 617)). Defendants were entitled "to dispute coverage based upon the

language" of the policies. Ibid. (citing Vizcaino, 392 N.J. Super. at 369–70).

        Absent any equitable reason to bar defendants from asserting

contractual coverage defenses, plaintiff was required to prove not only that

defendants wrongfully denied coverage for the homeowners' damage claims, but

also that those claims were covered under the terms of the policy. See Polarome

Int'l, Inc. v. Greenwich Ins. Co., 404 N.J. Super. 241, 275 (App. Div. 2008)

("[I]f there is a factual dispute that, once resolved, may indicate that an

occurrence is not covered, and it is unlikely to be resolved at trial, an insurer

may deny coverage and await judicial resolution." (citing Heldor Indus., Inc. v.

Atl. Mut. Ins. Co., 229 N.J. Super. 390, 399 (App. Div. 1988))). Resolution of

that issue in plaintiff's favor would mean that defendants' obligations under the

insurance contract would translate into reimbursing plaintiff for its costs and the

settlement amounts, assuming they were reasonable and entered in good faith.

Vizcaino, 392 N.J. Super. at 370 (citing Burd v. Sussex Mut. Ins. Co., 56 N.J.

383, 388–90 (1970)).

      Plaintiff claims in a footnote that the motion judge decided defendants

wrongfully denied coverage, citing a single sentence she uttered in her oral

decision denying reconsideration.       We disagree with that interpretation.

Reading the judge's initial decision in its entirety, including the quotations we

noted above, it is quite clear she found that plaintiff had not proven, as a matter

of fact and law, that defendants had no defense to plaintiff's claims and

wrongfully denied coverage, at least with respect to damages attributable to

covered versus uncovered claims. As a result, after settling the case, plaintiff

filed this appeal specifically challenging the judge's denial of its summary

judgment motion and subsequent reconsideration motion. 5

      When reviewing the grant of summary judgment, we apply the "same

standard as the motion judge." Globe Motor Co. v. Igdalev, 225 N.J. 469, 479

(2016) (quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). That standard

mandates that summary judgment 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."

Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224

   Denial of summary judgment is interlocutory and not appealable of right,
because the denial of summary judgment "decides nothing and merely reserves
issues for future disposition." Gonzales v. Ideal Tile Importing Co., 371 N.J.
Super. 349, 356 (App. Div. 2004). However, plaintiff sought leave to appeal on
an interlocutory basis and a panel of our colleagues denied that request.
N.J. 189, 199 (2016) (quoting R. 4:46-2(c)). Most importantly for the purposes

of this appeal,

             when the movant is the plaintiff, the motion court must
             view the record with all legitimate inferences drawn in
             the defendant's favor and decide whether a reasonable
             factfinder could determine that the plaintiff has not met
             its burden of proof. If a reasonable factfinder could
             decide in the defendant's favor, then the plaintiff has
             not demonstrated that it is "entitled to a judgment or
             order as a matter of law" and the court must deny the
             plaintiff's summary judgment motion.

             [Globe Motor Co., 225 N.J. at 481 (citations omitted)
             (quoting R. 4:46-2(c)).]

      As already noted, defendants were well within their rights to contest the

coverage issues. Here, we agree entirely with the motion judge's assessment of

the record. Although defendants never produced an expert, there were disputed

facts as to the nature, extent and timing of the damages caused by water

infiltration of the homes at issue. The facts were properly left for a factfinder

to conclusively resolve. Resolution of those factual issues was necessary to

determine coverage under the policies, and as a result, whether defendants'

denial of coverage was wrongful. Under controlling precedent and the facts of

this case, only defendants' wrongful denial of coverage would translate into a

duty to reimburse plaintiff for reasonable settlements it entered into with the

homeowners in good faith.