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Ingling v. Ryder Truck Rental


February 5, 2010


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-7910-04.

Per curiam.


Argued December 14, 2009

Before Judges Lisa, Baxter and Alvarez.

These back-to-back appeals, which we now consolidate for disposition in a single opinion, involve a dispute regarding insurance coverage. The underlying claim was brought by Benjamin Ingling,*fn1 because of injuries he suffered when he slipped and fell on an icy parking lot at the premises of Ryder Truck Rental Inc. (Ryder). Ingling suffered severe brain injuries. He ultimately settled the claim with Ryder and its snow removal contractor for $7 million, of which Ryder paid $6.5 million and the snow removal contractor paid $500,000.

Ingling's employer, McLean Packaging Corporation (McLean) had a $1 million motor vehicle policy with Liberty Mutual Insurance Company (Liberty Mutual). Ryder was also an insured under the policy. On cross-motions for summary judgment, the trial court initially determined that Ingling's injuries did not arise from the use of the insured vehicle covered by the Liberty Mutual policy, and thus granted Liberty Mutual's motion and dismissed Ryder's third-party complaint against Liberty Mutual which sought coverage. However, the court subsequently granted Ryder's motion for reconsideration and reversed its earlier decision. The court held that Ingling's injuries arose out of the use of the insured vehicle and Ryder was entitled to coverage from Liberty Mutual. The court subsequently denied two reconsideration motions made by Liberty Mutual.

Because of his injuries, Ingling was adjudged incapacitated, and the settlement on his behalf required court approval. After conducting a hearing, the court approved the settlement on March 27, 2007. On that date, Ryder filed a motion to amend its third-party complaint in order to join AIG National Union Fire Insurance Company of Pittsburgh, PA (National Union) as a third-party defendant. National Union had issued a $5 million commercial umbrella policy to McLean, which was in effect at the time of Ingling's injury. The critical allegation in the proposed amended third-party complaint stated: "As Ryder is an insured under the National Union policy and the incident arose from the ownership, maintenance, operation, and use of a vehicle, National Union is obligated to indemnify Ryder with respect to the settlement and all costs incurred."

The trial court denied Ryder's motion to amend its third-party complaint to include National Union. The court found that the delay in attempting to join this additional party was inexcusable and that National Union would suffer substantial prejudice by virtue of the late joinder, in light of the critical coverage determination that had already been made and the settlement that had been approved.

An order for final judgment was entered on November 5, 2008. Ryder and Liberty Mutual had entered into stipulations, agreeing that if the trial court's decision on coverage is affirmed on appeal, then (1) the settlement amount was reasonable and Liberty Mutual would indemnify Ryder up to its policy limit of $1 million, and (2) counsel fees incurred by Ryder in the amount of $300,000 were reasonable, and would be paid by Liberty Mutual. Thus, on November 5, 2008, the court entered final judgment against Liberty Mutual in favor of Ryder in the amount of $1,300,000.

In A-1911-08T3, Liberty Mutual appeals from the final judgment and from the earlier orders we have described in which it was determined that Liberty Mutual was obligated to provide coverage for Ingling's claim. We agree with Liberty Mutual's argument that Ingling's injuries did not arise out the use of the insured vehicle, and we therefore reverse on A-1911-08T3.

In A-2012-08T3, Ryder appeals from the denial of its motion to add National Union as an additional third-party defendant. Although the issue appears to be moot in light of our disposition of Liberty Mutual's appeal, for the sake of completeness we will address the issue substantively. We find no mistaken exercise of discretion in the denial of Ryder's motion, and we accordingly affirm on A-2012-08T3.


McLean leased tractors from Ryder for use by McLean's drivers in making deliveries. Pursuant to the truck lease agreement, McLean was required to obtain insurance providing primary coverage to Ryder and McLean for the ownership, maintenance, use or operation of the leased vehicles, with a combined single limit of $1 million per occurrence. McLean procured such coverage from Liberty Mutual, and the policy was in effect at the time of Ingling's injury. The liability provision in the policy obligated Liberty Mutual to pay all sums an insured was legally obligated to pay for bodily injury "caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto.'" The primary issue in these appeals is whether Ingling's accident "resulted from" or arose out of "the ownership, maintenance or use of" the insured vehicle.

