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Roofing v. Highlands Insurance Co.


July 31, 2007


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1466-03.

Per curiam.


Argued January 31, 2007

Before Judges Stern, Collester and Sabatino.

Plaintiffs, Plescia Roofing and Mark Plescia (hereinafter "plaintiffs" or "Plescia"), appeal from an order of the Law Division entered on May 10, 2005, which dismissed their complaint against American Guarantee and Liability Insurance Company ("American Guarantee") and other entities after having, on November 19, 2004, denied their motion for summary judgment. Plaintiffs seek liability coverage from American Guarantee as a result of an accident of August 8, 2000 involving Petrit Sokoli, an employee of defendant Recycled Paperboard Inc. ("RPB"). Sokoli filed a complaint against plaintiffs as well as RPB and City Mill Supplies ("City Mill"), the owner of a flatbed trailer which was on the RPB premises at the time of the accident. Sokoli alleged he was injured while "loading and/or unloading" the City Mill trailer, which was insured by American Guarantee.

On this appeal, the plaintiffs argue that the "trailer is a covered 'auto' under the American Guarantee policy[,]" that "Plescia was a 'user' of the insured vehicle" and was injured while "loading and unloading" it, and that "the insured vehicle need not inflict the injury[.]" In essence, plaintiffs assert that the American Guarantee policy was "primarily" responsible for coverage to plaintiffs and that "judgment should be entered awarding primary liability insurance coverage to the Plescia parties under the American Guarantee policy[.]" The underlying Sokoli action has been settled.

The plaintiffs' theory of coverage is that City Mill gave RPB permission to use the trailer, RPB permitted Plescia to use it, and that Sokoli was injured while assisting in the loading or unloading process.*fn1 Plaintiffs further assert that the trailer's use at the time of the accident came within the "initial permission rule."

The material facts are essentially undisputed. In any event, for purposes of this appeal, we incorporate the Plescias' recitation:

RPB was engaged in the business of recycling wastepaper and similar items. City Mills was a source of wastepaper for RPB's activities. When City Mills had a quantity of wastepaper to sell to RPB, City Mills would load the cargo onto one of its flatbed trailers, haul the trailer to RPB's premises, and drop the loaded trailer in RPB's trailer yard.

When RPB's plant was ready to process the load, RPB's own tractor would haul the loaded City Mills trailer to RPB's unloading area, and RPB's personnel would weigh the cargo and unload the trailer. After RPB completed that task, it would haul the now-empty trailer back to RPB's trailer yard. Eventually, City Mills would retrieve and back-haul the empty trailer. City Mills' empty trailers would remain in RPB's yard for an indefinite length of time, from one week to four weeks or longer, until City Mills chose to back-haul the trailers.

Thus, City Mills permitted RPB to use the subject trailer and others. City Mills permitted RPB to haul the trailers from RPB's trailer yard to the unloading area. City Mills permitted RPB to unload the trailers . . . . City Mills permitted RPB to utilize forklifts to unload the trailers. In addition, RPB sometimes hauled City Mills' trailers over-the-road to other facilities and consignees if RPB chose to do so.

According to documents provided by City Mills, the subject trailer was dropped off by City Mills at the RPB yard on July 11, 2000. RPB moved this trailer to RPB's unloading area and unloaded the waste paper on July 23, 2000. The subject trailer remained at RPB's premises continuously thereafter -- until well after the Sokoli accident of August 8, 2000.

On July 25, 2000, a fire occurred at the RPB plant, severely damaging the roof of a manufacturing building. RPB immediately contacted Plescia Roofing for assistance in the repair process.

The roofing repair work included the purchase, preparation and placement of new steel roof beams. RPB purchased the steel and hired a welder to install it. RPB retained Plescia Roofing to prepare the beams for installation. Plescia Roofing sandblasted and painted the beams some distance away from the damaged building. The prepared beams were then transported by trailer to the location of the repair work, where a crane would lift the beams from the trailer onto the roof of the damaged building.

RPB permitted, and indeed directed, Plescia Roofing to use the subject trailer and RPB's own forklift to move the beams from the preparation area to the repair site, in order to save costs by avoiding equipment charges that would have resulted if Plescia Roofing had used its own forklift. RPB hauled trailers loaded with beams within its premises, using its own tractors. RPB "provided all of that transportation mode for us [Plescia Roofing], whatever we had to do."

