Court Opinion

ID: 4635362
Source: CourtListenerOpinion
Date Created: 2020-11-23 15:05:59.82171+00
Date Added: 2024-06-11T07:58:22.314738
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                   APPROVAL OF THE APPELLATE DIVISION

                                 SUPERIOR COURT OF NEW JERSEY
                                 APPELLATE DIVISION
                                 DOCKET NO. A-4397-18T2

RONALD RAFANELLO,

      Plaintiff,

v.

JORGE S. TAYLOR-ESQUIVEL,
INTEK AUTO LEASING, INC.,
ENCOMPASS INSURANCE AND
ESURANCE,

      Defendants-Appellant,              APPROVED FOR PUBLICATION

and                                           November 23, 2020

                                            APPELLATE DIVISION
ENCOMPASS PROPERTY &
CASUALTY INSURANCE
COMPANY OF NEW JERSEY,

      Third-Party Plaintiff/
      Appellant,

v.

AMERICAN MILLENNIUM
INSURANCE COMPANY,
NAB TRUCKING, LLC, AVS
INSURANCE AGENCY, INC.,
INTEK AUTO LEASING, INC.,
EMPIRE FIRE AND MARINE
INSURANCE COMPANY,

      Third-Party Defendants/
      Respondent,

and

AMERIPRISE INSURANCE as
Subrogee of JOHN HENDERSON,

      Fourth-Party Plaintiff,

v.

NAB TRUCKING LLC, JORGE
TAYLOR-ESQUIVEL, INTEK
AUTO LEASING INC.,

     Fourth-Party Defendants.
______________________________

ENCOMPASS PROPERTY &
CASUALTY INSURANCE
COMPANY OF NEW JERSEY,
individually and as Subrogee of
RONALD RAFANELLO,

      Plaintiffs-Appellants,

v.

INTEK AUTO LEASING, INC.,
NAB TRUCKING, LLC, JORGE S.
TAYLOR-ESQUIVEL, AMERICAN
MILLENNIUM INSURANCE
COMPANY & EMPIRE FIRE &
MARINE INSURANCE COMPANY,
AVS INSURANCE AGENCY, INC.,
and ADMIRAL INSURANCE
COMPANY,

     Defendants-Respondents.
______________________________

                                      A-4397-18T2
                                  2
ENCOMPASS INSURANCE
COMPANY OF NEW JERSEY as
subrogee of NEIL PRUPIS
and ENCOMPASS INSURANCE
COMPANY OF NEW JERSEY,

     Plaintiffs,

v.

JORGE TAYLOR-ESQUIVEL,
NAB TRUCKING and INTEK
AUTO LEASING, INC.,

     Defendants.
_______________________________

           Submitted September 16, 2020 – Decided November 23, 2020

           Before Judges Fuentes, Rose and Firko.

           On appeal from the Superior Court of New Jersey,
           Law Division, Union County, Docket Nos. L-3488-15
           and L-1721-17.

           Hardin, Kundla, McKeon & Poletto, PA, attorneys for
           appellant Encompass Property & Casualty Insurance
           Company of New Jersey; and Steven G. Kraus,
           attorney for appellant Encompass Property & Casualty
           Insurance Company of New Jersey, individually and
           as subrogee of Ronald Rafanello and Neil Prupis
           (James L. Fant and Steven G. Kraus, on the joint
           briefs).

           Mintzer Sarowitz Zeris Ledva & Meyers, LLP,
           attorneys for respondent American Millennium
           Insurance Company (Kimberly A. Murphy and
           Christopher A. Gulla, on the brief).

                                                                  A-4397-18T2
                                    3
      The opinion of the court was delivered by

FIRKO, J.A.D.

      Defendant and third-party plaintiff Encompass Property & Casualty

Insurance Company of America (Encompass) appeal from a January 18, 2019

order granting summary judgment to third-party defendant American

Millennium Insurance Company (AMIC) and denying Encompass's cross-

motion for summary judgment as to AMIC. The trial court found that in this

multi-vehicle accident involving a commercial dump truck, the step-down

provision in the AMIC policy was triggered because defendant Jorge S.

Taylor-Esquivel, the dump truck driver, was not listed in the Covered Driver's

section of the policy procured by his employer, NAB Trucking, LLC (NAB).

The trial court determined that NAB's exposure was capped at $35,000.