Each morning, McLean's drivers would clock in at McLean's facility, drive to the Ryder parking lot, and pick up their tractors, after which they would return to the McLean lot, hook up their trailer, and begin their delivery routes. On February 5, 2004, Ingling followed this procedure. He arrived at the Ryder lot before daybreak. The lot was not lit, and the surface was covered with snow and ice from prior storms. Ingling parked his car, walked to and entered the tractor to which he was assigned, started the engine and turned on the headlights. Because his truck appeared to be blocked in by other trucks in the lot, Ingling got out of his truck and walked around the back of it to ascertain how he would exit. It appears that when Ingling fell, he might have been attempting to enter and start a bread truck that was blocking his tractor so he could move it out of the way. While walking alongside of his truck, Ingling slipped on the ice and fell, hitting his head and resulting in severe traumatic brain injuries. Ingling was found by a co-worker lying facedown on the ground about ten to twelve feet from his tractor.


The issue presented by Liberty Mutual's appeal (A-1911-08T3) is whether Ingling's injury falls within the scope of the policy provision covering injuries "resulting from the ownership, maintenance or use of a covered auto." The parties agree that the phrase "resulting from" must be interpreted to mean "arising out of," which has been judicially interpreted in a broad sense to mean "originating from" or "growing out of" the use of the automobile. Westchester Fire Ins. Co. v. Cont'l Ins. Cos., 126 N.J. Super. 29, 38 (App. Div. 1973), aff'd o.b., 65 N.J. 152 (1974).

A plaintiff must show a "substantial nexus" between the injury and the use of the vehicle in order for the coverage obligation to apply. Ibid. "Use" is not synonymous with "operation" and denotes the employment of the vehicle for some purpose of the user. Id. at 36-37.

The inquiry should be whether the negligent act which caused the injury, although not foreseen or expected, was in the contemplation of the parties to the insurance contract a natural and reasonable incident or consequence of the use of the automobile, and thus a risk against which they might reasonably expect those insured under the policy would be protected.

Whether the requisite connection or degree of relationship exists depends upon the circumstances of the particular case. [Id. at 38 (citation omitted).]

In Westchester Fire Ins. Co., a substantial nexus was found between the injury and the use of the subject vehicle where a passenger threw a stick from the rear passenger seat of the vehicle and struck a passing bicyclist in the head. Ibid. In another case we found the requisite connection to the use of the vehicle where the plaintiff was bitten by a dog being kept in the open cargo area of a pickup truck. Diehl v. Cumberland Mut. Fire Ins. Co., 296 N.J. Super. 231, 236 (App. Div.), certif. denied, 149 N.J. 144 (1997). Analogizing Diehl, we also found a substantial use nexus where a student was injured in a fight on a school bus while being transported to school. Home State Ins. Co. v. Cont'l Ins. Co., 313 N.J. Super. 584, 594 (App. Div. 1998), aff'd o.b., 158 N.J. 104 (1999). We found a substantial nexus between the maintenance of a vehicle and the injury where the plaintiff asked a service station attendant to replace a tire, and then suffered injuries when, unbeknownst to the attendant, he climbed into the trunk of the vehicle as the attendant hoisted it on a hydraulic lift and then fell out of the trunk. Am. Home Assurance Co. v. Hartford Ins. Co., 190 N.J. Super. 477, 488 (App. Div. 1983).

