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Baker v. J.J. Deluca Co.

June 9, 2010

JOHN BAKER AND LULA BAKER, HIS WIFE, PLAINTIFFS-RESPONDENTS,
v.
J.J. DELUCA COMPANY, INC., NORTH WALES MILLWORK, INC., LEEDO CABINETRY, DEFENDANTS-RESPONDENTS, AND CELADON TRUCKING, DEFENDANT-APPELLANT, AND J.J. DELUCA COMPANY, INC., DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT,
v.
NORTH WALES MILLWORK, INC., DEFENDANT/THIRD-PARTY DEFENDANT/FOURTH-PARTY PLAINTIFF-RESPONDENT,
v.
LEEDO CABINETRY, FOURTH-PARTY DEFENDANT-RESPONDENT, AND CELADON TRUCKING, FOURTH-PARTY DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-1393-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 1, 2010

Before Judges Lisa and Coburn.

By leave granted, Celadon Trucking Services, Inc. (Celadon) appeals from the March 17, 2009 order granting the summary judgment motions of defendants J.J. Deluca Company, Inc. (Deluca), North Wales Millwork, Inc. (North Wales) and Leedo Manufacturing Co., Inc. (Leedo), determining that Celadon is required to provide coverage to defendants. Celadon also appeals from the corresponding amended order of March 26, 2009 to the same effect. The orders also denied Celadon's cross- motion for partial summary judgment, which sought a declaration that Celadon was not required to provide coverage to defendants. Celadon argues that the trial court erred in holding that New Jersey's insurance statutes apply to it. It argues that, because it is an interstate carrier, federal laws and regulations prescribe its exclusive financial responsibility requirements, and that those laws and regulations do not extend its coverage obligations to non-insureds such as defendants. We reject these arguments and affirm.

Plaintiff, John Baker, was a workman at a construction project in West Orange. On December 4, 2004, while at the job site, plaintiff was helping to unload construction materials from a tractor trailer owned by Celadon. Plaintiff claims he was injured when he was struck by a backsplash that fell off the truck.

Deluca was the general contractor for the construction project. Deluca had ordered certain construction materials (e.g. bathroom cabinets, vanities, and backsplashes) from North Wales, which, in turn, subcontracted the manufacturing of those items to Leedo. Leedo manufactured the contracted items at its Texas facility and then retained Celadon's services to transport the items from Texas to the West Orange job site.

Celadon is a New Jersey corporation. It owns approximately 2500 trucks and 8000 trailers throughout the United States and Canada. All of its tractors and trailers, including the one plaintiff was unloading, are registered in Indiana. The driver of the truck in the underlying action in this case was "brought in" by Celadon Trucking Services of Indiana, Inc., an Indiana corporation. The driver was then "leased" to Celadon, and was for all purposes an employee of Celadon with respect to the incident in which plaintiff claims he was injured.

Celadon is self-insured in compliance with regulations of the United States Department of Transportation (USDOT). It does not have a certificate of self-insurance in any particular state. Celadon is self-insured for $2.5 million and has an excess insurance policy with Protective Insurance Company with a limit of $7.5 million per occurrence.

On February 17, 2006, plaintiff sued Deluca, which in turn filed a third-party complaint against North Wales, which then filed a fourth-party complaint against Leedo and Celadon.

On August 25, 2008, Deluca filed a motion to compel coverage from Celadon. Leedo and North Wales then filed similar motions. Celadon filed a cross-motion for partial summary judgment, seeking a determination that it was not responsible for coverage to those co-defendants. At the conclusion of oral argument on February 6, 2009, Judge McCormack granted defendants' motions and denied Celadon's, as memorialized by an order of March 17, 2009. The judge then issued a written opinion on March 26, 2009, with a corresponding amended order that was substantively the same as the March 17, 2009 order.

In his written opinion, Judge McCormack explained his rejection of Celadon's contention that it is not subject to New Jersey's motor vehicle statutes as follows:

N.J.S. 39:6A-3 establishes compulsory automobile insurance coverage. In furtherance of this omnibus coverage, every owner of a motor vehicle registered or garaged in New Jersey must maintain coverage for losses arising from, inter alia, "the use" of a motor vehicle. A person who is in the process of unloading cargo from a motor vehicle is, for purposes of the omnibus coverage, "a user" of the vehicle, Bellafronte v. General Motors, 151 N.J. Super. 377, 382-383 (App. Div. 1977). Thus, under New Jersey law, it is clear that the plaintiff, at the time of this incident, was using the Celadon vehicle and Celadon would be required to provide coverage for such use.

The issue before this Court is whether Celadon avoids this requirement by virtue of the fact that it self-insured under the FMCSA ...


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