Liberty Mut. Fire Ins. Co. v. Nat'l Cont'l Ins. Co.
| Decision Date | 30 November 2017 |
| Docket Number | Civil Action No. 15-7869 |
| Parties | LIBERTY MUTUAL FIRE INSURANCE COMPANY, Plaintiff, v. NATIONAL CONTINENTAL INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
THIS MATTER comes before the Court on Plaintiff Liberty Mutual Fire Insurance Company's ("Plaintiff" or "Liberty") motion for summary judgment and National Continental Insurance Company's ("Defendant" or "NCIC") motion for summary judgment. ECF No. 26, 29. For the reasons set forth herein, Plaintiff's motion is GRANTED and Defendant's motion is DENIED.
This insurance coverage dispute arises from a personal injury action filed in the New Jersey Superior Court, Law Division, Essex County, captioned Villar v. Synagro Technologies, Inc., et al., docket no. ESX-L-5110-12 (the "Underlying Action"). Compl. ¶ 6. Plaintiff and Defendant here disagree on which party's insurance policy affords primary coverage to the defendant in the Underlying Action.
The Underlying Action arose from a July 20, 2010 accident that occurred at a facility owned by the Passaic Valley Sewerage Commission ("PVSC"). Id. at ¶ 7. The plaintiff in theunderlying action, Gerardo Villar, was a truck driver employed by DJW Transport, Inc. ("DJW"). Id. at ¶ 8. PVSC contracted with Environmental Protection and Improvement Company, Inc., ("EPIC") to pick up and transport bulk waste from its facility. Id. at ¶ 9. Pursuant to an August 1, 2006 hauling agreement (the "Hauling Agreement"), EPIC subcontracted the hauling work to DJW, Villar's employer. Id. at ¶ 10. On July 20, 2010, Villar arrived at the PVSC site to load and haul away the bulk waste pursuant to the Hauling Agreement. Id. at 12. Villar was operating a tractor owned by DJW, which was connected to a trailer owned by EPIC. Id. at 13. After the trailer was filled with bulk waste and before leaving the facility, Villar attempted to cover the loaded trailer with a tarp secured by bungee cords. Id. at ¶ 14. The tarping of the bulk waste was required by law. Id. While attempting to cover the loaded trailer, Villar was standing on a rolling staircase at an elevation of approximately nine feet. Id. at ¶ 15. In the course of securing the tarp with the bungee cords, one of the cords snapped and Villar fell backwards to the ground, sustaining serious injuries. Id. at ¶ 16. Villar brought suit against EPIC, contending that the rolling staircase, tarp, and bungee cords, allegedly supplied by EPIC, were defective. Id. at ¶ 17.
In the underlying action, coverage was available under two distinct policies. The tractor Villar was operating was an "insured auto" under a commercial auto insurance policy issued by Defendant NCIC to DJW. Id. at ¶ 24-25. The trailer, which was owned by EPIC and connected to the DJW tractor at the time of the accident, was a "covered auto" under a business auto insurance policy issued by Plaintiff Liberty. Id. at ¶ 21-22. Ulitmately, the Underlying Action settled. Id. at ¶ 33. Both Plaintiff and Defendant contributed to the settlement, and both reserved the right to recover their respective contributions in the instant action. Id.
Here, Plaintiff Liberty seeks declaratory judgment that EPIC is entitled to primary coverage under the NCIC policy and reimbursement in the amount of $312,500 paid toward thesettlement of the underlying action; to reimburse of defense fees and costs of $80,315.99 incurred in the underlying action; and awarding fees incurred here. Defendant seeks summary judgment declaring that Plaintiff is not entitled to coverage under the NCIC policy, that Plaintiff is required to provide coverage to EPIC for the accident, and awarding fees and costs.
Here, Liberty argues that the tractor and trailer are a connected unit, EPIC is a "permissive user" of the tractor under Defendant's policy, there is coverage under the NCIC policy, and that coverage is primary. This Court agrees.
Under Rule 56(c) of the Federal Rules of Civil Procedure, a court should grant summary judgment when "there is no genuine issue as to any material fact and [] the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In considering a motion for summary judgment, the Court views all evidence in the light most favorable to the party opposing summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587. The party opposing summary judgment must make a showing sufficient to establish the essential elements of its claim. Celotex, 477 U.S. at 322-34. On cross motions for summary judgment, the same standards and burdens remain applicable. See Appelmans v. City of Phila., 826 F.2d 214, 216 (3d Cir. 1987).
