Garrett v. Albright

 

United States District Court,W.D. Missouri,Central Division.

James GARRETT, et al., Plaintiffs,

v.

George Martin ALBRIGHT, Jr., et al., Defendants.

 

Aug. 9, 2007.

 

 

ORDER

NANETTE K. LAUGHREY, United States District Judge.

This case involves five lawsuits that arose from a June 1, 2006 automotive accident on Interstate 70 in which four people died and several others were injured. The defendants are George Martin Albright, Jr.; Trucker’s Plus HR, Inc. (“ Trucker’s Plus” ); Resolve Staffing, Inc. (“ Resolve Staffing” ); Logistics Services, Inc. (“ Logistics Services” ); GLS LeasCo Corporation (“ GLS Leasco” ); Logistics Insight Corporation (“ Logistics Insight” ); CenTra, Inc. (“ CenTra” ); Central Transport, Inc. (“ Central Transport” ); and Pro Logistics, Inc. (“ Pro Logistics” ).

 

Pending before the Court is CenTra’s Motion for Summary Judgment [Doc. # 107]; CenTra’s Motion to Strike Certain of Plaintiffs’ Exhibits, which is contained within its reply to Plaintiffs’ response to its motion for summary judgment; and Plaintiffs’ Motion for a Continuance for the purpose of conducting additional discovery. For the reasons stated herein, CenTra’s Motion for Summary Judgment is granted, CenTra’s Motion to Strike is denied as moot and Plaintiffs’ Motion for a Continuance is denied.

 

I. Facts

 

On June 1, 2006, George Albright, Jr. was driving the tractor-trailer that caused the accident that is the subject of this case. On that date, Albright was an employee of Trucker’s Plus, which is a division of Resolve Staffing, and was working as a commercial driver for Pro Logistics.

 

Pro Logistics is an operational commercial motor carrier. LINC Logistics Company (“ LINC” ), a subsidiary of CenTra, is the parent company of Pro Logistics. CenTra is an investment and holding company that owns and manages a portfolio of investments, including approximately 50 subsidiary and affiliated companies. CenTra has complete ownership of LINC and, until the end of 2006, CenTra owned 100% of the stock of Pro Logistics.

 

CenTra, LINC and Pro Logistics all maintain their business and registered offices at 12225 Stevens in Warren, Michigan. At the time of the accident, several other CenTra subsidiaries and affiliates also maintained their office at 12225 Stevens, including Logistics Insight, GLS Leasco, Central Transport and Central Transport International, Inc. (“ Central Int’l” ). At 12225 Stevens, CenTra shares receptionist services with its related companies.

 

In their most recent annual reports, both LINC and Pro Logistics identified Mr. H.E. Wolfe as one of their corporate officers. In Pro Logistics most recent annual report, it also identified M.D. Akkanen as an officer. Akkanen was identified as an officer in one of LINC’s prior annual reports. Neither LINC nor Pro Logistics has officers in common with CenTra, though CenTra has officers in common with several of the other defendant subsidiaries and affiliates.

 

Mr. Larry Cox, a LINC employee operating on behalf of Pro Logistics, signed a driver release agreement with Trucker’s Plus. The agreement required Pro Logistics to obtain liability insurance in the amount of $1,000,000 per person. Pro Logistics never purchased the level of coverage required by the driver release agreement. Instead, Pro Logistics obtained a commercial trucking liability insurance policy that provided coverage in the amount of $1,000,000 per occurrence for the policy period of January 1, 2006 through January 1, 2007. Pro Logistics does not own any property or equipment.

