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Auto One Insurance Co. v. Robinson


November 17, 2008


On appeal from Superior Court of New Jersey, Law Division, Civil Part, Middlesex County, Docket No. L-5398-06.

Per curiam.


Argued October 27, 2008

Before Judges Lisa, Reisner, Sapp-Peterson.

These two appeals, which we have consolidated for purposes of this opinion, arise from a declaratory judgment action filed by plaintiff Auto One Insurance Company against its insured, defendant Christian M. Robinson, and several other parties who had sued Robinson for damages in connection with an automobile accident. Auto One sought a declaration that it did not owe Robinson coverage under its policy, because Robinson was a passenger rather than a driver of a borrowed automobile at the time of the accident. Because we conclude that the policy covered Robinson while he was "using" the automobile and the term "use" included riding in the car as a passenger, we reverse the December 7, 2007 order of the trial court in favor of Auto One and remand for entry of an order declaring coverage.


These are the most pertinent facts. Joseph Garcia, who had a learner's permit,*fn1 obtained his mother's permission to use her car to go out to a restaurant with a friend, Channing, who had a driver's license. Garcia's mother gave Channing permission to drive the car, as she had several times in the past. However, instead of returning home after dinner, Garcia and a group of friends went to a party, imbibed alcohol, and did not leave for home until early morning the next day. Initially on the trip home, Robinson, a licensed driver, was behind the wheel.*fn2

However, at some point the inebriated Garcia insisted on driving and, thereafter, drove the car off the road into a tree.

Nataliya Karpiy, who was injured in the accident, filed a negligence complaint alleging that Robinson "was the licensed driver responsible for [Garcia's] operation of the motor vehicle" and that the accident was proximately caused by Robinson's negligence "in the operation, control and supervision" of the vehicle. Maryann Erickson, on behalf of herself and as guardian for an injured minor passenger Amanda Erickson, also sued Robinson on the theory that Robinson was the licensed driver responsible for Garcia's operation of the car, as well as on the theory that Robinson permitted an intoxicated person to drive the vehicle in violation of N.J.S.A. 39:4-50(a).*fn3

At the time of the accident, Robinson was insured under his mother's Auto One insurance policy, which named Robinson as a covered driver. Section IV, subsection A of the policy defined "liability coverage" as including the insured's "use" of his private passenger auto or his "use" of a "non-owned auto":

b. We will

(1) pay damages that an insured becomes legally liable to pay because of

(a) bodily injury to others, and

(b) property damages caused by accident resulting from the ownership, maintenance, or use of your private passenger auto . . . .

d. Other Autos The Liability Coverage extends to the use, by an insured, of a . . . non-owned auto.

The definitions section of the policy (Section ID) defined "Non-owned Auto" as follows:

[A]n auto not owned by, registered to, leased to, or available or furnished for the regular use of

1. you;

2. any other person residing in the same household as you;

3. any relative.

Significantly, the definitions subsection also provided that "[a] non-owned auto must be an auto in the lawful possession of the person operating it." Based on this definition, Auto One filed a declaratory judgment action contending that the latter phrase barred coverage unless the insured was "operating" the non-owned auto. Because Robinson was not actually driving the Garcia vehicle at the time of the accident, Auto One contended that he had no coverage for the accident. The motion judge accepted this argument and granted summary judgment for Auto One.


Our review of the trial court's decision granting summary judgment is de novo, using the same standard employed by the motion judge. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998); Bello v. Lyndhurst Bd. of Educ., 344 N.J. Super. 187, 190 (App. Div. 2001). Accordingly, we determine whether there are material disputes of fact, and if not, whether the undisputed facts viewed most favorably to the non-moving party, entitle the moving party to judgment as a matter of law. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Further, the "trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

While we conclude that this case was ripe for summary judgment, we cannot agree with the trial judge's construction of the insurance policy. We begin by considering basic principles applicable to the construction of insurance policies. As contracts of adhesion, they are to be construed in favor of the insured:

New Jersey courts consistently have recognized that insurance policies are contracts of adhesion and, as such, are subject to special rules of interpretation. We have noted that an insurance company is "expert in its field and its varied and complex instruments are prepared by it unilaterally whereas the assured or prospective assured is a layman unversed in insurance provisions and practices." Thus, when called on to interpret insurance policies, we "assume a particularly vigilant role in ensuring their conformity to public policy and principles of fairness." An insurance policy generally should be interpreted according to its plain and ordinary meaning. We also have stated, however, that "policies should be construed liberally in [the insured's] favor to the end that coverage is afforded 'to the full extent that any fair interpretation will allow.'" [Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 272-73 (2001)(citations omitted).]