      The issue on appeal is whether New Jersey law requires a commercial

motor vehicle carrier, such as NAB, to provide the minimum insurance

coverage amount of $750,000, when engaged in interstate or intrastate

commerce, as prescribed by N.J.S.A. 39:5B-32 and N.J.A.C. 13:60-2.1, even

in the event an individual is not listed as a covered driver on the policy. We

answer in the affirmative and conclude, as a matter of law, that the AMIC

insurance policy issued to NAB requires a mandatory minimum insurance

coverage amount of $750,000 and the step-down provision in the insured's

                                                                      A-4397-18T2
                                      4
combined single limit (CSL) policy is not triggered. Therefore, we reverse and

remand.

                                        I.

      We discern the following facts from the summary judgment record and

view them in the light most favorable to the respective non-moving parties.

See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). On

September 22, 2015, 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. 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. NAB leased the

dump truck from Intek Auto-Leasing, Inc. (Intek). At the time of the accident,

Taylor-Esquivel was hauling a load of dirt obtained from Four Landscaping in

New Jersey to Newark.

      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.

                                                                      A-4397-18T2
                                        5
      The lease agreement between NAB and Intek provided that NAB

            will be responsible for providing and maintaining the
            following insurance coverages in the minimal amounts
            and the maximum deductibles listed below: Personal
            injury liability: $1,000,000/$1,000,000

                  ....

            If for any reason you fail or refuse to secure insurance
            coverage on amount stated above or cease to maintain
            such coverage during the term of the lease, lessor
            [Intek] shall supply the insurance to the lessee [NAB].

      In August 2015, NAB, through its insurance broker, AVS Insurance

Agency, Inc. (AVS), secured coverage for the dump truck from AMIC. NAB

submitted information to AVS about its owner, Jaime Colindres Mejia, and

dump truck drivers, Mejia and Taylor-Esquivel. Copies of Taylor-Esquivel's

driver's license and social security card were provided to AVS with the intent

to include him as a covered driver on the NAB policy.

      A Commercial Insurance Application and Supplemental Commercial

Application were submitted by AVS on behalf of NAB and listed two

additional drivers, Luis Vega and Donald Colindres.       While motor vehicle

record searches for Vega and Colindres were submitted with the Commercial

Insurance Application to AMIC, a motor vehicle search was not submitted for

Taylor-Esquivel. Taylor Stroud, an AVS representative, advised NAB that

                                                                       A-4397-18T2
                                       6
Taylor-Esquivel would not qualify as a covered driver because his driving

history was "unacceptable."

      The Commercial Insurance Application identified Keasbey as NAB's

business location and stated NAB hauled sand and gravel within a "[seventy -

five] mile radius." In the Supplemental Commercial Application submitted by

NAB, the following answers were given to questions regarding interstate

commerce:

             2. Do you require filings (Y/N)? N
             DOT1 #? 2560477

             MC2 # (if applicable)? NA.

             3. Does your company conduct any business or travel
             outside of the [S]tate of New Jersey (Y/N)? Y.

             If so, identify all states in which your company does
             business or travels to. Pennsylvania.

At a deposition, AMIC's underwriter acknowledged that based upon NAB's

answer on the Supplemental Commercial Application, NAB engaged in

"interstate transport."

1
  United States Department of Transportation. Interstate movers transporting
passengers or hauling cargo must be registered with the Federal Motor Carrier
Safety Administration (FMCSA) and have a USDOT number.
2
  Motor Carrier number. An MC number is assigned by the FMCSA to
companies operating in interstate commerce hauling cargo across state lines.

                                                                     A-4397-18T2
                                      7
      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 dump truck

involved in the subject accident is identified in the schedule of "Specifically

Described Autos."     The AMIC policy provides coverage to the "Named

Insured," NAB Trucking, and any permissive user of a covered "auto."

      The "Who is an Insured" section of the AMIC policy defines the

following as "insureds":

            a. You for any covered "auto."

            b. Anyone else while using with your permission a
            covered "auto" you own, hire or borrow . . .

            c. Anyone liable for the conduct of an "insured"
            described above but only to the extent of that liability.

      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.

