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Eastern Seaboard Pile Driving Corp. v. New Jersey Property-Liability Insurance Guaranty Association

Decided: March 6, 1979.

EASTERN SEABOARD PILE DRIVING CORPORATION, A CORPORATION OF THE STATE OF DELAWARE AUTHORIZED TO DO BUSINESS IN NEW JERSEY, PLAINTIFF,
v.
NEW JERSEY PROPERTY-LIABILITY INSURANCE GUARANTY ASSOCIATION, DEFENDANT



Geronimo, J.s.c.

Geronimo

Motion for summary judgment brought by defendant New Jersey Property-Liability Insurance Guaranty Association (Association), involving the interpretation of ยง 5 of the New Jersey Property-Liability Insurance Guaranty Association Act (Guaranty Act), N.J.S.A. 17:30A-5, which provides in pertinent part:

"Covered claim" means an unpaid claim, including one of unearned premiums, which arises out of and is within the coverage, and not in excess of the applicable limits of an insurance policy to which this act applies, issued by an insurer, if such insurer becomes an insolvent insurer after January 1, 1974, and (1) the claimant or insured is a resident of this State at the time of the insured event; or (2) the property from which the claim arises is permanently located in this State * * *.

Plaintiff is the owner and operator of a steel dredge named the "Beverly M" which sustained certain damage on or about March 17, 1973 within the coverage of a marine insurance policy jointly issued by 11 insurance companies. Interstate Insurance Company, one of the insurers, had underwritten 10% of the risk covered by the policy. Subsequent to January 1, 1974 a court of competent jurisdiction declared Interstate to be insolvent, thus bringing plaintiff's claim within the ambit of the Guaranty Act.

On or about June 11, 1976 all of said insurance companies, with the exception of Interstate, approved a settlement for all claims for damage to the "Beverly M" on a compromised basis for the sum of $379,000. The other ten insurance companies have paid plaintiff their proportionate shares of the settlement amount, or $341,100.

Plaintiff submitted a claim to defendant Association for Interstate's proportionate share of the settlement, i.e. , $37,900. On or about September 13, 1976 the Association rejected the claim, whereupon plaintiff instituted suit seeking a judgment declaring that its claim is a "covered claim" within the definition set forth in the Guaranty Act.

In a prior motion for summary judgment decided on January 5, 1979, 165 N.J. Super. 358 (Law Div. 1979), Judge Young held that plaintiff was not a resident of New Jersey and therefore not a covered claim on that basis. Accordingly, the issue presented by this motion is whether the "Beverly M" is permanently located in New Jersey so as to constitute a covered claim, alternatively.

The issue requires an extensive detailing of the facts.

Plaintiff is a Delaware corporation with its executive offices located in New Jersey and its only operational facility at the Todd Shipyards in Hoboken, New Jersey.

The "Beverly M" was purchased from the United States Maritime Commission in March 1972 and then brought to Hoboken for refitting which took 11 months to complete.

Between March 12 and December 6, 1973 the "Beverly M" was engaged in an operation off the southern coast of Long Island known as the Nassau County Outfall Project. During this period the "Beverly M" returned to Hoboken for repairs on six occasions. Out of this approximately 270-day period, the "Beverly M" was at the job site for about 170 days and in Hoboken for about 100 days.

Thereafter, the "Beverly M" remained in New Jersey until the summer of 1976, a 2 1/2-year period. Most of this period was spent in Hoboken, either for the purpose of effecting certain repairs on ...


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