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Planet Insurance Co. v. Anglo American Insurance Co.5/22/1998
Argued: April 29, 1998
Plaintiff, Planet Insurance Company (Planet), filed a declaratory judgment action seeking a determination that defendant Anglo American Insurance Company (Anglo) was obligated to provide primary liability coverage pursuant to an insurance policy issued to defendant Edward Gentile (Edward) for a motor vehicle accident that occurred on June 20, 1992. Anglo moved for summary judgment asserting, inter alia, that an exclusion in its policy precluded coverage for the accident caused by Ciro Gentile (Ciro). Planet cross-moved for summary judgment contending that the Anglo policy provided primary coverage for the accident. The judge granted Anglo's motion for summary judgment and denied Planet's cross-motion for summary judgment.
Planet now appeals and contends:
POINT I
THE ANGLO AMERICAN BOBTAIL POLICY WAS TRIGGERED AT THE TIME OF THE UNDERLYING ACCIDENT AS CIRO GENTILE WAS NOT ACTING WITHIN THE SCOPE OF THE LESSEE'S BUSINESS AT THE TIME OF THE ACCIDENT.
POINT II
AS A MATTER OF LAW, FEDERAL REGULATIONS WHICH IMPOSE STRICT LIABILITY ON A CARRIER/LESSEE DO NOT ABSOLVE A LESSOR OR ITS INSURER FROM PERFORMING CONTRACTUAL OBLIGATIONS.
POINT III
IT WAS THE REASONABLE EXPECTATION OF EDWARD GENTILE THAT BOBTAIL INSURANCE WOULD PROVIDE COVERAGE WHEN THE INSURED VEHICLE WAS NOT OPERATING UNDER DISPATCH.
We reject Planet's arguments and affirm.
I.
The facts are not in dispute. On May 22, 1991, Edward, the owner of a 1979 Mack tractor, leased the tractor to defendant International Motor Freight, Inc. (IMF), an interstate carrier licensed by the Interstate Commerce Commission (ICC). The lease had a termination date of June 30, 1992. One provision of the lease provided that IMF assumed full responsibility for the operation of the tractor during the period that it was actually operated by or for IMF while the lease was in effect.
Pursuant to applicable federal regulations, IMF secured liability insurance from Planet to cover the tractor. Planet's policy provided combined single limit coverage of $1,000,000. Edward also obtained "bobtail" insurance on the tractor from Anglo to provide coverage when the tractor was being used for non-trucking purposes. That policy provided combined single limit coverage of $300,000.
Ciro, Edward's father, also worked for IMF pursuant to a lease of his 1978 International truck. Shortly before June 20, 1992, Ciro's truck developed engine trouble and the tractor needed repairs. As a result, Ciro sold his truck and took the tractor to a welder to be repaired. On June 20, 1992, Edward took Ciro to the welder to pick up the repaired tractor. On the way home, Ciro stopped at the cleaners to pick up his clothing. After leaving the cleaners and continuing home, Ciro was involved in a motor vehicle accident in Elizabeth, when he lost control of the tractor and struck several vehicles before crashing into Bayway World of Liquors. At the time of the accident, the tractor was not attached to the trailer, but it displayed placards of IMF. As a result of the accident, several personal injury actions were initiated naming Edward, Ciro, and IMF as defendants (underlying actions). After the accident, Ciro continued to operate the tractor for IMF until his driver's license was suspended in 1993. Edward's relationship with IMF ended in August 1992.
Planet defended the Gentiles and IMF in accordance with ICC regulations and settled the underlying actions for $338,993.64. On March 26, 1996, Planet commenced this declaratory judgment action seeking reimbursement from Anglo for the sums paid to settle the und
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