The opinion of the court was delivered by: DEBEVOISE
This motion involves the scope of the "complete operation" doctrine under New Jersey law governing motor vehicle insurance coverage. The precise question is whether the insurer of a motor vehicle is required to defend and indemnify as an additional insured the owner of property on which a named insured is injured while loading a vehicle, when the injury occurred solely as a consequence of an allegedly unsafe condition on the premises. Defendant Cities Service Company and third party defendant Fireman's Fund Insurance Company cross-move for summary judgment on this issue.
The action was originally filed on March 11, 1980 in the Superior Court of New Jersey by plaintiffs Stanley and Martha Halifko, residents of New Jersey, against Cities Service Company, a Delaware corporation with a principal place of business in Oklahoma, to recover for injuries which Mr. Halifko sustained while loading a tank truck at a Cities Service terminal in Linden, New Jersey. On April 11, 1980, defendant removed the action to this Court pursuant to 28 U.S.C. § 1441, asserting federal jurisdiction on the ground of diversity of citizenship between the parties, 28 U.S.C. § 1332. Defendant then filed a third party complaint against Fireman's Fund Insurance Company, the insurer of plaintiff's truck, seeking a declaratory judgment that Cities Service was an additional insured under the truck policy and an injunction compelling Fireman's Fund to defend and indemnify Cities Service in the principal action.
Cities Service and Fireman's Fund are in essential agreement on the facts underlying the complaint. The undisputed facts are as follows: On March 22, 1978, in connection with his employment as a driver for George Schofield Company, plaintiff Stanley Halifko drove a tank truck onto the premises of the Cities Service terminal in Linden, New Jersey for the purpose of obtaining a truckload of heating oil which had been purchased by his employer. Upon arrival, he drove his truck into position number one of the loading facility and positioned the vehicle underneath the overhead lines of the loading rack. After parking his truck on the loading platform, he set his brake, opened the driver's door and stepped out onto the loading platform. Plaintiff alleges that as soon as his second foot hit the ground he slipped upon an oily substance on the platform and fell, sustaining injuries to his back. The source of the slippery substance and the time it was spilled on the platform have not yet been established. It can be fairly inferred from the complaint, however, and both parties agree for purposes of this motion, that the spillage was not attributable to plaintiff's truck.
The section of the Fireman's Fund policy under which defendant seeks coverage provides as follows:
(c) any other person while using an owned automobile or a hired automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, but with respect to bodily injury or property damage arising out of the loading or unloading thereof, such other person shall be an insured only if he is: (1) a lessee or borrower of the automobile, or (2) an employee of the named insured or of such lessee or borrower;
Defendant Cities Service contends that under the terms of this policy and the Compulsory Motor Vehicle Insurance Act, N.J.S.A. 39:6B-1, it was a "user" of plaintiff's truck at the time he was unloading and therefore entitled to coverage as an additional insured under the Fireman's Fund policy. Since the accident occurred in New Jersey, the law of New Jersey is applicable in this diversity action.
Defendant does not contend that it was a lessee or borrower of plaintiff's tank truck or that it was an employee of the named insured at the time the accident occurred so as to come within the express coverage of the insurance policy. Indeed, it could not plausibly make such an argument under New Jersey case law. See F & M Schaefer Brewing Co. v. Forbes Food Division, 151 N.J.Super. 353, 361-63, 376 A.2d 1282 (Law Div. 1977). Defendant does argue, however, that the policy provision restricting omnibus coverage to lessees, borrowers and employees, in the event of an accident during loading or unloading of the vehicle, conflicts with the broader statutory provision contained in the Compulsory Motor Vehicle Insurance Act, N.J.S.A. 39:6B-1, and must be disregarded. N.J.S.A. 39:6B-1 requires every owner of a New Jersey motor vehicle to maintain liability insurance coverage against loss sustained by "any person arising out of the ownership, maintenance, operation or use of a motor vehicle" in the amount of at least $ 15,000 per person and $ 30,000 per accident (emphasis added). At least one New Jersey court has held that this statutory provision overrides more restrictive provisions in an insurance policy. See Bellafronte v. General Motors Corp., 151 N.J.Super. 377, 376 A.2d 1294 (App.Div.1977). For purposes of deciding this motion, therefore, it will be assumed that the policy exclusions do not apply and that one who is not a lessee, borrower or employee is entitled to coverage under the policy as long as the remaining prerequisites are met.
