On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. PAS-L-69-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing, Parker and Messano.
Defendant American Automobile Insurance Company (American) appeals from an order entered on August 11, 2006 (1) granting summary judgment in favor of plaintiff United States Fidelity & Guaranty Company (USF&G) and ordering American to provide primary coverage to Noel A. Mattis for all claims arising out of an accident that occurred on November 3, 2001; (2) ordering American to pay plaintiff $52,259.75 in legal fees for defense of the underlying suit; and (3) awarding plaintiff costs in connection with the underlying suit. The issue presented on appeal is which carrier is obligated to provide primary coverage for the accident.
The facts relevant to this appeal are as follows. Noel A. Mattis was the owner/operator of a tractor-trailer that he leased to W.R.J. Trucking Company (W.R.J.), a common carrier registered with the U.S. Department of Transportation. Pursuant to the lease, Mattis used the tractor and trailer to pick up and deliver cargo for W.R.J. On November 2, 2001, Mattis drove the tractor from his home to the W.R.J. terminal, where he picked up the trailer and freight that he carried to various stops in New Jersey and Pennsylvania. After his last delivery, he returned to the terminal and left for home after midnight. On his way home, he was involved in an accident on Route 80 near Lodi. Byron Paul Rea died in the accident and his estate filed suit against Mattis in Passaic County.
USF&G issued a truckers liability policy in which W.R.J. was a named insured. The policy was in effect on the date of the accident. American issued a policy, commonly referred to as a Bobtail Policy, to the Independent Trucker's Association (ITA) of which Mattis was a member. By virtue of Mattis's membership in the ITA, the tractor was insured under the Bobtail Policy at the time of the accident.
American maintains that its Bobtail Policy excludes coverage for the tractor while in use for business or while used in the business of anyone to whom it was rented. American denied coverage to Mattis for any damages arising out of the accident. As a result, USF&G paid for Mattis's defense in the action brought by Rea's estate. USF&G then commenced this suit in January 2005, seeking a declaration that American's policy provided primary coverage.
On December 29, 2006, USF&G moved for summary judgment, alleging that Mattis was not operating the tractor in the business of W.R.J. at the time of the accident and that it was entitled to reimbursement for its defense and coverage of Mattis.
American cross-moved for summary judgment on the grounds that the terms and conditions of the USF&G policy provide for coverage of claims arising out of this accident and that coverage is excluded under the American policy because the vehicle was operated in the business of trucking at the time of the accident.
USF&G's motion for summary judgment was granted and American appeals, arguing that the trial court erred in (1) holding American responsible for coverage; and (2) determining that the USF&G policy only provides excess coverage over the American policy.
After hearing argument on February 10, 2006, the trial judge found that the material facts were undisputed:
On November 2, 2001, Mattis drove the tractor from his home to W.R.J.['s] terminal where he picked up a trailer. At that point, Mattis was dispatched by W.R.J. to haul a trailer from the terminal to various points in New Jersey and Pennsylvania. . . .
. . . Following his last delivery, Mattis returned the trailer to the terminal late in the ...