(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Ciba-Geigy Corporation v. Liberty Mutual Insurance Company, et al. (A-28/29/30/31-96)
Argued September 9, l996 -- Decided May 12, 1997
POLLOCK, J., writing for a majority of the Court.
The issue in these multiple party appeals is whether a constitutional right to a jury trial exists in an
action for declaratory judgment concerning claims against insurers for breach of contract and the recovery of
future remediation costs.
In Ciba-Geigy v. Liberty Mutual Insurance Co., plaintiff, Ciba-Geigy, sued its insurers seeking a
judgment declaring that the insurers are obligated to defend and indemnify it for future costs of
environmental remediation. Ciba-Geigy also seeks compensatory damages for remediation costs that it has
already incurred. The Law Division granted Ciba-Geigy's motion for a jury trial.
Thereafter, defendant, Century Indemnity Company, which had initially joined in Ciba-Geigy's
motion for trial by jury, moved for a trial by the court without a jury. Several other defendant insurers
opposed the motion. The Law Division granted Century's motion.
The Appellate Division denied Ciba-Geigy's motion for leave to appeal and to stay the trial. The
Supreme Court granted leave to appeal and further granted leave for Commercial and General Reinsurance
to participate in the appeal.
In GEI International Corp. v. St. Paul Fire and Marine Insurance Co., GEI seeks a judgment
declaring that its insurers are obligated to indemnify it for all future environmental remediation costs and
expenses. In addition, however, GEI seeks money damages for breach of the policy because of the insurers'
failure to reimburse it for the clean-up costs it has incurred to date. The Law Division bifurcated the claims
for environmental coverage and liability. In both the liability and the coverage actions, GEI and two insurers
demanded a jury trial. Two other insureds, moved to strike GEI's demand for a jury trial in the liability
action. The Law Division struck all demands for a jury trial and the Appellate Division affirmed.
The Supreme Court granted GEI's motion for leave to appeal that part of the Appellate Division's
order holding that the parties have no right to a jury trial on the environmental coverage claim.
HELD: An action by an insured against an insurer for a declaratory judgment to compel indemnification
for future environmental clean-up costs is substantially an action for specific performance, to which a right to
trial by jury does not attach; when an insured's claim to recover damages for past environmental
remediation costs is ancillary to the insured's claim for specific performance, the entire matter should be
resolved in a non-jury trial.
1. Traditionally, the right to a jury trial attached in legal, but not equitable, actions. (pp. 13-14)
2. The filing of a declaratory judgment action for insurance coverage does not necessarily engender the right
to a jury trial. Rather, that right depends on whether the action is the counterpart to one in equity or law.
(pp. 14-15)
3. In determining whether a declaratory judgment action is primarily legal or equitable, courts look to the
historical basis for the cause of action and focus on the requested relief. (pp. 15-16)
4. Although a declaratory judgment action may ultimately result in the payment of money, it is not
necessarily an action of law. A complaint seeking judgments mandating that insurers defend and indemnify
insureds for the future costs of environmental remediation is sufficiently like an action for specific
performance to withstand a demand for a jury trial. (pp. 16-17)
5. Although the essential nature of an action as legal or equitable may not be clear, specific performance is
appropriate if it will do more perfect and complete justice and where money damages would provide
inadequate compensation for the breach of an agreement. (pp. 17-18)
6. If an action is primarily equitable, a court of equity may assume jurisdiction over ancillary legal issues.
(pp. 18-19)
7. Specific performance is particularly appropriate when a claim involves a continuing right to future benefits
that cannot be satisfied by a one-time monetary payment or when a court cannot reasonably ascertain the
amount of damages. (pp. 19-20)
8. The predominance of equitable issues and complexity of declaratory judgment actions for insurance
coverage for the recovery of future environmental remediation costs distinguishes those actions from
coverage actions under other kinds of insurance policies. (pp. 20-22)
9. Without statutory authorization, the right to trial by jury does not attach to a claim if the claim did not
exist at common law. (pp. 22-24)
10. Remediation is a form of equitable relief that can require continuing supervision and one that is not
subject to trial by jury. (pp. 24-25)
11. Because the plaintiffs primarily seek specific performance of the insurers' duties under their policies, the
Court need not decide whether the right to trial by jury would attach to a claim limited to compensation for
already-incurred costs. (pp. 25-26)
12. Although budgetary constraints and concerns about efficiency cannot impinge on the right to a jury trial,
the unnecessary expansion of the right to trial by jury solely to enable litigants to obtain a tactical advantage
cannot be permitted in an era of fiscal constraint. (p. 26)
13. The mere existence of factual issues does not automatically entitle a party to a jury trial. (p. 27)
Judgment of the Appellate Division in GEI and that of the Law Division in Ciba-Geigy are
AFFIRMED.
JUSTICE O'HERN filed a separate dissenting opinion in which JUSTICE STEIN joins. Justice
O'Hern disagreed that the policyholders surrendered their right to a jury trial when they initiated their
declaratory judgment action, viewing the declaratory actions for coverage as merely actions at law for breach
of the insurance contract. He further considered the Court's decision to represent an abrupt departure from
longstanding New Jersey law.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, GARIBALDI and COLEMAN join in
JUSTICE POLLOCK's opinion. JUSTICE O'HERN filed a separate dissenting opinion in which
JUSTICE STEIN joins.
SUPREME COURT OF NEW JERSEY
A-28/29/30/
31 September Term 1996
IN RE ENVIRONMENTAL INSURANCE
DECLARATORY JUDGMENT ACTIONS
CIBA-GEIGY CORPORATION,
Plaintiff-Appellant
and Cross-Respondent,
v.
