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Ortiz v. Zurich American Insurance


October 23, 2009


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-4304-08.

Per curiam.


Submitted: September 30, 2009

Before Judges Collester and Fall.

Plaintiffs, Hector Ortiz and Reynaldo Benavides, appeal from an order entered in the Law Division on November 21, 2008, denying their motion for reconsideration of an order issued on October 7, 2008, that had denied their application to compel defendant Assurance Company of America, improperly pleaded as Zurich American Insurance, a/k/a Zurich North America, to submit to arbitration, and had granted defendant's cross motion, ruling that plaintiffs were ineligible for underinsured motorist benefits under a certain policy of automobile insurance issued by defendant to Garden State Flooring, Inc., plaintiffs' employer. We affirm.

The following factual and procedural history is relevant to our consideration of the issues presented on appeal. On May 13, 2005, plaintiffs were employed by Garden State Flooring, which was insured by Assurance Company of America under a certain policy of commercial motor vehicle insurance. Plaintiffs reported for work at 6:30 a.m., and loaded work materials into a van owned by Garden State Flooring and insured by defendant. With Ortiz driving, they traveled in the van to a jobsite in the Borough of Manhattan in New York City, arriving there shortly before 9:00 a.m. They first unloaded the work materials at the jobsite, and then drove the van to a parking space near the intersection of 81st Street and First Avenue. Plaintiffs left the van and began walking back to the jobsite, crossing 81st Street. Ortiz then realized they had forgotten to unload some material in the van needed to complete the job. Plaintiffs then began re-crossing 81st Street toward the van, and were struck by a vehicle being operated by Luis Marrero while they were within the crosswalk.

Marrero was insured by GEICO Insurance Company under a policy of motor vehicle insurance with liability limits of $25,000 per person and $50,000 per accident. Plaintiffs made a claim against Marrero for personal injuries suffered in the accident, and GEICO offered its policy limits of $50,000. Ortiz was insured under a policy of automobile insurance with High Point Insurance Company with underinsured motorist coverage of $100,000. High Point agreed to waive its underinsured subrogation rights and authorized Ortiz to tender a general release to GEICO after receiving a Longworth*fn2 letter from plaintiffs' counsel. Defendant's policy of commercial motor vehicle insurance insuring Garden State Flooring also contained underinsured motorist coverage. Defendant denied plaintiffs underinsured motorist benefits on the ground that plaintiffs were pedestrians at the time they were struck by Marrero's vehicle, and thereby were not "occupying" a covered vehicle at the time of the accident.

On August 25, 2008, plaintiffs filed a verified complaint against defendant, seeking judgment declaring plaintiffs were entitled to underinsured motorist benefits under defendant's policy insuring Garden State Flooring, and compelling defendant to arbitrate plaintiffs' claims. On September 5, 2008, the Law Division issued an order to show cause, directing defendant to show cause why the relief requested in the verified complaint should not be granted, originally returnable on September 26, 2008. On or about September 25, 2008, defendant filed a notice of cross motion, seeking an order declaring that plaintiffs were not entitled to underinsured motorist coverage benefits. There was no oral argument on the order to show cause and cross motion. On October 7, 2008, the court issued an order, granting defendant's cross motion, ruling that plaintiffs were not entitled to underinsured motorist coverage benefits under Garden State Flooring's commercial motor vehicle policy with defendant on the basis that at the time of the accident plaintiffs were not "in, upon, getting in, on or out of" the insured vehicle.

On October 20, 2008, plaintiffs filed a motion seeking to amend, alter or reconsider the October 7, 2008 order pursuant to R. 1:7-4 and R. 4:49-2. On November 21, 2008, the court denied plaintiffs' motion, "substantially for the reasons stated in the opposition."

On appeal, plaintiffs present the following argument for our consideration:


Section B(1)(b) of defendant's policy, entitled "Who Is An Insured," defines an insured as anyone "occupying" a covered auto. Section F(3) of the policy defines the term "occupying" to mean "in, upon, getting in, on, out or off."