The causal connection must be more than the mere fact or coincidence of the vehicle's presence. In the most recent case on the subject, the plaintiff offered to assist his employer in changing a tire on a pickup truck parked in the driveway in front of the employer's home. Penn Nat'l Ins. Co. v. Costa, 198 N.J. 229, 231-33 (2009). The employer declined the offer, but as plaintiff headed off, he slipped on ice or snow on the driveway, fell, and struck his head on the bumper jack the employer was using to lift the truck. Id. at 233. The Court held there was no substantial nexus between the plaintiff's injury and the employer's maintenance of the vehicle. Id. at 241. Recognizing that the plaintiff's injury was caused by his employer's failure to keep his driveway clear of ice and snow, the Court found the fact that he struck his head on the bumper jack being used to repair the flat tire to be "an unfortunate but entirely incidental happenstance to the maintenance activity [the employer] was performing on his truck." Ibid.

A separate line of cases has considered whether injuries sustained while loading or unloading trucks bear a substantial nexus to the use of the vehicle. In one case, the plaintiff truck driver backed his trailer into the loading dock where he was to leave it to be unloaded at a later time. Wakefern Food Corp. v. Gen. Accident Group, 188 N.J. Super. 77, 79 (App. Div. 1983). Because the trailer was refrigerated, he was obligated to hook up an electrical cable supplied by Wakefern from the wall socket of the dock and run it back to an outlet on his trailer. Ibid. As he walked between his trailer and another while carrying one end of the cable, the driver was injured when he stumbled and fell over debris which had been negligently left on the floor of the loading dock. Ibid. We held that there was no substantial nexus between the use of the truck and the driver's injuries. Id. at 86-87. We stated:

Sound policy considerations weigh strongly against construing an omnibus clause to cover the owner of a loading platform on which a named insured is injured solely due to an unsafe condition on the premises. Such an interpretation would reallocate the ultimate financial risk of the platform owner's negligence to the truck driver's insurance company. . . . As a consequence, the owner of a plant or warehouse at which trucks are unloaded would be freed from a financial incentive to maintain his premises in a safe condition. Truck owners and operators, who exercise little or no control over the premises on which they unload, would be forced to bear the entire financial burden of accidents resulting from platform owners' lack of care. [Id. at 86 (quoting Halifko v. Cities Serv. Oil Co., 510 F. Supp. 1131, 1136-37 (D.N.J. 1981), aff'd, 676 F.2d 685 (3d Cir. 1982)).] We further reasoned:

When an accident, such as the one here presented, is occasioned by negligent maintenance of the premises and the only connection to that event is the fact that the motor vehicle and its operator are present because a delivery or pick-up is to be made, no realistic social or public policy is served by straining to shift coverage. Moreover, no reasonable contractual expectations are disappointed or denied . . . . [Id. at 87.]

We reached a similar result where a truck driver was injured when, after backing his truck into the loading dock, he adjusted the movable loading dock plate to the height of his truck to facilitate its unloading and it collapsed upon him because it had been negligently maintained. Forsythe v. Teledyne Turner Tube, 209 N.J. Super. 608, 610-11 (App. Div. 1986). We found no substantial nexus between the unloading of the truck and the injuries, despite the fact that it was necessary to move the loading dock plate in order to unload the truck. Id. at 617. We reasoned:

We distinguish between cases where there is negligence in the actual loading and unloading operation, such as by an employee of a warehouse in loading a truck, and those cases where the negligence is not directly related to the loading and unloading, but the accident occurs during the loading and unloading process, such as where there is a dangerous condition on the premises of the warehouse. [Id. at 616.]

By contrast, we found a substantial nexus where a truck driver, directing a crane operator as to which of the truck's steel cargo he was to unload, was injured by a steel beam that had been caused to move by the crane's magnet. Bellafronte v. Gen. Motors Corp., 151 N.J. Super. 377, 382-83 (App. Div.), certif. denied, 75 N.J. 533 (1977). Similarly, the Supreme Court found a substantial nexus between the use of the vehicle being loaded and the injuries of a truck driver who, while observing the loading procedure, had a bundle of cardboard fall on him after the rotten pallet supporting it collapsed. Kennedy v. Jefferson Smurfit Co. & Container Corp. of Am., 147 N.J. 394, 396 (1997). In determining whether the selection of the pallet fell within the "complete operation" of loading the goods, the Court framed the issue as whether the selection of the pallet, as an act in preparation of the loading of the vehicle, was necessary or integral to carry out the loading or unloading. Id. at 401. Because the act of selecting a pallet was integral to the loading process, the Court found that the injury arose from the use of the vehicle. Id. at 405.