                                                                        A-4397-18T2
                                       8
      The policy did not include an MCS-90 endorsement, 3 a federal

endorsement for interstate truckers. Mejia testified that NAB was not involved

in interstate commerce. Tim O'Shea, an AMIC representative, testified that

            [a]s a matter of practice in underwriting, we normally
            react to the presence of an MC number, so if an
            insured is engaged in interstate commerce, we leave it
            up to the insured that they should be aware that they're
            engaging in interstate commerce and it would be up to
            the insured to obtain a[n] MC number, which, then, if
            that number is provided to the insurance company,
            would enable us to complete a federal filing and attach
            the MCS 90 endorsement.

      Mejia ultimately signed the policy, which did not include Taylor-

Esquivel as a covered driver or an MCS-90 endorsement. On August 6, 2015,

AVS issued a Certificate of Liability Insurance representing to Intek that the

AMIC policy was issued to NAB and afforded $1,000,000 in liability

coverage; included the dump truck involved in the accident; and named Intek

as an additional insured under 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. On

3
  An MCS-90 endorsement is attached to an insurance policy issued to a motor
carrier and is proof that the motor carrier has met the financial requirements of
the federal regulations for motor carriers. See 49 U.S.C. § 13906.

                                                                        A-4397-18T2
                                       9
September 16, 2016, the trial court entered an order permitting AMIC to

deposit its $35,000 policy limit into court pursuant to Rule 4:57-1.4             In

accordance with the terms of the order, on November 16, 2016, AMIC

deposited its $35,000 payment with the Superior Court Trust Fund.

        On May 8, 2017, Encompass filed a complaint against AMIC, NAB,

Intek, Taylor-Esquivel, and Empire Fire & Marine Insurance Company for

reimbursement of Personal Injury Protection (PIP) benefits. On June 26, 2017,

AMIC filed an answer to the complaint.          Thereafter, on March 27, 2018,

Encompass filed a second amended third-party complaint against AMIC,

NMAB, AVS, Intek, and Empire. Encompass alleged it was not required to

provide underinsured motorist coverage benefits to Rafanello because his

claims did not exceed the $1,000,000 policy limit required under the lease

agreement between NAB and Intek. On April 16, 2018, AMIC filed an answer

to Encompass's second amended third-party complaint.

        On November 7, 2018, AMIC filed a motion for summary judgment

arguing it deposited the "full $35,000 policy limit into the [c]ourt" because the

4
    Rule 4:57-1 provides in pertinent part:

              In any action in which any part of the relief sought is a
              judgment for a sum of money or the disposition of a
              sum of money, a party, on notice to every other party,
              and by leave of court, may deposit with the Superior
              Court Trust Fund all or any part of the sum.

                                                                          A-4397-18T2
                                         10
policy's step-down provision was triggered.       On December 11, 2018,

Encompass filed a cross-motion for summary judgment.

     On January 18, 2019, the Law Division judge heard oral argument and

placed his decision on the record. The judge granted AMIC's motion and

denied Encompass's cross-motion. In his decision, the judge found that the

step-down provision in the policy was triggered because the policy was clear

and unambiguous, and AMIC's exposure was $35,000 because Taylor-Esquivel

was not listed as a covered driver on NAB's policy. The appeal followed.

                                     II.

     On appeal, Encompass argues that the judge erred by granting AMIC's

motion for summary judgment. Encompass contends AMIC is obligated to

provide liability coverage for claims against NAB and Taylor-Esquivel in the

amount of $750,000 as mandated by New Jersey state law and federal law

because the dump truck involved in this accident was a commercial motor

vehicle engaged in interstate commerce, intrastate commerce, or both. In the

alternative, Encompass argues there is a genuine issue of material fact as to

whether NAB was engaged in interstate commerce, which would trigger

federal statutes requiring AMIC to provide NAB with a minimum insurance

coverage amount of $750,000. AMIC argues that NAB was not involved in

                                                                     A-4397-18T2
                                     11
interstate commerce at the time of the accident and did not execute an MCS-90

Endorsement, requiring affirmance.

      "An appellate court reviews an order granting summary judgment in

accordance with the same standard as the motion judge." New Jersey Transit

Corp. v. Certain Underwriters at Lloyd's London, 461 N.J. Super. 440, 452

(App. Div. 2019) (quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). Rule

4:46-2(c) provides that summary judgment shall be granted "if the pleadings,

depositions, answers to interrogatories and admissions on file, together with

affidavits, if any, show that there is no genuine issue as to any material fact

challenged and that the moving party is entitled to a judgment or order as a

matter of law."

      "If there exists a single, unavoidable resolution of the alleged disputed

issue of fact, that issue should be considered insufficient to constitute a

'genuine' issue of material fact for purposes of Rule 4:46-2." Brill, 142 N.J. at

540 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986)). The

court "should not hesitate to grant summary judgment" if "the evidence 'is so

one-sided that one party must prevail as a matter of law.'" Ibid. (quoting

Liberty Lobby, 477 U.S. at 252).

      We review the trial court's grant of summary judgment de novo under

the same standard as the trial court. Templo Fuente De Vida Corp. v. Nat'l

                                                                        A-4397-18T2
                                       12
Union Fire Ins. Co., 224 N.J. 189, 199 (2016). Where there is no issue of

material fact and only a question of law remains, we give "no special deference

to the legal determinations of the trial court." Ibid., (citing Manalapan Realty,

L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

      For the first time on appeal, Encompass argues that there is a genuine

issue of material fact as to whether Taylor-Esquivel should have been

identified in the "Covered Driver" section of the policy, in which case the

AMIC policy should be deemed to conform to NAB's reasonable expectations.

Here, AMIC argues that the trial court properly held "no facts exist to support

a finding that [Taylor-Esquivel] was listed as a 'Covered Driver' on the AMIC

policy and/or that NAB had a reasonable expectation that [Taylor-Esquivel]

would be a 'Covered Driver.'"

      Encompass contends that regardless of whether NAB was engaged in

intrastate commerce or both intrastate and interstate commerce, N.J.S.A.

39:5B-32 and N.J.A.C. 13:60 to -2.1 required AMIC to provide NAB with a

minimum liability coverage amount of $750,000. On the other hand, AMIC

contends that N.J.S.A. 39:6B-1 governs the minimum liability insurance

coverage for NAB, and N.J.S.A. 39:5B-32 or N.J.A.C. 13:60-2.1 are not

applicable.

                                                                        A-4397-18T2
                                       13
      To determine a question of statutory construction, our Court recently

confirmed the guiding principles judges must follow:

            Our objective in interpreting any statute is to give
            effect to the Legislature's intent. Frugis v. Bracigliano,
            177 N.J. 250, 280 (2003). When the clear language of
            the statute expresses the Legislature's intent, our
            analysis need go no further. Shelton v.
            Restaurant.com, Inc., 214 N.J. 419, 429 (2013). When
            a plain reading of the statute allows for more than one
            plausible interpretation or leads to an absurd result or
            a result at odds with the overall statutory scheme, we
            may turn to extrinsic evidence. DiProspero v. Penn,
            183 N.J. 477, 492-93 (2005).

            [McClain v. Bd. of Review, Dept. of Labor, 237 N.J.
            445, 456 (2019).]

      Importantly, when interpreting a statute, it must be read "in context with

related provisions so as to give sense to the legislation as a whole."

DiProspero, 183 N.J. at 492. "Additionally, 'whatever the rule of [statutory]

construction, it is subordinate to the goal of effectuating the legislative plan as

it may be gathered from the enactment read in full light of its history, purpose,

and context.'" Chasin v. Montclair State Univ., 159 N.J. 418, 426-27 (1999)

(alteration in original) (quoting State v. Haliski, 140 N.J. 1, 9 (1995)).

      Under Title 39, the Legislature has promulgated regulations to

differentiate certain classes of motor vehicles from the general class of motor

vehicles. See N.J.S.A. 39:3B-1 to -28; N.J.S.A. 39:3C-1 to -36; N.J.S.A. 39:4-

31.1 to -31.5; N.J.S.A. 39:5H-1 to -27. Additionally, the Legislature has

                                                                             A-4397-18T2
                                        14
specified the mandatory insurance requirements for these differing classes of

motor vehicles, which either align with the minimum insurance coverage

requirements mandated by N.J.S.A. 39:6B-1 or an increased minimum

insurance coverage requirement. See N.J.S.A. 39:6B-1; N.J.S.A. 39:3C-20;

N.J.S.A. 39:4-31.3(b).

      However, where the Legislature has adopted a separate statutory scheme

for a class of motor vehicles and has not specified the amount of compulsory

liability insurance coverage required, it has delegated that authority to the

Commissioner of Insurance in consultation with the Director of the Division of

Motor Vehicles. N.J.S.A. 17:1-1; see N.J.S.A. 39:4-14.3(e). Moreover, where

our Legislature has adopted federal statutes and regulations into its own

regulatory scheme for a specific class of motor vehicle, it has clearly

delineated the portions of the federal law applicable in our State. See N.J.S.A.

39:3B-27.

      In distinguishing vehicles transporting hazardous materials from the

general class of motor vehicles, our Legislature enacted a statutory scheme

pursuant to N.J.S.A. 39:5B-1 to -32. N.J.S.A. 39:5B-18 to -31.1 establishes

standards for the transportation of hazardous materials within the State of New

Jersey. Specifically, N.J.S.A. 39:5B-26 provides:

            The [Department of Transportation], in consultation
            with the Department of Environmental Protection, the

                                                                       A-4397-18T2
                                      15
             Department of Labor, the Department of Commerce
             and Economic Development, the Divisions of Motor
             Vehicles and State Police of the Department of Law
             and Public Safety, and other appropriate State
             departments and agencies shall adopt, within [twelve]
             months of the effective date of this act and pursuant to
             the provisions of the "Administrative Procedure Act,"
             P.L.1968, c. 410 (C. 52:14B-1 to -31), rules and
             regulations concerning the transportation of hazardous
             materials, which shall, to the maximum extent
             practicable, conform to the requirements established
             by 49 CFR Parts 100-199, adopted by the United
             States Department of Transportation pursuant to the
             provisions of the "Hazardous Materials Transportation
             Act," Pub.L. 93-633 (49 U.S.C. §§ 1801-1812).

       However, the Legislature also afforded additional authority to the

Superintendent of the State Police to promulgate additional regulations:

             The Superintendent of the State Police shall adopt,
             within six months of the effective date of this
             amendatory and supplementary act and pursuant to the
             "Administrative Procedure Act," P.L. 1968, c. 410 (C.
             52:14B-1 to -31), rules and regulations concerning the
             qualifications of interstate motor carrier operators and
             vehicles, which shall substantially conform to the
             requirements established pursuant to sections 401 to
             404 of the "Surface Transportation Assistance Act of
             1982," Pub.L.97-424 [49 U.S.C. §§ 31101-31104].5

             [N.J.S.A. 39:5B-32(a) (emphasis added).]

       These sections of the Surface Transportation Assistance Act of 1982

establish a federally funded Motor Carrier Safety Assistance Program for the

5
    Formerly found at 49 U.S.C. App. § 2301-2304.

                                                                        A-4397-18T2
                                       16
purpose of improving "motor carrier, commercial motor vehicle, and driver

safety to support a safe and efficient surface transportation system," which

would be implemented by states. 49 U.S.C. § 31102(b). 49 U.S.C. § 31101(1) 6

defines a commercial motor vehicle as

              a self-propelled or towed vehicle used on the
              highways in commerce principally to transport
              passengers or cargo, if the vehicle—

              (A) has a gross vehicle weight rating or gross vehicle
              weight of at least 10,001 pounds, whichever is greater;

              (B) is designed to transport more than 10 passengers
              including the driver; or

              (C) is used in transporting material found by the
              Secretary of Transportation to be hazardous under
              section 5103 of this title and transported in a quantity
              requiring placarding under regulations prescribed by
              the Secretary under section 5103.

              [(Emphasis added).]

Further, a motor carrier is defined as "a person providing motor vehicle

transportation for compensation." 49 U.S.C. § 13102(14).

       To ensure federal funding under this program, states are required to

create a plan, which, among many other requirements, requires the state to

"cooperate in the enforcement of financial responsibility requirements under

sections 13906, 31138, and 31139 and regulations issued under those

6
    See also 49 C.F.R. § 390.5.

                                                                         A-4397-18T2
                                        17
sections."    49 U.S.C. § 31102(c)(2)(Q).           Additionally, 49 U.S.C. §

31102(c)(2)(Y)(i) provides: "the State will conduct safety audits of interstate

and, at the State's discretion, intrastate new entrant motor carriers under

section 31144(g)[.]" (Emphasis added).         Further, 49 U.S.C. § 31102(e)

provides:

             The Secretary shall prescribe regulations specifying
             tolerance guidelines and standards for ensuring
             compatibility of intrastate commercial motor vehicle
             safety laws, including regulations, with [f]ederal
             motor carrier safety regulations to be enforced under
             subsections (b) and (c). To the extent practicable, the
             guidelines and standards shall allow for maximum
             flexibility while ensuring a degree of uniformity that
             will not diminish motor vehicle safety.

