In Gap, Inc. v. Travelers Insurance Company, the Appellate Division held that defendant insurance carrier, Travelers Insurance Company, was not required to indemnify plaintiff, Gap, Inc., for a settlement paid to Jose Otero for bodily injuries sustained while he was making a truck delivery on behalf of his employer. Plaintiff had sought indemnification under a commercial automobile liability policy issued by Travelers to plaintiff’s employer covering the truck.
In this case, Otero was injured while making a delivery to one of plaintiff’s stores. He was provided with a metal “baker’s rack” by plaintiff’s employees to wheel the boxes into the store. Plaintiff’s employees used these racks to take out trash and had stretched elastic bungee cords down the rack to secure trash bags. While Otero was loading boxes onto the rack, he was struck in the eye by a cord and sustained personal injuries.
Plaintiff settled Otero’s claim against it and filed a declaratory judgment action against Travelers seeking indemnification pursuant to a commercial automobile liability policy Travelers had issued to plaintiff’s employer for the truck. The policy provided the following coverage:
[Defendant] 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.”
The trial court ruled that, in order to obtain coverage, plaintiff was required to demonstrate a “substantial nexus” between Otero’s injury and the asserted negligent maintenance, operation or use of the truck. The trial court found that no such nexus existed because Otero’s injury was neither contemplated by the parties nor a natural or reasonable consequence of Otero’s use of the truck. The injury was caused by plaintiff’s failure to provide a safe workplace in permitting an unreasonably dangerous condition on the premises. Plaintiff did not own, operate or maintain the truck, and had nothing to do with the loading or unloading process. Therefore, the trial court held that no coverage was available.
On appeal, plaintiff argued that coverage was triggered because the injury occurred while the truck was being unloaded and merchandise was being delivered into the store. The Appellate Division rejected this argument. It acknowledged that “use” of a vehicle could include acts or omissions during the loading and unloading of a covered vehicle. However, to establish coverage, the proponent must demonstrate that the alleged act or omission which resulted in the injury was necessary or integral to accomplish the loading or unloading. There is no coverage when the alleged negligent act is merely useful or helpful to the process.
The Appellate Division concluded there was no coverage because the use of the rack to unload the boxes was not necessary. Otero had dollies to transport the boxes into the store. He neither asked for the bungee cords to be attached, nor used them for any purpose. The cords were attached prior to Otero’s arrival, and were used by plaintiff’s employees for convenience in trash removal.
The case is significant, as it confirms that New Jersey Courts have limited the availability of liability coverage when negligence occurs during the course of unloading and loading a covered vehicle. It is clear that the Courts are currently unwilling to extend the meaning of “use” of a vehicle to include all acts and omissions that may occur during such activity.
By Erin L. Peters, Esq.