NAT. UNION FIRE INS. CO. v. Transp. Ins. Co.
| Decision Date | 19 January 2001 |
| Citation | 765 A.2d 240,336 N.J. Super. 437 |
| Parties | NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA, and Kirbery Transportation, Inc., Plaintiffs-Appellants, v. TRANSPORTATION INSURANCE COMPANY/ a Subsidiary of CNA, Defendants-Respondents, and Michael Yaros, Hayden Roofing, Inc., and S & S Roofing, Inc., and Ziegler Chemical & Mineral Corp., Defendants. |
| Court | New Jersey Superior Court |
JoAnn Katzban, Montclair, argued the cause for appellants (Garrity, Graham, Favetta & Flinn, attorneys; Francis X. Garrity, of counsel; Ms. Katzban, on the brief).
Ira S. Lipsius, New York City, argued the cause for respondents (Schindel, Farman & Lipsius, attorneys; Mr. Lipsius, of counsel; Jeffrey S. Rogoff, on the brief).
No other parties participated in this appeal.
Before Judges D'ANNUNZIO, EICHEN and STEINBERG. The opinion of the court was delivered by EICHEN, J.A.D
Plaintiff National Union Fire Insurance of Pittsburgh, Pa. (National Union) appeals from a summary judgment granted in favor of defendant Transportation Insurance Company (TIC). We affirm.
The appeal involves an insurance coverage dispute concerning an automobile liability insurance policy issued by TIC to its insured, S & S Roofing, Inc. (S & S Roofing) (the TIC policy).1 In its definition of who is an insured, the TIC policy excludes coverage for persons "moving property to or from a covered `auto.'" This is an attempt to eliminate so-called "loading and unloading" coverage. See Kennedy v. Jefferson Smurfit Co., 147 N.J. 394, 688 A.2d 89 (1997)
. The TIC policy, however, contains an exception to its "loading and unloading" exclusion for "borrowers" of a "covered `auto.'" This decision interprets the term "borrowers" in the policy.
National Union asserts that its insured, Kirbery Transportation Company (Kirbery) is entitled to coverage as an additional insured under the TIC policy for a personal injury claim asserted by Michael Yaros, an S & S Roofing employee, against Kirbery because Kirbery was a "borrower" of a "covered `auto'" under that policy.
These are the material facts. Yaros was employed as a tankerman/kettleman for S & S Roofing and was in charge of the use of two tankers (a storage tanker and a pumping/production tanker) which were on loan to S & S Roofing from Hayden Roofing, Inc. (Hayden).2 The tankers were being used to transport hot asphalt to a construction site for a roofing project.
On February 26, 1996, Ralph Pope, an employee of Kirbery, arrived at the construction site with a delivery of hot asphalt (steap), parked his delivery truck in between the Hayden tankers, and asked Yaros which of the two tankers Yaros wanted loaded first. Yaros responded that Pope should fill the storage tanker first. Pope then removed the hose from his own truck, climbed on top of the storage tanker, opened the hatch, inserted the hose into the storage tanker, tied the hose down with a chain, and then went inside his truck to engage the pump. Pope then climbed back on top of the storage tanker until the filling process was completed. During the delivery, Yaros was eating his lunch in a nearby truck. The delivery took approximately twenty to thirty minutes. When it was complete, Pope flushed his hose with diesel fuel. Pope then asked Yaros whether he wanted Pope to put the remainder of the asphalt into the pumping/production tanker. Yaros responded affirmatively, shut off the heating system on the pumping/ production tanker, and Pope began to fill that tanker. After approximately twenty minutes, the hose started "kicking," at which point Pope checked his own tank and determined that it was empty. He then shut down the pump, disconnected the line from his tanker, and told Yaros that he was done unloading. According to Pope, Yaros then told him that he was going to the top of the pumping/production tanker to measure the asphalt level and that he would disconnect the chain.