LIBERTY MUTUAL INSURANCE COMPANY,
INSURANCE COMPANY OF NORTH AMERICA
ACCIDENT & CASUALTY INSURANCE
COMPANY OF WINTERTHUR, ADMIRAL
INSURANCE COMPANY, AETNA CASUALTY &
SURETY COMPANY, AGRIPPINA
VERSICHERUNGS-AKTIENGESELLSCHAFT,
AIU INSURANCE COMPANY, ALBA GENERAL
INSURANCE COMPANY LTD., ALLIANZ
VERSICHERUNGS-AKTIENGESELLSCHAFT,
AMERICAN HOME ASSURANCE COMPANY,
AMERICAN RE-INSURANCE COMPANY,
AMERICAN STAR INSURANCE COMPANY,
ANDREW WEIR INSURANCE COMPANY LTD.,
ANGLO FRENCH INSURANCE COMPANY
LTD., ANGLO SAXON INSURANCE COMPANY LTD., (A-28/29/30)
ARGONAUT NORTHWEST INSURANCE
COMPANY, ASSICURAZIONI GENERALI DI
TRIESTE E. VENEZIA S.P.A., BALOISE
FIRE INSURANCE COMPANY, THE BALOISE
INSURANCE COMPANY OF AMERICA,
BELLEFONTE INSURANCE COMPANY,
BERCANUS INSURANCE COMPANY LIMITED,
BERMUDA FIRE AND MARINE INSURANCE
COMPANY LTD., BIRMINGHAM FIRE
INSURANCE COMPANY OF PENNSYLVANIA,
BISHOPSGATE INSURANCE COMPANY LTD.,
THE BRITISH COMMERCIAL INSURANCE
COMPANY LTD., BRITISH NATIONAL LIFE
INSURANCE SOCIETY LTD., BRITISH &
OVERSEAS INSURANCE COMPANY LTD.,
BRITTANY INSURANCE COMPANY LTD.,
BRYANSTON INSURANCE COMPANY
LIMITED, CALIFORNIA UNION INSURANCE
COMPANY, THE CENTRAL NATIONAL
INSURANCE COMPANY OF OMAHA, CIA
AGRICOLA DE SEGUROS S.A., CITY
GENERAL INSURANCE COMPANY LTD.,
CITIZENS CASUALTY COMPANY OF NEW
YORK, CITY INSURANCE COMPANY, CNA
REINSURANCE OF LONDON LIMITED,
COLONIA VERSICHERUNG
AKTIENGESELLSCHAFT, COLUMBIA
CASUALTY COMPANY, COMPAGNIE BELGE
D'ASSURANCES GENERALES INCENDIE
ACCIDENTS ET RISQUES DIVERS,
COMPAGNIE EUROPEENNE D'ASSURANCES
INDUSTRIELLES S.A., CONTINENTAL
CASUALTY COMPANY, DART AND KRAFT
INSURANCE COMPANY LTD., DART
INSURANCE COMPANY LIMITED, DELTA-LLOYD NON-LIFE INSURANCE COMPANY
LTD., THE DOMINION INSURANCE
COMPANY LTD., THE DRAKE INSURANCE
COMPANY LTD., ECONOMIC INSURANCE
COMPANY LTD., EDINBURGH ASSURANCE
COMPANY LTD., EL PASO INSURANCE
COMPANY LIMITED, EMPLOYERS MUTUAL
CASUALTY INSURANCE COMPANY,
ENGLISH AND AMERICAN INSURANCE
COMPANY LTD., EURINCO ALLGEMEINE
VERSICHERUNGS A.G., EUROPEAN
GENERAL REINSURANCE COMPANY LTD.,
EUROPEAN GENERAL REINSURANCE (A-28/29/30)
COMPANY, LTD., OF ZURICH, EXCESS
INSURANCE COMPANY LTD., EXCESS
MUTUAL REINSURANCE COMPANY, FEDERAL
INSURANCE COMPANY, FIDELIDADE
INSURANCE COMPANY, THE FIDELITY AND
CASUALTY COMPANY OF NEW YORK,
FIREMAN'S FUND INSURANCE COMPANY,
FIRST STATE INSURANCE COMPANY,
GERLING-KONZERN ALLEGEMEINE
VERSICHERUNGS-AKTIENGESELLSCHAFT
GIBRALTER CASUALTY COMPANY, GRANITE
STATE INSURANCE COMPANY, GREAT
AMERICAN INSURANCE COMPANY,
GUILDHALL INSURANCE COMPANY LTD.,
HAFTPFLICHTVERBAND DER DEUTSCHEN
INDUSTRIE V.A.G., HARBOR INSURANCE
COMPANY, HAWK INSURANCE COMPANY
LTD., HELVETIA ACCIDENT SWISS
INSURANCE COMPANY LTD., HELVETIA
GENERAL INSURANCE COMPANY LTD.,
HIGHLANDS INSURANCE COMPANY, HOME &
OVERSEAS INSURANCE COMPANY, LTD.,
THE HOME INSURANCE COMPANY, INSCO
LTD., INSURANCE COMPANY OF STATE OF
PENNSYLVANIA, INTERGRITY INSURANCE
COMPANY, INTERSTATE FIRE & CASUALTY
COMPANY, LEXINGTON INSURANCE
COMPANY, LONDON AND EDINBURGH
GENERAL INSURANCE COMPANY, LTD.,
LONDON AND EDINBURGH INSURANCE CO.,
LTD. - now Mercury Insurance
Holdings Ltd., THE LONDON &
OVERSEAS INSURANCE COMPANY LTD.,
LOUISVILLE INSURANCE COMPANY LTD.,
LUDGATE INSURANCE COMPANY LTD.,
LUMBERMENS MUTUAL CASUALTY COMPANY,
MEAD REINSURANCE CORPORATION, THE
MERCANTILE AND GENERAL REINSURANCE
COMPANY LTD., MIDLAND INSURANCE
COMPANY, MINSTER INSURANCE COMPANY
LTD., MUTUAL REINSURANCE COMPANY
LTD., NATIONAL CASUALTY COMPANY,
NATIONAL CASUALTY COMPANY, LTD.,
NATIONAL CASUALTY COMPANY, (OF
DETROIT), NATIONAL CASUALTY COMPANY
OF AMERICA LTD., NATIONAL UNION
FIRE INSURANCE COMPANY OF
PITTSBURGH, NEW ENGLAND INSURANCE (A-28/29/30)
COMPANY, NEW LONDON REINSURANCE
COMPANY LIMITED, NORTH ATLANTIC
INSURANCE COMPANY LIMITED, ORION
INSURANCE COMPANY LTD., PACIFIC
INSURANCE COMPANY, PINE TOP
INSURANCE COMPANY, PRUDENTIAL
REINSURANCE COMPANY, PURITAN
INSURANCE COMPANY, for itself and
as successor to the Manhattan Fire
and Marine Insurance Company by
change of name, RIVER THAMES
INSURANCE COMPANY LTD., REPUBLIC
INSURANCE COMPANY, ROYAL INSURANCE
COMPANY OF AMERICA, ROYAL SCOTTISH
INSURANCE COMPANY LTD., SAFETY
MUTUAL CASUALTY CORPORATION,
SCOTTISH LION INSURANCE COMPANY
LTD., SOUTHERN AMERICAN INSURANCE
COMPANY, SOVEREIGN MARINE AND
GENERAL INSURANCE COMPANY LTD., THE
SPHERE INSURANCE COMPANY LTD., ST.
HELEN'S INSURANCE COMPANY LTD., ST.
KATHERINE INSURANCE COMPANY LTD.,
ST. PAUL FIRE AND MARINE INSURANCE
COMPANY, STRONGHOLD INSURANCE
COMPANY LIMITED, SWISS REINSURANCE
COMPANY, SWISS UNION GENERAL
INSURANCE COMPANY LTD., SWITZERLAND
GENERAL INSURANCE COMPANY LIMITED,
TERRA NOVA INSURANCE COMPANY LTD.,
TRENT INSURANCE COMPANY LTD.,
TUREGUM INSURANCE COMPANY, TWIN
CITY FIRE INSURANCE COMPANY,
UNDERWRITERS AT LLOYD'S LONDON,
UNIGARD MUTUAL INSURANCE COMPANY,
UNIONAMERICA INSURANCE COMPANY
LTD., UNITED STANDARD INSURANCE
COMPANY LTD., THE VICTORY INSURANCE
COMPANY LTD., WALBROOK INSURANCE
COMPANY LTD., "WINTETHUR" SWISS
INSURANCE COMPANY, WORLD AUXILIARY
INSURANCE CORPORATION, LTD., YASUDA
FIRE & MARINE INSURANCE COMPANY
(U.K.) LIMITED, YUVAL INSURANCE
COMPANY LTD., ZURICH INSURANCE
COMPANY,
Defendants,
and (A-28/29/30)
COMMERCIAL UNION INSURANCE COMPANY,
as successor to THE OCEAN ACCIDENT
& GUARANTEE CORPORATION, LTD.,
AMERICAN EMPLOYERS' INSURANCE
COMPANY, THE EMPLOYERS' LIABILITY
ASSURANCE CORPORATION, LTD.,
EMPLOYERS' SURPLUS LINES INSURANCE
COMPANY, GENERAL REINSURANCE
CORPORATION, ALLSTATE INSURANCE
COMPANY, as successor-in-interest
to Northbrook Excess and Surplus
Insurance Company, formerly
Northbrook Insurance Company, NORTH
STAR REINSURANCE CORPORATION, and
ZURICH INTERNATIONAL LIMITED,
Defendants-Respondents.
and Cross-Appellants,
and
CENTURY INDEMNITY COMPANY (as
successor to CCI Insurance Company,
which itself is the successor to
the Insurance Company of North
America),
Defendant-Respondent.