 

II. Discussion

 

A. Piercing the Corporate Veil

 

CenTra has moved for summary judgment on the grounds that it “ did not employ Mr. Albright, control his conduct, have a right of control over his conduct, or own/operate any vehicle involved in the accident.”  According to CenTra, it “ is merely a holding company and had no federal motor carrier authority, did not own any tractors or trailers, did not employ or contract any drivers, did not broker, dispatch, or otherwise procure transportation freight, nor provide logistics or trucking services.”  (Doc. 108 at 3). For their part, Plaintiffs argue that CenTra “ controls its subsidiaries and affiliates to such an extent that these subsidiaries and affiliates do not have a separate corporate existence.”  (Doc. 163 at 24). In other words, Plaintiffs argue that the corporate veil separating CenTra from its subsidiaries and affiliates should be pierced, thereby allowing Plaintiffs to hold CenTra responsible for the torts committed by its subsidiaries and affiliates.

 

In general, a party injured by the actions of a corporation or a corporation’s employee or agent may only achieve recovery against the corporation’s assets or those of its employee or agent. Radaszewski v. Telecom Corp., 981 F.2d 305, 306 (8th Cir.1992). A corporation’s shareholders, including, where applicable, its parent corporation, are not held responsible for the corporation’s or its employee’s tortious conduct. Id. In Radaszewski, the Eighth Circuit commented that

[t]his is a conscious decision made by the law of every state to encourage business in the corporate form. Obviously the decision has its costs. Some injuries are going to go unredressed because of the insolvency of the corporate defendant immediately involved, even when its shareholders have plenty of money.

 

Id.

 

An injured party may reach the assets of a corporation’s shareholders by “ piercing the corporate veil.”  Under Missouri law, a plaintiff seeking to pierce a corporate veil must show:

(1) Control, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; and

(2) Such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff’s legal rights; and

(3) The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.

 

Collet v. American National Stores, Inc., 708 S.W.2d 273, 284 (Mo.Ct.App.1986).

 

Assuming that Plaintiffs are able to satisfy the first Collet requirement by showing that CenTra controlled its affiliates and subsidiaries such that the affiliate or subsidiary had “ no separate mind, will or existence of its own,”  Plaintiffs must then show that CenTra used that control to commit fraud or wrong.

 

The only argument that Plaintiffs put forth concerning the second Collet requirement is that CenTra committed a wrong by undercapitalizing Pro Logistics. Collet, 708 S.W.2d at 286 (“ Examples of such wrongs as would satisfy [the second Collet requirement] include actual torts, violations of statutory duties, undercapitalization, or the stripping of assets from the subservient corporation.” ); Real Estate Invs. Four, Inc. v. American Design Group Inc., 46 S.W.3d 51, 57 (Mo.Ct.App.2001) (“ Actual fraud is not required to justify piercing the corporate veil; violation of statutory duties or undercapitalization may be sufficient.” ).

 

The Eighth Circuit case, Radaszewski v. Telecom Corp., is analogous to the instant action. In Radaszewski, the plaintiff was injured when his motorcycle collided with a truck driven by an employee of the defendant parent company’s subsidiary. In an attempt to pierce the corporate veil separating the defendant parent company and its subsidiary, the plaintiff argued that Collet’s second requirement was satisfied because the subsidiary was undercapitalized. Central to the Radaszewski court’s holding was the effect of insurance on the capitalization question:

The whole purpose of asking whether a subsidiary is “ properly capitalized,”  is precisely to determine its “ financial responsibility.”  If the subsidiary is financially responsible, whether by means of insurance or otherwise, the policy behind the second part of the Collet test is met. Insurance meets this policy just as well, perhaps even better, than a healthy balance sheet.

 

Id., 981 F.2d at 309. Moreover,[i]nsurance is unquestionably relevant on the issue of “ undercapitalization.”  The existence of insurance goes directly to the question of the subsidiary’s financial responsibility. If a parent has established a financially responsible subsidiary, then that subsidiary is not “ undercapitalized”  in the only sense that matters for present purposes. That subsidiary, in other words, is not unable to meet its obligations. It therefore cannot have been established by the parent, either deliberately or recklessly, in an effort to avoid obligations or to make them difficult to collect … Here, it is beyond dispute that [the subsidiary] had insurance, and that it was considered financially responsible under the applicable federal regulations.

