On appeal from Superior Court of New Jersey, Law Division, Hudson County.
Approved for Publication January 23, 1996.
Before Judges Havey, D'Annunzio and Braithwaite. The opinion of the court was delivered by D'annunzio, J.A.D.
The opinion of the court was delivered by: D'annunzio
The opinion of the court was delivered by D'ANNUNZIO, J.A.D.
New Jersey Manufacturers Insurance Company (NJM) appeals from a summary judgment determining that it had to provide coverage to Jefferson Smurfit Company (Jefferson) for a personal injury claim asserted by Joseph Kennedy. Jefferson appeals from a summary judgment in favor of North Operating Company (North) determining that North was not required to indemnify Jefferson under a contractual indemnification clause.
Jefferson manufactures cardboard. Kennedy was the owner and operator of a tractor which he leased to North. North was in the trucking business and had entered into a written agreement to transport cardboard for Jefferson to Jefferson's customers.
In February 1991, Kennedy, using his tractor pulling a North trailer, was delivering a shipment of cardboard from Jefferson to Ultra Packaging (Ultra). The cardboard was on wood pallets in bundles weighing hundreds of pounds. Each pallet held two bundles of cardboard. When Kennedy arrived at Ultra, an Ultra employee, using a forklift, began to unload the palletized cardboard. The employee had removed five pallets when the bundles of cardboard on the sixth pallet fell on Kennedy, burying him and causing substantial injury.
Kennedy contended that the wooden pallet collapsed, causing the bundles to shift and fall. According to Kennedy, he observed rotten pieces of pallet wood after the incident. In a personal injury action which Kennedy brought against Jefferson, Kennedy alleged that Jefferson caused his injuries by negligently selecting and using defective pallets. Jefferson filed a third-party complaint against North, seeking indemnification.
While Kennedy's personal injury action was pending, Jefferson began a separate declaratory judgment action against NJM and other carriers not involved in this appeal. NJM provided automobile liability coverage to North. Jefferson contended that it was entitled to coverage under NJM's policy because Jefferson was using North's trailer when Kennedy was injured.
Eventually, Jefferson settled Kennedy's claim for $750,000. After Jefferson settled the Kennedy claim, NJM and North moved for summary judgment against Jefferson, and Jefferson cross-moved for summary judgment. As previously indicated, the trial court granted Jefferson's motion against NJM on the ground that Jefferson was entitled to coverage because it was using North's vehicle when Kennedy was injured. The court granted North's motion for summary judgment against Jefferson on the indemnity claim because the court determined that Jefferson could not be indemnified for its own negligence.
We first address NJM's appeal. NJM contends that its policy does not cover Jefferson for Kennedy's claim because Jefferson's negligent act of selecting a defective pallet was not an integral part of the loading and unloading operation. NJM also contends that Jefferson never established the reasonableness of the $750,000 settlement with Kennedy.
An insurer's obligation to provide coverage to persons using a vehicle in a loading and unloading context is imposed by statute and is broad in scope. Ryder/P.I.E. Nationwide, Inc. v. Harbor Bay, 119 N.J. 402, 407, 575 A.2d 416 (1990). The statutes obligate motor vehicle liability insurers to provide coverage for injuries "arising out of the ownership, maintenance, operation or use of" a vehicle. N.J.S.A. 39:6A-3; N.J.S.A. 39:6B-1.
In the present case, NJM's policy, which it describes as a "Truckers Policy," tracks the statutory language regarding liability coverage. It provides:
We will pay all sums the insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ...