JACQUELINE KISSEL v. REPOSSESSION SPECIALISTS, INC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4566-11T3

JACQUELINE KISSEL and

JAMES KISSEL,

Plaintiffs,

v.

REPOSSESSION SPECIALISTS, INC.,

Defendant-Third-Party

Plaintiff/Appellant,

v.

HIGH POINT SAFETY AND

INSURANCE COMPANY,

Third-Party Defendant/

Respondent.

_______________________________________

February 27, 2013

Argued February 11, 2013 - Decided

Before Judges Ashrafi and Espinosa.

On appeal from Superior Court of New Jersey,

Law Division, Monmouth County, Docket No.

L-346-09.

Frank H. Reimers argued the cause for

appellant (Garrity, Graham, Murphy, Garofalo

& Flinn, attorneys; Mr. Reimers, of counsel and on the brief; Rudolph G. Morabito, on the brief).

Sandra M. Guage argued the cause for respondent (Law Offices of Debra Hart, attorneys; Ms. Guage, on the brief).

PER CURIAM

Third-party plaintiff Repossession Specialists, Inc., appeals from an order dismissing its claim for liability insurance coverage from the plaintiff's own auto insurance carrier for injuries she suffered when her car was being repossessed. Appellant contends it was a permissive user of the injured party's vehicle as appellant was towing the vehicle away. As a permissive user, appellant argues, its liability for negligence must be covered by the vehicle owner's own auto policy. We reject these contentions, as did another panel of this court last year. Repossession Specialists v. GEICO Ins. Co., 423 N.J. Super. 518 (App. Div.), certif. denied, 210 N.J. 217 (2012). We affirm the trial court's order dismissing the third-party complaint.

This case commenced when plaintiffs Jacqueline and James Kissel filed a complaint against appellant Repossession Specialists alleging that its negligence caused personal injury to Mrs. Kissel. Appellant filed an answer and also a third-party complaint against the Kissels' auto insurance carrier, High Point Safety and Insurance Company. On cross-motions for summary judgment between appellant and High Point, and a subsequent motion for reconsideration, the trial court dismissed appellant's third-party complaint seeking insurance coverage.

Viewed most favorably to appellant, see R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), the summary judgment record revealed the following facts.

In 2004, James Kissel leased a GMC Yukon vehicle. The lease contract provided that, if Kissel failed to make the required monthly payments, the lessee "may take (repossess) the vehicle from you if we do so peacefully and the law allows it." Kissel defaulted on the installment payments, and the lessee hired appellant Repossession Specialists to repossess the vehicle.

An employee of Repossession Specialists went to the Kissels' residence on May 10, 2007, at about 10:30 p.m. Before speaking to either of the Kissels, he cut an ignition key and drove the Yukon out of the Kissels' driveway and onto his flatbed tow truck. As he was leaving, Jacqueline Kissel came out of the house. The driver stopped the tow truck and asked if she wanted to retrieve any items from the Yukon. Mrs. Kissel pleaded with him not to take the Yukon. He refused her pleas, stating that he had a repossession order. With the driver's permission, Mrs. Kissel climbed onto the tow truck to retrieve some items from the Yukon. In the course of doing so, she fell and was injured.

Both Mr. and Mrs. Kissel were named insureds on the auto policy issued to them by High Point. Under a section headed "Who Is Insured," the policy stated: "You and any persons you give permission to use this automobile, are insured as long as they use it in the way you intended when you gave permission." Appellant contends it was a "permissive user" under this policy language and the terms of the lease contract, and therefore, it was entitled to indemnification by High Point if it was found liable for causing injury to Mrs. Kissel.

This precise issue was decided by a panel of this court in Repossession Specialists v. GEICO, supra, 423 N.J. Super. 518, a case in which the same appellant contested denial of coverage in factual circumstances almost identical to this case. Judge Ostrer, writing for that panel, concluded that a repossessor was not a permissive user within the meaning of similar language in an auto insurance policy. Id. at 520. He explained:

Repossession's use was as of right, and [the owner of the automobile] lacked the power to revoke or prevent Repossession's use. Use as of right pursuant to irrevocable authority is inconsistent with the concept of permission. . . . [The owner] lacked the power to withhold or revoke use . . . once she granted her lender a security interest."

[Id. at 523.]

We agree with the analysis and conclusions of the panel that decided the prior appeal and see no need to repeat that discussion here.

We reject appellant's argument that the prior panel wrongly decided the issue because its holding deprives creditors and repossessors of the insurance coverage mandated by N.J.S.A. 39:6B-1(a). Appellant argues that the only authorized exception from mandatory automobile insurance coverage is when the "use" of the automobile arises from actions amounting to "theft or the like." See Matits v. Nationwide Mut. Ins. Co., 33 N.J. 488, 496-97 (1960) ("[I]f a person is given permission to use a motor vehicle in the first instance, any subsequent use short of theft or the like while it remains in his possession, though not within contemplation of the parties, is a permissive use.").

However, persons who are not thieves or the like may be excluded from coverage provided to permissive users. See Rutgers Cas. Ins. Co. v. Collins, 158 N.J. 542, 551 (1999) (remanding to determine whether owner's daughter-in-law had permission to use her car); Nicholas v. Sugar Lo Co., 192 N.J. Super. 444, 447-48, 452 (App. Div. 1983) (owner's son, who had limited permission to drive the vehicle but was too young to have a license, was not a permissive user on the public roads without his parent's knowledge), certif. denied, 96 N.J. 284 (1984). Whether a use constitutes "theft or the like" is a consideration in determining that a permissive user did not exceed the scope of the permission granted by the owner, but it does not determine whether the liable party was a permissive user in the first place. See French v. Hernandez, 184 N.J. 144, 156-57 (2005) (finding no coverage because initial permission was lacking, even though use did not appear to amount to theft or the like); Repossession Specialists, supra, 423 N.J. Super. at 526 n.2 (no need to inquire whether the use constituted "theft or the like" because "the issue is not whether the use exceeded the scope of initial permission, but whether initial permission was granted at all"). New Jersey auto insurance law does not require that insurers provide coverage to all users other than thieves and the like.

A repossessor such as appellant must provide its own liability coverage to defend and indemnify it for its alleged negligence in carrying out its operations.