                                NOT FOR PUBLICATION WITHOUT THE
                               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-2328-17T3

EVANSTON INSURANCE
COMPANY,

          Plaintiff-Respondent,

v.

A&R HOMES DEVELOPMENT,
LLC, JOSE APONTE, ENNOBLE
REACH MANAGEMENT
CORPORATION, KUEI MEI
and TSENG, and LIEN YI TSENG,

          Defendants,

and

DAVID SHARKEY,

     Defendant-Appellant.
______________________________

                    Argued February 5, 2019 – Decided February 19, 2019

                    Before Judges Gilson and Natali.

                    On appeal from Superior Court of New Jersey, Law
                    Division, Hudson County, Docket No. L-4547-16.
            Francis X. Garrity argued the cause for appellant
            (Garrity, Graham, Murphy, Garofalo & Flinn, PC,
            attorneys; Jane Garrity Glass, of counsel; Francis X.
            Garrity, on the briefs).

            April T. Villaverde argued the cause for respondent
            (Kennedys CMK LLP, attorneys; April T. Villaverde,
            of counsel and on the brief).

PER CURIAM

      In this insurance coverage dispute, defendant David Sharkey appeals from

a December 15, 2017 Law Division order granting plaintiff Evanston Insurance

Company (Evanston) summary judgment, and a December 15, 2017 order

denying his cross-motion for summary judgment.1 We affirm the court's orders

on two independent bases.

      First, we conclude that Sharkey was bound by the court's October 13, 2017

default judgment, in which the court concluded that Evanston "owe[d] no

coverage obligation" to defendants, A&R Homes Development, LLC (A&R),

and its owner, Jose Aponte, for any claims asserted by Sharkey. Second, we

agree with the court that the comprehensive general liability (CGL) policy

issued by Evanston did not provide coverage for Sharkey's third-party bodily

injury claim, in any event.


1
  It appears the court mistakenly referred to Sharkey as "[p]laintiff" in its
December 15, 2017 order denying his cross-motion.
                                                                       A-2328-17T3
                                      2
                                       I.

      In June 2015, A&R, a general contractor, was hired by defendants Kuei

Mei Tseng and Lien Yi Tseng to build a four story, three-unit apartment building

with a rear parking lot on their property in Jersey City. A&R subsequently

retained YVPV Construction, LLC, (YVPV) as a subcontractor for the project.

On March 23, 2016, Sharkey, an employee of YVPV, was working at the

construction site when he fell approximately twenty feet and sustained bodily

injuries. Sharkey filed a complaint on May 4, 2016, against the Tsengs, A&R,

Jose Aponte, and Ennoble Reach Management Corp., alleging that their

negligence caused his injuries.

      At the time of Sharkey's accident, A&R was insured by Evanston under a

CGL policy that promised to pay "those sums that [A&R] becomes legally

obligated to pay as damages because of 'bodily injury' . . . caused by an

'occurrence' . . . ." The Evanston policy defined "Bodily Injury" as "bodily

injury, sickness or disease . . . ." "Occurrence" is defined as "an accident . . . ."

The policy contains a common declarations page, which explains that the policy

includes the "declarations, together with the [c]ommon [p]olicy [c]onditions and

[c]overage [f]orm(s) and any [e]ndorsement(s) . . . ."




                                                                             A-2328-17T3
                                            3
      Immediately following the declarations page is a schedule of attached

forms. Under the general liability section, Evanston explicitly identified the

following form as part of the policy: "EXCLUSION – EMPLOYER'S

LIABILITY       AND      BODILY        INJURY      TO     CONTRACTORS             OR

SUBCONTRACTORS" (capitalized emphasis in original) (subcontractor

employee exclusion). The subcontractor employee exclusion provides that the

Evanston policy does not apply to:

             "Bodily Injury" to any:

                (1) Contractor or subcontractor while working on
                   behalf of any insured;

                (2) Employee, volunteer worker, leased employee or
                   temporary worker of such contractor or
                   subcontractor; or

                (3) Additional    subcontractor,    including   the
                   employees, volunteer workers, leased employees
                   or temporary workers of such contractor or
                   subcontractor indicated in Paragraph (1) above.

