Fontana v. Exec. Cars
| Decision Date | 15 July 2020 |
| Docket Number | DOCKET NO. A-4520-18T2 |
| Parties | PETER FONTANA and KATHY FONTANA, Plaintiffs-Respondents, v. EXECUTIVE CARS, NEW YORK BLACK CAR.COM, ROYAL DISPATCH SERVICES, INC., KING LEE CHEUNG and TWIN LIGHTS INSURANCE COMPANY, INC., Defendants, and GLOBAL LIBERTY INSURANCE COMPANY OF NEW YORK, Defendant-Appellant. |
| Court | New Jersey Superior Court — Appellate Division |
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
Before Judges Ostrer, Vernoia and Susswein.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-1359-11.
Vincent F. Gerbino argued the cause for appellant (Bruno Gerbino & Soriano, LLP, attorneys; Matthew J. Smith, on the briefs).
Robert A. Jones argued the cause for respondents.
In our initial decision in this matter, we concluded defendant King Lee Cheung is not an insured under a commercial liability insurance policy issued by defendant Global Liberty Insurance Company of New York (Global) to defendant Royal Dispatch Services, Inc. (Royal).1 Fontana v. Executive Cars, No. A-3151-15 (App. Div. Nov. 8, 2017) (slip op. at 23). We found, however, there is coverage under the policy for Cheung's negligence "if it is determined that Royal, as the insured, is vicariously liable for Cheung's putative negligence that resulted in plaintiffs' [Peter Fontana and Kathy Fontana] alleged injuries." Id. at 22. We reversed orders finding Cheung was an insured under the policy and remanded for the court to determine if Royal is vicariously liable for Cheung's alleged negligence. Id. at 23-24.
Global appeals from a May 20, 2019 order, entered after the bench trial following our remand, in which the court found: Royal is vicariously liable for defendant Cheung's negligence in causing plaintiff's alleged injuries; Royal is responsible to pay the sums due to plaintiffs in accordance with a February 10, 2016 consent judgment; and the consent judgment remains in full force and effect, and plaintiffs are entitled to enforce its terms. Having considered the record and the arguments presented by the parties in light of the applicable law, we affirm.
Royal operates a transportation services business that its president describes as a "black car service" and "corporate transportation by Town Cars car service." It enters into franchise agreements with drivers of passenger vehicles and dispatches the drivers to provide transportation services to its customers. Cheung was a party to a franchise agreement with Royal, and Royal dispatched Cheung to pick up and transport Royal's customers.
On February 24, 2010, Royal dispatched Cheung to transport plaintiff Peter Fontana (Fontana), an employee of one of Royal's corporate clients, American International Group, Inc. (AIG), from New York City to Fontana'sNew Jersey home. Cheung picked up Fontana and, during the trip, was involved in a single vehicle accident in which Fontana was injured.
Fontana and his wife, plaintiff Kathy Fontana, filed a personal injury action against Cheung, individually and in his capacity "as the agent, servant, [or] employee of" Royal. The complaint was later amended to include a claim for a declaratory judgment that a commercial liability policy issued by Global to Royal provided coverage for Cheung's negligence.
Following a bench trial on the declaratory judgment claim, the court entered orders finding Cheung was entitled to liability coverage and indemnification under the Global policy. The orders were based on the court's determination Cheung was an insured under the policy because Royal and Global reasonably expected such coverage was provided under the policy's terms.
Following entry of the court's orders on the coverage issue, plaintiffs, Global, and Cheung reached a settlement that was incorporated in the February 10, 2016 consent judgment. In pertinent part, the consent judgment states the parties "agreed to adjudged damages on consent in the total amount of $750,000 for [p]laintiffs['] personal injury claim against . . . Cheung, arising out of the February 24, 2010 automobile loss." The consent judgment further providedthat $100,000 of the judgment would be paid by Cheung's personal automobile insurance carrier, and that $650,000 would be paid by Global. The consent judgment also provided, however, that Global intended to appeal from the court's orders finding it was required to provide coverage to Cheung, and the judgment stated that if Global prevailed on its appeal from those orders, plaintiffs would not receive any monies from Global under the settlement and plaintiffs would not attempt to enforce the judgment against Cheung's personal assets.