 

Id. at 310.

 

The Radaszewski court concluded that the subsidiary in its case was not undercapitalized because it maintained insurance sufficient to satisfy the financial responsibility requirement of the Federal Motor Carrier Safety Regulations. As a result, the court held that Collet’s second requirement had not been met. Id.

 

The Federal Motor Carrier Safety Regulations require motor carriers to “ obtain and [have] in effect … minimum levels of financial responsibility as set forth in § 387.9.”  49 C.F.R. § 387 .7. The regulations define financial responsibility as “ the financial reserves (e.g., insurance policies or surety bonds) sufficient to satisfy liability amounts set forth in this subpart covering public liability.”  49 C.F.R. § 387.5. The minimum level of financial responsibility required of common carriers of property is $750,000. 49 C.F.R. § 387.9; 49 C.F.R. § 387.03.

 

On June 1, 2006, George Albright was driving a tractor-trailer pursuant to a driver release agreement between Pro Logistics and Trucker’s Plus. The driver release agreement required Pro Logistics to procure and maintain insurance coverage of at least $1,000,000 per person. Pro Logistics, however, only carried liability insurance in the amount of $1,000,000 per occurrence. No evidence has been submitted that Pro Logistics ever sought additional coverage as a result of the driver release agreement, and Pro Logistics has no umbrella or excess insurance coverage from which it could draw to satisfy a judgment that exceeds $1,000,000. Moreover, Pro Logistics has no other assets (e.g., real estate or equipment) from which a judgment could be satisfied. Thus, Plaintiffs argue, CenTra undercapitalized Pro Logistics by not acquiring liability insurance as specified by the driver release agreement. CenTra, on the other hand, argues that Pro Logistic was not undercapitalized because its $1,000,000 per occurrence insurance policy exceeded the amount of insurance coverage deemed financially responsible by the Federal Motor Carrier Safety Regulations.

 

The issue before the Court is whether Pro Logistics was undercapitalized. In Radaszewski, the Eighth Circuit held that a motor carrier subsidiary is not undercapitalized if it maintains insurance sufficient to satisfy the financial responsibility requirement of the Federal Motor Carrier Safety Regulations. While the Court understands why a reasonable person might disagree with the Eighth Circuit’s ruling in Radaszewski, the Court is bound by it and finds the reasoning of the Eighth Circuit in that case is applicable to the facts of this case. Because Pro Logistics maintained liability insurance coverage in excess of that required by the Federal Motor Carrier Safety Regulations, Pro Logistics was not undercapitalized on June 1, 2006, as a matter of law, for purposes of this lawsuit. Therefore, Plaintiffs cannot satisfy Collet’s second requirement and cannot pierce the corporate veil separating CenTra from its subsidiaries and affiliates.

 

B. Plaintiffs’ Alternative Motion for a Continuance

 

In the alternative, Plaintiffs argue that the Court should not grant CenTra’s Motion for Summary Judgment and should grant Plaintiffs a continuance to conduct additional discovery “ because defendants have yet to produce for deposition all of the witnesses with knowledge about the structure of and relationships among the CenTra, Inc.-affiliated companies that are defendants in this case.”  (Doc. 163 at 24). In the previous section, the Court assumed that Plaintiffs could satisfy Collet’s first requirement-that CenTra controlled its affiliates and subsidiaries such that the affiliate or subsidiary had “ no separate mind, will or existence of its own.”  Even with this assumption, Plaintiffs were unable to satisfy the second prong of Collet. Given that Pro Logistics was not undercapitalized, the discovery proposed or planned by Plaintiffs would not uncover any information that would change the Court’s ruling on Centra’s motion. Therefore, Plaintiffs’ alternative motion for a continuance is denied.

