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Richard Vann v. Mercury Indemnity Company of America and Mercury Insurance Group


April 25, 2012


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5821-09.

Per curiam.


Argued January 23, 2012

Before Judges Sabatino and Ashrafi.

In this insurance coverage dispute, plaintiff Richard Vann appeals the trial court's order dated April 1, 2011, granting summary judgment in favor of defendant, Mercury Insurance Group.*fn1

The trial court rejected plaintiff's contention that defendant is obligated to provide him with extended medical expense benefits ("med-pay") coverage for injuries he sustained while driving a truck for his father's company. The court concluded that such med-pay coverage was inapplicable by virtue of the "regular use" exclusion set forth in the personal automobile policy defendant issued to plaintiff. We affirm that sound determination.

These are the pertinent facts. Plaintiff has driven a truck for Vann Trucking, a company in Elmer owned and operated by his father, for approximately thirty years. At the time of plaintiff's accident, Vann Trucking owned three trucks, including two Mack CH600 models. The trucks made local trips, typically within a hundred-mile radius of Philadelphia, and were not used for overnight deliveries.

At approximately 6:30 a.m. on November 19, 2007, a train struck the Mack CH600 truck plaintiff was driving for the company on a service road near Columbus Boulevard in Philadelphia. At the time of the accident, plaintiff was on his way to Packer Avenue Pier to pick up a trailer to hitch to the truck. Plaintiff alleges that he sustained various injuries from the accident, including injuries to his lower back, neck, shoulders, and head.

At plaintiff's deposition, he described the general practices that he followed in determining which particular company truck he would use when performing his job:

Q.: Are you restricted by the type of truck for what you can transport? I mean do you use it for one job as opposed to another or can they be used interchangeable?

PLAINTIFF: It's interchangeable. It just depends on the style of truck you want to drive that day.

Q.: Now, on the date of the accident, is there a reason that you took the CH600 truck that you did?

PLAINTIFF: Well, that's one I normally drive. You know, I have access to all of them, but that one is parked closest to me. It's at my brother's house. That's the one -- once you start with one, you try to stick with it for various reasons.

Q.: That's one you would normally drive during the course of your employment? PLAINTIFF: Yes.

Q.: How often did you use that particular truck?

PLAINTIFF: I'm going to say over the course that we've had it, I would say I drive that [truck] about 90 percent of the time.

Q.: Okay. And are you out working every day so how many jobs do you do in a given week, would you say, or how many days . . a week are you driving the truck?

Plaintiff: I'm going to say between three and five. [Emphasis added.]

Plaintiff further explained that he customarily parked the Mack truck involved in the accident outside of his brother's house in order to reduce his travel time to retrieve the vehicle. He contended that he never used the truck for personal trips outside of his job.

At the time of plaintiff's accident, defendant was his personal insurance carrier for two automobiles that he owned. Defendant's auto policy provided, among other things, personal injury protection ("PIP") and med-pay benefits, subject to certain exclusions.

Meanwhile, Vann Trucking had a commercial vehicle policy with National Independent Truckers Insurance Company ("National"), which insured the Mack truck involved in plaintiff's accident. The National policy did not provide medpay coverage. Nor did the National policy provide PIP coverage, except for an injured pedestrian.*fn2

After plaintiff's accident, he sought med-pay and other benefits from defendant.*fn3 Defendant disclaimed such coverage, invoking the "regular use" exclusion in its policy. The relevant policy language provides as follows:


The company will pay medical expense benefits not to exceed the total aggregate amount stated in the schedule with respect to bodily injury sustained by an insured person, caused by an accident occurring during the policy period anywhere in the world and arising out of the ownership, maintenance or use, including loading and unloading, of an insured automobile or of a highway vehicle*fn4 not owned by or furnished or available for the regular use of the named insured or any relative of the named insured. [Emphasis added.]

Plaintiff contended that the exclusionary language within this provision did not apply here, because he allegedly did not make "regular use" of the company's Mack truck involved in the accident. Consequently, he filed the present action in the Law Division, seeking an order compelling defendant to provide medpay and other*fn5 benefits for the accident.

Following discovery, defendant moved for summary judgment. The trial court granted that motion, agreeing with defendant that the "regular use" exclusion applied.

On appeal, plaintiff argues that the trial court erred in applying the policy exclusion to his circumstances. He contends that, although it was frequent, his driving of the Mack truck for company purposes did not amount to "regular use," as that term has been construed in prior case law. We disagree.

Defendant's automobile policy included coverage for med-pay benefits pursuant to N.J.A.C. 11:3-7.3(b). The regulation provides that "[e]ach policy form or endorsement covering an automobile as defined at N.J.S.A. 39:6A-2 shall include excess medical payments coverage, corresponding to Section II, Extended Medical Expense Benefits Coverage of the personal automobile policy. Insurers must include a minimum coverage of $1,000 and may offer coverage of $10,000." N.J.A.C. 11:3-7.3(b); see also Ingersoll v. Aetna Cas. and Sur. Co., 138 N.J. 236, 239-40 (1994).

Med-pay benefits "require[] some small amount of medical expense benefits to be provided for accidents not otherwise qualifying for PIP medical expense payments." Craig & Pomeroy, New Jersey Auto Insurance Law § 5:2-3 at 103 (2011). However, med-pay benefits "represent[] a very narrow window of coverage to a limited class of persons who . . . are ineligible for basic PIP benefits." Ingersoll, supra, 138 N.J. at 240. That "very narrow window" is circumscribed by "regular use" exclusions such as the one set forth in defendant's policy here.

As we have noted, there is no dispute that the Mack truck that plaintiff was driving in the accident is a "highway vehicle." Med-pay coverage in this case thus turns on whether or not the truck was "furnished or available for the regular use" of plaintiff. Although the applicable regulations and defendant's insurance policy do not express a specific percentage or frequency that constitutes "regular use," it is clear that usage comprising three to five days per week and ninety percent of the time is indeed "regular."

