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Crystal Point Condominium Association, Inc. v. Kinsale Ins. Co.

Crystal Point Condominium Association, Inc. v. Kinsale Ins. Co.

Superior Court of New Jersey, Appellate Division

January 11, 2021, Argued; March 4, 2021, Decided

DOCKET NO. A-4621-19

Opinion

 [**408]  [*475]   The opinion of the court was delivered by

 [*476]  SUTER, J.A.D.

Plaintiff Crystal Point Condominium Association appeals the June 23, 2020 order that dismissed its declaratory judgment complaint against defendant Kinsale Insurance Company with prejudice and required it to arbitrate its claims against defendant. For reasons that follow, we reverse the June 23, 2020 order, reinstate plaintiff's declaratory judgment complaint and remand for further proceedings consistent with this decision.

Plaintiff is a nonprofit corporation that is responsible for "administering, managing, operating and maintaining the common elements" of a forty-two-story high-rise condominium building located in Jersey City. An inspection of the condominium's common elements [***2]  by an engineering firm retained by plaintiff revealed there were construction defects or deficiencies with "the concrete balconies and slabs of the building."

In 2015, plaintiff sued several contractors involved in construction of the building seeking damages for these alleged construction defects. Nacamuli Associates, LLC (Nacamuli), the structural engineer for the condominium construction project, and Hawke Inspection and Testing (Hawke), a third-party inspector of the concrete balconies and slabs, were added as parties in 2017 and 2018, respectively. Neither Nacamuli nor Hawke filed an answer to the construction litigation complaint. A default was entered against Nacamuli in January 2018 and against Hawke in July 2018. Following a hearing, judgments  [**409]  were entered in favor of plaintiff against Hawke for $859,965.01 and against Nacamuli for $874,400.86. Plaintiff attempted to execute on the judgments. Only Hawke had a federal tax lien number. A bank account search using that number showed Hawke was out of business. Relevant here, plaintiff issued writs of execution against Nacamuli and Hawke to be served by the Hudson County Sheriff. The writs were not returned by the time this appeal [***3]  was briefed.

 [*477]  Defendant is an excess and surplus lines insurer that is eligible to issue insurance policies in New Jersey.1 Plaintiff alleges that defendant issued an architects and engineers professional liability policy to Nacamuli and Hawke for the periods from July 29, 2016 to July 29, 2017, and from July 29, 2017 to July 29, 2018.

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466 N.J. Super. 471 *; 247 A.3d 405 **; 2021 N.J. Super. LEXIS 26 ***; 2021 WL 822085

CRYSTAL POINT CONDOMINIUM ASSOCIATION, INC., PLAINTIFF-APPELLANT, v. KINSALE INSURANCE COMPANY, DEFENDANT-RESPONDENT.

Subsequent History:  [***1] Approved for Publication March 4, 2021.

Certification denied by Crystal Point Condo. Ass'n v. Kinsale Ins. Co., 2021 N.J. LEXIS 743 (N.J., July 13, 2021)

Prior History: On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-1579-20.

CORE TERMS

arbitration, insured, direct action, third-party, insolvency, parties, binding arbitration, arbitration clause, trial court, contractual, unsatisfied, insurance policy, injured party, non-signatory, coverage, insurance contract, declaratory, nonparties, estoppel, lines

Insurance Law, Claim, Contract & Practice Issues, Civil Procedure, Appeals, Standards of Review, De Novo Review, Insurer Insolvency, Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, Questions of Fact & Law, Pretrial Matters, Judicial Review, Validity of ADR Methods, Federal Arbitration Act, Arbitration Agreements, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Contract Formation, Acceptance, Meeting of Minds, Contracts Law, Third Parties, Beneficiaries, Claims & Enforcement, Types of Third Party Beneficiaries, Incidental Beneficiaries, Intended Beneficiaries, Commercial General Liability Insurance, Persons Insured, Third Parties, Liability & Performance Standards, Good Faith & Fair Dealing, Third Party Claimants, Waiver, Insurance Company Operations, Conducting Business, Surplus Lines Insurers, Claim, Contract & Practice Issues, Arbitration