The exclusion further states that it applies "even if the claim against any insured

alleges negligence or any other wrongdoing in the . . . selection, hiring, or

contracting . . . supervision or monitoring . . . or training . . . of any contractor

or subcontractor for whom any insured is or was legally responsible . . . ."




                                                                             A-2328-17T3
                                         4
      A&R submitted Sharkey's complaint to Evanston and requested a defense

and indemnity. Relying on the subcontractor employee exclusion, Evanston

agreed to defend A&R and Aponte under a reservation of rights, but cautioned

A&R that "to the extent . . . Sharkey could be considered an employee of A&R

. . . or an employee . . . of . . . a contractor or subcontractor, there is no coverage

for the Sharkey [l]awsuit."

      Evanston's investigation confirmed that Sharkey was employed by YVPV

to perform construction work at the Jersey City project. Accordingly, it filed a

complaint pursuant to the Declaratory Judgment Act, N.J.S.A. 2A:16-50 to -62,

naming all defendants, and sought an order that it was "not obligated to defend

or indemnify [A&R] or . . . Aponte for the Sharkey [l]awsuit" because coverage

was excluded pursuant to the subcontractor employee exclusion. Evanston also

served the declaratory judgment complaint on Sharkey and named him as an

interested party.

      After Aponte, A&R, Ennoble, and the Tsengs failed to answer the

complaint, Evanston moved for default judgment. In an October 13, 2017 order,

the court granted Evanston's motion and ordered that Evanston "owe[d] no

coverage obligation to . . . A&R . . . and Jose Aponte for any claims that have

been or may be asserted by . . . Sharkey . . . ." Despite receiving notice of


                                                                               A-2328-17T3
                                          5
Evanston's motion, Sharkey did not object to the court entering the default

judgment.

      Several months after the default judgment was entered, Sharkey sought

discovery from Evanston. Thereafter, Evanston moved for summary judgment

against Sharkey. Sharkey opposed the motion and cross-moved for summary

judgment, seeking an order "declaring and adjudging that . . . [the] Evanston

[policy] . . . affords insurance coverage to A&R . . . with respect to defense and

indemnity as to [his] bodily injury claim" arising from the March 23, 2016

accident.

      Evanston made two arguments in support of summary judgment. First, it

argued that the October 13, 2017 default judgment resolved any insurance

coverage issues related to Sharkey's claims and Sharkey was bound by that

judgment.    Second, Evanston maintained that the policy unambiguously

excluded Sharkey's claims because he sustained "bodily injury" while an

"employee" of a "subcontractor" of A&R.

      In opposing Evanston's motion, and in support of his request for a

declaratory judgment, Sharkey claimed that he was not bound by the October

13, 2017 default judgment.       Additionally, Sharkey argued that he had a

reasonable expectation of coverage because the declarations page of the


                                                                          A-2328-17T3
                                        6
Evanston policy confirmed that A&R obtained commercial general liability

coverage, but the declarations page did not refer to any exclusion limiting that

broad coverage.        Sharkey also asserted that the subcontractor employee

exclusion was ambiguous and unenforceable, as its title, "Employer's Liability

. . . ," suggested that it related only to A&R's worker's compensation liability.

Finally, Sharkey contended that the subcontractor employee exclusion did not

apply, as YVPV was not working "on behalf of" A&R.

      After hearing oral arguments, the court entered orders on December 15,

2017 granting Evanston's motion and denying Sharkey's cross-motion. In its

accompanying written statement of reasons, the court concluded that the October

13, 2017 default judgment was binding on Sharkey, as he could have "objected

or otherwise intervened on the motion for default judgment as a party to this

declaratory action."

      The court also considered Sharkey's substantive arguments and

determined that the Evanston policy's declarations page "did not create any

reasonable expectations of coverage, notwithstanding the fact that a non-party

to the insurance policy has asserted such an expectation." In examining the

subcontractor employee exclusion, the court explained that the language is

"clear, unambiguous, and thus, enforceable."      Finally, the court noted that


                                                                         A-2328-17T3
                                        7
YVPV was hired by A&R as a subcontractor, and was therefore working "on

behalf of" A&R. This appeal followed.

      Sharkey raises two primary arguments on appeal. First, he maintains that

he is not bound by the October 13, 2017 default judgement because his joinder

under the Declaratory Judgment Act permitted him to seek an adjudication that

his claim was covered by the Evanston policy.

