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Ooida Risk Retention Group, Inc. v. Klockwork Trucking, Inc.

United States District Court, D. New Jersey, Camden Vicinage

December 19, 2019

OOIDA RISK RETENTION GROUP, INC., Plaintiff,
v.
KLOCKWORK TRUCKING, INC., et. al, Defendants.

          MEMORANDUM OPINION AND ORDER

          JOEL SCHNEIDER United States Magistrate Judge.

         This 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.

         Background

         This 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].

         Plaintiff 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.

         The underlying action arises from an accident that occurred on or about December 2, 2017.[1] 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.

         Plaintiff 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 follows:

         IMPORTANT NOTICE

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].

         Under “Section II: Liability Coverage, ” the policy states:

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:[2]

(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” ...

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