      As a prerequisite to adopting the federal scheme, New Jersey had to

comply with the Motor Carrier Safety Assistance Program. The Legislature

provided:

             b. The superintendent, in consultation with the New
             Jersey Motor Vehicle Commission and with the
             Department of Transportation, shall revise and
             readopt, within six months of the effective date of P.L.
             1991, c. 491, the rules and regulations adopted
             pursuant to subsection a. of this section to provide that
             the regulations:

             (1) Substantially conform to the requirements
             concerning the qualifications of interstate motor
             carrier operators and vehicles established pursuant to
             sections 401 to 404 of the "Surface Transportation
             Assistance Act of 1982," Pub.L. 97-424 [49 U.S.C. §
             31101-31104] and the federal "Motor Carrier Safety

                                                                         A-4397-18T2
                                        18
             Act of 1984," Pub.L. 98-554 [49 U.S.C. § 31131-
             31151];7 and

             (2) Include provisions with regard to motor carrier
             operators and vehicles engaged in intrastate commerce
             or used wholly within a municipality or a
             municipality's commercial zone, except for farm
             vehicles weighing 26,000 pounds or less that are
             operated exclusively in intrastate commerce and are
             registered pursuant to [N.J.S.A.] 39:3-24 and
             [N.J.S.A.] 39:3-25, that are compatible with federal
             rules and regulations.

             Notwithstanding subsection c. of this section, the
             hours of service variances as adopted in 49 CFR §
             350.341(e), as amended and supplemented, are hereby
             adopted effective immediately for commercial motor
             vehicles weighing 26,001 pounds or more operating in
             intrastate commerce provided that these vehicles are
             not designed to transport 16 or more passengers,
             including the driver, or used in the transportation of
             hazardous materials and required to be placarded in
             accordance with 49 CFR § 172.500-172.521 or display
             a hazardous materials placard. The superintendent
             shall adopt rules and regulations that conform to the
             requirements established in 49 CFR § 350.341(e) as
             amended and supplemented.

             [N.J.S.A. 39:5B-32(b)(1) to       -32(b)(2) (emphasis
             added).]

       Against this backdrop, our Legislature clarified:

             Notwithstanding any provision of law or regulation to
             the contrary, no person shall operate a commercial
             motor vehicle, as defined in rules adopted pursuant to
             this section, in this State unless the operation of the

7
    Formerly found at 49 U.S.C. § 2501 to 2519.

                                                                       A-4397-18T2
                                       19
             commercial motor vehicle is in accordance with the
             rules adopted by the Superintendent of State Police
             pursuant to this section.

             [N.J.S.A. 39:5B-32(c) (emphasis added).]

      Our Legislature clarified that "[t]he superintendent shall enforce

financial responsibility requirements under 49 U.S.C. 13906 and 31139, and 49

CFR Part 387." 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." Further, 49 CFR § 387.9 provides:

     Type of carriage               Commodity                 January 1, 1985
                                    transported
     (1) For-hire (In interstate or Property                 $ 750,000
     foreign commerce, with a
     gross vehicle weight rating (nonhazardous)
     of 10,001 or more pounds)

      Under N.J.S.A. 39:5B-32, our Legislature authorized the Superintendent

of the State Police to promulgate corresponding rules and regulations in the

Administrative Code, N.J.A.C. 13:60 to 13:60-2.1.               N.J.A.C. 13:60-1.1

explains the purpose for this section of the Administrative Code:

                                                                             A-4397-18T2
                                         20
            This chapter establishes rules and regulations
            concerning the qualifications of motor carrier
            operators and vehicles engaged in interstate or
            intrastate commerce or used or operated wholly within
            a municipality or a municipality's commercial zone,
            which substantially conform to the requirements
            established pursuant to sections 401 to 404 of the
            "Surface Transportation Assistance Act of 1982," Pub.
            L. 97-424 (49 U.S.C. §§ 31101-31104) and the
            Federal "Motor Carrier Safety Act," Pub. L. 98-554
            (49 U.S.C. §§ 31131-31151), by adopting and
            incorporating by reference: the "Federal Motor Carrier
            Safety Regulations," and all supplements and
            amendments thereto; and Appendices to the "Federal
            Motor Carrier Safety Regulations," and all
            supplements and amendments thereto.