In Torres v. The Travelers Indemnity Company, 171 N.J. 147, 148 (2002), the Court was faced with an identical definition of the term "occupying" in a policy of commercial automobile insurance company involving a claim by an employee of the insured seeking uninsured motorist benefits. The facts, however, were significantly different than here, and were outlined by the Court, as follows:

On the morning of February 15, 1994, plaintiff Franklin Torres was working in his capacity as a warehouse manager for Cornell Surgical Company (Cornell). A UPS truck came to Cornell's warehouse to drop off packages. Almost immediately after that truck left the warehouse, Torres discovered that a certain package was missing.

In accordance with his employment duties, Torres used a Cornell van to search for the UPS driver and the missing package. Having located the UPS truck double-parked around the corner, Torres stopped the Cornell van a few inches behind it. Torres then exited the van, and, with the UPS driver's permission, entered the delivery truck to search for the missing package with the driver. At trial, Torres stated that he believed that the Cornell van was still running when he exited it.

Because Torres was unable to find the missing package in the UPS truck, he then exited from the driver's side door of the truck and began walking back towards the Cornell van. While walking in the street along the side of the UPS truck and a few inches away from the front of the Cornell van, Torres saw another truck approaching him. He raised his right hand in an attempt to get the driver of the third vehicle to stop so that he could enter the Cornell van and avoid being hit. However, the "box portion" of the third vehicle accidentally struck Torres, pinning him between the third vehicle and the UPS truck. As a result of that accident, Torres alleges that he suffered serious bodily injuries.

After determining that the vehicle that struck him was uninsured, Torres made a claim on Cornell's commercial carrier, defendant Travelers Indemnity Insurance Co. (Travelers), seeking uninsured motorist (UM) arbitration....

Under that policy, the term "insured" included "[a]nyone else occupying a covered auto or a temporary substitute for a covered auto." In addition, the policy defined "occupying" as "in, upon, getting in, on, out or off." All parties agree that the Cornell van was a "covered auto." Travelers denied coverage on the ground that Torres did not qualify as an "insured" because he was not "occupying" the Cornell van. [Id. at 147-49.]

Although the trial court ruled in favor of Travelers, and we affirmed in a majority opinion, the Court reversed, agreeing with the dissent of Judge Stern, who had concluded "that Torres was 'occupying' the insured vehicle within the meaning of relevant precedent and that there was a 'sufficient nexus' between the vehicle and the accident to require coverage." Id. at 149. In so ruling, the Court stated:

In Mondelli v. State Farm Mutual Automobile Insurance Co., 102 N.J. 167, 172 (1986),*fn3 we held that the meaning of the term "occupying" in a UM clause must be determined on a case-by-case basis, depending on the facts of the accident and the use of the vehicle, and that "[m]ere coincidental connection between the accident and some touching of the car would not be enough." Id. at 172. We reaffirm those principles here. In the final analysis, as Judge Stern aptly pointed out, in order to obtain UM coverage where occupancy is in issue, a plaintiff is required to establish a substantial nexus between the insured vehicle and the injury sustained.... That nexus was proved in this case.

[Id. at 149-50 (other citations omitted).]

We reached the same conclusion on the "occupying" issue in Macchi v. Connecticut General Ins. Co., 354 N.J. Super. 64, 71-72 (App. Div.), certif. denied, 175 N.J. 79 (2002), where the plaintiff sustained injuries when she stopped and left the car she was driving to help the driver of another, overturned vehicle. Id. at 66. There, the plaintiff sought benefits from the underinsured motorist coverage of the policy issued by Connecticut General to the owner of the car she was driving. Ibid. In finding a substantial nexus between the insured vehicle and the injury sustained, we stated:

The facts in Torres are, for all intents and purposes, indistinguishable from those before us in this matter. In both cases, the claimant drove the covered vehicle to the place where the accident occurred and, leaving the engine running, stepped from the vehicle to perform an essential task with every intention of returning to the vehicle to continue the journey. The one factual difference that the claimant in Torres was discharging his employment duties in driving the covered vehicle and plaintiff herein was on a personal errand is of no consequence in applying the pertinent language of the insurance policy. [Id. at 72.]