GEI INTERNATIONAL INCORPORATED, a
New Jersey corporation, (formerly
known as ANDREW DENHOLM, INC.), and
ANDREW DENHOLM, INC.,
Plaintiffs-Appellants,
v.
ST. PAUL FIRE AND MARINE INSURANCE
COMPANY, FEDERAL INSURANCE COMPANY,
ATLANTIC MUTUAL INSURANCE COMPANY,
NORTHWESTERN NATIONAL INSURANCE
COMPANY, MIDLAND INSURANCE COMPANY,
CHUBB GROUP OF INSURANCE COMPANIES,
FIREMAN'S FUND INSURANCE CO., INC.,
IDEAL MUTUAL INSURANCE CO., INC.,
ORB HOLDING CO., JOHN BLACK, ROBERT
DEDERER, FRANK VANDERHOOF,
METRAMATIC CORPORATION, HIGH SPEED
CHECKWEIGHER INC., successor in
interest to METRAMATIC CORPORATION,
AG fur PRAZISIONSINSTRUMENTE and
NEW JERSEY PROPERTY/LIABILITY
GUARANTY ASSOCIATION,
Defendants,
and (A-31)
JOHN BLACK, ROBERT DEDERER and
FRANK VANDERHOOF, individually and
as former corporate officers,
directors and shareholders of NGR
Design and Manufacturing Co., Inc.
and Metal Detectors, Inc.,
Metramatic Corporation and ORB
Holding Co.,
Defendants and Third Party
Plaintiffs,
v.
FIREMAN'S FUND INSURANCE CO., INC.,
ST. PAUL MERCURY INSURANCE COMPANY,
NORTHWESTERN NATIONAL INSURANCE
CO., and NEW JERSEY
PROPERTY/LIABILITY GUARANTY
ASSOCIATION,
Third-Party Defendants.
Argued September 9, 1996 -- Decided May 12, 1997
On appeal from the Superior Court, Appellate
Division, whose opinion in GEI International
Incorporated v. St. Paul Fire and Marine
Insurance Co. is reported at
287 N.J. Super. 385 (1996).
Robert Mahoney argued the cause for
appellants GEI International Incorporated,
etc., et al. (Friedman Siegelbaum, attorneys;
Mr. Mahoney and James M. Andrews, of counsel
and on the brief).
Vincent R. FitzPatrick, Jr., a member of the
New York bar, argued the cause for appellant
and cross-respondent Ciba-Geigy Corporation
(Hayden, Perle & Silber, attorneys).
James W. Christie, III, argued the cause for
respondents and cross-appellants Commercial
Union Insurance Company, as successor to The
Ocean Accident & Guarantee Corporation, Ltd.;
The Employers' Liability Assurance
Corporation, Ltd.; American Employers'
Insurance Company; and Employers' Surplus
Lines Insurance Company (Christie, Pabarue,
Mortensen and Young, attorneys).
Stefano V. Calogero argued the cause for respondents and cross-appellants General Reinsurance Corporation, North Star Reinsurance Corporation, Allstate Insurance Company, as successor in interest to Northbrook Excess and Surplus Insurance
Company, formerly Northbrook Insurance
Company and Zurich International Limited
(Cuyler Burk, attorneys).
Paul R. Koepff, a member of the New York bar,
argued the cause for respondent Century
Indemnity Company (as successor to CCI
Insurance Company, which itself is the
successor to the Insurance Company of North
America) (Graham, Curtin & Sheridan,
attorneys).
Paul E. Breene submitted briefs on behalf of
amicus curiae, New Jersey Public Risk
Managers' Association (Anderson Kill Olick &
Oshinsky, attorneys; Mr. Breene and Jennifer
D. Marell, of counsel).
The opinion of the Court was delivered by
POLLOCK, J.
These appeals pose the issue whether a constitutional right
to a jury trial exists in an action for a declaratory judgment
concerning claims against insurers for breach of contract and the
recovery of future remediation costs. Resolution of the issue
depends on whether such an action is more like a traditional
common-law action for damages or one for equitable relief.
In Ciba-Geigy v. Liberty Mutual Insurance Co., plaintiff
Ciba-Geigy Corporation ("Ciba-Geigy") sued its insurers seeking a
judgment declaring that the insurers are obligated to defend and
indemnify it for future costs of environmental remediation.
Ciba-Geigy also seeks compensatory damages for remediation costs
that it has already incurred. The Law Division granted Ciba-Geigy's motion, in which the insurers initially joined, for a
jury trial.
On March 6, 1996, defendant Century Indemnity Company
("Century"), changed its position and moved for a trial by the
court without a jury. Defendants Unigard Security Insurance
Company and Great American Insurance Company joined Century's
motion. Ciba-Geigy and five other insurers, Commercial Union
Insurance Company ("Commercial"), General Reinsurance Company
("General Reinsurance"), North Star Reinsurance Corporation,
Allstate Insurance Company, and Zurich International Limited,
opposed the motion. The Law Division granted Century's motion.
The Appellate Division denied Ciba-Geigy's motion for leave
to appeal and to stay the trial. We granted leave to appeal.
144 N.J. 371 (1996). Thereafter, we granted leave for Commercial
and General Reinsurance, which oppose Century's motion to strike
Ciba-Geigy's jury demand, to participate in this appeal.
145 N.J. 369 (1996).
In GEI International Corp. v. St. Paul Fire and Marine
Insurance Co., GEI, like Ciba-Geigy, seeks a judgment declaring
that its insurers are obligated to indemnify it for all future
environmental remediation costs and expenses. GEI also seeks
money damages for breach of the policy because of the insurers'
failure to reimburse it for the clean-up costs it has incurred to
date. The Law Division bifurcated the claims for environmental
coverage and liability.
In both the liability and coverage actions, GEI and two
insurers, Chubb Group of Insurance Companies ("Chubb Group") and
Federal Insurance Company ("Federal"), demanded a jury. Two
other insureds, Hi-Speed Checkweigher and A.G. fur
Prazisionsinstrumente ("AG"), moved to strike GEI's demand for a
jury trial in the liability phase. The Law Division struck all
demands for a jury trial. The Appellate Division affirmed.
287 N.J. Super. 385, 396 (1996).
We granted GEI's motion for leave to appeal that part of the
Appellate Division's order holding that the parties have no right
to a jury trial on the environmental coverage claim.
144 N.J. 373 (1996).
We hold that an action by an insured against an insurer for
a declaratory judgment to compel indemnification for future
environmental clean-up costs is substantially an action for
specific performance, to which a right to trial by jury does not
attach. We further hold that when an insured's claim to recover
damages for past environmental remediation costs is ancillary to
the insured's claim for specific performance, the entire matter
should be resolved in a non-jury trial. Consequently, we affirm
the order of the Appellate Division in GEI and the order of the
Law Division in Ciba-Geigy.
The relevant facts in both cases are undisputed. Ciba-Geigy
is one of five cases consolidated under the general heading of
"In re Environmental Insurance Declaratory Judgment Actions."
The Ciba-Geigy action, which was filed in 1987, involves numerous
policies, some of which were issued nearly half-a-century ago.
According to Ciba-Geigy, it is subject to claims from
governmental agencies, such as the Environmental Protection
Agency ("EPA") and the Department of Environmental Protection
("DEP"), for alleged environmental pollution at several
industrial sites. Ciba-Geigy seeks indemnification for liability
that arises from environmental remediation at those sites.
From 1952 through 1986, the defendant-insurers issued
primary, excess, and umbrella Comprehensive General Liability
("CGL") policies to Ciba, Geigy, Toms River Chemical Corporation
and their successor, Ciba-Geigy Corporation ("Ciba-Geigy").