Global appealed from the court's orders finding Cheung had coverage under its policy. The issue presented on appeal was whether the court correctly determined Cheung was entitled to coverage based on its finding he was an insured under the policy. As noted, we determined the court erred in finding Cheung was an insured under the policy, but we remanded for the court to determine if there is coverage under the policy because Royal, which is the named insured under the policy, is vicariously liable for Cheung's negligence. See Fontana, slip op. at 23-24. The consent order was included in the record on appeal, but none of the parties made any arguments based upon it. Instead, all of the arguments presented focused on whether there was coverage under the policy for Cheung's negligence.
Before the remand court, Global argued that it prevailed on appeal and, as a result, it had no obligation under the consent judgment to pay the otherwise agreed upon $650,000 to plaintiffs.2 Global further contended that because it prevailed on appeal, the settlement reflected in the consent judgment rendered it unnecessary to determine the issue for which the remand was ordered; whether Royal was vicariously liable for Cheung's negligence.
In a written opinion dated March 23, 2018, the court rejected Global's contention that it "prevailed on the appeal and this action is concluded by the terms of the consent judgment." The court found Global's position was "inconsistent with the plain language of both the consent judgment and [our] remand" order. The court further found Royal was vicariously liable for Cheung's negligence.
The record on appeal does not include an order entered as a result of the court's March 23, 2018 opinion. We discern, however, that subsequent to issuance of its opinion, the court entered an order dismissing plaintiffs' complaint. That is because on October 15, 2018, a different judge entered an order reinstating plaintiffs' complaint, noting it had been "dismissed without prejudice."3
The October 15, 2018 order included two findings. First, it adopted as "valid" the findings in the court's March 23, 2018 opinion rejecting Global's claim that it prevailed on the initial appeal under the terms of the consent order, and that, because it prevailed, further litigation over whether the policy provided coverage for Cheung's negligence based on Royal's vicarious liability for his actions was barred under the consent judgment. Second, the October 15, 2018 order vacated the court's finding in the March 23, 2018 opinion that Royal was vicariously liable for Cheung's negligence; instead, the order scheduled a bench trial on the issues of negligence and vicarious liability.4
At the bench trial, plaintiffs presented Cheung and former Royal employee Amnon Oberlander as witnesses, and plaintiffs' counsel also read from deposition and prior trial testimony of Fontana and Royal's president, Turdik Ozen. Global did not present any witnesses. Royal's counsel read a portion of Ozen's prior testimony into the record. The parties also introduced various documents into evidence.
The evidence showed that in 2010, Royal, doing business as Executive Cars Service, was party to a "Service Agreement" with AIG pursuant to which Royal agreed to provide "car service" to AIG. In pertinent part, the agreement required that Royal's "drivers . . . carry automobile liability insurance," and that Royal maintain a "general liability policy with coverage of $2,000,000." Royal represented that it would "not subcontract [its services] to any other black car company without the express written consent of AIG," but Royal reserved the right to subcontract work "to its own affiliates." Royal also represented that its "drivers will ensure that AIG riders initial all necessary information for billing purposes," and that in the event one of Royal's drivers falsified a billing voucher to AIG, it would "at a minimum" remove the driver from servicing the AIGaccount, and, "[d]epending upon the circumstances, [the driver] may be dismissed from" Royal.
On February 24, 2010, Fontana was employed by AIG in its New York offices. AIG had a policy that if Fontana worked beyond 9:00 p.m., AIG would pay for a car service to take Fontana home. Fontana understood AIG "had an exclusive contract with [Royal] to provide cars and drivers to [AIG's] employees to be driven home," and AIG provided him Royal's phone number and instructed he could call only that number to arrange for car service. Prior to February 24, 2010, Fontana called Royal to obtain car service from his office in New York to his home in New Jersey. On that date, he called Royal for a ride home, and the person answered the phone by stating, "Executive Cars." The person who answered the phone made the arrangements for the car service and gave Fontana the number of the car that would provide the requested service.
Fontana understood all the drivers who drove him home as the result of his calls to Royal were employees of the...
To continue reading
Request your trial