In order to prevail on the motion, defendant must show that on the facts of this case and under the law of New Jersey it was a "user" of plaintiff's trailer truck during the loading process and that there was a causal connection between its "use" of the truck and plaintiff's injuries. While such a claim might have merit in other jurisdictions, see Getty Oil Company v. Hartford Insurance Company, 34 Cal.App.3d 355, 109 Cal.Rptr. 889 (Ct. of Appeal 1973), neither the case law of New Jersey nor considerations of sound policy counsel such a conclusion here.
In support of its claim that it is entitled to coverage under plaintiff's insurance policy, defendant relies primarily upon two cases recently decided by the Superior Court of New Jersey, Appellate Division: Bellafronte v. General Motors Corp., 151 N.J.Super. 377, 376 A.2d 1294 (App.Div.1977), and Streeter v. Henry Heide, Inc., 171 N.J.Super. 58, 407 A.2d 1265 (App.Div.1979). Neither of these cases, however, controls the outcome of this case.
In Bellafronte, a truck driver who had delivered a shipment of steel beams to General Motors Corporation was injured when the General Motors crane unloading his truck accidentally caused a steel beam to shift and strike his leg. Judge Pressler, writing for the Court, held that under these circumstances the truck driver's insurance company was required by law to provide coverage to the crane operator as an additional insured. First, she determined, although the insurance policy's omnibus clause purported to exclude all but lessees, borrowers or employees from coverage during loading and unloading operations, N.J.S.A. 39:6-23, et seq. (and, on reconsideration, N.J.S.A. 39:6B-1) required it to provide coverage to any "user" of the truck. Second, she determined, the word "use" in the statute was intended to cover loading and unloading operations. Third, she determined, "the use of a truck as a cargo carrier necessarily implies, as a matter of common understanding, its use in and as an integral part of the process of loading and unloading that cargo. Thus, one who is in the process of unloading cargo from the vehicle is, for purposes of the omnibus coverage, a user of the vehicle." Id. 151 N.J.Super. at 382-83, 376 A.2d 1294. Finally, she concluded, the accident in this case "manifestly arose out of that use since there was clearly "a substantial nexus between the injury and the use of the vehicle ....' ". Id. 151 N.J.Super. at 383, 376 A.2d 1294.
In Streeter, a truck driver was preparing a loading platform to load a shipment at Henry Heide Incorporated's premises when a spring-loaded docking plate which was supposed to fall into place between the truck and the dock malfunctioned and struck him. Relying upon Drew Chemical Corp. v. American Fore Loyalty Group, 90 N.J.Super. 582, 218 A.2d 875 (App.Div.1966), and Cenno v. W. Va. Paper & Pulp Co., 109 N.J.Super. 41, 47, 262 A.2d 223 (App.Div.1970), the Appellate Division held in a brief opinion that under the applicable "complete operation" doctrine Heide qualified as an additional insured under the truck driver's motor vehicle insurance policy. Citing Drew, the Court determined that the proper approach was to consider " "whether the accident was, within reason, causally connected with the complete operation of unloading the ... truck.' " Streeter, supra, 171 N.J.Super. at 60, 407 A.2d 1265 (emphasis in original). Here, it held, "without the lowering of the docking plate to connect the truck with the loading platform, there could be no loading of the truck" and therefore "the placement of the docking plate was an integral part of the loading operation". Id. 171 N.J.Super. at 60-61, 407 A.2d 1265. To the insurance company's objection that Henry Heide Incorporated could not be a user because no Heide employee was involved in the accident, the Court replied that "since the installation of the docking plate was essential to the loading of the truck and the installation was provided for by Heide, Heide was in fact using the truck for loading". Id. 171 N.J.Super. at 61, 407 A.2d 1265. In support of this proposition, the Court cited Cenno v. W. Va. Paper & Pulp Co., supra.
Assuming, under New Jersey law, that the loading or unloading of a vehicle constitutes a "use" of the vehicle, whether or not loading operations are expressly covered in the policy, and that the "complete operation" doctrine gives a broad scope to the functional operation of loading and unloading, see Maryland Casualty Co. v. N.J. Manufacturers Ins. Co., 48 N.J.Super. 314, 321, 137 A.2d 577, aff'd, 28 N.J. 17, 145 A.2d 15 (1958); Drew Chemical Corp. v. American Fore Loyalty Group, supra, the case before the Court is nevertheless distinguishable on its facts from Bellafronte. In Bellafronte, the allegedly negligent act of the crane operator which caused plaintiff's injuries took place during the loading process and was itself a part of the loading process. Hence, it could be said that the crane operator's negligent "use" of the truck caused plaintiff's injuries. Here, however, the negligent omission which allegedly caused plaintiff's injuries, i. e., a failure to maintain the premises in a safe condition, took place before plaintiff even arrived at the premises and cannot be considered a "use" of the truck. That plaintiff may have ...