NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

The opinion of the court was delivered by

ACCURSO, J.A.D.

This is an appeal over defense costs. FJL Enterprises, Inc., a general contractor, appeals from orders denying it a defense by its comprehensive general liability (CGL) carrier, Selective Insurance Company, and its subcontractor's CGL carrier, Valley Forge Insurance Company, for certain claims in now-settled consolidated suits arising out of property damage caused by a malfunctioning fire suppression system installed by the subcontractor.

The facts are straightforward and not disputed. FJL agreed in 2000 to build an assisted living facility for Merion Gardens Assisted Living, LLC. The building required a fire suppression system, which FJL hired Fire Suppression to design and install. Sometime after installation, the fire suppression system malfunctioned. Plunging temperatures caused water in uninsulated sections of the system's pipes to freeze, damaging the system and eventually causing activation of the sprinklers and resulting water damage. Merion Gardens recovered some of its damages under its own policy of insurance issued by Pacific Insurance, and filed suit against FJL and Fire Suppression, among others, to collect the remainder. Pacific subsequently filed a subrogation action against FJL and Fire Suppression, which was consolidated with Merion Gardens' suit.

The litigation was started in 2003. While the facts are straightforward, the same cannot be said of the procedure leading to this appeal. We relate only so much of this history as is necessary and eschew a strictly chronological narrative in the interest of clarity.

In 2004, Selective filed a declaratory judgment action against FJL seeking an adjudication of its coverage obligations with respect to the claims in Merion Gardens' suit. Selective had voluntarily assumed FJL's defense on the two negligence counts of that complaint pursuant to a reservation of rights, but had denied coverage on the counts for breach of contract, breach of warranty, breach of the Consumer Fraud Act, breach of warranty on goods, and breach of the implied and express warranties of reasonable workmanship (collectively, the contract counts). FJL counterclaimed against Selective for defense and indemnity on all counts and filed a third-party complaint against Valley Forge seeking a declaration that FJL was an additional insured under Valley Forge's policy requiring defense and indemnification to the same extent as Fire Suppression.

Pacific filed its subrogation action in 2005, tracking the allegations in the Merion Gardens suit. The complaint's three counts alleged negligence, breach of contract and breach of warranty. Selective and FJL filed cross-motions for summary judgment in the declaratory judgment action as to both the Merion Gardens and Pacific complaints in August 2008. The judge decided in favor of Selective, ruling it had no obligation to defend FJL on the contract counts of either action.

FJL appeals that order. Pacific's subrogation action was eventually dismissed, and the Merion Gardens' action settled in 2011 with Selective paying FJL's share of the settlement. Accordingly, in appealing the 2008 summary judgment to Selective, FJL seeks its defense costs for the contract claims Selective refused to defend in the consolidated cases.

Valley Forge defended its own insured, Fire Suppression, on all counts of each complaint in the consolidated actions and paid Fire Suppression's share of the settlement. Valley Forge, however, refused to defend FJL in either action on the ground that it was not an additional insured under the CGL policy issued to Fire Suppression. FJL based its claims for coverage on the terms of the standard American Institute of Architects (AIA) form of agreement between FJL and Fire Suppression and the certificate of insurance provided to FJL by Fire Suppression's broker pursuant to that agreement.

Valley Forge eventually moved for summary judgment to dismiss FJL's third-party complaint on the basis that FJL was not an additional insured under the Valley Forge policy and the certificate of insurance expressly did not confer any rights on FJL, and could not, in any event, bind Valley Forge to coverage because it was issued by Fire Suppression's broker and not Valley Forge. Finding that FJL was an additional insured and entitled to indemnity under the Valley Forge policy, as well as that the certificate of insurance was ambiguous, and determining to give effect to FJL's reasonable expectations accordingly, the judge granted FJL's cross-motion for summary judgment. The judge entered an order memorializing her ruling in August 2007, directing that Valley Forge assume defense and indemnity of FJL on all counts of the consolidated actions.

Valley Forge did not do so. Instead, it filed a motion for reconsideration, and when that was unsuccessful, attempted an interlocutory appeal, which was also denied. Notwithstanding its lack of success in overturning that order, Valley Forge continued to refuse to assume FJL's defense in either action. Three years later, in August 2010, Valley Forge again sought reconsideration of the order that it defend and indemnify FJL in the consolidated actions. Its motion was again denied, as was its second attempt at an interlocutory appeal.