Liberty Mutual analogizes this case to Penn National as well as Wakefern, Forsythe, and other premises liability cases. It argues that, as with the plaintiff in Penn National, Ingling's injuries were merely coincidental to the fact that his vehicle was present or even the fact that he was looking for a way to move the vehicle that was blocking his. Ryder argues that Ingling's injuries bore the requisite substantial nexus to the use of the insured vehicle because his only purpose for being on the property was to use the vehicle, the accident occurred after he had turned his vehicle on, and his sole purpose in walking to the side of the vehicle was to find an exit path so he could use the vehicle. We agree with Liberty Mutual.

The crucial question is whether a substantial nexus exists between the injury and the use of the vehicle, not whether Ingling was injured while using the vehicle. The fact that Ingling had begun using the truck by the time the accident occurred is not dispositive. The fact that he had begun using the vehicle does not lead to a conclusion that everything that followed resulted from or arose out of the use of the vehicle.

In Penn National, the crucial fact was not that the injured individual had not been engaged in maintenance of the vehicle, but rather that his injury did not arise out of such maintenance. The Court reasoned that there was "no allegation whatsoever that [the employer] was negligent in the manner in which he repaired the flat tire - that is, how he performed the maintenance activities - on his pickup truck." Penn National, supra, 198 N.J. at 241.

Similarly, the crucial inquiry in Wakefern was not whether the driver had stopped using the refrigerated truck, but rather whether his injury bore a substantial nexus to his continued use of it. Wakefern, supra, 188 N.J. Super. at 86-87. Indeed, we made no effort to isolate the point at which the driver stopped "using" the truck, but instead found that the condition which caused the injury, the accumulation of debris, bore no substantial nexus to the unloading process despite the fact that the injury occurred while the driver was engaged in an activity causally related to that process. Id. at 83-84.

Again, it is possible to use a vehicle and still suffer injuries arising from an accident which did not bear a nexus to that use. For example, while backing a truck out of a parking lot, one could suffer a heart attack from defective medication recently taken. In such a case, the mere use of the vehicle is not enough of a nexus to the injury to establish that the injury arose out of that use. On the other hand, if one suffers injuries from a crash because the brakes on the vehicle are defective, then the injuries bear the requisite substantial nexus because application of the brakes is integrally involved in the use of the vehicle.

As Westchester Fire instructs, the question "should be whether the negligent act which caused the injury, although not foreseen or expected, was in the contemplation of the parties to the insurance contract a natural and reasonable incident or consequence of the use of the automobile" and therefore a risk against which they might reasonably expect the policy to cover. Westchester Fire, supra, 126 N.J. Super. at 38 (emphasis added). In the context of this case, the inquiry would be whether the risk presented by Ryder's failure to clear the lot of ice and snow would be a viewed by McLean and Liberty Mutual as a reasonable consequence of the use of the truck.

In Home State Ins. Co., we held that fights between students on a school bus were a foreseeable consequence of the use and operation of the bus, just as dog bites from pets being transported in pickup trucks were a foreseeable consequence of the use of the truck in Diehl because they were "facilitated by the height and open design of the deck." Home State Ins. Co., supra, 313 N.J. Super. at 594; Diehl, supra, 296 N.J. Super. at 236. In this case, however, there was no relationship between the use of the truck and the icy condition of the parking lot which caused Ingling's fall. The icy parking lot cannot be said to be a natural and reasonable consequence of the use of the truck in the same way in which fights between students may be said to be a natural consequence of their being transported in the school bus. The better analogy is to Penn National and Wakefern, in which it was recognized that the conditions of the premises giving rise to the injuries were unrelated to the maintenance or unloading of the vehicle.

