LIBERTY MUTUAL INSURANCE CO. v. MONTCLAIR ART MUSEUM, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3310-04T33310-04T3

LIBERTY MUTUAL INSURANCE CO.,

Plaintiff-Respondent,

v.

MONTCLAIR ART MUSEUM,

Defendant-Appellant,

and

RANDOLPH BLACK, FORTRESS/FAE,

and FORTRESS WORLDWIDE, INC.,

Defendants.

__________________________________

 

Argued April 3, 2006 - Decided August 28, 2006

Before Judges Fall, C.S. Fisher and C.L. Miniman.

On appeal from Superior Court, Law Division, Essex County, Docket No. L-7966-01.

John F. Gaffney argued the cause for appellant (Chase Kurshan Herzfeld & Rubin, attorneys; Mr. Gaffney, on the brief).

Joseph DiRienzo argued the cause for respondent (DiRienzo & DiRienzo, attorneys; Mr. Joseph DiRienzo, on the brief).

PER CURIAM

This is an appeal from a summary judgment in favor of plaintiff-respondent Liberty Mutual Insurance Company ("Liberty Mutual") declaring that defendant-appellant Montclair Art Museum ("Museum") is not entitled to defense and indemnification from Liberty Mutual for personal-injury claims made against the Museum by James Welby ("Welby"), an employee of Liberty Mutual's insured, defendants Fortress/FAE and Fortress Worldwide, Inc. (collectively "Fortress"). The Museum asserts that the motion judge erred in granting summary judgment to Liberty Mutual and argues that the Museum is entitled to omnibus motor vehicle insurance coverage from Liberty Mutual because the injury occurred during the unloading of a large, crated sculpture from a truck owned by Fortress. The singular issue presented for our consideration is whether, viewing the facts in a light most favorable to the Museum and drawing all inferences in its favor, Liberty Mutual was entitled to a declaration that it had no obligation to defend and indemnify the Museum under New Jersey law and the terms of Liberty Mutual's policy covering the Fortress delivery truck.

I.

Welby worked for Fortress as a truck driver and art handler. Welby's job entailed picking up and delivering artwork to most of the major museums throughout the New England region. Fortress was selected by the Augustus Saint-Gaudens National Historic Site ("Historic Site") in Cornish, New Hampshire, to crate and transport one of Saint-Gaudens' sculptures, "Amor Caritas," a large plaster sculpture of an angel, to the Montclair Art Museum together with another, smaller work of art.

Jack Carr ("Carr"), head of the packing department at Fortress, went to the Historic Site to inspect "Amor Caritas" before it was shipped. He looked at the sculpture, measured it, and spoke with Henry Duffy, the curator, about any special needs of the piece. After inspection, Carr designed a crate specifically for the "Amor Caritas" sculpture and had his shop build the crate. The finished crate was 122 inches tall, 68 inches wide, and 35 inches deep. In addition to the specifications of the piece, Carr also took into consideration the need to fit the crated piece through the doors at the Museum. Carr spoke with defendant Randolph Black ("Black"), the Museum's registrar, and visited the Museum to look at its doors to insure that the crate was built to fit through them.

The crated sculpture was intended to be shipped on its back and the crate was designed with skids on the back to protect the sculpture from getting wet and to permit a forklift or pallet jack to be put under the back of the crate to move it. There were also skids on one long side to permit the crate to be turned up on that long side so that it would fit through the Museum doorway. The crate weighed approximately 650 pounds empty and about 1,600 pounds with the sculpture inside.

Carr returned to the Historic Site when the crate was completed and was present when the piece was prepared for shipment and crated. Carr gave Welby and his co-worker, Roderick Williams ("Williams"), instructions on the procedure for moving the crated sculpture, telling them that the crate was to be shipped flat on the skidded back. He also advised them that a pallet jack was required to load and unload the crate because the crated sculpture would not fit on the lift gate while it was laying flat, a shipping position that had to be maintained until the sculpture was unloaded at the Museum. Carr advised Welby and Williams that, after the crate was off the truck, it had to be placed up on the long, skidded side to fit through the doors of the Museum.