 

III. Conclusion

 

Accordingly, it is hereby

 

ORDERED that CenTra’s Motion for Summary Judgment is GRANTED;

 

ORDERED that CenTra’s Motion to Strike Plaintiffs’ Exhibits J and K is DENIED AS MOOT; and

 

ORDERED that Plaintiffs’ Alternative Motion for a Continuance is DENIED.

 

W.D.Mo.,2007.

Garrett v. Albright

 

 

 

 

Potenzone v. Annin Flag Co.

 

Supreme Court of New Jersey.

Gary POTENZONE, Plaintiff,

v.

ANNIN FLAG COMPANY and Le Tran, Defendants and Third-Party Plaintiffs-Appellants,

v.

Pennsylvania National Mutual Casualty Insurance Company, Third-Party Defendant-Respondent.

Argued Feb. 20, 2007.

Decided June 6, 2007.

 

Background: In truck driver’s personal injury action, forklift operator’s employer sought a declaratory judgment that truck owner’s automobile policy provided liability coverage for operator and employer. The Superior Court, Law Division, Essex County, entered summary judgment that insurer was liable up to full policy limit due to invalidity of exclusion applicable to permissive user involved in loading and unloading activities. Insurer appealed. The Superior Court, Appellate Division, Sabatino, J.S.C. (temporarily assigned), 388 N.J.Super. 303, 908 A.2d 232, reversed and remanded limiting coverage to statutory minimum. Certification was granted.

 

Holding: The Supreme Court, Wallace, J., held that policy limits, rather than statutory minimum, applied.

 

 

Policy limits, rather than statutory minimum, applied to claim under automobile liability policy which contained invalid exclusion defining “ insured”  to exclude permissive user, other than named insured’s employees or partners, while moving property to or from a covered auto; the insurer was thus required to provide coverage in a loading and unloading accident to the limits of its policy. N.J.S.A. 39:6B-1.

 

Justice WALLACE, JR., delivered the opinion of the Court.

In this appeal, we must determine whether the amount of insurance coverage available in a commercial automobile policy, in which the exclusion for loading and unloading activities was void as contrary to the omnibus automobile statute, is the statutory minimum or the policy limit. The trial court found that the full policy limit applied. On appeal, relying on our decision in Proformance Insurance Co. v. Jones, 185 N.J. 406, 887 A.2d 146 (2005), the Appellate Division reversed and limited the insurance coverage to the statutory minimum. Potenzone v. Annin Flag Co., 388 N.J.Super. 303, 308-10, 908 A.2d 232 (App.Div.2006). Based on our long-standing case law invalidating the exclusion for loading and unloading activities, we treat that exclusion as though it were not part of the policy and hold that the insurer is responsible for coverage up to the full policy limit.

 

I.

 

Plaintiff, Gary Potenzone, an Apollo Flag Company (Apollo Flag) employee, was standing near an Apollo Flag truck while supervising the loading operations when defendant Le Tran, an employee of defendant Annin Flag Company (collectively Annin Flag), struck Potenzone in the back with either the forklift or a pallet on the forklift. As a result, Potenzone filed a personal injury action for bodily injury against Annin Flag. Annin Flag was insured by Atlantic Mutual Insurance Company (Atlantic Mutual) with policy limits of one million dollars. Annin Flag also sought coverage from Apollo Flag’s business automobile insurance policy issued by third-party defendant Penn National Mutual Casualty Insurance Company (Penn National) with policy limits of $500,000. *150 Penn National denied coverage to Annin Flag under its policy exclusion for injuries arising out of loading or unloading accidents to Apollo Flag, its employees, or persons who operate Apollo Flag vehicles with permission.