      Second, he argues, as he did in the trial court, that the declarations page

in the Evanston policy created a reasonable expectation that a standard

commercial general liability policy would cover a subcontractor's employee's

claims. Specifically, Sharkey asserts that the declarations page expressly listed

multiple risks that were "not covered," but failed to mention the s ubcontractor

employee exclusion, which suggested coverage was extended for that risk.

      Relying on Lehrhoff v. Aetna Cas. & Sur. Co., 271 N.J. Super. 340 (App.

Div. 1994), Sharkey contends that A&R's reasonable expectation of coverage

"cannot be contradicted by the policy’s boilerplate unless the [d]eclarations . . .

clearly so warn[] the insured." He also asserts that the declarations page created

a reasonable expectation of coverage based on the reference to classification

code number 91581 for "contractors-subcontracted work," and related rating




                                                                           A-2328-17T3
                                        8
information.2 Having considered these arguments in light of the record and

applicable legal principles, we conclude the court correctly determined that

Sharkey was bound by the October 13, 2017 default judgment, and that the

Evanston policy did not cover Sharkey's claim.

                                            II.

      We disagree with Sharkey's assertion that the court's October 13, 2017

default judgment was not binding on him. Pursuant to N.J.S.A. 2A:16-56,

"[w]hen declaratory relief is sought, all persons having or claiming any interest

which would be affected by the declaration shall be made parties to the

proceeding." A declaratory judgment will only have an effect on persons joined

as interested parties. N.J.S.A. 2A:16-57; see also Tal v. Franklin Mut. Ins. Co.,

172 N.J. Super. 112, 116 (App. Div. 1980) ("The failure to join [an interested

party] robs the resulting judgment of any binding effect on [him or] her.");

Constant v. Pacific Nat'l Ins. Co., 84 N.J. Super. 211, 222 (Law Div. 1964)

("[T]he intent of the . . . Declaratory Judgment Act was only to be binding over

those parties before the court . . . .").




2
  On appeal, Sharkey has abandoned the argument he made before the trial court
that the subcontractor employee exclusion was ambiguous and did not apply to
his claim.
                                                                         A-2328-17T3
                                            9
      Evanston properly joined Sharkey as an interested party to the declaratory

judgment action, as he was the party injured in his underlying negligence action.

As such, pursuant to the Declaratory Judgment Act, we conclude Sharkey is

bound by the court's default judgment in Evanston's favor. As the trial court

correctly noted, "Sharkey could have objected or otherwise intervened on the

motion for default judgment as a party to this declaratory action." See Riehle v.

Margolies, 279 U.S. 218, 225 (1929) ("A judgment of a court having jurisdiction

of the parties and of the subject matter operates as res judicata, in the absence

of fraud or collusion, even if obtained upon a default.").

                                       III.

      In ruling on a summary judgment motion, a trial court must "consider

whether the competent evidential materials presented, when viewed in the light

most favorable to the non-moving party, are 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). An

appellate court reviews a grant of summary judgment de novo, using the same

standard as the trial court. Turner v. Wong, 363 N.J. Super. 186, 198-99 (App.

Div. 2003). Thus, we must determine whether a genuine issue of material fact

is present and, if not, evaluate whether the trial court's ruling on the law was


                                                                         A-2328-17T3
                                       10
correct. See Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162,

167-69 (App. Div. 1998).

      Even if the default judgment was not binding on Sharkey, we conclude

that the court correctly granted Evanston's motion on the merits. Guided by the

principles regarding interpretation of insurance contracts detailed below, we are

not persuaded that there is any ambiguity in the Evanston policy as it relates to

coverage for Sharkey's claim. The declarations page clearly states that the

policy includes the "declarations, together with the [c]ommon [p]olicy

[c]onditions and [c]overage [f]orm(s) and any [e]ndorsement(s) . . . ." On the

next two pages of the policy, Evanston, in capitalized letters, listed the forms

schedule and explicitly identified the subcontractor employee exclusion.

      "The interpretation of an insurance contract is a question of law for the

court to determine, and can be resolved on summary judgment." Adron, Inc. v.

Home Ins. Co., 292 N.J. Super. 463, 473 (App. Div. 1996) (citing Weedo v.