On September 8, 1999, Welby and Williams were dispatched to the Historic Site to pick up the crated sculpture for shipment to the Museum. To get the crate out of the Historic Site's garage and into the truck while it was laying flat on its back, they used a combination of two Fortress dollies under one end and a Fortress vertical pallet jack under the other end. The "Amor Caritas" sculpture, laying flat on its back, was wheeled over to the lift gate on the back of the truck. As Carr advised, the crate was too large to fit entirely on the lift gate. The dollies under one end were rolled onto the lift gate while the pallet jack remained under the other end. Then the lift gate and pallet jack were raised simultaneously to get the crate level with the bed of the truck and the crate was wheeled inside. The crate had an uneven distribution of weight in it because of the wood and plaster construction of the sculpture.

Welby and Williams drove the artwork to Jamaica Plains in Boston, where the sculpture and another crate of art remained overnight stored in the back of the truck. The following day, Welby and Williams drove to the Museum in New Jersey. Welby testified that his assignment was to "deliver the goods we had on the truck that were going to that address." Welby understood delivery to mean "get [the goods] off the truck and deliver them to the museum" but he testified that he was not responsible in any way for setting them up.

Welby and Williams pulled the truck up to the front of the Museum rather than the loading dock, in accordance with the Museum's delivery instructions, and proceeded to open the smaller crate and unload the smaller sculpture. Welby handed the piece to Williams, who placed it on the sidewalk. It was then taken into the Museum by one or more Museum employees. The Museum's prior experience with Fortress was that Fortress employees would bring artwork they were delivering into the Museum galleries. Welby acknowledged that he "would have brought them in, but the Museum people brought them in." It was in Welby's job description to bring "basic items" into the Museum.

After the smaller piece was off the truck, Welby and Williams removed the poles and straps that secured the crate to the truck and used a Fortress hand truck to lift the bottom of the crate so that two Fortress dollies could be slipped underneath. The dollies were placed under the portion of the crate near the front of the cab and Welby and Williams pushed the crate toward the raised lift gate. The pallet jack was already off the truck. The crate was then pushed onto the lift gate with one end sticking over the edge of the gate. Williams, operating the pallet jack, put its two blades underneath the overhanging end of the crate. Once the crate was clear of the bed of the truck, the lift gate and pallet jack were simultaneously lowered to the ground. Two additional dollies were then placed under the end of the crate which was on the pallet jack and the crate was wheeled off the lift gate onto the Museum driveway.

Black and Tom Shannon ("Shannon"), the Museum's Director of Facilities Management/Planning and Exhibitions, were in charge of arranging the handling of objects brought in and out of the Museum. Although the Fortress contract was silent on this issue, Black and Shannon both asked Welby and Williams to assist the Museum employees in moving the "Amor Caritas" crate into the Museum. On the other hand, Welby testified that he agreed to help because the sooner the piece got into the Museum, the sooner he would get the Fortress equipment back, and the sooner he would be able to leave. Shannon anticipated that Welby and Williams would help move the crate into the Museum because that was the custom in the industry and the past practice of Fortress. Welby denied that he had any responsibility to help.

Shannon testified that he anticipated relying upon the assistance of the drivers from Fortress who came to deliver the piece. When asked if he ever communicated to Fortress in any way, verbal or written, that the drivers would be needed to move the crate, Shannon testified that "it's implied pretty much. Every time [I've] done business with Fortress over the past years they have assisted in bringing work into the building. And knowing the size where there was, I believe there was some discussion about getting assistance." Shannon testified that in his experience the truckers always participated in bringing the art into the Museum. Shannon insisted that curbside delivery was never done in the art shipment industry. Welby admitted that typically the Fortress truck is backed into the loading dock area and the art is brought by Fortress employees into the receiving area. Indeed, he testified that the receiver can specify exactly where in the building the art was to be delivered. He testified that the receiver does not take control of the art until it is inside the building.