In December 2010, FJL filed a motion to enforce litigant's rights against Valley Forge on its duty to defend and for reimbursement of defense costs. The judge that had presided over the matter having been reassigned, the motion was heard by a different judge. The new judge granted FJL's motion enforcing the duty to defend on the basis that it was the law of the case but invited Valley Forge to bring another motion to "determine the scope of [that] duty."

FJL promptly brought that motion, and the judge determined that Valley Forge's duty was limited to defending FJL on the negligence claims Selective was already defending. Accordingly, the judge entered an order in June 2011 that Valley Forge had no duty to defend any claims brought against FJL in either of the consolidated actions, and FJL had no right to reimbursement for any of its defense costs. In August 2012, the judge denied FJL's motion for an award of fees against Valley Forge in the declaratory judgment action. FJL appeals both orders.

In sum, FJL appeals the August 2008 order denying it defense costs from Selective, the June 2011 order, as amended, denying it defense costs from Valley Forge and the August 2012 order denying it counsel fees and costs in the declaratory judgment action against Valley Forge. Valley Forge cross-appeals from the three orders entered by the first judge ordering it to defend and indemnify FJL. Because we agree that Selective had no obligation to defend FJL on the contract counts of the consolidated actions and that FJL had no rights under the Valley Forge policy or the certificate of insurance issued by the broker, we affirm the orders FJL appeals and reverse those appealed by Valley Forge.

Because the orders on appeal all concern only issues of law, our review is de novo. Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt. Osteopathic Med. & Physical Therapy, 210 N.J. 597, 605 (2012); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J.Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

We begin by addressing the Selective order. We do so because the operative terms of the Selective and Valley Forge CGL policies are nearly identical.1 That means that if the first judge was correct that Selective was responsible for defending FJL against only the negligence counts of the consolidated actions, then the second judge was likely correct that the Valley Forge policy was similarly limited, and thus there was nothing for Valley Forge to defend, even assuming FJL was covered by that policy. To that end, although addressing the Selective order, we analyze the operative terms of both policies together.

A carrier's duty to defend its insured "is not a product of statute or common law, but is solely a contractual undertaking made in the insurance policy," Horesh v. State Farm Fire & Cas. Co., 265 N.J.Super. 32, 38 (App. Div. 1993), which "can be as limited or as broad as the insurer sees fit to provide." Hartford Acc. & Indem. Co. v. Aetna Life & Cas. Ins. Co., 98 N.J. 18, 22 (1984). Selective's duty to defend is included in the "coverages" section of its policy and provides in pertinent part:

Valley Forge's duty to defend is also included in the "coverages" section of its policy and provides in language identical to that of the Selective policy:

Explaining the damages for bodily injury or property damage to which the insurance applies, the Selective policy further states:

The pertinent language of the Valley Forge policy is virtually identical:

Both policies define "occurrence" and "property damage" in exactly the same terms:

In the context of this case then, a plain reading of both policies makes clear that the carriers had a duty to defend their insureds against claims seeking damages for physical injury to tangible property and loss of use of tangible property, whether or not injured, caused by an occurrence covered by the policies. See Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537 (1990) (explaining that words of an insurance policy are to be given their ordinary meaning). While it is often said that a carrier's duty to defend is broader than its duty to indemnify, that is only so because under the typical policy, like those at issue here, the carrier's "obligation to defend is triggered by a complaint against the insured alleging a cause of action which may potentially come within the coverage of the policy, irrespective of whether it ultimately does come within the coverage and hence irrespective of whether the insurer is ultimately obliged to pay." Hartford Ins. Group v. Marson Constr. Corp., 186 N.J.Super. 253, 257 (App. Div. 1982), certif. denied, 93 N.J. 247 (1983). "[T]he duty `is not broader in the sense that it extends to claims not covered by the covenant to pay.'" Grand Cove II Condo. Ass'n, Inc. v. Ginsberg, 291 N.J.Super. 58, 72 (App. Div. 1996) (quoting Horesh, supra, 265 N.J. Super. at 38).