Stone-E-Brick, Inc., 155 N.J. Super. 474, 479 (App. Div. 1977), rev'd on other

grounds, 81 N.J. 233 (1979)). Further, whether an insured's expectations are

objectively reasonable is a question of law to be determined by the court.

Bromfeld v. Harleysville Ins. Cos., 298 N.J. Super. 62, 79 (App. Div. 1997).




                                                                         A-2328-17T3
                                      11
      Our analysis is guided by well-established principles concerning

interpretation of insurance contracts. Insurance policies are subject to special

scrutiny, as they are contracts of adhesion. Gibson v. Callaghan, 158 N.J. 662,

669 (1999). While insurance companies are "expert[s] in [their] field" that

unilaterally prepare "complex instruments," insureds are typically "laymen

unversed in insurance practices and provisions." Ibid.

      As a general rule, "[a]n insurance policy is a contract that will be enforced

as written when its terms are clear in order that the expectations of the parties

will be fulfilled." Flomerfelt v. Cardiello, 202 N.J. 432, 441 (2010). When an

ambiguity does exist, the ambiguity is resolved against the insurer and in favor

of coverage. Kopp v. Newark Ins. Co., 204 N.J. Super. 415, 420 (App. Div.

1985).   However, "not every 'far-fetched interpretation of a policy will be

sufficient to create an ambiguity requiring coverage' . . . ." Mem'l Props., LLC

v. Zurich Am. Ins. Co., 210 N.J. 512, 528 (2012) (quoting Cobra Prods., Inc. v.

Fed. Ins. Co., 317 N.J. Super. 392, 400-01 (App. Div. 1998)). "A genuine

ambiguity exists when the 'phrasing of the policy is so confusing that the average

policyholder cannot make out the boundaries of coverage.'"           Simonetti v.

Selective Ins. Co., 372 N.J. Super. 421, 428-29 (App. Div. 2004) (quoting Lee

v. Gen. Accident Ins. Co., 337 N.J. Super. 509, 513 (App. Div. 2001)). "[W]hen


                                                                           A-2328-17T3
                                       12
considering ambiguities and construing a policy, courts cannot 'write for the

insured a better policy of insurance than the one purchased.'" Flomerfelt, 202

N.J. at 441 (quoting Walker Rogge, Inc. v. Chelsea Title & Guar. Co., 116 N.J.

517, 529 (1989)).

      Further, courts must not read one provision of a policy in a way that would

render another provision meaningless. Homesite Ins. Co. v. Hindman, 413 N.J.

Super. 41, 47 (App. Div. 2010). However, "[i]n exceptional circumstances,

'even an unambiguous contract has been interpreted contrary to its plain meaning

so as to fulfill the reasonable expectations of the insured.'" Gibson, 158 N.J. at

671 (quoting Werner Indus., Inc. v. First State Ins. Co., 112 N.J. 30, 35-36

(1988)).

      Generally, "in the absence of fraud or inequitable conduct on the part of

the carrier," "an insured is chargeable with knowledge of the contents of an

insurance policy." Edwards v. Prudential Prop. & Cas. Co., 357 N.J. Super. 196,

204 (App. Div. 2003). "Normally, insurance purchasers are expected to read

their policies and 'the law may fairly impose upon [them] such restrictions,

conditions and limitations as the average insured would ascertain from such

reading.'" Sears Mortgage Corp. v. Rose, 134 N.J. 326, 348 (1993) (quoting

Bauman v. Royal Indem. Co., 36 N.J. 12, 25 (1961)).


                                                                          A-2328-17T3
                                       13
                                      IV.

      As noted, Sharkey, relying on Lehrhoff, contends that its reasonable

expectation of coverage, gleaned from the declarations page, cannot be

frustrated by the subcontractor employee exclusion unless Evanston warned

A&R on the declarations page that the policy did not cover liability A&R's

subcontractor's negligence. We disagree.