And, in Bogey's Trucking & Paving, Inc. v. Indian Harbor Ins. Co., 395 N.J. Super. 59, 68-69 (App. Div. 2007), we concluded there was a substantial nexus between the insured vehicle and the injury sustained and, thereby, a passenger was "occupying" the insured truck, where he left the passenger seat and entered the roadway in order to assist the truck's driver in making a turn, and was out of the truck for a matter of seconds when he was struck and injured.

However, in Thompson v. James, 400 N.J. Super. 286, 295 (App. Div. 2008), also involving an identical definition of "occupying" in the subject commercial motor vehicle policy, we held that the plaintiff had failed to meet his burden of establishing a "substantial nexus" between his use of the vehicle and the injuries he eventually sustained, where he drove his employer's vehicle to a gas station to refuel, left it there, and walked about 350 feet onto a grassy median of an exit ramp to search for jewelry that he had been told had been thrown there; while on the grassy median he was struck by an uninsured motorist. We found "there was nothing about plaintiff having 'occupied' the covered vehicle that was directly, much less substantially, related to the incident in which he was injured." Ibid.

Most recently, in Severino v. Malachi, 409 N.J. Super. 82, 86 (App. Div. 2009), we held that plaintiffs were not entitled to underinsured motorist benefits because they were not named insureds under the covered policy and were not "occupying" the covered vehicle at the time of the accident. There, the decedent plaintiffs Severino and Rodriguez had driven from New York City to Jersey City in a vehicle owned by Severino's fiancé, Muniz. Severino, who had been driving, parked the vehicle in a parking space near his apartment and turned off the engine; Severino got out the vehicle on the driver's side, and Rodriguez exited on the front passenger side. Another passenger, Soba, was still inside the vehicle, leaning "over to the floor to pick up his sandwich and, a few second later, heard a 'boom.' An automobile had struck the car." Id. at 87. Soba, who did not realize that Severino and Rodriguez had been hit until after he exited the Muniz vehicle, observed their bodies lying about fifty feet from the car. Ibid. "Soba stated that Severino and Rodriguez were crossing the street when they were hit. He said that Severino and Rodriguez were probably several feet away from the car when they were struck." Ibid. We concluded that plaintiffs failed to establish the requisite "substantial nexus" between the accident and the Muniz vehicle. As stated previously, Severino and Rodriguez were not in or getting out of the Muniz vehicle when they were hit. They had already exited the vehicle and closed the doors of the car. Furthermore, there is no evidence that either Severino or Rodriguez was leaning upon or touching the Muniz vehicle when they were struck, as was the case in Mondelli.

Moreover, Severino did not leave the vehicle with its lights on or its engine running to perform some essential task, as was the case in Torres and Macchi. Severino's and Rodriguez's journey from New York City to Severino's apartment had concluded when Severino parked the car and turned off the engine. According to Soba, Severino and Rodriguez exited the car to enter Severino's apartment. They intended to return to the car at some point so that Severino could drive Rodriguez and Soba to their homes. Even so, Severino's and Rodriguez's use and occupancy of the vehicle had ended when they sustained their fatal injuries. [Id. at 92.]

Applying these principles to this case, we conclude plaintiffs have failed to establish the requisite "substantial nexus" between the accident that occurred while they were pedestrians in the crosswalk of 81st Street and the covered vehicle. They had parked the vehicle, turned off the engine, exited the vehicle, and had walked across 81st Street on their way to the jobsite when they realized they had left some needed materials in the van, and began walking back toward the vehicle. When they were struck, they were pedestrians inside a marked crosswalk. At the time they were struck, they had not reached the van and were at least fifteen feet from it; they were not stepping on or off the vehicle, standing near the vehicle or touching it. In these factual circumstances, we cannot conclude that plaintiffs were "occupying" the covered vehicle when the accident occurred. Not every act of driving to a location, parking and proceeding on one's way falls within the definition of "occupying" the vehicle one used to get there. At most, this accident was "merely coincidental" to the use of the vehicle. See Mondelli, supra, 102 N.J. at 172 (agreeing that a merely coincidental connection between the covered vehicle and the accident is insufficient to constitute "occupying"). On the issue of "occupying," we discern no distinction between these facts, and the circumstances that would have been present if plaintiffs had been at the jobsite for multiple hours, and had been struck in the same location within that crosswalk while walking back towards the covered vehicle at the end of the work day.


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