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Cupitt v. Penske Truck Leasing Co.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 25, 2007

MONICA R. CUPITT, PLAINTIFF,
v.
PENSKE TRUCK LEASING CO., L.P. DEFENDANT-RESPONDENT,
v.
SIMCO SALES SERVICE OF PENNSYLVANIA,*FN1 T/A JACK AND JILL ICE CREAM COMPANY, DEFENDANT-APPELLANT, AND FRANK E. NICKLIS, JR. DEFENDANT.
EDWARD WARD AND AFRIDA WARD, HIS WIFE, PER QUOD, PLAINTIFFS,
v.
PENSKE TRUCK LEASING CO., L.P. DEFENDANT-RESPONDENT,
v.
SIMCO SALES SERVICE OF PENNSYLVANIA, T/A JACK AND JILL ICE CREAM COMPANY, DEFENDANT-APPELLANT,
v.
FRANK E. NICKLIS, JR., MONICA R. CUPITT, ELIZABETH COLON, AND NEW JERSEY TRANSIT CORP., DEFENDANTS.
ELEANOR EDWARDS AND HUBERT EDWARDS, HER HUSBAND, PER QUOD, PLAINTIFFS,
v.
PENSKE TRUCK LEASING CO., L.P. DEFENDANT-RESPONDENT,
v.
SIMCO SALES SERVICE OF PENNSYLVANIA, T/A JACK AND JILL ICE CREAM COMPANY, DEFENDANT-APPELLANT,
v.
FRANK NICKLIS, JR., NEW JERSEY TRANSIT CORP., MONICA CUPITT, AND ELIZABETH COLON, DEFENDANTS.
STANLEY DRAKEFORD, PLAINTIFF,
v.
PENSKE TRUCK LEASING CO., L.P. DEFENDANT-RESPONDENT,
v.
SIMCO SALES SERVICE OF PENNSYLVANIA, T/A JACK AND JILL ICE CREAM COMPANY, DEFENDANT-APPELLANT,
v.
NEW JERSEY TRANSIT CORP., ELIZABETH COLON, AND MONICA R. CUPITT, FRANK E. NICKLIS, JR., DEFENDANTS.
GERMAINE INZAR, PLAINTIFF,
v.
PENSKE TRUCK LEASING CO., L.P. DEFENDANT-RESPONDENT,
v.
SIMCO SALES SERVICE OF PENNSYLVANIA, T/A JACK AND JILL ICE CREAM COMPANY, DEFENDANT-APPELLANT,
v.
FRANK E. NICKLIS, JR., MONICA R. CUPITT, ELIZABETH COLON, AND NEW JERSEY TRANSIT CORP. DEFENDANTS.
JAMES HILLSTOCK, PLAINTIFF,
v.
PENSKE TRUCK LEASING CO., L.P. DEFENDANT-RESPONDENT,
v.
SIMCO SALES SERVICE OF PENNSYLVANIA, T/A JACK AND JILL ICE CREAM COMPANY, DEFENDANT-APPELLANT,
v.
FRANK E. NICKLIS, JR., MONICA R. CUPITT, ELIZABETH COLON, AND NEW JERSEY TRANSIT CORP., DEFENDANTS.
GEORGE YOUNGER AND LARA MAXWELL, PLAINTIFFS,
v.
PENSKE TRUCK LEASING CO., L.P. DEFENDANT-RESPONDENT,
v.
SIMCO SALES SERVICE OF PENNSYLVANIA, T/A JACK AND JILL ICE CREAM COMPANY, DEFENDANT-APPELLANT,
v.
NEW JERSEY TRANSIT CORP., ELIZABETH COLON, MONICA R. CUPITT, AND FRANK E. NICKLIS, JR., DEFENDANTS.

On appeal from Superior Court of New Jersey, Law Division, Essex County, L-3317-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted June 5, 2007

Before Judges Payne and Lihotz.

By leave granted, defendant, Simco Sales Service of Pennsylvania, t/a Jack and Jill Ice Cream Company, appeals from an order of summary judgment entered against it by the trial court. The order requires Simco to indemnify defendant, Penske Truck Leasing Co., for any defense costs and liability incurred as the result of multiple personal injury law suits filed by passengers of New Jersey Transit busses involved in a chain motor vehicle accident occurring on June 2, 2003 when Simco's truck rear-ended one bus, pushing it into the second. The driver of the Simco truck has claimed, in a statement to the police immediately after the accident and in certified answers to interrogatories, that the cause of the accident was the failure of the truck's brakes. That claim is supported by the report of Simco's expert, W.L. Davison, Jr., who concluded that the brake fluid contained in the truck's front and rear brake reservoirs was contaminated with high levels of petroleum products. According to Davison, the contamination would adversely affect the operation of the brake system by causing swelling and deterioration of its rubber parts, in turn causing "an intermittent problem within the brake system." Davidson did not reach a conclusion whether the defect was a manufacturing or maintenance one, or when it would have first been evident to either a driver or a service mechanic. However, Davidson's report notes that, following repair of the truck by an unidentified entity, the ABS brake warning light signaled the existence of continuing brake problems, following low-speed braking. The record does not disclose any examination of the truck by an expert on behalf of Penske.

