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Progressive Northern Insurance Co. v. Beltempo

May 14, 2009

PROGRESSIVE NORTHERN INSURANCE COMPANY, PLAINTIFF,
v.
DANIEL BELTEMPO, FRANCINE BELTEMPO, PAMJAM, INC., JILCO EQUIPMENT LEASING COMPANY, INC., DANA'S PRO TRUCKING, INC., TRAILMOBILE CORP., TRAILMOBILE PARTS AND SERVICE CORP., THERMO KING CORP., INGERSOLL-RAND CO., LTD., AND THERMO KING CORP., A UNIT OF INGERSOLL-RAND COMPANY, LTD., DEFENDANTS.



The opinion of the court was delivered by: Seibel, J.

MEMORANDUM DECISION AND ORDER

On April 23, 2007, Plaintiff Progressive Northern Insurance Company ("Progressive" or "Plaintiff") filed a declaratory judgment action in New York State Supreme Court, Orange County, against Defendants Daniel and Francine Beltempo; PamJam, Inc.; Jilco Equipment Leasing Company, Inc.; Dana's Pro Trucking, Inc. ("DPT"); Trailmobile Corp.; Trailmobile Parts and Service Corp.; Thermo King Corp.; Ingersoll-Rand Co., Ltd.; and Thermo King Corp, a unit of Ingersoll-Rand Company, Ltd. (collectively, "Defendants"). Defendant DPT removed the case to this Court on May 22, 2007. Before the Court is Plaintiff's Motion for Summary Judgment filed August 18, 2008. (Doc. 21.) For reasons discussed below, Plaintiff's Motion is denied.

I. Background

A. Facts

The following facts are undisputed unless otherwise noted. Progressive issued to Defendant PamJam a motor vehicle liability insurance policy (effective May 4, 2004, through May 5, 2005) (the "policy"), which included, among other things, coverage for "claims by third parties for 'accidents' occasioned by the ownership, maintenance and use of said insured vehicles." (Compl. ¶¶ 20-21.)

Defendant PamJam was in the business of hauling produce in tractor-trailers. On or about January 21, 2005, Defendant DPT lent to PamJam a trailer with a refrigerator unit, which was attached to a PamJam tractor. Defendant Daniel Beltempo operated the tractor-trailer, and on the same date, was injured when he fell from the trailer (the "incident").*fn1

In connection with the January 21, 2005 incident, Defendants Daniel and Francine Beltempo commenced a personal injury action on October 4, 2005, in Supreme Court, Orange County, against several of the defendants sued herein, including DPT (the "underlying action"). (Id. ¶¶ 25-26; see Beltempo v. Dana's Pro Trucking, Inc. et al., No. 7209-2005.) PamJam was not sued by the Beltempos in the underlying action.

On March 7, 2006, Progressive received a letter from DPT's insurer, Northland Insurance, which stated: "It is our belief that your policy would have coverage for our insured. Accordingly, we are tendering the defense and indemnity of our insured to your company." (Certification of Steve L. Momon ("Momon Certif.") Ex. 1.) On March 9, 2006, Progressive sent a letter to PamJam, which stated that Progressive was investigating the January 21, 2005 incident under a "Reservation of Rights," explaining that PamJam's "failure/delay in notifying us of this loss, appears to be a violation of the notice provision of your policy." (Id. Ex. 2 (emphasis in original).)

On March 19, 2006, Progressive sent identical disclaimer letters to PamJam and Northland Insurance, in which Progressive wrote: "I regret to inform you that your claim cannot be covered by Progressive . . . . The reason coverage cannot be provided is this claim was not reported to Progressive in a reasonable manner as outlined by the policy requirements." (Id. Ex. 3.) The March 19 letters referred to the March 9 letter, which had been sent only to PamJam. DPT commenced a third-party action against PamJam in the underlying action on April 14, 2006, seeking contribution and indemnification. (Compl. ¶¶ 27-28.) Progressive was served with the third-party complaint in the underlying action on August 28, 2006, and on October 26, 2006, Progressive wrote a letter to PamJam, detailing the various bases upon which Progressive was disclaiming coverage for the January 21, 2005 incident. (Momon Certif. Ex. 4.)

B. Procedural History

Progressive filed the present action seeking a declaration that it is not required to provide PamJam with a defense or with indemnification for the January 21, 2005 incident. (Compl. ¶¶ 41-47.) On August 18, 2008, Progressive filed a Motion for Summary Judgment, "seeking this Court's declaration that a motor vehicle liability policy issued to defendant PamJam . . . provides no liability coverage for the third-party claims asserted against PamJam by defendant Dana's Pro Trucking Inc. . . . in an action which is pending in the Supreme Court of the State of New York, Orange County." (Mem. of Law in Supp. of Pl.'s Mot. for Summ. J. ("Pl.'s Mem.") 1.)

According to Progressive, there is no coverage under the policy for the January 21, 2005 incident, and, therefore it is entitled to summary judgment in its favor, for two reasons: (1) PamJam failed to give Progressive timely notice of the incident, and (2) coverage is barred by the employee exclusion to the policy. (Id.) PamJam has never made an appearance in this case (and is now apparently a defunct company), so it is DPT that opposes Plaintiff's Motion.

II. Discussion

A. Standard of ...


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