Black testified that the Museum never had a contract with Fortress calling for inside delivery and admitted that the Fortress employees were assisting the Museum employees, who were responsible for moving the art into the Museum, and that Welby and Williams were free to refuse to help. Nevertheless, Black testified that in most cases the Fortress employees would move the art into the Museum, that it was part of their job. He also testified that on other occasions it was not necessary to have the Fortress employees do so.

Black and Shannon supervised the moving of the crate into the Museum. The crate, while balanced on four dollies, was rolled to the end of a ramp supplied by Welby, which was placed over the curb and step to the Museum. The ramp was not as wide as the back of the crate, so the dollies were repositioned to fit onto the ramp and the crate was pushed up the ramp. However, it did not fit through the doors while it was flat on its back, and there was apparently insufficient room before the doors to lift the crate on its side. As a result, it was backed down the ramp. Then, either Black or Shannon said to turn the crate on its skidded side and place it on two dollies to push it up the ramp. All the Museum employees present at the scene and the two Fortress employees assisted in lifting the sculpture onto its skidded, long side. Then dollies had to be placed under each end. Welby used a J-bar to lift one end off the ground and then a dolly was rolled under that end. Aimee McElroy ("McElroy"), an employee of the Museum, was laying on the ground next to the crate positioning a dolly under one end when the crate started to tip over. Welby tried unsuccessfully to hold up the crate so that it would not crush McElroy's head, but it toppled onto both McElroy and Welby. Welby sustained injuries to his knee and McElroy suffered injuries to her shoulder. Both were taken to the hospital.

At some point in time, the Fortress employees obtained Shannon's signature on the bill of lading for the two pieces that were being delivered. Shannon testified that he signed the bill of lading only after the "Amor Caritas" was delivered inside the Museum. Shannon testified that he "would have signed after the work was in the building" and that on September 9, 1999, he signed the bill of lading after the accident. Shannon further testified that control of a piece transfers "[o]nce it's in the building." Welby, on the other hand, testified that custody and control of the items was turned over from Fortress to the Museum "when the last piece was off the truck and I got a signature from the curator of the museum." At that point, Welby testified that he felt he was free to go.

Liberty Mutual and the Museum disagree about whether delivery under the contract was complete prior to the time of the accident. The trial court addressed the question of whether the events leading up to Welby's injury constituted a use of the vehicle by the Museum so as to invoke coverage for the Museum as an additional insured under the Liberty Mutual policy. That policy provided that anyone using the Fortress truck with the permission of Fortress was an insured under the policy. However, only a Fortress employee would be an insured while moving property to or from a covered auto.

The judge found that the accident occurred after the crate was fully unloaded and that the crate was only being moved for installation. He found that the truck had been sealed and the alarm activated before the accident, and held that the vehicle was entirely detached from the scene before the accident. The court also found that none of the documentation generated pursuant to the agreement to move the sculpture specifically included a provision for Fortress employees to actually move the piece into the Museum. The judge also found that the crate was being moved into the Museum at the direction of Museum personnel.

Based on these fact findings, the judge concluded that the Museum's negligence was not an integral part of unloading the vehicle, and that Welby was not injured during the use of the covered motor vehicle. The judge held that

[I]t is clear that the sculpture was turned over at the place of its destination to the party to whom delivery was to be made and the operation of loading and unloading was complete. Therefore, there are no perceivable policy considerations mandating that responsibility should be borne by the trucker's -- by the truck's insurer.

Summary judgment is designed to provide a prompt, businesslike and inexpensive method of resolving cases. Judson v. Peoples Bank and Trust Co. of Westfield, 17 N.J. 67, 73-74 (1954). In reviewing a ruling on a summary judgment motion, we apply the same standard as that governing the trial court. Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989).