The issue before us in Liberty Mutual's appeal was decided in the trial court on the parties' cross-motions for summary judgment. No material facts were in dispute, and the matter was ripe for disposition in that procedural posture. The issue before the trial court, and now before us, is a legal one. Therefore, our review is de novo, and our task is to determine whether the trial court's ruling on the law was correct. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). For the reasons we have stated, we conclude that the trial court misapplied the controlling legal principles in finding that the required substantial nexus existed between Ingling's injuries and the use of the insured vehicle. There was no such substantial nexus, and Liberty Mutual was not required to provide coverage. Accordingly, we reverse on A-1911-08T3.


Ryder's appeal (A-2012-08T3) arises from the trial court's refusal to allow Ryder to amend its third-party complaint to add National Union as a third-party defendant two years after the original complaint, because it failed to comply with the notice requirement of Rule 4:5-1(b)(2). As we stated at the outset of this opinion, it appears that based upon our disposition of Liberty Mutual's appeal, the issue raised in Ryder's appeal is moot. Nevertheless, for the sake of completeness, we will address the substantive issue presented.

Amendments to pleadings should be freely and liberally granted in the interest of justice, especially "when the failure to join necessary parties may preclude a subsequent law suit because of the entire controversy doctrine, and where no undue delay or prejudice will result from the amendment." Marinelli v. Mitts & Merrill, 303 N.J. Super. 61, 77 (App. Div. 1997) (quoting Tomaszewski v. McKeon Ford, Inc., 240 N.J. Super. 404, 411 (App. Div. 1990)(citations omitted).

Rule 4:5-1(b)(2) states:

Each party shall include with the first pleading a certification . . . [which] shall disclose . . . the names of any non-party who should be joined in the action pursuant to R. 4:28 or who is subject to joinder pursuant to R. 4:29-1(b) because of potential liability to any party on the basis of the same transactional facts. . . .

If a party fails to comply with its obligations under this rule, the court may impose an appropriate sanction including dismissal of a successive action against a party whose existence was not disclosed . . . . A successive action shall not, however, be dismissed for failure of compliance with this rule unless the failure of compliance was inexcusable and the right of the undisclosed party to defend the successive action has been substantially prejudiced by not having been identified in the prior action. [Emphasis added.]

This rule is intended to implement the philosophy of the entire controversy doctrine. Pressler, Current N.J. Court Rules, comment on R. 4:5-1(b)(2) (2010). Dismissal for noncompliance with Rule 4:5-1(b)(2) is permitted only if two conditions are met: (1) the failure to comply with the rule was inexcusable, and (2) the right of the undisclosed party to defend the action will be substantially prejudiced. Mitchell v. Charles P. Procini, D.D.S., P.A., 315 N.J. Super. 557, 564-65 (App. Div. 1998) (Mitchell I). Substantial prejudice implies the loss of witnesses, loss of evidence, fading memories, and the like. Mitchell v. Charles P. Procini, D.D.S., P.A., 331 N.J. Super. 445, 454 (App. Div. 2000) (Mitchell II). Delay alone does not create substantial prejudice, but it is the lack of availability of information which results from the delay that is determinative of the issue of substantial prejudice. Ibid.

As an equitable preclusionary doctrine, the principal aims of the entire controversy doctrine are to encourage conclusive legal determinations, avoid fragmented litigation, promote judicial economy and efficiency, and, above all, provide fairness to the parties. K-Land Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 70 (2002). An important consideration in applying the equitable doctrine with an eye toward fairness is whether the party whose claim is being barred had a fair and reasonable opportunity to fully litigate the claim in the prior proceeding. Oliver v. Ambrose, 152 N.J. 383, 396 (1998). Application of the doctrine is left to the discretion of the trial court based on the factual circumstances of each case. Id. at 395.

