Approved Opinions for the Week of July 25, 2016

23-2- 9756 Phibro Animal Health Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, N.J. Super. App. Div. (Sabatino, P.J.A.D.) (41 pp.) Plaintiff in this coverage dispute, a maker of animal health products, sold an additive for chicken feed designed to control a common intestinal disease. The additive stunted the growth of broiler chickens commercially raised by several of plaintiff’s customers, and the customers sued. Plaintiff sought coverage for those customers under Comprehensive General Liability (CGL) and umbrella policies it purchased from its insurer. The insurer disclaimed coverage, and plaintiff sued the insurer in a declaratory judgment action. The trial court granted the insurer summary judgment, finding the stunted-growth claims were not within the scope of the policies’ insuring clauses and also were disallowed under the policy exclusion for “impaired property” that can be restored to use. We reverse the trial court’s ruling that the liability claims against plaintiff relating to the undersized chickens did not arise out of a covered “occurrence” and did not involve covered “property damage.” We also reject the insurer’s argument that coverage must be disallowed here under the “economic loss” doctrine. However, we agree with the trial court that the “impaired property” exclusion might nullify coverage, and remand for further proceedings and fact-finding to determine whether the affected chickens could feasibly be “restored to use” after they ceased ingesting the additive. We address other issues in the unpublished portion of this opinion, which (1) affirms the trial court’s ruling that the “contractual liability” and “professional liability” policy exclusions do not apply and (2) remands for fact-finding concerning the reasonableness of the settlement that plaintiff reached with its affected customers. (Approved for Publication)

14-1- 9781 State v. Scharf, Supreme Ct. LaVecchia, J. (48 pp.) State-of-mind hearsay statements by a deceased about fear of a defendant, who later advances in his or her defense in a homicide prosecution a claim that the victim’s death was accidental, are admissible for the purpose of proving the declarant’s state of mind under N.J.R.E. 803(c)(3). Such evidence is relevant when the door is opened by the defense. A weighing for undue prejudice should follow a review for relevance under Rule 803(c)(3).