On the day of the accident, Plescia Roofing was transporting prepared beams from the preparation area to the repair site. Plescia Roofing had performed the same task, using the subject trailer, on a day or days prior to the accident as well. RPB instructed Plescia Roofing to use the subject trailer to do so. RPB confirms that Plescia Roofing had RPB's permission to use the subject trailer to move the beams to the repair site.*fn2

RPB had continuous possession of the insured trailer: from the date it arrived at RPB's premises on July 11, 2000, including the date that the waste paper was unloaded on July 23rd, and on the date of the Sokoli accident on August 8th, and for some time thereafter. City Mills did not contact RPB about the trailer at any time between the date City Mills turned the trailer over to RPB on July 11th and the date of the Sokoli accident on August 8th. Indeed, City Mills commonly left its trailers in RPB's possession for weeks after the waste paper was unloaded.

On the day of the accident, one beam had already been loaded onto the subject trailer. At the time of the accident, Mark Plescia and Sokoli were loading a second beam onto the subject trailer, for transport to the repair site. Mr. Sokoli was walking beside the beam as the forklift operated by Plescia approached the subject trailer, in the process of loading the trailer. Although their versions of the accident differ, Mark Plescia and Petrit Sokoli agree that it occurred during the operation of loading the subject trailer.

[Citations and footnotes omitted.]

The motion judge granted summary judgment to City Mill as well to American Guarantee, its carrier. He concluded that this was not a "loading/unloading case" because the unloading had been accomplished "well in advance" of the accident, and that the "loading/unloading" rule did not involve "non-motorized or stationary trailer[s]." He further held that the use of the trailer was not incident to the "initial permission":

The argument being made by the moving party here is that since this vehicle, trailer, not motor vehicle but trailer, was being used even within the contemplation of the parties, they did have permission of Recycle Paperboard who had the permission of City Mills to use the trailer. And, therefore, as an initial permissive user of the trailer, Recycle Paperboard could grant permission to anyone to use the trailer for any person. Plescia Roofing received permission from Recycle Paperboard to use the trailer in connection with Plescia's work, specifically to load and unload roofing beams. And as a result, Plescia Roofing it is argued by the moving party is an additional insured under the liability policy.

The -- the moving party also argues that their motion should be granted because coverage is not denied if a permissive user exceeded the scope of the permission of the use of the vehicle. And they cite Small v. [Schuncke, 42 N.J. 407 (1964)] where the Court held that under the rule, once permission is given by a named insured, any deviations from the scope of that permission in time, place, or purpose are irrelevant.

Well, the Court has come to the conclusion in this case that American --that City Mills and the American Guarantee and Liability Insurance Company have persuaded us that their motion on the cross-motion should be granted because the initial permission rule does not apply to the facts in this case.

Under the case law, it is argued that the initial permission rule cases cited by Plescia and Plescia roofing consist of instances involving the use of an automobile on a roadway. None of the cited cases involved either accidents or injuries which involved the unauthorized loading or unloading of a non-motorized or stationary trailer.

We recognize that coverage is generally provided when the insured gives someone permission to use the vehicle and the person is injured or causes injury while using it. We also recognize that the word "use" is broadly construed. See Kennedy v. Jefferson Smurfit Co., 147 N.J. 394, 403-04 (1997); Verriest v. INA Underwriters Ins. Co., 142 N.J. 401, 412 (1995). And a stationary vehicle can be "used" while being unloaded, requiring coverage. Kennedy, supra, 147 N.J. at 402-03; Potenzone v. Annin Flag Co., 191 N.J. 147, 152-53 (2007); Ryder/P.I.E. Nationwide, Inc. v. Harbor Bay Corp., Inc., 119 N.J. 402 (1990) (requiring "'broad scope of coverage' . . . for accidents arising during loading and unloading"). We nevertheless affirm the judgment under the facts of the case.

For about two weeks after the unloading of products shipped by City Mill was fully completed, Plescia was using the trailer for a purpose unrelated to the delivery or the loading or unloading of paper. While Sokoli must be deemed to have been loading or unloading the vehicle, he did not allege that his actions were in connection with anything authorized by City Mill or incident to its delivery. In other words, the storage and removal of beams for Plescia's use was in no way related to City Mill's delivery, much less "a necessary and integral part" thereof. See Kennedy, supra, 147 N.J. at 400-01. As noted by the motion judge, the use in question occurred after the delivery by City Mill and was unrelated to it. Thus, it was not the type of loading or unloading that would require coverage. See Pisaneschi v. Turner Constr. Co., 345 N.J. Super. 336, 344- 48 (App. Div. 2001). See also French v. Hernandez, 184 N.J. 144 (2005) (permission to use vehicle did not extend to accident).

We understand this case to be a dispute between carriers as to which is primary and responsible for the underlying action,*fn3 and we affirm the judgment as to Plescia. As that is the only issue before us, we affirm the judgment substantially for the reasons expressed by Judge Daniel Mecca in his oral opinion of November 19, 2004, as supplemented herein.

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