A moving party is entitled to summary judgment if there is no genuine issue as to any material fact in the record. R. 4:46-2. In deciding a summary judgment motion, the trial court must apply the standard articulated by the Supreme Court in Brill v. Guardian Life Ins. Co., 142 N.J. 520 (1995):

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational fact-finder to resolve the alleged disputed issue in favor of the non-moving party.

[Id. at 540.]

Thus, the trial court must assume that the opposing party's version of the facts is true, must give the opposing party the benefit of all favorable inferences, and must then ascertain "what reasonable conclusions a rational jury can draw from the evidence." Id. at 535. Of course, where the determination of a material fact depends primarily on credibility evaluations or where a material fact is genuinely at issue, summary judgment should be denied. O'Loughlin v. Nat'l Cmty. Bank, 338 N.J. Super. 592, 606 (App. Div.), certif. denied, 169 N.J. 606 (2001); Olsen v. Stevens, 322 N.J. Super. 119, 122 (App. Div. (1999).

In accordance with this case law, we have summarized the evidence in a light most favorable to the Museum and have pointed to various disputes in the testimony. The pivotal issues are whether the Museum was using the truck and whether Fortress completed delivery.

The Liberty Mutual policy contained various exclusions from coverage. One of these exclusions applies to:

Bodily injury or property damage arising out of your work after that work has been completed or abandoned.

In this exclusion, your work means:

a. Work or operations performed by you or on your behalf; and

b. Materials, parts or equipment furnished in connection with such work or operations.

That exclusion also provides in pertinent part that "work will be deemed completed . . . [w]hen all of the work called for in your contract has been completed.

In addition, the policy excludes coverage for the handling of property, as follows:

Bodily injury or property damage resulting from the handling of property:

(a) Before it is moved from the place where it is accepted by the insured for movement into or onto the covered auto; or

(b) After it is moved from the covered auto to the place where it is finally delivered by the insured.

We have construed similar provisions previously.

In Drew Chem. Corp. v. American Fore Loyalty Group, 90 N.J. Super. 582 (App. Div. 1966), we construed the phrase loading and unloading in automobile policies. The policy before us at that time provided that the term "use" included the loading and unloading of the vehicle. In construing that phrase we noted that courts have been guided by one of two basic theories, the coming-to-rest doctrine and the complete-operation doctrine.

Under the "coming to rest" doctrine, unloading comprises "only the actual removing or lifting of the article from the motor vehicle up to the moment when the goods which are taken off the motor vehicle actually come to rest and every connection of the motor vehicle with the process of unloading ceases." On the other hand, the "complete operation" doctrine has been said to cover the entire process involved in moving the goods, from the moment they are given into the insured's possession until they are turned over at the place of destination to the party to whom delivery is to be made.

[Drew, supra, at 586-87 (citations omitted).]

We determined that "the more modern and enlightened doctrine," the one supported by the weight of authority, was the complete-operation doctrine, and we then applied it to interpret the loading and unloading provision of the insurance policy then before us. Id. at 587. We recognized that a loading and unloading clause "is one of extension, expanding the meaning of the phrase 'while using the automobile.'" Ibid.

Where a policy does not have an express loading and unloading clause, the policy must be construed to include loading and unloading under Bellafronte v. Gen. Motors Corp., 151 N.J. Super. 377 (App. Div.), certif. denied, 75 N.J. 533 (1977). There we held that the term "use" in a policy issued pursuant to the Motor Vehicle Security Responsibility Law necessarily implies as a matter of common understanding the use of the vehicle in and as an integral part of loading and unloading the cargo. Id. at 382-83. Thus, we held the word "use" in N.J.S.A. 39:6-46a and N.J.S.A. 39:6B-1 required insurance for loading and unloading operations and policies issued thereto are required to provide such coverage. Bellafronte, supra, 151 N.J. Super. at 382-83. We must determine in this case, therefore, whether the exclusion from insureds for persons while moving property to or from a covered auto is permissible under the statutory mandate.

