Motor Vehicles Participating in Intrastate or Interstate Commerce May Be Held to Higher Insurance Requirements

Rafanello v. Taylor-Esquivel

Docket No.: A-4397-18T2

Decided November 23, 2020

Submitted by New Jersey Truck Crash Lawyer, Jeffrey Hark.

In a recent published decision, the Appellate Division reviewed a trial court’s dismissal of a third party plaintiff Encompass Property & Casualty Insurance Company of America (Encompass) complaint against third party defendant American Millennium Insurance Company (AMIC) seeking reimbursement of PIP payments from a multivehicle accident involving a dump truck.

In Rafanello, plaintiff Ronald Rafanello was rear-ended by a dump truck operated by Taylor-Esquivel in West Orange on Route 280, during the course of his employment with NAB Trucking, LLC (NAB).  Upon impact, Rafanello’s vehicle struck a third motor vehicle owned by plaintiff Neil Prupis. Debris was dumped onto a fourth motor vehicle owned by Angelo Abrego and a fifth motor vehicle owned by fourth-party plaintiff John Henderson. Rafanello suffered personal injuries as a result of the accident. Notably, the dump truck was a 2006 Sterling L-9800 and weighed in excess of 26,001 pounds.

Encompass is the automobile insurance provider for Rafanello. The policy issued by Encompass to Rafanello provided uninsured and underinsured motorist coverage of $250,000 per person and $500,000 per accident.

During the application for insurance, NAB did not list Taylor-Esquivel as a driver, as he would not qualify as a covered driver due to his driving history. Also on the application, NAB stated that it engaged in interstate transport.

AMIC issued a Commercial Automobile Policy to NAB for the policy period from August 6, 2015 to August 6, 2016. The policy provided liability coverage of $750,000 per accident on the declarations page.  The policy also includes a step-down provision, which provides for a maximum coverage limit of $35,000 for liability arising from incidents involving an individual who is not listed as a “Covered Driver” under the policy. Taylor-Esquivel was not listed as a covered driver in the “Schedule of Covered Drivers” section of the policy

On October 19, 2015, Rafanello filed an amended complaint against Taylor-Esquivel, Intek, and Encompass alleging he was entitled to underinsured (UIM) motorist coverage from Encompass because there was insufficient insurance coverage under the AMIC policy issued to NAB.  Encompass filed a complaint against AMIC, NAB, Intek, Taylor-Esquivel, and Empire Fire & Marine Insurance Company for reimbursement of Personal Injury Protection (PIP) benefits.

AMIC filed a motion for summary judgment arguing it deposited the “full $35,000 policy limit into the [c]ourt” because the policy’s step-down provision was triggered.  The trial court agreed with AMIC, and dismissed Encompass’ third party complaint.  Encompass appealed, arguing AMIC was obligated to provide coverage of the minimal amount of $750,000 mandated by New Jersey state law and federal law for commercial vehicles.

The Appellate Division found that because NAB was operating a commercial vehicle, as defined by the federal motor carrier safety regulations adopted by New Jersey, and because they were participating in intrastate commerce, they must carry a minimum policy under the regulations.

N.J.S.A. 39:5B-32(e). 49 U.S.C. § 31139(b) provides that “[t]he Secretary of Transportation shall prescribe regulations to require minimum levels of financial responsibility sufficient to satisfy liability amounts established by the Secretary covering public liability, property damage, and environmental restoration for the transportation of property by motor carrier[,]” and “[t]he level of financial responsibility . . . shall be at least $750,000.”

This provision applies to all commercial motor vehicles participating in intrastate or interstate commerce. Finding NAB was subject to these provisions, the Appellate Division reversed and remanded the trial court’s decision, finding that NAB’s participating in any commercial activity, interstate or intrastate was sufficient to subject them the motor carrier safety regulations, mandating a policy of at least $750,000.

Insurance requirements for commercial vehicles in New Jersey are much higher than those for personal private use.  Being involved in an accident with a commercial vehicle such as a dump truck may subject them to a variety of different federal and state regulations, including those higher insurance requirements. If you or someone you know was injured in an accident with a commercial vehicle such as a dump truck, be sure to hire an experienced attorney versed in the federal and state motor carrier safety regulations to get you the largest compensation for your injuries.

For personal injury matters, you pay nothing upfront, and our fee is paid as a percentage of your recovery. At Hark & Hark, we represent clients for any case in any county in New Jersey including Atlantic, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Mercer, Ocean, and Salem counties.



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Criminal Civil Lawyer

Jeffrey Hark is a New Jersey Civil and Criminal Lawyer.

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