 

Annin Flag filed a third-party complaint against Penn National, seeking a declaration that Penn National had a duty to defend and indemnify it against Potenzone’s lawsuit. Penn National filed an answer denying that it owed any duty to provide coverage. Annin Flag and Penn National each sought summary judgment. Penn National also sought alternative relief requesting that if it owed coverage to Annin Flag, its liability limit was the statutory minimum of $15,000 as required by N.J.S.A. 39:6B-1(a) and not the $500,000 face value of the policy. The trial court granted Annin Flag’s motion for summary judgment and required Penn National to provide coverage up to its full policy limit of $500,000.

 

The Appellate Division granted Penn National’s motion for leave to appeal. Around the same time, Potenzone settled his personal injury claim against Annin Flag for $850,000. Penn National agreed to pay $500,000, and Atlantic Mutual agreed to pay the balance of $350,000. However, the settlement agreement also directed that, in the event Penn National was successful in its appeal seeking to limit its liability to the statutory minimum, Penn National could then seek reimbursement from Atlantic Mutual for the amount it paid in excess of $15,000.

 

The sole issue on appeal was whether Penn National’s insurance coverage should be limited to the statutory minimum or extended to the face amount of its insurance policy. Potenzone, supra, 388 N.J.Super. at 307, 908 A.2d 232. In its appeal, Penn National did not contest that “ its moving property exclusion was unenforceable in this case because of New Jersey’s**747 statutory scheme and case law requiring coverage for so-called loading and unloading activities.”  Id. at 306, 908 A.2d 232 (internal quotations marks omitted). The Appellate Division reversed, concluding that Proformance controlled the disposition of the appeal, and, therefore, Penn National was required only to provide coverage up to the *151 statutory minimum of $15,000. Id. at 309-10, 908 A.2d 232. We granted Annin Flag’s petition for certification. 188 N.J. 493, 909 A.2d 727 (2006).

 

II.

 

Annin Flag argues that Penn National’s coverage obligation for accidents arising out of loading or unloading operations is the contractual amount stated in the insurance policy. It contends that the Court’s decision in Proformance is not applicable and should be limited to only those cases where an innocent third party will be left with no remedy because an insurer properly denied liability coverage due to the misconduct of an insured. Annin Flag asserts that it would be unreasonable to permit Penn National to rely on an obviously invalid loading and unloading exclusion to reduce its contractual coverage obligation to the statutory minimum amount of $15,000. Annin Flag adds that it would thwart the public policy goals of the Legislature if insurers could vastly limit their coverage by including invalid policy exclusions that would cause the policy limits to be deemed reduced to the statutory minimum, irrespective of what the insured paid for the policy. Finally, Annin Flag notes that other Appellate Division decisions, which it claims have been cited with approval by this Court, involving invalid loading and unloading exclusions, have enforced the policy terms, rather than limited the liability coverage to the statutory minimum.

 

In contrast, Penn National argues that the decision in Proformance settled the issue and that its coverage should be limited to the statutory minimum because the loading and unloading exclusion was invalid. In response to Annin Flag’s argument that Proformance should be limited to cases in which an innocent party is denied coverage as a result of the insured’s misconduct, Penn National claims that the same outcome would have resulted in that case even if the named insured in Proformance had given permission to the additional insured to use the vehicle in his business. Further, Penn National contends that Proformance should be *152 interpreted to conclude that insurers can properly deny coverage for an otherwise covered use as long as that denial still requires coverage for the statutory minimum. Finally, Penn National asserts that the decision below is not in conflict with other Appellate Division decisions or with decisions of this Court.

 

III.

 

A.

 

Every owner of an automobile registered in New Jersey must have liability insurance coverage. N.J.S.A. 39:6B-1(a). Insurers must afford that liability insurance coverage at no less than the minimum amounts set forth by the Legislature. Proformance, supra, 185 N.J. at 415, 887 A.2d 146 (citing State Farm Mut. Auto. Ins. Co. v. Zurich Am. Ins. Co., 62 N.J. 155, 170, 299 A.2d 704 (1973)). The statute requires at least $15,000 coverage for bodily injury or death to any person in an accident. N.J.S.A. 39:6B-1(a).