Ciba-Geigy submitted claims under the policies to recover
environmental remediation costs. Ciba-Geigy maintains that the
environmental pollution claims involve personal injury or
property damage caused by an "accident" or "occurrence" within
the meaning of the policies and during the policy periods. The
insurers have denied Ciba-Geigy's claims on the grounds that
either: (1) Ciba-Geigy "expected or intended" to cause the
damage; (2) the underlying claims did not arise out of an
"accident" or "occurrence"; or (3) at the time the policies were
issued, Ciba-Geigy knew of the pollution damage for which it now
seeks coverage.
Ciba-Geigy subsequently commenced this action, seeking
coverage for over 100 underlying sites located in thirty states.
It asks each insurer to defend and indemnify it for future
liability and to compensate it for costs already incurred. Ciba-Geigy estimates that the costs incurred at various sites
approximate $400 million. It estimates further that its future
liability will exceed $1 billion. Ciba-Geigy seeks a declaratory
judgment that the insurers must indemnify it for those future
costs.
The trial court limited this phase of the coverage
litigation to all of Ciba-Geigy's sites in New Jersey,
principally its dye- and resin-manufacturing plant in Toms River.
Ciba-Geigy seeks approximately $125 million in compensatory
damages for the Toms River site. It also requests an order that
the insurers pay for all future costs, approximately $400
million. After resolution of the claims for coverage for the New
Jersey sites, the parties will address Ciba-Geigy's claims for
coverage concerning the numerous other sites located outside of
New Jersey.
One issue at trial will be whether Ciba-Geigy "expected or
intended" the environmental pollution at the Toms River site. If
so, Ciba-Geigy is not entitled to coverage at the Toms River
site, and perhaps certain other sites in New Jersey. If not, the
trial court will resolve numerous other coverage issues
concerning the Toms River site, including the time when the
alleged property damage occurred and the effect of the "owned
property exclusion." Another critical issue for some of the
carriers is whether they have a duty to defend Ciba-Geigy.
The Law Division in Ciba-Geigy initially ordered a jury
trial. Before the trial commenced, however, the Appellate
Division rendered the GEI decision. Relying on that decision in
the Ciba-Geigy action, the Law Division granted Century's motion
for a non-jury trial. It reasoned that the issues and claims for
relief in environmental coverage actions are "unique, different,
and above all very complex and complicated." The court also
stated that the case was "not a typical breach of contract case"
and was "unknown in common law."
GEI's claims are like those asserted by Ciba-Geigy. The
claims arise primarily from ground water contamination at a
manufacturing facility in Roxbury Township that a former wholly-owned subsidiary of GEI, Metramatic, operated from 1983 to 1988.
Before 1983, defendants Black, Dederer and Vanderhoof were
shareholders of Metramatic. Their general partnership, defendant
ORB, owned the site. In March 1983, ORB transferred title to the
real estate to Metramatic, and GEI purchased the Metramatic
stock.
When GEI sold the Metramatic stock to AG, the sale triggered
the Environmental Cleanup Responsibility Act ("ECRA"), now known
as the Industrial Site Remediation Act ("ISRA"), N.J.S.A. 13:1K-6
to -35. Compliance with ECRA required GEI to conduct a full
investigation to determine the possible existence of hazardous
contamination and the necessity for environmental remediation.
That investigation disclosed substantial ground water
contamination. To date, the cost of clean-up has exceeded $2
million. As the clean-up continues, the costs will mount.
GEI submitted claims against its CGL and excess-insurance
carriers to recover the costs of investigation and remediation of
the groundwater contamination. The carriers disclaimed coverage,
relying in part on pollution-exclusion clauses. GEI then filed
this action, alleging that the insurers had breached their
policy. It seeks a judgment for monies spent to date and for a
declaration that the insurers are liable for the continuing cost
of remediation.
GEI also seeks contribution under the Spill Compensation and
Control Act ("Spill Act"), N.J.S.A. 58:10-23.11 to -23.11z, from
other owners and operators of the site. The Law Division
bifurcated the claims, determining that the contribution claims
under the Spill Act would be litigated in the first trial and the
coverage claims against the insurers in the second trial.
GEI, along with two defendant-insurers, Chubb Group and
Federal, demanded a jury in both trials. The Law Division struck
the demands. It ruled that GEI's claim for coverage, despite the
demand for money damages, essentially sought specific
performance.
The Appellate Division affirmed.
287 N.J. Super. 385
(1996). The court held that no right to a jury trial attached
either to the claim for contribution under the Spill Act or to
the claim for coverage. Id. at 392-95. GEI has not appealed
from the court's determination that the right to trial by jury
did not attach to the contribution action. It appeals only from
the denial of a jury trial on the coverage claim.
The Appellate Division characterized a declaratory judgment
action against an insurance company seeking to compel
indemnification for environmental clean-up costs as an equitable
action for specific performance. Ibid. So characterized, the
action should be determined by the court sitting without a jury.
Ibid. The court acknowledged that the coverage dispute involved
the determination of factual issues, such as whether the
contamination occurred intentionally or accidentally. Those
issues, however, were "ancillary and incidental to and subsumed
within the main cause of action for equitable relief in the
coverage trial." Id. at 396.
Article I, Paragraph 9 of the 1947 New Jersey Constitution provides that "[t]he right of trial by jury shall remain inviolate." N.J. Const. art. 1, ¶ 9. This provision guarantees
the right to trial by jury as it existed at common law at the
time of the adoption of the New Jersey Constitution. Weinisch v.
Sawyer,
123 N.J. 333, 343 (1991); In re Livolsi,
85 N.J. 576, 587
(1981). Traditionally, the right to a jury trial attaches in
legal, but not equitable, actions. Weinisch, supra, 123 N.J. at
343.
In federal courts, the Seventh Amendment to the United
States Constitution guarantees the right to a jury trial in civil
cases. Minneapolis & St. Louis R.R. v. Bonbolis,
241 U.S. 211,
36 S. Ct. 595,
60 L. Ed. 961 (1916). The Seventh Amendment right
to a jury trial, however, is not binding on the states. Id. at
217, 36 S. Ct. at 596, 60 L. Ed. at 963. Thus, the right to a
trial by jury in New Jersey must arise under either a statute or
the state constitution. Shaner v. Horizon Bancorp.,
116 N.J. 433, 435-36 (1989).
Declaratory judgment actions were unknown at common law. In
New Jersey, the Uniform Declaratory Judgments Act (the "Act"),
N.J.S.A. 2A:16-50 to -62, governs the right to declaratory
relief. The Act does not specifically state when the right to a
jury trial attaches to an action for a declaratory judgment.
Instead, the Act provides that factual issues "may be tried and
determined in the same manner as issues of facts are tried and
determined in other civil actions . . . ." N.J.S.A. 2A:16-58.
Depending on the issue, a declaratory judgment can be either
legal or equitable. See Utility Blade & Razor Co. v. Donovan,
33 N.J. Super. 566, 572 (App. Div. 1955) (explaining that
declaratory relief is traditionally "neither equitable nor legal
in its nature . . . [but] takes on the color of either, depending
upon the issue"); see also Government Employees Ins. Co. v.
Butler,
128 N.J. Super. 492, 495 (Ch. Div. 1974) (same). Thus,
the filing of a declaratory judgment action for insurance
coverage does not necessarily engender the right to a jury trial.
In a declaratory judgment action, the right to a jury trial
depends on whether the action is the counterpart to one in equity
or in law.
By comparison, a right to trial by jury in a declaratory
judgment action in the federal courts may be demanded under the
circumstances and in the manner provided by the Federal Rules of
Civil Procedure.
28 U.S.C.A.
§2201; Fed. R. Civ. P. 57. As in
the New Jersey courts, the right to a jury trial in federal
courts depends on whether a claim is legal or equitable. 22A Am.