Plaintiff argues the tractor and trailer should be regarded as one unit for determining coverage because they were connected at the time of the accident. Defendant argues this analysis is unnecessary because EPIC, as both the tortfeasor and the named insured under Plaintiff's policy, is entitled to coverage under Plaintiff's policy alone. The Court agrees with Plaintiff.
The law here is undisputed and Defendant's unsupported argument to the contrary is unavailing. "It is an accepted principle of insurance law that where an accident arises out of the use of a combined vehicle such as a tractor-trailer and where separate policies cover the tractor and trailer, all insurance applicable to the combined vehicle comes into play, regardless of which part of the rig was physically involved in the accident." Contrans, Inc. v. Ryder Truck Rental, Inc., 836 F.2d 163, 165 (3d Cir. 1987); see also Carolina Cas. Ins. Co. v. Travelers Prop. Cas. Co., 90 F. Supp. 3d 304, 318 (D.N.J. 2014); Blue Bird Body Co. v. Ryder Truck Rental, Inc., 583 F.2d 717, 727 (5th Cir. 1978). To put it simply, "coverage variously on the tractor or the trailer is merely a means of attaching insurance to the rig." Contrans, 836 F.2d at 165.
There is no question that the tractor and trailer were connected at the time of the accident. Thus, in keeping with Contrans, the Court is satisfied that the connected tractor-trailer should be regarded as the equivalent of an inseparable unit for determining insurance coverage.
Defendant attempts to distinguish Contrans, Carolina Casualty, and Blue Bird, by arguing that they do not "involve a set of facts where the tortfeasor is also the owner of a trailer involved in a loading/unloading accident." Id. However, Defendant fails to show that such facts would negate the "accepted principle" that all insurance applicable to the component parts of a combined vehicle comes into play in determining coverage.
Consequently, the operative question becomes whether EPIC was using the combined unit at the time of the accident.
Plaintiff argues EPIC was using the unit at the time of the accident because it supplied allegedly defective equipment—the tarp, bungee cord, and rolling staircase—for the sole purpose of facilitating the loading and transporting of waste from PVSC. Defendant responds that bungeecord was not integral to the loading process and, therefore, Plaintiff was not using the unit at the time of the accident. The Court agrees with Plaintiff.
Use of a vehicle "includes that acts of loading and unloading the vehicle. Kennedy v. Jefferson Smurfit Co., 147 N.J. 394, 398 (1997). Carolina Causalty, 90 F. Supp. 3d at 317. New Jersey follows the "complete operation" doctrine as it pertains to use of a vehicle. Cenno v. W. Virginia Paper & Pulp Co., 109 N.J. Super. 41, 47, 262 A.2d 223, 226 (App. Div. 1970). Under this doctrine, "any occurrence during and arising out of the process of unloading is covered." Id. at 46-47. The "critical issue" is whether an act—here, the supplying of the equipment—was an "integral part of the loading activity." Kennedy, 147 N.J. at 400. In Kennedy, the court determined that selection of a defective pallet was part of the loading process because the pallet was "necessary in order to load the goods onto [the] trailer." Id. Plaintiff contends Kennedy controls the case here because EPIC's "sole purpose in furnishing the tarp and bungee cords and especially the rolling staircase was to facilitate the loading and transport of the waste from the PVSC to its ultimate destination." Pl's. Br. at 8.
Defendant concedes the tarp was integral to loading and unloading because tarping is required by law, but argues the bungee cords and rolling staircase were not necessary to load the waste into the trailer. Def's. Br. at 9. Defendant relies on Cenno to supports its position. 109 N.J. Super. 41. In Cenno, the plaintiff was unloading a bale of cardboard boxes from a truck. Id. at 43. The cardboard was baled using metal bands and clips manufactured by the defendant. Id. Plaintiff was pulling on a band securing the bale when the band came apart, causing plaintiff to lose his balance and fall out of the truck. Id. at 44. The court determined the negligent act—defective manufacturing of the band securing the bale—was not "causally connected with the loading or unloading in any way." Id. at 47. Analogizing to Cenno, Defendants contend supplying of the defective bungee cord here did not constitute use.
The Court is not persuaded by Defendant's argument. In Kennedy, the Supreme Court of New Jersey distinguished Cenno, noting that it was "unclear whether the cardboard was baled with metal bands solely to facilitate its shipment or whether that was a requirement of [defendant's] customer." 147 N.J. at 405. It went on to state, "If there had been a factual basis for concluding that the...
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