A court determines the carrier's duty to defend by comparing the allegations of the complaint to the language of the policy. Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 173 (1992). "[A] definitive conclusion that a policy by its terms affords no coverage, and therefore that there is no duty of indemnification, also means that there is no duty to defend." Flomerfelt v. Cardiello, 202 N.J. 432, 444 (2010).

The first judge determined that the Selective policy provided that definitive conclusion with regard to the contract counts of both the Merion Gardens and Pacific complaints. That judge determined that Selective owed FJL a defense only on the two counts of Merion Gardens' complaint and one count of Pacific's complaint alleging that FJL had breached its duty of care to Merion Gardens in constructing the sprinkler system and in supervising FJL's subcontractor, Fire Suppression, in doing so, resulting in damage to the building and loss of its use.

The judge found no coverage under the Selective policy for those counts in which Merion Gardens or Pacific alleged breach of contract, breach of warranty, breach of warranty on goods, breach of implied and express warranties of reasonable workmanship and breach of the Consumer Fraud Act. All of those counts are obviously claims for FJL's breach of its contractual obligations by failing to install the sprinkler system in a workmanlike manner and provide merchantable goods in the form of the sprinkler heads and other system components. Such claims do not fall within the accidental injury to people and damage to property caused by faulty workmanship that a CGL policy is intended to cover. See Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 239-40, 249 (1978) (explaining that CGL policies do "not cover an accident of faulty workmanship but rather faulty workmanship which causes an accident").

None of those counts alleges that the improper design and installation of the fire suppression system was an "accident." Instead, all are premised on FJL's failure to live up to its contractual promises resulting in Merion Gardens' loss of "the benefit of its bargain," and seek damages intended to place FJL in as good a position as it would have been had it received that for which it contracted. See Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 13-14 (2004) (explaining expectation damages). The consumer fraud count goes even further in alleging that FJL acted intentionally in making a representation to Merion Gardens it knew it could not fulfill, thereby entitling Merion Gardens to treble damages for FJL's ascertainable loss. See N.J.S.A. 56:8-19.

We agree that the Selective policy plainly provides no coverage for any of the contract claims, that conclusion being entirely consistent with case law interpreting standard CGL policies. See, e.g., Grand Cove, supra, 291 N.J. Super. at 72. We also reject FJL's argument that Selective owed it a duty to defend on all counts of both complaints because each contained at least one claim covered by the policy. New Jersey law is clear that when a comparison of the allegations of a complaint with the terms of the insurance policy allows a definitive conclusion that the policy affords no coverage, the carrier is under no obligation to defend the uncovered claims. Flomerfelt, supra, 202 N.J. at 444. The duty of a carrier to defend all counts of a complaint when at least one covered claim is pleaded arises only when a conclusive decision about coverage is not possible in advance of discovery or even trial. Id. at 447 (explaining that "in circumstances in which the underlying coverage question cannot be decided from the face of the complaint, the insurer is obligated to provide a defense until all potentially covered claims are resolved" but noting that "resolution may be through adjudication of the complaint" or through a declaratory judgment proceeding either before or after such adjudication).

Here, it was possible for the judge to make a conclusive decision about the coverage afforded by the Selective policy in the declaratory judgment action. As in Grand Cove, the plaintiffs' claims against FJL consisted of claims for breach of contract and warranties, violation of statute, and negligence. As we explained in that case, claims for breach of contract, breach of warranties and the intentional acts giving rise to statutory violations are not claims covered by the standard CGL policy. Grand Cove, supra, 291 N.J. Super. at 72. Here, as there, the plaintiffs' claims "do not represent conflicting theories for the same claim, but rather constitute separate claims for damages," only one of which — negligence — is covered by the policy and thus the only one for which the carrier owed a defense. Ibid. Grand Cove controls here and requires our affirmance of the August 2008 order denying FJL defense costs from Selective for the contract claims.