Jur.2d Declaratory Judgments § 230 (1988). If a claim is
equitable, no right to trial by jury attaches. Ross v. Bernhard,
396 U.S. 531, 533,
90 S. Ct. 733, 735,
24 L. Ed.2d 729, 733
(1970).
In determining whether GEI's and Ciba-Geigy's declaratory
judgment actions are primarily legal or equitable, "we look to
the historical basis for the cause of action and focus on the
requested relief." Weinisch, supra, 123 N.J. at 343. Of the
two, the more persuasive factor is the requested relief. Ibid.
For example, the right to a trial by jury does not attach to
an insured's action against an insurer and its insurance agent
for their failure to advise the insured of available coverage.
Id. at 342-43. The relief requested in such an action is
reformation of the insurance policy, an equitable remedy. Ibid.
We also have held that absent an express statutory provision, a
claimant is not entitled to a jury trial in an action under the
Law Against Discrimination ("LAD"), N.J.S.A. 10:5-1 to -42,
because the relief available under the LAD is predominately
equitable in nature. Shaner, supra, 116 N.J. at 453. In
response, the Legislature amended the relevant statute, N.J.S.A.
10:5-3, to provide that a person could assert a claim for damages
based on the LAD. L. 1992, c. 146, § 1.
Here, the Appellate Division characterized Ciba-Geigy's
requests for declaratory judgments as actions for specific
performance. As a claim for equitable relief, specific
performance does not trigger a right to a jury trial. See, e.g.,
Barry M. Dechtman, Inc. v. Sidpaul Corp.,
89 N.J. 547, 552 (1982)
(stating that specific performance rested on equitable
principles); Livolsi, supra, 85 N.J. at 590 n.12 (1981) (holding
"[i]n purely equitable matters there is no right to a jury even
if both parties want one"); Brady v. Carteret Realty Co.,
70 N.J.
Eq. 748, 751 (1906) (holding that there was no right to jury
trial when equity provided a remedy because legal remedy was
inadequate), aff'd,
72 N.J. Eq. 904 (1907).
A declaratory judgment action, although it ultimately may
result in the payment of money, is not necessarily an action of
law. GEI's and Ciba-Geigy's complaints seek judgments mandating
that the defendant-insurers defend and indemnify them for the
future costs of environmental remediation. Such a request, which
seeks an order to compel an insurer to discharge future
obligations under its policy, is sufficiently like an action for
specific performance to withstand a demand for a jury trial. 11
Samuel Williston, A Treatise on the Law of Contracts § 1418 (3d
ed. 1968 & Supp. 1996) (explaining that specific performance
seeks an order compelling a party substantially to perform).
GEI and Ciba-Geigy seek orders compelling the insurers to
perform their contractual obligations, relief made necessary by
the inadequacy of a remedy at law. Although the essential nature
of an action as legal or equitable may not be clear, specific
performance is appropriate if it will "do more perfect and
complete justice." Fleisher v. James Drug Stores, 1 N.J. 138,
146 (1948). For nearly half a century, the test, although it
could be more specific, has served to distinguish actions in
equity from those at law. Moreover, we anticipate no wholesale
revision of the traditional right to a jury trial in declaratory-judgment actions involving insurance policies. We go no further
than to hold that a jury need not decide the present actions,
which involve unique questions concerning insurance for the
remediation of environmental harm.
Specific performance also is appropriate when relief at law,
money damages, provides inadequate compensation for the breach of
an agreement. Ibid.; Mantell v. Int'l Plastic Harmonica Corp.,
141 N.J. Eq. 379, 390 (1947). An award of money damages in these
cases would be inadequate. As the Law Division in Ciba-Geigy
recognized, the issues in environmental coverage actions are
uniquely complex. Ciba-Geigy asserts five claims for relief,
seeking coverage for its liability to clean up over a hundred
sites, located in thirty states. In several counts, Ciba-Geigy
seeks the ability to designate which of its many policies from
several insurers would be triggered. Characterization of the
cause of action depends on the dominant relief sought and the
nature of the proceeding that would provide the most complete
resolution of the issues. In other contexts, the complexity of
environmental coverage actions has led to creative procedural
responses. See Westinghouse Electric Corp. v. Liberty Mut. Ins.
Co.,
233 N.J. Super. 463, 478-79 (App. Div. 1989) (remanding case
involving 3,000 claims in more than twenty states for trial in a
single forum, finding that "[w]e understand that ultimately the
[environmental] coverage questions may be fact-sensitive and that
site-specific factual findings may have . . . to be made").
Moreover, if left to their legal remedy, Ciba-Geigy and GEI
would be required to file multiple future breach-of-contract
actions each time an insurer refuses to defend or indemnify them.
Only specific performance can place Ciba-Geigy and GEI in the
position they assert they would have been, had the defendant-insurers performed their contractual obligations.
As the doctrine of ancillary equitable jurisdiction
illustrates, avoidance of a multiplicity of lawsuits
appropriately limits the right to a jury trial. If an action is
primarily equitable, a court of equity may assume jurisdiction
over ancillary legal issues. Fleischer, supra, 1 N.J. at 150.
The exercise of ancillary equitable jurisdiction avoids a
multiplicity of actions and permits a court to do complete
justice. See Eckard Drugs v. S.R. 215 Rite-Aid,
170 N.J. Super. 37, 41 (App. Div. 1979) (noting that once equity jurisdiction
attaches it may be retained in order to avoid multiplicity of
suits even if suit includes some matters traditionally considered
to be strictly legal). In addition, specific performance is
particularly appropriate when, as here, the claim involves a
continuing right to future benefits that cannot be satisfied by a
one-time monetary payment. See, e.g., Manetti v. Prudential
Property & Casualty Ins. Co.,
196 N.J. Super. 317, 321-22 (App.
Div. 1984) (reasoning that nature of personal injury protection
benefits is such that they may give rise to ongoing or recurring
disputes). A contrary result would lead to a fragmentation of
issues and waste of judicial resources. Id. at 40-41. The
hallmark of a modern system of justice is designation of a single
forum to decide all matters in controversy. Brennan v. Orban,
145 N.J. 282, 293 (1996). A jury simply could not grant all the
relief that Ciba-Geigy seeks.
Ciba-Geigy and GEI cannot convert their claims into actions
at law simply by placing a monetary figure on their requests for
declaratory relief. Both Ciba-Geigy and GEI seek substantial
future damages. The amount of the damages, however, are both
uncertain and unknown. When a court cannot reasonably ascertain
the amount of damages, specific performance emerges as the more
appropriate remedy. Fleischer, supra, 1 N.J. at 146-47 (holding
that damages were not adequate compensation for breach of co-operative contract designed to place retail druggists on
competitive level with well-known chain pharmacies, in part
because damages were immeasurable); American Assoc. of Univ.
Professors v. Bloomfield College,
136 N.J. Super. 442 (App. Div.
1975) (reasoning that dismissed college faculty members were
entitled to specific performance of reinstatement because of
uncertainty in measuring damages).
Contrary to the dissent, however, we do not rely on an
"award of a finite amount" as the predicate for the right to a
jury trial. (Post, at ___, slip op. at 10). In the present
cases, the insureds seek more. They seek an order directing the
insurers to reimburse them for the future cost of environmental
remediation. Because those breaches have not yet occurred, the
insureds' damages are not calculable. As previously stated, the
award of money damages cannot constitute adequate relief.
Commercial Union argues that Morton Int'l, Inc. v. General
Accident Ins. Co.,
134 N.J. 1 (1993), cert. denied,
512 U.S. 1245,
114 S. Ct. 2764,
129 L. Ed.2d 878 (1994), requires a
reversal of the judgment of the Appellate Division in GEI. We
disagree. True, Morton held that under the CGL policies at issue
in that case, environmental-remediation expenses constituted
"damages." Id. at 27. Morton, however, concerned the
interpretation of "damages" within the policies, not a
determination whether the requested relief was legal or
equitable. Unlike GEI and Ciba-Geigy, Morton sought compensation
only for the clean-up and remediation costs for which it had
already been held liable in a prior proceeding. Id. at 9.