As a general matter, exclusionary clauses of the kind at issue here are designed to confine coverage, apart from automobiles that are owned by the insured, to vehicles that the insured uses only infrequently or casually:

"An exclusionary clause or definition, such as the one here involved, manifests an intention on the part of the insurer to protect itself from a situation whereby an insured could purchase a policy covering one automobile and be covered without qualification as to all automobiles available for his use. . . . It has been held that the general effect of such a clause is to give coverage to the insured while engaged in only infrequent or merely casual use of the non-owned automobile, but not in respect to the operation of another automobile which he frequently uses or has the opportunity of using." [Malouf v. Aetna Cas. and Sur. Co., 275 N.J. Super. 23, 27 (App. Div.) (emphasis added) (quoting Am. Cas. Co. v. Lattanzio, 78 N.J. Super. 404, 410-11 (Ch. Div. 1963)), certif. denied, 138 N.J. 271 (1994).]

We have construed the concept of "furnished for regular use," in contexts involving a company-owned vehicle, as encompassing circumstances "[w]here the insured . . . has an unrestricted right to use the vehicle for business purposes and was using the vehicle for such purposes at the time of the accident[.]" Fiscor v. Atl. Cnty. Bd. of Chosen Freeholders, 293 N.J. Super. 19, 27-28 (App. Div.), certif. denied, 147 N.J. 263 (1996); see also DiOrio v. N.J. Mfrs. Ins. Co., 79 N.J. 257, 264-69 (1979); DiOrio v. N.J. Mfrs. Ins. Co., 63 N.J. 597, 602-08 (1973); Malouf, supra, 275 N.J. Super. at 27-29 (discussing a similar "regular use" exclusion in an automobile insurance policy). The definition of "regular use" set forth in Fiscor is instructive to the analysis here.

In Fiscor, the plaintiff was the Atlantic County Jail warden, and was provided with a county-owned vehicle to drive to and from work to his home. Fiscor, supra, 293 N.J. Super. at 22. One day the plaintiff left work and stopped at a winery before going home. Ibid. While driving home from the winery, he was involved in an accident with another vehicle and killed the other driver. Ibid. The plaintiff sued his personal automobile insurance carrier under the "non-owned vehicle" provision of his policy, and the trial court granted the plaintiff summary judgment finding the defendant insurance company liable. Id. at 21.

We reversed the trial court's grant of summary judgment to the insured in Fiscor and instead found that the "regular use" exclusion in the policy applied. Id. at 28-29. We noted that the plaintiff was using the vehicle to drive home from work. Id. at 28. Because "plaintiff had an unrestricted right to use the County-owned vehicle for business purposes, which the County defined as including driving to and from work, and plaintiff was using the vehicle for these purposes at the time of the accident, the 'regular use' exclusion applies." Id. at 28-29.

Here, although plaintiff was not provided with the Mack CH600 truck in order to drive to and from work, the "regular use" exclusion in the med-pay policy is nonetheless applicable. As is evident from plaintiff's deposition testimony, he had an unrestricted right to use the truck for business purposes. He regularly used the Mack CH600 truck for work ninety percent of the time, three to five days per week. He was manifestly the vehicle's primary user. He personally chose to use that truck on the day of the accident, and there is no proof in the record that the company directed him to use that particular vehicle. He parked the truck at his brother's house essentially for his personal convenience, in order to reduce his travel time. Additionally, at the time of the accident he was using the Mack CH600 truck for a business purpose, driving to Philadelphia to pick up a trailer.

The fact that plaintiff did not drive the truck for personal purposes is not dispositive. The key consideration is that plaintiff had an unrestricted right to use the vehicle for business purposes, and that he was using the vehicle for a business purpose at the time of the accident. See Fiscor, supra, 293 N.J. Super. at 27-28.

We similarly enforced a "regular use" insurance policy exclusion in Venters v. Selected Risks Insurance Co., 120 N.J. Super. 549 (App. Div. 1972), a case that is strikingly on point factually. In Venters, the plaintiff was a bus driver involved in an accident while in the course of his employment. Id. 551-52. We concluded that the bus driver was precluded from obtaining coverage for the accident from his personal automobile insurer, because he had been provided the bus for use on a regular basis. Ibid. We rejected the plaintiff's argument that the bus was not furnished for his "regular use" because he was allowed to operate it only during working hours. Ibid; see also Fiscor, supra, 293 N.J. Super. at 24 (citing Venters, supra, 120 N.J. Super. at 551-52). Additionally, we rejected the plaintiff's argument that the "regular use" exclusion did not apply because he did not always drive the same bus. Venters, supra, 120 N.J. Super. at 552.

Similarly, Vann Trucking did not provide plaintiff with the Mack CH600 truck to use twenty-four hours a day. In fact, plaintiff here exerted even a greater degree of control over the vehicle than compared to the plaintiff in Venters, because he parked the Mack CH600 truck at his brother's house each night. Thus the "regular use" exclusion in the policy is applicable.

Also supportive of our conclusion is the Supreme Court's opinion in DiOrio, supra, 79 N.J. at 257. In that case, the Court noted that the son of a partner of a business, where the partner regularly used a car owned by the partnership to commute to work, was not covered by the family's personal auto policy for an accident that occurred while the son was driving that car. Id. at 265-67. Although plaintiff in the present case did not commute from his home in the company's truck, his use of that truck ninety percent of the time at work was sufficiently regular and frequent to compel a similar result of non-coverage.

For these reasons, the trial court's grant of summary judgment denying plaintiff med-pay coverage under defendant's policy is affirmed.*fn6

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