      In Lehrhoff, we reversed an order dismissing a complaint that sought

uninsured motorist coverage because the policy's exclusion was insufficient to

overcome the insured's reasonable expectations of coverage based on the

insurer's representations on the declarations page. Lehrhoff, 271 N.J. Super. at

342. We concluded that the insured was entitled to coverage based on the

reasonable expectations doctrine because:

            [A] conscientious policyholder, upon receiving the
            policy, would likely examine the declaration[s] page to
            assure himself that the coverages and their amounts, the
            identity of the insured vehicle, and the other basic
            information appearing thereon are accurate and in
            accord with his understandings of what he is
            purchasing. We deem it unlikely that once having done
            so, the average automobile policyholder would then
            undertake to attempt to analyze the entire policy in
            order to penetrate its layers of cross-referenced,
            qualified, and requalified meanings. Nor do we deem
            it likely that the average policyholder could
            successfully chart his own way through the shoals and
            reefs of exclusions, exceptions to exclusions,

                                                                        A-2328-17T3
                                      14
             conditions and limitations, and all the rest of the
             qualifying fine print, whether or not in so-called plain
             language. We are, therefore, convinced that it is the
             declaration[s] page, the one page of the policy tailored
             to the particular insured and not merely boilerplate,
             which must be deemed to define coverage and the
             insured's expectation of coverage. And we are also
             convinced that reasonable expectations of coverage
             raised by the declaration[s] page cannot be contradicted
             by the policy's boilerplate unless the declaration[s]
             page itself clearly so warns the insured.

             [Id. at 346-47.]

      The declarations page in Lehrhoff is distinguishable from that in the

Evanston policy.     In Lehrhoff, the court noted that the declarations page

expressly identified the policyholder and his son in the list of drivers. Id. at 349.

As a result, the court determined that the declarations page gave the policyholder

a reasonable expectation that his son was covered that could not be overcome

by the contradictory, difficult-to-locate language in the policy that limited

family members to residents of the household. Id. at 349-50. Conversely,

Sharkey asserts that the Evanston policy's declarations page should have

included language specifying what was excluded from coverage.               Further,

A&R's insurance broker obtained the Evanston policy and was familiar with

commercial liability insurance, unlike the average, unversed automobile




                                                                             A-2328-17T3
                                        15
insurance policyholder, who is likely to rely on the declarations page. Id. at

346-47.

      Additionally, in Zacarias v. Allstate Ins. Co, 168 N.J. 590 (2001), the

Supreme Court limited Lehrhoff's holding and explained "[w]e do not, however,

interpret Lehrhoff to require an insurer to include an . . . exclusion on the policy's

declarations sheet in all cases." Id. at 602. The Court stated that "an insurance

contract is not per se ambiguous because its declarations sheet, definition

section, and exclusion provisions are separately presented." Id. at 603.

      The Zacarias court enforced the insurance contract as written, finding "no

ambiguity, inconsistency, or contradiction between the declarations sheet and

the body of plaintiff's policy" because "the declarations sheet alerts the insured

that the coverages and limits of liability" are contingent on the policy's

provisions and "the exclusion itself is written in direct and ordinary terms." Id.

at 602-03. Further, in Zacarias, the declarations sheet included the language

"SUBJECT TO THE FOLLOWING FORMS AND ENDORSEMENTS,"

indicating the coverages and limits of liability. Id. at 593; see also Morrison v.

Am. Int'l Ins. Co. of Am., 381 N.J. Super. 532, 539 (App. Div. 2005) ("Lehrhoff

. . . does not establish a bright[-]line rule that the declaration[s] page controls




                                                                              A-2328-17T3
                                         16
where important additional terms of the policy are not included on the

declaration[s] page but are reflected elsewhere.").

      Here, the declarations page, similar to that in Zacarias, states "[t]hese

declarations, together with the [c]ommon [p]olicy [c]onditions and [c]overage

[f]orm(s) and any [e]ndorsement(s), complete the [Evanston] policy." Even

though the declarations page lacked any reference to the subcontractor employee

exclusion, it clearly identified the exclusion in capitalized letters in the form

schedule.

      In sum, we conclude that no ambiguity exists in the Evanston policy

because the declarations page and the policy's terms and exclusions clearly alert

the average policyholder to the "boundaries of coverage." See Simonetti, 372

N.J. Super. at 428-29. In our view, construing the policy in accordance with

Sharkey's interpretation would be writing "for the insured a better policy of

insurance than the one purchased." Flomerfelt, 202 N.J. at 441 (quoting Walker

Rogge, Inc., 116 N.J. at 529).

      Affirmed.




                                                                         A-2328-17T3
                                      17