 

We have noted that New Jersey’s statutory scheme evinces a strong legislative policy in favor of protecting innocent accident victims. Gazis v. Miller, 186 N.J. 224, 231-32, 892 A.2d 1277 (2006); Proformance, supra, 185 N.J. at 414-15, 887 A.2d 146. Nevertheless, an exclusion may be enforced if it is “ specific, plain, **748 clear, prominent, and not contrary to public policy.”  Doto v. Russo, 140 N.J. 544, 559, 659 A.2d 1371 (1995) (citations omitted). If there is ambiguity in the exclusion, it will be construed narrowly and the insurer bears the burden of proving that the exclusion should be enforced. Proformance, supra, 185 N.J. at 415, 887 A.2d 146 (citing Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95, 698 A.2d 9 (1997)). Further, a policy exclusion “ that conflicts with statutorily mandated coverage will not be enforced.”  Ibid.

 

B.

 

Our courts have long recognized “ that the obligation to provide coverage in a loading and unloading accident arises from statute *153 and therefore cannot be limited by contract.”  Ryder/P.I.E. Nationwide, Inc. v. Harbor Bay Corp., 119 N.J. 402, 407, 575 A.2d 416 (1990) (internal quotation marks omitted) (citing Bellafronte v. Gen. Motors Corp., 151 N.J.Super. 377, 381-82, 376 A.2d 1294 (App.Div.), certif. denied, 75 N.J. 533, 384 A.2d 513 (1977)). In Ryder, an employee was injured while unloading Ryder’s truck with the assistance of a Harbor Bay forklift operator. Id. at 404, 575 A.2d 416. The Ryder employee filed a complaint against Harbor Bay, which in turn sought coverage from Ryder as an additional insured. Ibid. Based on the decision in Bellafronte, the trial court granted Harbor Bay’s summary judgment motion and required Ryder to provide coverage. Id. at 404-05, 575 A.2d 416.

 

On appeal, we approved of the holding in Bellafronte and stated that:

Bellafronte makes clear the broad scope of coverage that an insurer must provide for accidents arising during loading and unloading. Because of statutorily-imposed omnibus requirements, any contractual attempt to exclude coverage for an additional insured will be held invalid. Moreover, all parties subject to omnibus coverage requirements-both self-insurers and those with liability policies-must provide coverage. What Bellafronte does not address, however, is the limitation, if any, on the amount of coverage that an insurer must provide in the context of a loading and unloading accident.

[Id. at 408, 575 A.2d 416 (emphasis omitted).]

 

In deciding the amount of coverage issue left unanswered in Bellafronte, we stated that “ [u]nder the terms of an ordinary liability policy, an insurer would be required to provide coverage in a loading and unloading accident to the limits of its policy-often an amount greater than the statutory minimum.”  Id. at 413, 575 A.2d 416 (internal quotation marks omitted). We reasoned that if the statutory minimum were imposed for a self-insurer, a “ self-insurer would be placed at a distinct advantage over one maintaining a liability policy insofar as its liability would be limited by N.J.S.A. 39:6B-1-a result that finds no justification in the self-insurance scheme or the insurance-coverage policies of this state.”  Ibid. We found no reason to distinguish between the two types of insurance coverage and concluded that Ryder’s liability for “ an additional insured during a loading or unloading *154 accident”  was not limited by the “ minimum amounts of compulsory insurance mandated by N.J.S.A. 39:6B-1.”  Id. at 414, 575 A.2d 416 (internal quotation marks omitted).