Pope testified that he then flush-cleaned his hose and began to take his line apart as Yaros was going to the top of the pumping/production tanker. When Yaros reached the top, a fireball explosion occurred engulfing him in flames. Yaros jumped off the ladder, rolled in mud and water to extinguish the flames on his person, and climbed back to the top of the tanker to put out the flames in the tanker. Yaros suffered first, second and third degree burns to his chest, right arm and face in the explosion.
Yaros sued Kirbery alleging negligence in the manner in which the delivery was made. National Union then commenced this declaratory judgment action against TIC seeking a determination that TIC was obligated to provide for Kirbery's defense and to reimburse National Union for all defense costs. Thereafter, National Union settled Yaros' claim against Kirbery for $560,000 and moved for summary judgment in the declaratory judgment action. TIC cross-moved for similar relief. On the motions, National Union argued, among other things, that Kirbery was an additional insured under S & S Roofing's automobile policy issued by TIC because Pope was in control of the Hayden tanker during the loading process and, therefore, Kirbery was a "borrower" under the terms of the TIC policy.
The following are "insureds" under the TIC policy:
The motion judge granted TIC's cross-motion and dismissed National Union's complaint concluding that (1) the TIC policy did not provide coverage for Kirbery because Kirbery was not a "borrower" inasmuch as Kirbery's operator, Pope, had not exercised control and/or dominion over the Hayden tanker; (2) even if Kirbery was a "borrower," National Union is not entitled to contribution from TIC because National Union's policy provided primary coverage and TIC's policy only provided excess coverage; and (3) National Union is not entitled to contribution from TIC because the policies do not insure against the same risks.
This appeal requires us to decide whether the TIC policy affords Kirbery coverage under the "borrower" exception to the "loading and unloading" exclusion in S & S Roofing's automobile liability policy. As a threshold matter, we deem it appropriate to point out certain stipulations made by the parties. They agreed in the trial court, as they do on appeal, that the tanker on which Yaros was injured in the accident is a "covered `auto'" under the TIC policy; they agree that there are no issues relating to the permissive use of the tanker by Kirbery; and they agree the accident occurred during a "loading and unloading" operation. Most significantly, they agree that even though the accident occurred during the "loading and unloading" of the tanker, because S & S Roofing is not the "owner" of the tanker that exploded, the statute mandating omnibus liability insurance coverage for loss arising out of use of an automobile, N.J.S.A. 39:6B-1, does not apply.3 Hence, the parties agreed that the appeal involves only the contractual interpretation of the TIC policy. Because they insist on framing the issue in this fashion, notwithstanding the mandatory statutory omnibus clause, we address and resolve the issue as a contract dispute not governed by statute.
Applying the parties' stipulated construct to our interpretation of section b(4) of the TIC policy, the question quite simply is whether Kirbery can be considered a "borrower" of the Hayden tanker and, therefore, an additional insured under TIC's policy, entitling National Union to reimbursement for the compensation it paid to Yaros for his injuries.
Initially, we reject National Union's argument in Point I of its brief that the motion judge's misstatement of the facts shows it reached an erroneous decision on the issue of Kirbery's status as a "borrower." While it is true that the judge twice made reference to Yaros when he clearly should have referred to Pope, despite the factfinding mistakes, the judge's ultimate conclusion that Kirbery is not a "borrower" is correct.
75 N.J. 533, 384 A.2d 513 (1977).
There is one Law Division decision, however, which the motion judge relied upon in reaching his decision, which does examine the meaning of the term "borrower" in an automobile liability policy in the "loading and unloading" context. See F & M Schaefer Brewing Co. v. Forbes Food Div., 151 N.J.Super. 353, 362, 376 A.2d 1282 (Law Div.1977)
. In that case, the driver of a delivery truck consigned to pick up yeast slurry4 from the plaintiff's premises was injured when one of plaintiff's employee's threw a rope. Id. at 355, 376 A.2d 1282. During the loading operation, the driver had stayed with the truck to determine when and in what quantity the yeast slurry would be transferred into it. Ibid. Through its insurer, the plaintiff compensated the driver for his injuries and then sought indemnification as an additional insured from the insurer of the...
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