            [(Emphasis added).]

N.J.A.C. 13:60-1.2 explains the application of this chapter of the Code:

            (a) The provisions of this chapter are applicable to
            every motor carrier and every person, including
            drivers, agents, employees, and representatives,
            involved or in any manner related to:

            1. The transportation in a commercial motor vehicle of
            any cargo in interstate or intrastate commerce;

            2. The operation of a commercial motor vehicle, with
            or without a cargo, in interstate or intrastate commerce
            or wholly within a municipality or a municipality's
            commercial zone;

            3. The transportation in any motor vehicle in intrastate
            commerce of materials determined by the Secretary of
            the United States Department of Transportation to be
            hazardous for the purposes of the Hazardous Materials
            Transportation Act (49 U.S.C. §§ 5101-5128) and
            which materials are transported in a quantity requiring

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      hazardous material(s) placarding under Federal
      Hazardous Materials Regulations (49 C.F.R. Parts
      171, 172, 173, 174, 177, 178, 179, and 180) and all
      supplements and amendments thereto;

      4. The operation of a commercial motor vehicle, with
      or without a cargo, displaying hazardous material(s)
      placarding in intrastate commerce or wholly within a
      municipality or a municipality's commercial zone;

      5. The transportation in a commercial motor vehicle,
      as defined at 49 CFR 390.5, to the extent and not
      inconsistent with this chapter and N.J.A.C. 13:60-
      2.1(d), in intrastate commerce of any non-hazardous
      material(s) cargo; and

      6. The operation of a commercial motor vehicle, as
      defined at 49 CFR 390.5, and subject to any prevailing
      requirements of (a)3 above, in intrastate commerce or
      wholly within a municipality or a municipality's
      commercial zone.

      [(Emphasis added).]

Further, N.J.A.C. 13:60-1.3 provides:

      (c) This chapter establishes minimum standards of
      compliance concerning the qualifications of motor
      carrier operators and vehicles, operating in this State
      in interstate or intrastate commerce or used or
      operated wholly within a municipality or a
      municipality's commercial zone. Therefore, in the
      event of a conflict between this chapter and any other
      State regulation, except as otherwise provided by
      statute or law, the stricter, more stringent standard
      shall apply and govern.

      (d) Whenever the term "interstate" is used in the
      Federal Motor Carrier Safety Regulations, adopted
      and incorporated, by reference, herein, and all

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                                22
     supplements and amendments thereto, it shall, for the
     purpose of this chapter, mean or include both
     "interstate" and "intrastate" transportation in
     commerce and those vehicles used or operated wholly
     within a municipality or a municipality's commercial
     zone except where stated otherwise.

           ....

     (g) The provisions and requirements of these
     regulations as well as the Federal Motor Carrier Safety
     Regulations adopted and incorporated, by reference,
     herein, and all supplements and amendments thereto,
     and made a part hereof as if set forth in full, are
     applicable to all motor vehicles, as defined in this
     chapter, engaged in transportation in interstate and
     intrastate commerce or operating in interstate and
     intrastate commerce or used or operated wholly within
     a municipality or a municipality's commercial zone, as
     well as all motor vehicles engaged in transportation of
     hazardous material(s) in a quantity requiring
     hazardous material(s) placarding or displaying
     hazardous material(s) placarding unless specifically
     stated otherwise.

     [(Emphasis added).]

Importantly, N.J.A.C. 13:60-2.1(b) provides:

     The Parts and Appendices of the Federal Motor
     Carrier Safety Regulations and all supplements and
     amendments thereto, adopted as final rule action by
     the Federal Administration, United States Department
     of Transportation, and adopted and incorporated, by
     reference, herein, by the Superintendent, are
     summarized below. Within that list some sections,
     subparts, or parts may have been modified, revised,
     amended, made subject to a different effective date,
     and/or intentionally omitted by the Superintendent.

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                               23
            Those sections, subparts, or parts are clearly identified
            in (d) below.

                  ....