 

In the present matter, the Penn National insurance policy provides liability coverage to “ an insured”  who becomes legally obligated to pay damages as a result of a “ bodily injury … caused by an accident and resulting from the ownership, maintenance or use of a covered auto.”  (Internal quotation marks omitted). An “ insured”  is defined, in part, as anyone using a covered automobile with Apollo Flag’s permission, except “ [a]nyone other than [Apollo Flag’s] employees, **749 partners, … or a lessee or borrower or any of [its] employees, while moving property to or from a covered auto.”  (Emphasis added) (internal quotation marks omitted). Penn National conceded that its “ while moving property to or from a covered auto”  language carved out an exception for loading and unloading operations. Initially, Penn National contended that under the definition of an insured in its loading and unloading exclusion, Annin Flag was not covered because it was not an employee, lessee, or borrower of Apollo Flag’s vehicle and, therefore, Annin Flag was not entitled to insurance coverage for Potenzone’s claim. However, Penn National later conceded that its “ while moving property”  exception to the definition of insured was not enforceable due to New Jersey “ law requiring coverage for so-called loading and unloading activities.”  Potenzone, supra, 388 N.J.Super. at 306, 908 A.2d 232 (internal quotation marks omitted).

 

In Ryder, supra, we stated that an “ insurer would be required to provide coverage in a loading and unloading accident to the limits of its policy.”  119 N.J. at 413, 575 A.2d 416 (internal quotation marks omitted). We find no justification to alter that statement. Ryder was decided more than sixteen years ago and the insurance industry has had ample time to adjust its premiums and policies to provide either step-down or full coverage for loading or unloading accidents.

 

Our courts have made it clear that a policy exclusion may not override statutory mandates to provide insurance coverage and the attempt to do so in a loading and unloading accident is void. Ryder, supra, 119 N.J. at 407, 575 A.2d 416; Bellafronte, supra, 151 N.J.Super. at 381-82, 376 A.2d 1294. In view of our long-established case law voiding loading or unloading exclusion clauses, we conclude that Penn National’s insurance policy should be read as if that clause were not part of the policy. Absent the invalid loading and unloading clause, the remaining portions of the policy are applicable as written. Consequently, Penn National must provide coverage up to its full policy limit.

 

We recognize that one could fairly read our decision in Proformance to reach a different result in this matter. However, in Proformance, supra, we addressed for the first time whether, in light of the omnibus statute, an otherwise valid business exclusion should bar a third party from coverage under the policy. 185 N.J. at 410, 887 A.2d 146. We held that the business exclusion could not bar recovery that was required by statute. Id. at 420, 887 A.2d 146. It was the first time we invalidated a business exclusion of that nature. We followed the reasoning in Marotta v. New Jersey Automobile Full Insurance Underwriting Ass’n, 280 N.J.Super. 525, 532, 656 A.2d 20 (App.Div.1995), aff’d, 144 N.J. 325, 676 A.2d 1064 (1996) to conclude that “ the statutorily required minimum limits of coverage”  applied. Proformance, supra, 185 N.J. at 421, 887 A.2d 146.

 

We choose a different path here. Following our decision in Ryder, insureds, insurers, and self-insurers should have reasonably expected that the full policy limit for an accident during a loading or unloading operation was required. As stated earlier, the insurance industry has had ample time to adjust its rates and policy terms. Ryder, supra, 119 N.J. at 413, 575 A.2d 416 (“ Under the terms of an ordinary liability policy, an insurer would be required to provide coverage in a loading and unloading accident to the limits of its policy-often an amount greater than the statutory minimum.”  (Internal quotation marks omitted)). If *156 the insurer intended to provide the statutory minimum coverage for loading or unloading accidents, it should have amended its policy to expressly provide for such step-down coverage.**750 The failure to plainly provide for any step-down amounts results in the application of the full policy limits. We conclude that Penn National must provide coverage up to its policy limit of $500,000.

 

IV.

 

We reverse the judgment of the Appellate Division and reinstate the judgment of the trial court.

 

For reversal and reinstatement-Chief Justice ZAZZALI and Justices LONG, LaVECCHIA, ALBIN, WALLACE, RIVERA-SOTO and HOENS-7.

Opposed-None.

N.J.,2007.

Potenzone v. Annin Flag Co.