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National Union Fire Insurance Co. of Pittsburgh Pa. v. Transportation Insurance Co.

January 19, 2001


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, L- 10252-97.

Before Judges D'Annunzio, Eichen and Steinberg.

The opinion of the court was delivered by: Eichen, J.A.D.

Argued September 27, 2000

No other parties participated in this appeal.

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).*fn1 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 (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).*fn2 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:

a. You [S&S Roofing] for any covered "auto."

b. Anyone else while using with your [S&S Roofing] permission a covered "auto" you [S&S Roofing] own, hire or borrow except:

(4) Anyone other than your employees, partners, a lessee or borrower or any of their employees, while moving property to or from a covered ...

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