Ryder's initial third-party complaint was against "ABC Insurance Company," a fictitious name. See R. 4:26-4 (allowing such practice where "the defendant's true name is not known to the plaintiff"). Soon after filing it, Ryder amended its third-party complaint to name Liberty Mutual as a third-party defendant. But it continued to name "ABC Insurance Company" and continued to claim that Ryder was entitled to be defended and indemnified by ABC because it "issued to McClean [sic] an insurance policy that was in effect at the time of the incident described in Plaintiff's Compliant [sic], and which provided coverage for the aforesaid motor vehicle owned by Ryder and operated by McLean and the Plaintiff." However, notwithstanding Ryder's knowledge of National Union's identity, from which it had received a denial of coverage letter in December 2005, Ryder did not move to amend to name National Union until March 27, 2007, after the critical coverage determination was made and the case was settled for $7 million.

On appeal, Ryder appears to concede the first prong, as it did before the trial court, that its failure to comply with Rule 4:5-1(b)(2) was inexcusable. The crux of Ryder's argument rests on its contention that National Union could not have been substantially prejudiced because it was aware of the pendency of the action and should have known that a party would file suit against it. Ryder argues that National Union set forth no evidence to satisfy its burden of showing substantial prejudice.

Ryder relies heavily upon DiMaria Constr., Inc. v. Interarch, 351 N.J. Super. 558, 575-76 (App. Div. 2001), aff'd, 172 N.J. 182 (2002), where, after prevailing in a suit against a bank for breach of contract, a contractor brought another suit against an interior designer and an architect for tortious interference with contract. When the contractor prevailed in that suit as well, the architect appealed, claiming the complaint should have been dismissed on entire controversy grounds for the contractor's failure to name him in his certification pursuant to Rule 4:5-1(b)(2), despite the fact that it named the interior designer. Ibid.

We held that the architect suffered no substantial prejudice because he was well aware of the earlier action between the contractor and the bank and because his close association with the bank and the interior designer and his position as architect on the project would have alerted him to the fact that if the designer was potentially liable to the contractor, then he would be too. Ibid. The contractor's certification stated that it had an action against the designer and "possibly others." Id. at 576. We reasoned that a simple inquiry would have disclosed that the architect was one of those possible others. Ibid.

Ryder claims that DiMaria stands for the principle that parties who are aware of litigation cannot be substantially prejudiced by the failure of a party to name them pursuant to Rule 4:5-1(b)(2). It argues that National Union's awareness provided it ample opportunity to intervene in the matter. Ryder claims that a "simple inquiry" would have disclosed that National Union was, in fact, ABC Insurance Company.

Ryder's reliance on DiMaria is misplaced. Unlike the architect in DiMaria, National Union bore no close relationship with Liberty Mutual such that it would be on notice that it might also be liable for coverage. Instead, National Union sent a letter disclaiming coverage, but did not hear back from Ryder until nearly two years later. Rather than informing National Union that it would be sued, these facts and circumstances support National Union's argument that it had no idea whether Ryder intended to seek coverage from it under its policy with McLean. DiMaria does not hold or even suggest that awareness of a law suit precludes substantial prejudice.

National Union could not have known it would be brought in as a third-party defendant. Further, its knowledge of the case is not enough to prevent a finding of prejudice. Ryder attempts to shift attention from its failure to comply with the provisions of Rule 4:5-1(b)(2) by pointing out that National Union could have intervened in the action. Yet, the burden of compliance with the rule remained with Ryder, and National Union was under no obligation to voluntarily join in the case.

The trial court did not mistakenly exercise its discretion in denying Ryder's motion to join National Union because National Union would certainly have suffered substantial prejudice if brought in as a party to the litigation at the eleventh hour. Discovery had ended. Ryder, McLean, and the snow removal contractor had settled the claim with the Inglings for $7 million. Ryder had recently obtained a crucial coverage ruling against Liberty Mutual, finding that Ingling's injuries arose out of the use of the truck. Had it been joined, National Union would have been precluded from meaningful participation in all of these important stages of the litigation.

On A-1911-08T3, the orders under review are reversed; on A-2012-08T3, the order under review is affirmed.

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