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Maryland Casualty Co. v. Hearn

Decided: October 10, 1957.

MARYLAND CASUALTY COMPANY, A CORPORATION OF THE STATE OF MARYLAND, PLAINTIFF-APPELLANT,
v.
JOHN HEARN, JR., BY HIS FATHER AND GUARDIAN AD LITEM, JOHN HEARN; AND JOHN HEARN, IN HIS OWN RIGHT; ROBERT NASH; ANNA MAY LIPSCOMB AND WILLIAM J. KEYSER, TRADING AS PACKAGE FREIGHT EXPRESS; RONAN RENTAL CORPORATION, A CORPORATION OF THE COMMONWEALTH OF PENNSYLVANIA; AND EUREKA CASUALTY COMPANY, A CORPORATION OF THE COMMONWEALTH OF PENNSYLVANIA, DEFENDANTS-RESPONDENTS



Goldmann, Freund and Conford. The opinion of the court was delivered by Conford, J.A.D.

Conford

The instant controversy concerns the construction of an exclusionary clause of an automobile liability insurance policy. It grows out of the following facts.

John Hearn, Jr., a minor, was injured when his bicycle was in collision with a truck owned by Ronan Rental Corporation ("Ronan," hereinafter) on August 18, 1953, in Camden, New Jersey. At the time the truck was being operated by Package Freight Express ("Package Freight," hereinafter) through its employee, Nash, under an agreement of lease from Ronan. Package Freight was insured for liability in respect to vehicles it rented under a non-ownership

automobile liability policy issued by plaintiff, Maryland Casualty Company ("Maryland," hereinafter). Ronan was insured by defendant Eureka Casualty Company ("Eureka," hereinafter) under a liability insurance policy which covered Package Freight as an additional insured under the common "omnibus clause." Another clause in that policy, hereinafter set forth in full, is the subject of this litigation.

Nash, Package Freight and Ronan were sued by Hearn for negligence and called upon both Maryland and Eureka to defend. Eureka refused. Maryland defended, there was a dismissal as to Ronan, and later a compromise judgment in favor of Hearn and against Nash and Package Freight for $10,000 was entered and paid by Maryland. In the meantime, Maryland instituted the present action for declaratory judgment, and, after the settlement with Hearn, this action devolved into one for reimbursement of Maryland, as subrogee of Package Freight, by Eureka. Only a single issue is argued upon this appeal. That is whether Eureka is absolved of liability as a result of the presence of the following clause in the policy it issued to Ronan:

"In consideration of the premium at which this policy is written, it is hereby understood and agreed that such coverage as is afforded under this policy does not cover as an insured any person, or organization, or any agent, employee or contractor thereof, other than the named insured, who is required to carry automobile liability insurance under any Motor Carrier Law."

The trial court held that the quoted provision precluded liability on the basis of the following stipulated facts. At the time of the accident, Package Freight was a partnership which held a certificate of public convenience issued by the Pennsylvania Public Utility Commission, authorizing transportation of property as a Class B motor carrier between points in the City and County of Philadelphia. The rules and regulations of that Commission prohibit the operation of motor carriers under its jurisdiction in intrastate commerce unless a certificate of insurance is filed evidencing

coverage for liability for negligent operation, maintenance or use of motor vehicles under a certificate issued by the Commission. As of the date of the accident, Maryland was listed with the Pennsylvania Public Utility Commission as Package Freight's insurer in compliance with the regulations. The policy issued by Maryland, moreover, bore separate indorsements purporting to comply, respectively, with section 215 of the federal Interstate Commerce Act and the rules and regulations of the Interstate Commerce Commission, and the provisions of the Pennsylvania Public Utility Law and the regulations of the Public Utility Commission of that Commonwealth, respecting liability coverage of the insured (Package Freight) as a motor carrier.

Plaintiff argues that the exclusionary clause in the Eureka policy is not applicable in respect of the claim it asserts in this case, because the accident involving the Hearn boy occurred while the truck was carrying freight from Philadelphia to Camden, an interstate journey outside the superintending jurisdiction of the Pennsylvania Public Utility Commission and not conducted pursuant to the certificate issued by that agency. It further contends that while the interstate carrier journey would ordinarily be within the jurisdiction of the Interstate Commerce Commission, that body has, pursuant to enabling legislation, 49 U.S.C.A. , ยง 303(b)(8), adopted regulations exempting from the operation of the provisions of the federal act applicable to motor carriers a zone comprising the City of Philadelphia, Pennsylvania, and certain areas in New Jersey, including the corporate limits of Camden. 49 C.F.R. 170.6. Defendant Eureka objects to the references to the Interstate Commerce Regulations as not contained in the record made in the trial court. It may be noted that federal laws, and regulations adopted pursuant thereto, are required to be judicially noticed by the courts of this State. Carlo v. Okonite-Callender Cable Co. , 3 N.J. 253, 260 (1949). But in the view we take of the mooted clause in the policy the effect of the Interstate Commerce Act and of the quoted regulation may be assumed to be as plaintiff represents.

From what has been set forth, particularly the motor carrier indorsements on the Maryland policy, it is fair to infer that Package Freight's general motor carrier business includes some intrastate transportation in the Commonwealth of Pennsylvania pursuant to the certificate issued by the Pennsylvania Public Utility Commission and some interstate business conducted pursuant to certificate by the Interstate Commerce Commission. At the very least, it concededly holds a Pennsylvania certificate, and, therefore, is literally within the scope of the Eureka policy exclusion as an "organization * * * other than the named insured, who is required to carry automobile liability insurance under any motor carrier law." Plaintiff concedes this but argues that the clause must be taken as though it contained the ...


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