Because the operative terms of the Selective and Valley Forge policies are virtually identical, it follows that the second judge was correct regarding the "scope" of Valley Forge's duty to defend FJL, assuming, as that judge did pursuant to law of the case, that FJL was covered by the Valley Forge policy.4 Assuming coverage for FJL under the Valley Forge policy, Valley Forge would only be obligated to defend FJL on the negligence counts of the Merion Gardens and Pacific suits for the reasons explained. As Selective was already defending FJL on those counts, there was nothing for Valley Forge, the "excess carrier," to defend.5 Selective tacitly acknowledged that when it dismissed with prejudice its contribution claim against Valley Forge in 2011. Accordingly, we also affirm the second judge's June 2011 order, as amended, denying FJL defense costs from Valley Forge.

Understanding that even were FJL's alternative arguments for coverage under the Valley Forge policy meritorious, they could not afford FJL any greater rights under Valley Forge's CGL policy than FJL had under Selective's policy for the reasons already explained, we address them only briefly. The Valley Forge policy contains an endorsement for additional insureds. It provides in pertinent part:

Thus, if Fire Suppression were required to add FJL as an additional insured pursuant to written agreement, then FJL would qualify as an additional insured under the Valley Forge policy. The AIA subcontractor agreement between FJL and Fire Suppression, however, contains no such requirement. Article 13 of that agreement entitled, "Insurance and Bonds," which allows the parties to state specifically the types of coverage the subcontractor is to purchase, is blank. Thus, there is no written agreement that required Fire Suppression to add FJL as an additional insured on Fire Suppression's insurance policies, and FJL does not qualify as an additional insured under the Valley Forge policy.

The certificate of insurance issued by Fire Suppression's broker to FJL does not provide it any additional rights and certainly does not alter the conclusion that FJL is not an additional insured under the Valley Forge policy. That certificate contains in bold capital letters under the title of the document:

Thus, although the certificate lists the Valley Forge CGL policy and states that "FJL Enterprises, Inc. & Merion Gardens Assisted Living Co. are Additional Insureds under the General Liability coverage for liability arising out of the Named Insured's operations," the certificate expressly confers no rights on its holder, FJL.6 The back of the certificate makes the point even more emphatically. It provides:

Accordingly, the first judge erred in finding that FJL was an additional insured under the Valley Forge policy whether based on the policy, the subcontract between FJL and Fire Suppression, or the certificate of insurance.7 We likewise find no basis for coverage under the "indemnity clause" of the Valley Forge policy. That clause on which FJL relies specifically limits the carrier's obligation to liability assumed by Fire Suppression to which the insurance applies. Thus, any coverage afforded FJL by the indemnity clause would necessarily be limited to defense of the negligence claims of the Merion Gardens and Pacific suits because those are the only claims the Valley Forge CGL policy covers. As Selective provided FJL a defense against those counts, this provision, even if all the other conditions were met, provides FJL no more extensive a defense than that Selective provided.

Further, the indemnity clause has several conditions, all of which must be met in order to trigger coverage. One of those conditions is that there appears no conflict between the interests of the insured and the indemnitee precluding their representation by the same counsel in the action.8 Here, FJL and Fire Suppression pursued cross-claims against one another, suggesting at least the existence of such a conflict. As FJL has not demonstrated that it could satisfy all of the conditions necessary to trigger coverage under the indemnity clause, and its trigger would, in any event, not provide FJL greater rights to a defense than that which it was provided by Selective, the indemnity clause provides FJL no avenue of relief. Because we conclude that FJL had no rights under the Valley Forge policy, we reverse the three orders entered by the first judge ordering Valley Forge to defend and indemnify FJL.

Finally, because FJL did not ultimately prevail in its declaratory judgment action against Valley Forge, we agree with the second judge that it was not entitled to its fees for that action, notwithstanding the length of time such orders stood.9 See Jeffrey M. Brown Assocs., supra, 414 N.J. Super. at 172 (holding reversal on appeal of order requiring insurer to defend results in plaintiffs no longer qualifying as "successful claimant[s]" necessitating reversal of attorneys' fee awards in their favor).

We affirm the August 2008 order denying FJL defense costs from Selective, the June 2011 order, as amended, denying it defense costs from Valley Forge, and the August 2012 order denying it counsel fees and costs in the declaratory judgment action against Valley Forge. We reverse the three orders requiring Valley Forge to defend and indemnify FJL.

Affirmed in part, and reversed in part.