NOT FOR PUBLICATION
PER CURIAM.
In this declaratory judgment lawsuit, Harleysville Insurance Company of New Jersey (Harleysville) appeals from three September 7, 2011 orders (1) compelling it to defend and indemnify Rode's Fireside Restaurant and Tavern, David Rode, Joyce Rode, Emily Rode, and Earl C. Rode, Jr., Inc. (the Rode defendants) in an underlying negligence and wrongful death lawsuit; (2) declaring that New Jersey Manufacturers Insurance Group (NJM) had no obligation to defend or indemnify the Rode defendants; and (3) denying Harleysville's request that NJM reimburse Harleysville's defense costs and fees. The judge entered the orders after considering summary judgment motions filed by Harleysville, NJM, and the Rode defendants. We affirm.
In reviewing a grant of summary judgment, we apply the same standard under Rule 4:46-2(c) that governs the trial court. See Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007). We 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). Viewed most favorably to plaintiff, the summary judgment record established the following facts.
Nicole Beadling (Beadling) worked as a bartender for the Rode defendants. In November 2008, after reporting for work, she became physically impaired (apparently from intoxication),2 left work early, drove her vehicle, and sustained fatal injuries from an automobile accident.
Beadling's Estate (the Estate) brought suit against the Rode defendants, asserting claims for negligence, Dram Shop Act violations, wrongful death, and survivorship. The complaint alleged that Beadling "reported to work for a regular lunchtime shift as a server and bartender"; that she was "disoriented and visibly impaired"; that "[d]uring the course of her shift, the physical signs of her impairment were obvious"; and that she was "observed making multiple mistakes in connection with her duties." The complaint further alleged that Emily Rode, the restaurant manager, "called [Beadling] into the office to discuss her behavior," but "deemed [her] competent[,] and sent her back to work." The complaint stated that Beadling "asked [Emily] Rode if she could be excused from the rest of her shift so she could go home," and that "despite [Beadling's] erratic behavior and obviously impaired physical condition during the course of her shift, the defendants, their agents, servants and/or employees allowed [her] to leave the premises in her impaired state when they knew or should have reasonably known that [she] would soon drive her vehicle." Apart from these factual and purely narrative references to Beadling's workplace location and to her interactions with her supervisor, the complaint did not allege, either explicitly or in substance, that Beadling's injuries "arose out of and in the course of her employment" with the Rode defendants.
In December 2009, the Rode defendants tendered the defense to Harleysville, its general liability carrier, and NJM, its workers' compensation carrier. Harleysville initially declined to defend the Rode defendants, stating that its policy only extended "coverage for `bodily injury' that is caused by an `occurrence,'" and did not provide "coverage for any `bodily injury' to `(1) [a]n employee of the insured arising out of and in the course of employment by the insured; or (2) [t]he spouse, child, parent, brother or sister of that employee as a consequence of (1)." Harleysville stated that "review of the [c]omplaint reveals that the allegations of injuries to [Beadling]... arose out of and in the course of [her] employment." NJM, recognizing that the accident was not job-related, declined to defend and indemnify the Rode defendants and claimed that coverage was precluded by a policy exclusion for intentional wrongs.
In April 2010, the Rode defendants asked Harleysville and NJM to reconsider. NJM maintained that its policy denied coverage:
Mere negligence has not been shown to reach the intentional wrong portion of the Workers' Compensation Act and thus there is no defense offered for this type of injury. In the case that the plaintiff has filed, there are mere allegations of negligence against each of the defendants and no statement regarding the substantial certainty which would obligate the carrier to provide a defense to [the Rode defendants]. Thus, the [Estate's] claims which do not rise above the level of negligence are excluded from coverage.
Although Harleysville urged NJM to accept coverage, NJM again declined. Harleysville then defended the Rode defendants and expressly reserved its rights, including the right "to deny coverage to [the Rode defendants], to deny indemnity for the claims asserted against [them], to terminate and withdraw its defense at any time, and to seek reimbursement from [them] for defense costs."
On October 14, 2010, Harleysville filed a complaint for declaratory judgment against NJM and the Rode defendants, seeking a ruling that NJM was obligated to defend and indemnify the Rode defendants and reimburse Harleysville for costs.3 Thereafter, Harleysville, NJM, and the Rode defendants filed motions for summary judgment.
On September 7, 2011, Judge Richard S. Hoffman issued an oral decision and entered the three orders from which Harleysville appeals.4 The judge stated:
Essentially, NJM argues that [Beadling's] death was a personal injury and not one connected to her employment.
This [c]ourt finds the arguments of NJM to be persuasive that these injuries did not arise out of her employment.
Indeed, the alleged negligence asserted by the [p]laintiff would apply to [Beadling] whether or not she was an employee of Rode's. There is nothing about the alleged failure on the part of Rode's to monitor or take appropriate action that seems to particularly implicate [Beadling's] employment.
Looking at the four corners of the [c]omplaint, while the [c]omplaint clearly and unequivocally states that the cause of the accident which ended [Beadling's] life was her driving while in an impaired state, there is no language in the [c]omplaint from which it can be inferred that [Beadling's] impaired state was caused by, contributed to or exacerbated by anything relating to her employment.
At most, the language of the [c]omplaint when viewed most favorable to Harleysville is that Rode's recognized [Beadling] — that [Beadling] was impaired before she left her employment and failed to stop her from driving.
The [c]omplaint does not state that this alleged duty on the part of Rode's arose out of its contract of employment as various paragraphs of the [c]omplaint assert that this is an obligation allegedly owed to [Beadling] and to any business invitee.
It's most noteworthy that half of the critical evidence that [p]laintiffs would be pointing to would be the events of three days before when clearly as a business invitee only[, Beadling] was flagged and appropriate steps taken to make sure that she didn't drive and that she was driven home.