In Parkway Iron and Metal Co. v. New Jersey Mfrs. Ins. Co., 266 N.J. Super. 386 (App. Div. 1993), certif. denied, 135 N.J. 302 (1994). We were presented with an exclusion from coverage for "[b]odily injury or property damage resulting from the movement of property by a mechanical device (other than a hand truck) not attached to the covered auto." Id. at 387. The policy did not define the word "use" and the phrase "loading and unloading" was not found anywhere in the policy. We held that the exclusion for movement of property by a mechanical device violated public policy because, in effect, it eliminated coverage for a class of users of the vehicle during the loading and unloading operation where the injury or damage resulted from the movement of property by a mechanical device not attached to the covered auto. Id. at 390. We rejected the insurer's contention that it was permissible to limit the activity covered and the scope of permission without violating New Jersey's public policy as long as the class of users was not restricted. We noted that the Supreme Court in Ryder/P.I.E. Nationwide, Inc. v. Harbor Bay Corp., Inc., 119 N.J. 402 (1990), stated: "'Because of statutorily imposed omnibus requirements, any contractual attempt to exclude coverage for an additional insured will be held invalid.'" Parkway Iron, supra, at 391, quoting Ryder, 119 N.J. at 408. With such a strong expression from our Supreme Court we concluded that we could not condone the exclusion in the policy and declared it invalid and against the public policy of this State. Ibid.

The Supreme Court in Kennedy v. Jefferson Smurfit Co., 147 N.J. 394 (1997), considered the issue of coverage to an additional insured in a loading and unloading case under an omnibus automobile insurance claim. "[T]he question presented is whether the selection of a defective pallet is part of the loading process, and thus arises out of the 'use of a motor vehicle.'" Id. at 396. The insurer contended that the selection of the pallet was not an integral part of the loading or unloading process but was a separate act that did not trigger motor vehicle insurance coverage. The Supreme Court noted that an obligation to provide insurance could arise from the explicit language of a policy or from the statutory obligation to insure. The Court emphasized that New Jersey courts have found that the obligation to provide coverage in a loading and unloading accident arises from statute and therefore cannot be limited by contract. Id. 398-99.

The Court then cited Drew for the proposition that New Jersey was a complete-operation jurisdiction and had not adopted the coming-to-rest doctrine of unloading. The Court said that under the complete-operation doctrine, as defined by the Drew court, the distinction between preparation of loading and the act of loading was obliterated. Id. at 400. The Court concluded that selection of the defective pallet was an integral part of the loading operation, because pallets were necessary to load the cargo onto the truck. Id. at 401. The Court held that mandatory use coverage in New Jersey must be broadly construed. Id. at 403. Thus, Kennedy makes clear that the complete-operation doctrine applies to statutorily mandated coverage and may not be modified by the policy.

In light of this established law, we conclude that the exclusion in the Liberty Mutual policy for movement of property to or from a covered auto is inconsistent with statutorily mandated loading and unloading coverage. If the movement to or from the vehicle is an essential component of loading or unloading, which is a use of the vehicle, then coverage must be afforded to the person or entity moving the goods. Of course, there are limits to loading and unloading, and they must be decided on a case-by-case basis.

The motion judge here relied on Pisaneschi v. Turner Constr. Co., 345 N.J. Super. 336 (App. Div. 2001), in granting summary judgment to Liberty Mutual. In that case we cautioned that mandatory use coverage:

is not intended to insure all defendants against all claims arising from any accident in any way incident to loading/unloading irrespective of causation, that is, irrespective of the defendant's actual involvement with the insured vehicle itself. Rather, it is only "intended to protect the named insured and others who, in the pick-up or delivery process, are actually using the motor vehicle and its contents during the 'complete operation'" of that vehicle.