In particular, ambiguous phrases are to be construed in favor of coverage, and the policy language is to be construed in a manner consistent with the insured's reasonable expectations. Id. at 273-74. See also Proformance Ins. Co. v. Jones, 185 N.J. 406, 415 (1995). In construing auto accident policies, we also bear in mind the "strong legislative policy of assuring at least some financial protection for innocent accident victims." Id. at 414-15.

Viewing the policy language in light of these basic legal principles, we have no hesitation in concluding that the Auto One policy provided Robinson with coverage for this accident. All of the policy provisions concerning coverage are phrased in terms of the insured's "use" of a vehicle, whether the vehicle is an owned or non-owned auto. While the policy does not define "use," the term has a well-understood meaning in our case law.

In Westchester Fire Ins. Co. v. Continental Ins. Cos., 126 N.J. Super. 29 (App. Div.), aff'd o.b., 65 N.J. 152 (1974), we construed a policy that provided coverage for bodily injury arising out of the "use" of a non-owned automobile. In Westchester, a rear seat passenger threw a stick out of the window of a moving car, causing injury to a passing bicyclist. A critical issue in the case was whether the passenger was "using" the car within the meaning of the policy. In concluding he was covered, we indicated our agreement with the following:

We think that in this context the words use and operation are not synonymous. The use of an automobile denotes its employment for some purpose of the user; the word "operation" denotes the manipulation of the car's controls in order to propel it as a vehicle. Use is thus broader than operation. One who operates a car uses it, but one can use a car without operating it. An automobile is being used, for example, by one riding in it although another is driving. [Id. at 36 (quoting Indemnity Ins. Co. v. Metropolitan Cas. Ins. Co., 33 N.J. 507, 513 (1960))(citations omitted).]

We thus concluded that the "vehicle was being used by the driver as well as by his passenger." Ibid.

In Indemnity, supra, the question was whether Acerra, a driver who had permission to "use" the car in the sense that he had permission to be a passenger, but did not have permission to drive the car, was nonetheless covered under a policy providing coverage to a person "using" the vehicle with the owner's permission. After considering that "the language of the standard omnibus clause in an automobile liability insurance contract is to be construed broadly in favor of the insured and injured to effectuate a strong legislative policy of assuring financial protection for innocent victims of automobile accidents," id. at 512-13, the Court held that the term "use" was broader than "operation" and that the term "use" resulted in coverage.

It is undisputed in the present case that [the owner] gave Smith, Acerra and the others in the party permission to use her automobile to go to and from Schmidt's Brewery in Philadelphia. At the time of the accident the automobile was being used for that purpose, i.e., transporting the members of the party from the brewery to their homes. Since under the terms of the omnibus clause in Metropolitan's policy a person is an additional insured if he is using the automobile with the named insured's permission, we hold that Acerra was an additional insured. [Id. at 515.]

Applying these principles to the Auto One policy, it is clear that as a passenger in the Garcia vehicle, Robinson was "using" the car. This construction is consistent with the plain language of the policy and with the reasonable expectation of the insured. Moreover, even if the policy were ambiguous, we would construe it in favor of coverage. Progressive Cas. Ins., supra, 166 N.J. at 272-74; Proformance Ins. Co., supra, 185 N.J. at 416.

Auto One's reliance on the definitions section of the policy, rather than the coverage section, is misplaced. After defining "non-owned auto," the definitions section additionally provides that "[a] non-owned auto must be an auto in the lawful possession of the person operating it." We find no merit in Auto One's contention that this sentence vitiates the clear language of the coverage section and thus requires that the insured be "operating" the non-owned vehicle in order to be covered. The language simply will not support that construction and, even if it did, such an interpretation would stand on its head the well-established rule that ambiguous language is to be construed in favor of the insured. See ibid.

If the insurer intended the term "person" to be limited to the "insured," and coverage to be limited to the driver, it should have specifically so stated. It did not. See Aetna Ins. Co. v. Weiss, 174 N.J. Super. 292, 296 (App. Div.), certif. denied, 85 N.J. 127 (1980). We conclude that the most reasonable construction of the sentence is that the auto must not be stolen or otherwise taken unlawfully. For example, the policy would not cover a passenger joyriding in a stolen car.

We reverse the judgment of the trial court. We recognize that neither Robinson nor the appellants filed a cross-motion for summary judgment. However, because our opinion is conclusive on the issue and further litigation of this matter would serve no purpose beyond delaying the resolution of the underlying personal injury lawsuit, we exercise our original jurisdiction and remand this matter for entry of a judgment in favor of defendants on the coverage issue. R. 2:10-5.

Reversed and remanded.

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