If [p]laintiff is successful, that incident of the 10th will likely be of significance in any jury determination in favor of the [p]laintiff.
The [c]omplaint in the underlying lawsuit does not contain words which are to the effect that [p]laintiff's impaired condition was a risk directly connected or indirectly connected to her employment at Rode's.
If [Beadling] had been back in on the 13th as a patron, [p]laintiffs would likely be asserting the same claim. That is, that Rode's should have taken affirmative action in the nature that they did on the 10th and also on the 13th....
The only connection to this case relating to [Beadling's] employment is that her being at work on the 13th provided Rode's with the knowledge and opportunity and alleged duty to take appropriate action to protect [Beadling] from herself and from others.
As noted previously, this case would be beyond dispute if [Beadling] had been in on the 13th as a patron as she had been on the 10th. Because she was at work on the 13th, the issue of employment comes into the discussion. But upon further analysis, it is clear that the alleged negligence is not related to her employment.
This appeal followed.
On appeal, Harleysville argues that the judge (1) overlooked the language in both insurance policies and misapplied the law, and (2) erred by failing to require NJM to reimburse its defense costs and fees in the underlying action. We disagree and affirm substantially for the reasons given by Judge Hoffman in his oral opinion.5 We add the following comments.
"Whether an insurer has a duty to defend is determined by comparing the allegations in the complaint with the language of the policy." Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 173 (1992). "When the two correspond, the duty to defend arises, irrespective of the claim's actual merit." Ibid. (citing Danek v. Hommer, 28 N.J.Super. 68, 76-77 (App. Div. 1953), aff'd o.b., 15 N.J. 573 (1954)); see also Danek, supra, 28 N.J. Super. at 77 (holding that the duty to defend arises when a complaint states a claim for a risk insured against, even if the claim is fraudulent or cannot be maintained).
Section B.4. of "Part Two — Employers Liability Insurance" of NJM's policy provides:
B. We Will Pay
We will pay all sums you legally must pay as damages because of bodily injury to your employees, provided the bodily injury is covered by this Employers Liability Insurance.
The damages we will pay, where recovery is permitted by law, include damages:
....
4. because of bodily injury to your employee that arises out of and in the course of employment, claimed against you in a capacity other than as employer.
Apart from the factual references previously noted, the complaint did not implicate the NJM policy. The complaint made no allegation that Beadling's injuries arose "out of and in the course of employment."6
Harleysville maintains that Section B.4. "makes it clear that the NJM policy must respond not only to lawsuits against the insured in its capacity as an employer, but also [those] where employees sue the insured in any other capacity." Thus, Harleysville contends that "based on a plain reading of the NJM policy, if [Beadling's] injuries arose out of and in the course of her employment, the Rode [d]efendants are entitled to coverage under the NJM policy, regardless of whether [they] are being sued in a capacity other than as an employer." (Emphasis added). Harleysville contends, therefore, that NJM should defend the Rode defendants; however, the complaint did not allege, either explicitly or in substance, that the injuries arose out of and in the course of Beadling's employment. See Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) ("[A] reviewing court `searches the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary.'" (quoting Di Cristofaro v. Laurel Grove Mem'l Park, 43 N.J.Super. 244, 252 (App. Div. 1957))). Moreover, the fundament here is not a claim against the Rode defendants based on Beadling's status as an employee, which would be barred by the Workers' Compensation Act, N.J.S.A. 34:15-1 to-142. See Printing Mart-Morristown, supra, 116 N.J. at 746.
Unlike NJM's policy language, the complaint implicated Harleysville's policy, which provides:
1. Business Liability. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury," "property damage," "personal injury" or "advertising injury" to which this insurance applies....
a. This insurance applies only:
(1) To "bodily injury" or "property damage":
(a) That occurs during the policy period; and
(b) That is caused by an "occurrence." The "occurrence" must take place in the "coverage territory."
Here, the complaint alleged that the accident occurred during the policy period and was not job-related.
We reject Harleysville's argument that the employee exclusion of its policy should have excluded coverage. In relevant part, that exclusion applies to "[b]odily injury" to "[a]n employee of the insured arising out of and in the course of employment by the insured." Harleysville urges an expansive interpretation of the exclusion's "arising out of" language "to mean conduct `originating from,' `growing out of,' or having a `substantial nexus' with the activity excluded." Harleysville contends that the court erred in not applying the exclusion. Harleysville emphasizes the phrase "arising out of" but disregards the phrase "in the course of." Read in its entirety, the policy excludes "[b]odily injury... arising out of and in the course of employment."
Harleysville relies on American Motorists Insurance Co. v. L-C-A Sales Co., 155 N.J. 29, 41 (1998), where an exclusion containing "arising out of and in the course of employment" language, identical to that in Harleysville's policy, was "clear and unambiguous" and therefore precluded coverage for a wrongful discharge action. The Court stated that "whether specific acts of harassment or discrimination took place outside the workplace, such as harassing telephone calls to [the plaintiff's] home, [it] is of no consequence because such conduct nevertheless would have arisen out of the employment relationship between [the plaintiff] and [his employer]." Id. at 42.
American Motorists, supra, is distinguishable, however, because the plaintiff's wrongful termination claim "unquestionably arose out of and in the course of his employment, as did the essential factual allegations on which the cause of action was predicated." Ibid. Here, the complaint did not allege that Beadling's impairment arose out of and in the course of her employment; the allegations had nothing to do with the terms and conditions of her employment. The judge correctly found, therefore, that the exclusion did not apply.
After consideration of Harleysville's remaining arguments, we conclude that they lack sufficient merit to warrant discussion in this written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
