United States District Court, D. New Jersey, Camden Vicinage
MEMORANDUM OPINION AND ORDER
SCHNEIDER United States Magistrate Judge.
matter is before the Court on the “Motion for Summary
Judgment and Request for Declaratory Relief”
(“motion”) [Doc. No. 24] filed by plaintiff OOIDA
Risk Retention Group, Inc. (“OOIDA”) and the
Cross-Motion for Summary Judgment (“cross
motion”) [Doc. No. 25] filed by defendant Harris
Storage & Distribution, Inc. (“Harris
Storage”). The Court received plaintiff's response
[Doc. No. 26] and defendant's reply [Doc. No. 27]. No.
opposition was filed by the remaining defendants. The Court
exercises its discretion to decide the parties' motions
without oral argument. See Fed.R.Civ.P. 78; L. Civ. R. 78.1.
Pursuant to 28 U.S.C. § 636(c), the parties consented to
the jurisdiction of this Court to hear the case [Doc. No.
22]. For the following reasons, plaintiff's motion is
GRANTED and defendant's cross-motion is DENIED.
matter concerns an action for declaratory judgment by an
insurance company, OOIDA, against its policyholder, Klockwork
Trucking, LLC (“Klockwork”), and defendants
Tonido Dixon (“Dixon”), Harris Storage, and Gary
Smiley (“Smiley”). Dixon owns Klockwork.
Plaintiff seeks a declaration that it is not responsible for
defending or indemnifying defendants in an underlying action,
Harry M. Graham v. Gary W. Smiley, et al., pending
in the Superior Court of New Jersey, Law Division, Docket No.
SLM-L-000146-18 (hereinafter, “underlying
action”). See Compl. ¶ 11 [Doc. No. 1].
filed its initial complaint in state court which was removed
to federal court on October 26, 2018. Plaintiff seeks
declaratory relief pursuant to 28 U.S.C. § 2201. See
Compl. ¶¶ 24-30; see also Am. Compl. ¶¶
24-30 [Doc. No. 5]. Harris Storage filed its answer on
December 10, 2018. See Def.'s Answer [Doc. No. 10]. On
January 11, 2019, the Clerk of the Court filed an entry of
default as to defendants Klockwork, Dixon, and Smiley because
of their failure to plead or otherwise defend the action.
[Doc. Nos. 14-16]. The matter was subsequently referred to
this Court by Order of Consent. See Order, Jan. 22, 2019
[Doc. No. 22]. Thus, Harris Storage is the only named
defendant actively defending this action.
underlying action arises from an accident that occurred on or
about December 2, 2017. See Pl.'s Statement of Material
Facts (“SMF”) ¶ 1 [Doc. No. 24]. At the time
of the accident, Smiley was driving a 1999 Freightliner
tractor owned by Dixon and hauling a trailer owned by Harris
Storage. Id. at ¶ 18. Smiley was driving the
tractor without the permission of Dixon and/or Klockwork
Trucking. Id. Harry M. Graham was injured in the
accident and subsequently filed suit in state court asserting
claims of negligence against Smiley, Dixon, Klockwork and
Harris Storage. Id. ¶¶ 2-3.
OOIDA issued Commercial General Liability Policy No. PL
199525901 (“policy”) to Klockwork with effective
dates of January 10, 2017 through January 10, 2018. Pl.'s
SMF at ¶ 7. The first page of the policy reads as
Coverage for insured vehicles is only provided if being
driven by person(s) reported to your agent and accepted by
underwriters. It is extremely important that you notify us
immediately to add or delete drivers. New drivers must be
reported prior to engaging in any driving duties.
The policy covers scheduled vehicles only. All new and/or
replacement vehicles should be reported to us immediately. It
is imperative that you notify your agent prior to placing new
vehicles in operation.
See Mot. Ex. C at 3 [Doc. No. 24-7].
“Section II: Liability Coverage, ” the policy
We will pay all sums an “insured” legally must
pay as damages because of “bodily injury” or
“property damage” to which this insurance applies
caused by an “accident” and resulting from the
ownership, maintenance or use of a covered
“auto.” . . . We will have the right and duty to
defend any “insured” against a “suit”
asking for such damages . . . . However, we have no duty to
defend any “insured” against a “suit”
seeking damages for “bodily injury” or
“property damage” . . . to which this insurance
does not apply.
Id. at 25. The policy defines “insureds”
to include the following:
(a)You for any covered “auto” [;] (b) Anyone else
while using with your permission a covered “auto”
you own, hire or borrow except: (1) The owner, or an
“employee, ” agent or driver of the owner, or
anyone else from whom you hire or borrow a covered
”auto.” . . . (c) The owner or anyone else from
whom you hire or borrow a covered “auto” that is
a “trailer” while the “trailer” is
connected to another covered “auto” ...