Morton did not ask the Chancery Division to compel its insurers
to indemnify it for any future costs. Consequently, Morton does
not compel the conclusion that the parties in the present case
have a right to trial by jury.
Nor does the conclusion that the present action should
proceed in a non-jury trial contradict the holding of the
Appellate Division in Chiacchio v. Chiacchio,
198 N.J. Super. 1,
5 (App. Div. 1984). In Chiacchio, the underlying action was one
for divorce in which the wife sought recovery for personal
injuries arising out of the husband's alleged acts of extreme
cruelty. The husband filed a third-party complaint seeking
coverage from his homeowner's insurer. The Appellate Division
held that "[a]n action for a declaratory judgment as to the
rights of parties to an insurance policy is basically an action
for the construction of a contract generally cognizable before
the law courts." Id. at 5. It transferred the husband's claim
for indemnification to the Law Division for a trial by jury. The
court reasoned that the husband's request for indemnification
from his insurer did not arise out of the marital relationship
that underlay the wife's divorce and tort actions. Id. at 6.
Chiacchio, unlike GEI and Ciba-Geigy, involved a claim for a
fixed amount for a past wrong, not a claim for costs to be
incurred in the future. Our recent decision in Brennan v. Orban,
supra, moreover, suggests limits on the appropriateness of
transferring an indemnification claim from the Family Part to the
Law Division. Brennan recognized that the Family Part could
better manage as part of a single case claims as distinct as
those for divorce and marital torts. Brennan, supra, 145 N.J. at
304. Similarly, in the present actions, the demands for
declaratory relief, although arising out of the insurers alleged
breach of contract, may be so imbued with claims for equitable
relief that management by a single judge is the only sensible
answer.
We limit our holding to declaratory judgment actions for
insurance coverage for the recovery of future environmental
remediation costs. The predominance of equitable issues and
complexity of the underlying action distinguishes those actions
from coverage actions under other kinds of insurance policies.
We do not reach the broader question concerning the extent to
which the right to a jury trial attaches to actions for coverage
on other kinds of insurance policies. See Steiner v. Stein,
2 N.J. 367, 371 (1949) (holding that in "actions for breach of
contract . . . the parties are entitled to a trial by jury as of
right").
Historically, moreover, environmental-insurance coverage actions for the recovery of future remediation costs were unknown in 1776, when New Jersey adopted its first constitution. Without statutory authorization, a right to trial by jury does not attach to a claim if the claim did not exist at common law. Shaner, supra, 166 N.J. at 447; Montclair v. Stanoyevich, 6 N.J. 479, 487-88 (1951). To this extent, Ciba-Geigy and GEI assert a cause of action and seek relief that was unknown at common law. See Livolsi, supra, 85 N.J. at 587-88 (holding that attorneys did not have absolute right to trial by jury in fee dispute cases before adoption of the 1947 Constitution); Ebling Brewing Co. v. Heirloom, Inc., 1 N.J. 71, 78 (1948) (reasoning that jurisdiction of Chancery Court to appoint statutory receiver of insolvent corporation existed before adoption of 1844 Constitution); Boardwalk Properties, Inc. v. BPHC, 253 N.J. Super. 515, 530 (App. Div. 1991) (finding that New Jersey Antitrust Act did not replace common law causes of action that were triable to jury);
Manetti, supra, 196 N.J. Super. at 320 (holding that statutory
personal injury protection ("PIP") benefits did not exist at
common law and were not subject to right of jury trial); Peterson
v. Albano,
158 N.J. Super. 503, 506 (App. Div.), certif. denied,
78 N.J. 337 (1978) (finding that right to a jury trial in summary
dispossess action existed at common law when Constitution of 1776
was adopted); Kugler v. Banner Pontiac-Buick, Opel, Inc.,
120 N.J. Super. 572, 582 (Ch. Div. 1972) (holding that claims under
Consumer Fraud Act were completely unknown to common law).
Appellants argue that environmental-insurance-coverage
disputes for the recovery of future remediation costs are no
different than other insurance coverage disputes and breach-of-contract actions generally. See Guy v. Petti,
275 N.J. Super. 536, 544 (App. Div. 1993) ("A civil litigant may demand a jury
trial if the same or highly analogous action entitled one to a
jury trial when the people adopted their constitution."). In one
sense, declaratory judgments concerning environmental insurance
policies may be the heir of more commonplace declaratory-judgment
actions for coverage. Ordinarily, an action for the declaration
of parties' rights under an insurance policy is considered to be
a contractual obligation cognizable in a court of law and,
therefore, generally subject to trial by jury. See Paul v. Ohio
Casualty Ins. Co.,
196 N.J. Super. 286, 289 n.1 (App. Div. 1984),
certif. denied,
99 N.J. 228 (1985) (holding that declaratory
judgment actions seeking interpretation of insurance policies
involved primarily legal rights and belonged in Law Division);
Government Employees, supra, 128 N.J. Super. at 496 (reasoning
that action for the declaration of the parties' rights under
insurance policy was basically action for construction of a
contract cognizable before the law courts).
Declaratory judgment actions against insurers for the
recovery of future environmental remediation costs, however,
differ from claims asserted in eighteenth-century litigation. No
one dreamt in 1776 of environmental torts or claims for
contribution under environmental statutes. Similarly, disputes
between an insured and an insurer concerning future coverage for
environmental remediation costs were not cognizable before the
adoption of any of this State's constitutions.
Also supporting a non-jury trial in the present action is
the proposition that the underlying claim, remediation, is not
subject to trial by jury. Weinisch, supra, 123 N.J. at 343;
Asbestos Fibres, Inc. v. Martin Lab.,
12 N.J. 233, 239-40 (1953).
Remediation is a form of equitable relief that can require
continuing supervision. Although questions pertaining to
insurance coverage are separate from those pertaining to
remediation, a single judge can resolve all questions in both
proceedings sensibly and justly. In sum, insurance-coverage
actions for the recovery of the costs of environmental
remediation are sufficiently different from many other
declaratory judgment actions to support the distinction between
them.
The gravamen of GEI's and Ciba-Geigy's complaints is their request for specific performance of their insurance policies to compensate them for future costs of remediation. For example, at the Toms River site alone, Ciba-Geigy seeks more than $400 million in estimated future remediation costs. It also seeks $125 million as compensation for costs already incurred. That sum, although substantial, is but a fraction of the estimated remediation costs.
Because GEI and Ciba-Geigy primarily seek specific performance of the insurers' duties under their policies, we need not decide whether the right to trial by jury would attach to a claim limited to compensation for already-incurred costs. The claim to recover those costs rides in the wake of the claim for specific performance. Once a court of equity assumes jurisdiction over a cause, it may resolve all other issues that "are germane to or grow out of the subject-matter of the equitable jurisdiction." Fleisher, supra, 1 N.J. at 150; see also Steiner, supra, 2 N.J. at 373 ("It has long been a cardinal principle of equity that once [a court of equity] has obtained jurisdiction of a cause it will ordinarily dispose of all of the issues to avoid a multiplicity of suits.").
Thus, even if the parties are otherwise entitled to a jury
trial on the insurer's alleged breach of contract for failure to
compensate GEI and Ciba-Geigy for costs already incurred, those
claims grow out of and are germane to the declaratory judgment
action for specific performance. See, e.g., Brennan, supra, 145
N.J. at 302 (holding that doctrine of ancillary jurisdiction
authorizes Family Part to adjudicate marital tort without jury
when tort claim is intertwined with subject matter of divorce
action). Both the requests for declaratory judgment and recovery
of past remediation costs involve the interpretation of the same
insurance policies on the same sets of facts. But cf. N.J.
