APPELLATE DIVISION UPHOLDS HOMEOWNER’S  EXCLUSION, APPLIES AUTO LIABILITY POLICY  TO SLIP AND FALL IN DRIVEWAY

In the April 29, 2008 decision of Penn Nat’l Ins. Co. v. Costa, et al. v. Arians, et al., A-5162-06T3, the Appellate Division reversed the lower court’s decision in favor of an automobile insurer,  holding that an accident that occurred to one party while another party was changing a flat tire in a driveway fell under an exclusion in a homeowner’s insurance policy, and therefore was covered by the automobile liability insurance policy.

One of the defendants, Frank Costa, was changing a flat tire on his Ford pickup truck located in his driveway. Mr. Costa was the owner of a business that repaired eighteen-wheel trucks, which was located next to his home.  Ernest Arians, the plaintiff, was a mechanic employed by Costa’s business. Mr. Arians was on his lunch break, and when he saw Mr. Costa replacing the tire he walked towards him to inquire as to whether he needed help.  As he approached Mr. Costa, he slipped on some ice and fell forward, hitting his head on the top of the bumper jack sticking out from behind the pickup truck.  Mr. Arians sustained multiple face, head, and skull fractures, requiring intensive surgery and causing him to lapse into a coma, develop blood clots, and suffer from cognitive and mental deficiency.

At the time of the accident, Mr. Costa was covered by a commercial automobile policy issued by Gulf Insurance Company and a homeowner’s policy issued by Farmers Insurance Company.  Mr. Arians sued Mr. Costa on a personal injury claim.  Mr. Arians’ personal automobile carrier, Penn National Insurance Company, provided him with Personal Injury Protection benefits, and then filed a subrogation suit to recover those payments, naming Farmers, Costa, and Costa’s business.  At the same time, Farmers sought a declaration from Arians and Gulf that it did not provide coverage.

The motion judge determined that coverage lay with Farmers, relying on an interpretation of Wakefern Food Corp. v. Gen. Accident Group, 188 N.J. Super. 77 (App. Div. 1983), finding that because the accident arose from the negligent accumulation of ice and snow, coverage for personal injury liability fell under the homeowner’s policy and not the automobile policy.  Subsequently, Mr. Arians settled his personal injury suit and a $400,000 judgment was entered.  Farmers satisfied the judgment, and then filed its appeal, alleging that Mr. Arians’ injuries are excluded from coverage under its homeowner’s policy because they are covered by Gulf’s automobile policy.

The Appellate Division reversed the decision.  It found that Farmers’ policy expressly excluded bodily injury arising out of the “maintenance, operation, ownership, or use” of any motor vehicles owned or operated by any insured.  The court first made reference to a litany of cases that have stood for the idea that the term “use” is a broad, catch-all term intended to include all proper uses of a vehicle that do not fall within the terms “ownership” and “maintenance”. Additionally, under Westchester Fire Ins. Co. v. Continental Ins. Co., 126 N.J. Super. 29, 36 (App. Div. 1973), aff’d, 65 N.J. 152 (1974), when considering use, there need only be a showing of a substantial nexus, or connection, between the injury and the use of the vehicle for the obligation to the auto carrier to provide coverage to arise.

Judge Lintner then cited Am. Home Assurance Co. v. Hartford Ins. Co., 190 N.J. Super. 477 (App. Div. 1983).  That case involved a dispute between a carrier providing liability coverage for a service station and automobile policies covering the car being serviced.  Pointing out that “the changing of a tire represents an act of repair or maintenance,” the panel determined that the automobile policies controlled because the injuries had a substantial connection to the maintenance of the automobile.

Unlike the facts in Wakefern relied upon by the motion judge, where the negligent maintenance of the premises was essentially the only connection to the injury, the Appellate Division found that Mr. Arians’ injuries were directly connected with the maintenance of Mr. Costa’s pickup truck.  Because Mr. Arians’ injuries were not solely related to the existence of ice and snow, the accident came within the exclusion in the homeowner’s policy, and met the substantial nexus requirement of Westchester. As a consequence, the decision against Farmers was reversed, and the automobile policy insured by Gulf was declared as the one providing coverage.

This case, is a reminder to carriers that there is a very broad basis for coverage under automobile liability policies.  The facts of a case need not have much relation to a motor vehicle to have a “substantial nexus”.


Sean M. Strichek, Esq.