            10. Part 387, Minimum Levels              of   Financial
            Responsibility for Motor Carriers.

      Thereafter, N.J.A.C. 13:60-2.1(d) provides:

            (d) As stated in (a) and (b) above, this chapter
            generally incorporates 49 CFR Parts 40, 325, 350,
            355, 380, 382, 383, 384, 385, 387, 388, and 390
            through 398, inclusive, by reference. The following
            modifications, additions, and deletions apply to those
            parts:

            1. The definition of "commercial motor vehicle" in 49
            CFR 390.5 (relating to definitions) is modified to read
            as follows:

            "Commercial motor vehicle" means any self-propelled
            or towed motor vehicle used on a highway in intrastate
            commerce to transport passengers or property when
            the vehicle:

            i. Has a gross vehicle weight rating or gross
            combination weight rating, or a registered weight of
            4,536 kg (10,001 pounds) or more, whichever is
            greater;
                  ....

      Here, the express language of N.J.S.A. 13:5B-32 and N.J.A.C. 13:60 to

13:60-2.1 clearly establishes a separate statutory scheme for commercial motor

vehicles having a registered weight of 10,001 pounds or more, like the NAB

dump truck involved in the subject accident.         Moreover, by adopting a

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statutory scheme that mirrors the Federal Motor Carrier Safety Act, our

Legislature clearly intended to enroll into the Motor Carrier Safety Assistance

Program, which provides funding for improving "motor carrier, commercial

motor vehicle, and driver safety to support a safe and efficient surface

transportation system."    N.J.S.A. 39:5B-32(a); 49 U.S.C. § 3112(b).         The

Legislature intended that these statutes and regulations apply to both intrastate

and interstate commerce.

      Importantly, N.J.A.C. 13:60-1.3(d) provides "[w]henever the term

"interstate" is used in the Federal Motor Carrier Safety Regulations, adopted

and incorporated, by reference, herein, and all supplements and amendments

thereto, it shall, for the purpose of this chapter, mean or include both

"interstate" and "intrastate" transportation in commerce[.]" (Emphasis added).

N.J.A.C. 13:60-1.3(g) also provides "[t]he provisions and requirements of

these regulations as well as the Federal Motor Carrier Safety Regulations . . .

are applicable to all motor vehicles . . . engaged in transportation in interstate

and intrastate commerce or operating in interstate and intrastate commerce [.]"

(Emphasis added). Additionally, N.J.A.C. 13:60-1.2(a)(1) provides "[t]he

provisions of this chapter are applicable to every motor carrier . . . , involved

or in any manner related to . . . [t]he transportation in a commercial motor

vehicle of any cargo in interstate or intrastate commerce[.]" (Emphasis added).

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       Here, the NAB dump truck operated by Taylor-Esquivel fits squarely

within the definition of a commercial motor vehicle because at the very least,

the dump truck was engaged in intrastate commerce. And, the NAB dump

truck satisfies the specifications of a commercial motor vehicle as defined by

the applicable statutes and regulations. See 49 U.S.C. § 31101(1); 49 C.F.R. §

390.50;   N.J.A.C. 13:60-2.1(d)       (defining   commercial     motor vehicles).

Moreover, the fact that Taylor-Esquivel was not listed as a covered driver on

NAB's policy is irrelevant because that would distort and ignore the impact of

the statutes and regulations adopted to insure safety for drivers on public

roadways and would be in conflict with the bedrock principles enacted by the

ICC.    Here, the accident occurred while Esquivel-Taylor was engaged in

NAB's business of trucking and hauling dirt, with permission of the owner.

Esquivel-Taylor was acting within the scope of his employment, and there is

no basis to relieve the insurer of its contractual obligation to its insured.

       We recognize that the intent of the statutes and regulations enacted by

Congress was to protect drivers and shippers traveling public highways and to

guarantee compensation to accident victims injured by vehicles transporting

cargo and individuals in interstate commerce. Our Legislature reacted with an

express intent on the subject by adopting the federally mandated minimum of

$750,000 in insurance coverage for commercial motor vehicles. See N.J.S.A.

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39:5B-32(e); N.J.A.C. 13:60-2.1(b); 49 U.S.C. § 31102(c)(2)(Q); 49 U.S.C. §

31139(b); and 49 CFR § 387.9. Saliently, our Legislature expanded upon the

federal mandate by expanding the law to cover all motor vehicles engaged in

interstate and intrastate commerce transporting cargo. Therefore, we conclude

that NAB was engaged in interstate or intrastate commerce, as defined in

N.J.S.A. 39:5B-32 and N.J.A.C. 13:60-2.1, and AMIC must provide the

minimum insurance coverage of $750,000. The step-down provision is not

triggered.

      Reversed and remanded.

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