[Id. at 343-44 (emphasis added; citations omitted).]

In Pisaneschi the manufacturer of air conditioning units was seeking coverage under the automobile policy that applied to the truck that was carrying the air conditioning units. That truck was owned by Air Systems, which was also the installer of the air conditioning units at a New Jersey Institute of Technology reconstruction site. The accident occurred after the air conditioning units had been offloaded and the truck had pulled away from the dock. Four of those units were then taken by Air Systems employees to the sites of installation and the plaintiff was manipulating another of the air conditioning units to position it for movement by a pallet jack or lift fork. As he was moving the air conditioning unit, a strap on the boxed unit broke and he was injured.

We were required to decide whether the manufacturer was entitled to coverage under the auto policy on the theory that unloading was not complete. In looking at the activities of Air Systems as the trucker and as the installer of the air conditioning units, we concluded that unloading was completed at the time that the units were placed on the loading dock and the truck moved away from the dock. As a consequence the manufacturer of the air conditioning units was not entitled to coverage under the installer's truck insurance.

These facts are not on all fours with this case, primarily because Fortress was not an installer of the "Amor Caritas" sculpture. In Pisaneschi we did not create a bright-line rule that unloading was complete when goods are placed on a loading dock (or curbside) and the truck is moved away. Rather, we considered those facts in the context of an installer who delivered the goods and began moving them off the loading dock for installation. We thus concluded that the delivery phase of the installer's work had been completed and installation begun.

Even had we created such a bright-line rule, the grant of summary judgment would still have been erroneous here because there are clearly genuine issues of credibility and fact to be determined, mandating a trial on the merits. Welby's general credibility as a witness must be evaluated in light of his admission that his recollection was not completely clear due to the injury he sustained and the discrepancies that exist between his testimony and other evidence. In addition, Welby's statement that he locked, alarmed, and moved the truck before any attempt was made to move the crate appears to be contradicted by photographs of the scene of the accident, which show the truck in front of the Museum doors with the back of the truck open and the crate on its side behind it. We note, without deciding, that it is not clear why Welby would have closed the truck, set the alarm, and moved the truck away when he and Williams still had to put their equipment back on the truck. This, and all the other evidence, must be considered in determining whether in fact Welby locked, alarmed, and moved the truck before the crate was moved.

Although Welby testified that he obtained a signature on the bill of lading just before or just after the "Amor Caritas" crate was unloaded, Shannon testified that he did not sign it until the crate was inside the Museum after the accident. This dispute has to be resolved at trial. Furthermore, as in Pisaneschi, in deciding the issue of when delivery was complete, the trial court must consider all of the relevant facts, including but not limited to the use of the contents of the truck (ramp, J-bar, dollies, pallet jack) to move the crate into the Museum, Pisaneschi, 345 N.J. Super. at 344, the past practices of Fortress, the customs of the art-transporting industry, and the understanding of the parties to determine when "unloading" was completed.

Reversed and remanded for trial on all issues.

 

This crate was only 41 inches by 31 inches by 18 inches and contained another Saint-Gaudens sculpture.

Because the "Amor Caritas" sculpture was on a tour to various museums, its crate would remain at the Museum to be used for the next leg of its journey.

It is not clear whether this occurred when the first or second dolly was being placed under the crate. The trial court found that it occurred when McElroy was placing a third dolly under the crate, but we have not located that evidence in the record.

Welby was unsure if the signature was obtained before or after the "Amor Caritas" was removed from the truck. He testified that he was not sure if the bill of lading was signed before the last piece was off the truck, but "it was either while it was still on the truck or - it was either on the truck or just recently off the truck. It was before I had sealed the truck."

For example, Welby testified that the crate was pushed up six steps before it was rolled back down to turn it on its side, but the photographs at the scene appear to show only one step up to the Museum doors.

(continued)

(continued)

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A-3310-04T3

 

August 28, 2006