On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-8186-03.
The opinion of the court was delivered by: Sabatino, J.S.C.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Payne, Axelrad and Sabatino.
The narrow question in this appeal is the amount of insurance coverage available in circumstances in which a commercial automobile policy's exclusion for "loading and unloading" activities is nullified as contrary to our State's omnibus automobile statute, N.J.S.A. 39:6B-1. Specifically, when such an exclusion in the policy is invalidated, is the coverage the face amount of the insurance policy (here, $500,000), or is it the statutory minimum coverage (namely, $15,000)?
The Law Division concluded, after hearing motion arguments, that the coverage amount in this scenario is $500,000, the face amount of the policy that had contained the improper exclusion. We granted leave to appeal and now reverse, based upon the New Jersey Supreme Court's recent and materially-indistinguishable opinion in Proformance Ins. Co. v. Jones, 185 N.J. 406 (2005).
The parties in interest on this appeal are appellant Pennsylvania National Insurance Company ("Penn National") and respondents Annin Flag Company ("Annin Flag") and Annin Flag's employee Le Tran. The case arises out of a serious workplace accident that occurred on May 22, 2003. On that date plaintiff Gary Potenzone, a worker employed by the Apollo Flag Company ("Apollo Flag"), drove a truck owned by Apollo Flag to pick up merchandise at the premises of defendant Annin Flag. After arriving at Annin Flag's premises, Potenzone stood near his company's truck to oversee the loading operations. While Tran was moving the items with a forklift onto Potenzone's truck, he struck Potenzone in the back, either with the forklift itself or with a pallet.
Potenzone was seriously injured, and in September 2003 he filed a personal injury action in the Law Division against Annin Flag and Tran. Those defendants, in turn, brought a third-party complaint for coverage against Apollo Flag's insurer Penn National.
At the time of Potenzone's accident, Annin Flag and Tran were insured under a $1 million policy with Atlantic Mutual Insurance Company ("Atlantic Mutual"). Apollo Flag, on the other hand, had a business auto policy with Penn National, with a face amount of coverage of $500,000. Atlantic Mutual provided Annin Flag and Tran with a defense to Potenzone's lawsuit, subject to those insureds' third-party claims for coverage against Penn National.
Prior to trial Potenzone settled his claims against defendants Annin Flag and Tran for $850,000. The settlement funds were paid on a provisional basis by the two insurance carriers, with Penn National advancing $500,000 and Atlantic Mutual advancing $350,000, contingent on the court's ultimate disposition of the coverage claims against Penn National.
A resolution of the remaining coverage dispute requires us to consult, as an initial matter, the pertinent language set forth in Penn National's insurance policy. In the liability coverage portion of that policy, the following ...