Highway Auth. v. Renner,
18 N.J. 485, 494 (1955) (reasoning that
since parties had proceeded on assumption that defendant's
counterclaim was not incidental to plaintiff's claim for specific
performance, interests of justice required that counterclaim be
tried by jury). Trying the two sets of claims separately, some
to a judge and others to a jury, would be a waste of judicial
resources.
All parties agree that a trial before a judge is more
efficient than one before a jury. Efficient judicial
administration confirms the conclusion that these actions should
proceed before a court sitting without a jury. Although
budgetary constraints and concerns about efficiency cannot
impinge on the right to a jury trial, in an era of fiscal
constraint, we cannot permit the unnecessary expansion of the
right to trial by jury solely to enable litigants to obtain a
tactical advantage.
The mere existence of factual issues does not automatically
entitle a party to a jury trial. Here, for example, a central
point of dispute in both Ciba-Geigy and GEI is whether the
insureds intended the environmental contamination within the
meaning of the underlying policies. The right to a jury that
otherwise might attach to those claims must yield to the
resolution of the dominant equitable issues in a non-jury trial.
In sum, the factual issues are ancillary to the insured's primary
claim for equitable relief in the claim for coverage. GEI,
supra, 287 N.J. Super. at 396. Admittedly, the case for a jury
trial in GEI, which involves a single site, is stronger than that
in Ciba-Geigy. On balance, however, we are inclined to affirm
the trial court's decision in GEI not to require a jury trial.
The orders of the Appellate Division in GEI and of the Law
Division in Ciba-Geigy are affirmed.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, GARIBALDI and
COLEMAN join in JUSTICE POLLOCK's opinion. JUSTICE O'HERN filed
a separate dissenting opinion in which JUSTICE STEIN joins.
SUPREME COURT OF NEW JERSEY
A-28/29/30/
31 September Term 1996
IN RE ENVIRONMENTAL INSURANCE
DECLARATORY JUDGMENT ACTIONS
CIBA-GEIGY CORPORATION,
Plaintiff-Appellant
and Cross-Respondent,
v.
LIBERTY MUTUAL INSURANCE COMPANY,
INSURANCE COMPANY OF NORTH AMERICA
September Term 1995
ACCIDENT & CASUALTY INSURANCE
COMPANY OF WINTERTHUR, ADMIRAL
INSURANCE COMPANY, AETNA CASUALTY &
SURETY COMPANY, AGRIPPINA
VERSICHERUNGS-AKTIENGESELLSCHAFT,
AIU INSURANCE COMPANY, ALBA GENERAL
INSURANCE COMPANY LTD., ALLIANZ
VERSICHERUNGS-AKTIENGESELLSCHAFT,
AMERICAN HOME ASSURANCE COMPANY,
AMERICAN RE-INSURANCE COMPANY,
AMERICAN STAR INSURANCE COMPANY,
ANDREW WEIR INSURANCE COMPANY LTD.,
ANGLO FRENCH INSURANCE COMPANY
LTD., ANGLO SAXON INSURANCE COMPANY LTD., (A-28/29/30)
ARGONAUT NORTHWEST INSURANCE
COMPANY, ASSICURAZIONI GENERALI DI
TRIESTE E. VENEZIA S.P.A., BALOISE
FIRE INSURANCE COMPANY, THE BALOISE
INSURANCE COMPANY OF AMERICA,
BELLEFONTE INSURANCE COMPANY,
BERCANUS INSURANCE COMPANY LIMITED,
BERMUDA FIRE AND MARINE INSURANCE
COMPANY LTD., BIRMINGHAM FIRE
INSURANCE COMPANY OF PENNSYLVANIA,
BISHOPSGATE INSURANCE COMPANY LTD.,
THE BRITISH COMMERCIAL INSURANCE
COMPANY LTD., BRITISH NATIONAL LIFE
INSURANCE SOCIETY LTD., BRITISH &
OVERSEAS INSURANCE COMPANY LTD.,
BRITTANY INSURANCE COMPANY LTD.,
BRYANSTON INSURANCE COMPANY
LIMITED, CALIFORNIA UNION INSURANCE
COMPANY, THE CENTRAL NATIONAL
INSURANCE COMPANY OF OMAHA, CIA
AGRICOLA DE SEGUROS S.A., CITY
GENERAL INSURANCE COMPANY LTD.,
CITIZENS CASUALTY COMPANY OF NEW
YORK, CITY INSURANCE COMPANY, CNA
REINSURANCE OF LONDON LIMITED,
COLONIA VERSICHERUNG
AKTIENGESELLSCHAFT, COLUMBIA
CASUALTY COMPANY, COMPAGNIE BELGE
D'ASSURANCES GENERALES INCENDIE
ACCIDENTS ET RISQUES DIVERS,
COMPAGNIE EUROPEENNE D'ASSURANCES
INDUSTRIELLES S.A., CONTINENTAL
CASUALTY COMPANY, DART AND KRAFT
INSURANCE COMPANY LTD., DART
INSURANCE COMPANY LIMITED, DELTA-LLOYD NON-LIFE INSURANCE COMPANY
LTD., THE DOMINION INSURANCE
COMPANY LTD., THE DRAKE INSURANCE
COMPANY LTD., ECONOMIC INSURANCE
COMPANY LTD., EDINBURGH ASSURANCE
COMPANY LTD., EL PASO INSURANCE
COMPANY LIMITED, EMPLOYERS MUTUAL
CASUALTY INSURANCE COMPANY,
ENGLISH AND AMERICAN INSURANCE
COMPANY LTD., EURINCO ALLGEMEINE
VERSICHERUNGS A.G., EUROPEAN
GENERAL REINSURANCE COMPANY LTD.,
EUROPEAN GENERAL REINSURANCE (A-28/29/30)
COMPANY, LTD., OF ZURICH, EXCESS
INSURANCE COMPANY LTD., EXCESS
MUTUAL REINSURANCE COMPANY, FEDERAL
INSURANCE COMPANY, FIDELIDADE
INSURANCE COMPANY, THE FIDELITY AND
CASUALTY COMPANY OF NEW YORK,
FIREMAN'S FUND INSURANCE COMPANY,
FIRST STATE INSURANCE COMPANY,
GERLING-KONZERN ALLEGEMEINE
VERSICHERUNGS-AKTIENGESELLSCHAFT
GIBRALTER CASUALTY COMPANY, GRANITE
STATE INSURANCE COMPANY, GREAT
AMERICAN INSURANCE COMPANY,
GUILDHALL INSURANCE COMPANY LTD.,
HAFTPFLICHTVERBAND DER DEUTSCHEN
INDUSTRIE V.A.G., HARBOR INSURANCE
COMPANY, HAWK INSURANCE COMPANY
LTD., HELVETIA ACCIDENT SWISS
INSURANCE COMPANY LTD., HELVETIA
GENERAL INSURANCE COMPANY LTD.,
HIGHLANDS INSURANCE COMPANY, HOME &
OVERSEAS INSURANCE COMPANY, LTD.,
THE HOME INSURANCE COMPANY, INSCO
LTD., INSURANCE COMPANY OF STATE OF
PENNSYLVANIA, INTERGRITY INSURANCE
COMPANY, INTERSTATE FIRE & CASUALTY
COMPANY, LEXINGTON INSURANCE
COMPANY, LONDON AND EDINBURGH
GENERAL INSURANCE COMPANY, LTD.,
LONDON AND EDINBURGH INSURANCE CO.,
LTD. - now Mercury Insurance
Holdings Ltd., THE LONDON &
OVERSEAS INSURANCE COMPANY LTD.,
LOUISVILLE INSURANCE COMPANY LTD.,
LUDGATE INSURANCE COMPANY LTD.,
LUMBERMENS MUTUAL CASUALTY COMPANY,
MEAD REINSURANCE CORPORATION, THE
MERCANTILE AND GENERAL REINSURANCE
COMPANY LTD., MIDLAND INSURANCE
COMPANY, MINSTER INSURANCE COMPANY
LTD., MUTUAL REINSURANCE COMPANY
LTD., NATIONAL CASUALTY COMPANY,
NATIONAL CASUALTY COMPANY, LTD.,
NATIONAL CASUALTY COMPANY, (OF
DETROIT), NATIONAL CASUALTY COMPANY
OF AMERICA LTD., NATIONAL UNION
FIRE INSURANCE COMPANY OF
PITTSBURGH, NEW ENGLAND INSURANCE (A-28/29/30)
COMPANY, NEW LONDON REINSURANCE
COMPANY LIMITED, NORTH ATLANTIC
INSURANCE COMPANY LIMITED, ORION
INSURANCE COMPANY LTD., PACIFIC
INSURANCE COMPANY, PINE TOP
INSURANCE COMPANY, PRUDENTIAL
REINSURANCE COMPANY, PURITAN
INSURANCE COMPANY, for itself and
as successor to the Manhattan Fire
and Marine Insurance Company by
change of name, RIVER THAMES
INSURANCE COMPANY LTD., REPUBLIC
INSURANCE COMPANY, ROYAL INSURANCE
COMPANY OF AMERICA, ROYAL SCOTTISH
INSURANCE COMPANY LTD., SAFETY
MUTUAL CASUALTY CORPORATION,
SCOTTISH LION INSURANCE COMPANY
LTD., SOUTHERN AMERICAN INSURANCE
COMPANY, SOVEREIGN MARINE AND
GENERAL INSURANCE COMPANY LTD., THE
SPHERE INSURANCE COMPANY LTD., ST.