The vehicle in question was a 2002 International box truck leased by Penske to Simco. The record does not state when the vehicle was supplied to Simco, the number of miles it had traveled at the time of the accident, or its maintenance history, if any. It also does not indicate whether any Simco employee had previously observed brake problems with the truck. The right to indemnification of Penske by Simco was premised upon the terms of a multi-vehicle commercial lease agreement between the parties, dated August 8, 1995. In paragraph one of the lease, Penske agreed to provide, at its own cost and expense,

(a) all preventive maintenance, replacement parts, and repairs to keep the Vehicles in good repair and operating condition; (b) oil and lubricants necessary for the efficient operation of the Vehicles; (c) all necessary tires and tubes; [and] (d) road service due to mechanical and tire failures . . . .

The paragraph further required Simco to permit Penske to make all repairs and adjustments to the vehicles. It further required Simco to cause its drivers to report any trouble concerning the Vehicle not later than the date of occurrence on forms provided by PENSKE TRUCK LEASING and to check oil and coolant levels in each Vehicle on a daily basis to prevent damage and to return each Vehicle to PENSKE TRUCK LEASING at the location set forth on Schedule "A," or as otherwise directed by PENSKE TRUCK LEASING, for inspection, preventive maintenance, and repair for a minimum of eight (8) consecutive hours every fourteen (14) days during PENSKE TRUCK LEASING's normal business hours at scheduled times as are mutually agreed upon.

Paragraph 9 of the lease required Simco to provide liability and property damage insurance coverage for itself and Penske, as an additional insured, in an amount of not less than one million dollars per occurrence. Indemnity by Simco, as Customer, was provided in paragraph 10, which stated:

CUSTOMER shall protect, defend, indemnify and hold harmless PENSKE TRUCK LEASING and its partners and its agents and employees from any and all claims, suits, costs, damages, expenses and liabilities arising from: (a) CUSTOMER's failure to comply with its obligations to governmental bodies having jurisdiction over CUSTOMER and the Vehicles or its failure to comply with the terms of this lease, or the ownership, use, selection, possession, maintenance, and/or operation of the Vehicle . . . .

Seven suits arising out of the June 2, 2003 accident were instituted on unknown dates and, thereafter, were consolidated. While the period for discovery was still open,*fn2 on March 27, 2006, Penske moved for summary judgment on the indemnification provision of the lease, arguing that the provision entitled it to indemnity as a matter of law, and regardless of whether acts of negligence or other fault on the part of Penske had contributed to the accident. The motion was granted by order entered May 12, 2006. Following the subsequent denial of a motion for reconsideration, Simco moved for leave to file an interlocutory appeal. We granted the motion, and summarily reversed the order of summary judgment, stating:

The order is summarily reversed insofar as it requires Simco, pursuant to its lease agreement with Penske, to defend and indemnify Penske for acts of negligence on the part of Penske. See Ramos v. Browning Ferris Indus. of South Jersey, Inc., 103 N.J. 177, 191 (1986) ("a contract will not be construed to indemnify the indemnitee against losses resulting from its own negligence unless such an intention is expressed in unequivocal terms.") Any issues of fact with respect to the existence of negligence or fault on the part of Penske and the applicability of the contractual indemnity provision in the absence of such negligence or fault are reserved for trial.

Upon further appeal by Penske, the Supreme Court, in an order dated January 10, 2007, summarily remanded the matter for our reconsideration on the merits after full briefing. Upon further review of briefs that are substantially similar, if not identical, to those that were submitted to us initially, we adhere to our initial opinion that the indemnification provisions of the lease can not be read as a matter of law, in the fashion adopted by the motion judge, to require Simco to indemnify Penske for negligence or fault on Penske's part that is causally related to the June 2 accident.

As the Supreme Court held in Ramos, supra:

Indemnity contracts are interpreted in accordance with the rules governing the construction of contracts generally. When the meaning of the clause is ambiguous, however, the clause should be strictly construed against the indemnitee. Thus, a contract will not be construed to indemnify the indemnitee against losses resulting from its own negligence unless such an intention is expressed in unequivocal terms.

[103 N.J. at 191 (citations omitted).]

See also Mantilla v. NC Mall Assocs., 167 N.J. 262, 272-73 (2001)(affirming the principles of Ramos). We do not regard the agreement at issue in the present case to provide indemnification to Penske for its own negligence or fault in the unequivocal terms that Ramos demands. Indeed, the subject of responsibility for Penske's acts of negligence is omitted entirely from the agreement. We, therefore, regard summary judgment on this basis to have been granted improperly. We further discern issues of material fact that preclude summary judgment based on the theory that Simco's negligence was the sole cause of the accident. Although few facts have been presented at this stage, principally because of Penske's position before the motion judge that facts were irrelevant to an issue that could be resolved as a matter of law, the report of Simco's expert provides prima facie evidence of a defect in the truck's braking system, corroborated by the statement of the driver to the police, following the accident, that the truck's brakes had failed. Viewing the facts in a fashion most favorable to Simco, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), we have been offered no basis, without further discovery, to determine whether the alleged failure of the truck's brakes resulted either from a manufacturing defect or faulty repair on the part of Penske, or whether the condition arose solely from Simco's negligence.

As a consequence, we reverse and remand the matter to the trial court for further proceedings, including any adjustment of the period for discovery that the court deems necessary to permit a fair consideration of the matters raised herein.

Reversed.


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