HELEN'S INSURANCE COMPANY LTD., ST.
KATHERINE INSURANCE COMPANY LTD.,
ST. PAUL FIRE AND MARINE INSURANCE
COMPANY, STRONGHOLD INSURANCE
COMPANY LIMITED, SWISS REINSURANCE
COMPANY, SWISS UNION GENERAL
INSURANCE COMPANY LTD., SWITZERLAND
GENERAL INSURANCE COMPANY LIMITED,
TERRA NOVA INSURANCE COMPANY LTD.,
TRENT INSURANCE COMPANY LTD.,
TUREGUM INSURANCE COMPANY, TWIN
CITY FIRE INSURANCE COMPANY,
UNDERWRITERS AT LLOYD'S LONDON,
UNIGARD MUTUAL INSURANCE COMPANY,
UNIONAMERICA INSURANCE COMPANY
LTD., UNITED STANDARD INSURANCE
COMPANY LTD., THE VICTORY INSURANCE
COMPANY LTD., WALBROOK INSURANCE
COMPANY LTD., "WINTETHUR" SWISS
INSURANCE COMPANY, WORLD AUXILIARY
INSURANCE CORPORATION, LTD., YASUDA
FIRE & MARINE INSURANCE COMPANY
(U.K.) LIMITED, YUVAL INSURANCE
COMPANY LTD., ZURICH INSURANCE
COMPANY,
Defendants,
and (A-28/29/30)
COMMERCIAL UNION INSURANCE COMPANY,
as successor to THE OCEAN ACCIDENT
& GUARANTEE CORPORATION, LTD.,
AMERICAN EMPLOYERS' INSURANCE
COMPANY, THE EMPLOYERS' LIABILITY
ASSURANCE CORPORATION, LTD.,
EMPLOYERS' SURPLUS LINES INSURANCE
COMPANY, GENERAL REINSURANCE
CORPORATION, ALLSTATE INSURANCE
COMPANY, as successor-in-interest
to Northbrook Excess and Surplus
Insurance Company, formerly
Northbrook Insurance Company, NORTH
STAR REINSURANCE CORPORATION, and
ZURICH INTERNATIONAL LIMITED,
Defendants-Respondents.
and Cross-Appellants,
and
CENTURY INDEMNITY COMPANY (as
successor to CCI Insurance Company,
which itself is the successor to
the Insurance Company of North
America),
Defendant-Respondent.
GEI INTERNATIONAL INCORPORATED, a
New Jersey corporation, (formerly
known as ANDREW DENHOLM, INC.), and
ANDREW DENHOLM, INC.,
Plaintiffs-Appellants,
v.
ST. PAUL FIRE AND MARINE INSURANCE
COMPANY, FEDERAL INSURANCE COMPANY,
ATLANTIC MUTUAL INSURANCE COMPANY,
NORTHWESTERN NATIONAL INSURANCE
COMPANY, MIDLAND INSURANCE COMPANY,
CHUBB GROUP OF INSURANCE COMPANIES,
FIREMAN'S FUND INSURANCE CO., INC.,
IDEAL MUTUAL INSURANCE CO., INC.,
ORB HOLDING CO., JOHN BLACK, ROBERT
DEDERER, FRANK VANDERHOOF,
METRAMATIC CORPORATION, HIGH SPEED
CHECKWEIGHER INC., successor in
interest to METRAMATIC CORPORATION,
AG fur PRAZISIONSINSTRUMENTE and
NEW JERSEY PROPERTY/LIABILITY
GUARANTY ASSOCIATION,
Defendants,
and (A-31)
JOHN BLACK, ROBERT DEDERER and
FRANK VANDERHOOF, individually and
as former corporate officers,
directors and shareholders of NGR
Design and Manufacturing Co., Inc.
and Metal Detectors, Inc.,
Metramatic Corporation and ORB
Holding Co.,
Defendants and Third Party
Plaintiffs,
v.
FIREMAN'S FUND INSURANCE CO., INC.,
ST. PAUL MERCURY INSURANCE COMPANY,
NORTHWESTERN NATIONAL INSURANCE
CO., and NEW JERSEY
PROPERTY/LIABILITY GUARANTY
ASSOCIATION,
Third-Party Defendants.
O'Hern, J., dissenting.
I disagree that the policyholders surrendered their right to
a jury trial when they initiated their declaratory judgment
actions. The decision represents an abrupt departure from
longstanding New Jersey law.
"[U]nder any declaratory judgment act, legal questions of
fact must be tried before a jury where a demand for jury trial
has been properly made." 20 Appleman, Insurance Law and Practice
§ 11378 (1980).
The reasoning that underlies this principle is quite simple.
A declaratory judgment act merely provides a procedural device to
accelerate the resolution of a dispute; the procedural device
does not alter the substance of the dispute. What was a legal
dispute before a declaratory judgment action remains a legal
dispute after the action commences. Declaratory judgment actions
do not change any substantive rights and accordingly neither
enlarge nor diminish a litigant's right to a jury trial. Beacon
Theatres, Inc. v. Westover,
359 U.S. 500,
79 S. Ct. 948,
3 L. Ed.2d 988 (1959); West 14th Street Commercial Corp. v.
5 West 14th
Owners Corp.,
815 F.2d 188 (2d Cir.), cert. denied,
484 U.S. 850,
108 S. Ct. 151,
98 L. Ed.2d 107 (1987). All that a declaratory
judgment proceeding does is to afford a party "an early
adjudication of an actual controversy." McDougald v. Jenson, 786
F.2d 1465, 1481 (11th Cir.), cert. denied,
479 U.S. 860,
107 S.
Ct. 207,
93 L. Ed.2d 137 (1986).
The right to a jury trial in a declaratory judgment action
depends on whether the action is the counterpart of an action in
equity or merely an inverte