Court Opinion

ID: 4218570
Source: CourtListenerOpinion
Date Created: 2017-11-08 15:12:02.649545+00
Date Added: 2024-06-11T14:41:45.576062
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-3151-15T4

PETER FONTANA AND KATHY
FONTANA,

        Plaintiffs-Respondents,

v.

EXECUTIVE CARS, NEW YORK BLACK
CAR.COM, ROYAL DISPATCH SERVICES,
INC., KING LEE CHEUNG and TWIN LIGHTS
INSURANCE COMPANY,

        Defendants,

and

GLOBAL LIBERTY INSURANCE COMPANY
OF NEW YORK,

     Defendant-Appellant.
____________________________________

              Argued September 11, 2017 – Decided November 8, 2017

              Before Judges Messano, Accurso and Vernoia.

              On appeal from the Superior Court of New
              Jersey, Law Division, Essex County, Docket No.
              L-1359-11.

              Vincent F. Gerbino argued the cause for
              appellant (Bruno, Gerbino & Soriano, LLP,
              attorneys; Michael R. Tucker, Jr., on the
              briefs).
              Robert A. Jones       argued        the    cause   for
              respondents.

PER CURIAM

     In this insurance coverage dispute, defendant Global Liberty

Insurance Company of New York appeals from orders declaring that

defendant King Lee Cheung and his automobile had coverage under

an   automobile    liability     insurance       policy     Global   issued       to

defendant Royal Dispatch Services, Inc.1                Based on our review of

the record, we affirm the court's order finding Cheung's vehicle

was a covered auto under the policy.                Because we conclude the

clear and unambiguous terms of the policy do not support a finding

that Cheung was an insured, we reverse the court's order requiring

that Global defend and indemnify Cheung, and remand for further

proceedings.

                                     I.

     Royal operates in the transportation industry as a franchisor

that provides dispatching services to its franchisees.                    Pursuant

to its franchise agreements, Royal dispatches the franchisees in

their   own    vehicles   to   provide       limousine   services    to   Royal's

customers.     Cheung was a franchisee of Royal.

1
  Royal is also referred to as Executive Cars, New York Black
Car.com, Last Radio Group Corp. and Velocity Limo Inc. We refer
to the entities collectively as Royal.

                                         2                                 A-3151-15T4
     In 2010, Royal dispatched Cheung to transport plaintiff Peter

Fontana, an employee of one of Royal's customers, from New York

City to a location in New Jersey.         During the trip, the vehicle

was involved in a single-vehicle accident in which Fontana suffered

significant injuries.

     Fontana and his wife filed a complaint against Cheung and

Royal alleging that Cheung, individually and in his capacity "as

the agent, servant, employee of" Royal, negligently caused the

accident and Fontana's injuries.        An amended complaint also sought

a   declaratory   judgment   that        plaintiffs    were   third-party

beneficiaries of the Global insurance policy and entitled to

coverage because Cheung's vehicle was listed as a "covered auto[]"

under the policy."

     The court conducted a bench trial on plaintiffs' request for

a declaratory judgment that Cheung and his vehicle had liability

coverage under the Global insurance policy.           The evidence showed

that at the time of the accident, Cheung had a franchise agreement

with Royal pursuant to which Royal dispatched Cheung to provide

limousine services to Royal's customers.          The agreement states

that Cheung is "an independent businessman, and shall not be deemed

to be an employee or agent of" Royal.           In accordance with the

                                    3                             A-3151-15T4
agreement's       requirements,        Cheung          maintained       an     automobile

liability insurance policy with a bodily injury limit of $100,000. 2

     Royal separately maintained the Global automobile liability

insurance policy at issue here.                 The policy provides coverage for

Royal's    use    or    operation     of    "non-owned          automobiles,"       with    a

coverage     limit      of   $1,000,000          and     a    $100,000       self-insured

retention.       The declarations section of the policy is entitled,

"Business Auto Declarations," and states in large, bold print that

the policy is for "NON-OWNED AUTO ONLY," and describes the policy's

coverage    through      references        to    other       portions   of    the    policy

entitled "items."         Item One states that the policy is issued to

Royal and lists Royal as the named insured.

     Item    Two       includes   a   schedule          of    coverages      and    covered

automobiles,      and    states     that        the    policy    provides      automobile

liability coverage for "symbols [7/9] from the [c]overed [a]utos

[s]ection of the Business Auto Coverage Form."                      The Business Auto

Coverage Form provides definitions for the "symbols 7 and 9."                            All

of the 234 automobiles owned by Royal's franchisees and used in

their provision of transportation to Royal's customers fall within

the definitions of covered autos under Business Auto Coverage Form

2
   Following the accident, Cheung's insurance company                                   paid
plaintiffs its $100,000 bodily injury coverage limit.

                                            4                                       A-3151-15T4
symbols 7 and 9.    The policy, however, does not list, mention or

identify any of the franchisees.

       "Symbol 7" includes automobiles, otherwise referred to as

"specifically    described   'autos,'"   which   are   "those   'autos'

described in Item Three of the [d]eclarations for which, a premium

charge is shown."    Item Three lists all of the vehicles used by

Royal's 234 franchisees and the premium charged by Global for each

vehicle.    Cheung's vehicle is listed as a covered automobile.3

       The Business Auto Coverage Form also defines "symbol 9"

automobiles, otherwise referred to as "[n]on[-]owned 'autos,'" as

"those 'autos' you [Royal,]4 do not own, lease, hire, rent or

borrow that are used in connection with your business." The policy

includes an "endorsement [which] modifies [the] insurance provided

under" symbol 9, and provides that coverage for damages that would

otherwise be payable will be reduced by a $100,000 self-insured

retention.

       During trial, the court heard testimony concerning Royal's

operations, its purchase of the policy and the policy's terms.

Royal's president Turgot Ozen testified that Royal has twenty-

seven employees, but they do not drive vehicles to perform their

3
    Cheung's vehicle is listed as vehicle "#109."
4
  The policy defines "the words 'you' and 'your'" as the "Named
Insured," i.e., Royal.

                                  5                             A-3151-15T4
job duties or provide transportation for Royal's customers.            The

employees perform only dispatch and other administrative services.

Royal's employees do not maintain or drive the vehicles used by

Royal's franchisees.

     Ozen completed the policy application and was required to

provide Global with "driver information" for all of Royal's 234

franchisees.   Ozen was not required to provide any information

about Royal's twenty-seven employees, and the employees' vehicles

are not listed in the policy. The annual premium for the policy

was in excess of $94,000.

     According to Ozen, Royal purchased the Global policy for non-

owned   vehicles   to   insure   the   company   if   "one   of     [its]

employees . . . got into an accident" while driving a non-owned

vehicle while performing Royal's business.        He also testified,

however, that Royal's employees do not drive any of the non-owned

vehicles covered autos listed in the policy.

     When asked if he purchased the policy to provide excess

coverage if one of the dispatched franchisees was involved in an

accident, Ozen responded, "I don't think that was the intent. I'm

not sure."   On cross-examination, however, Ozen acknowledged that

at his deposition he testified that he understood the policy

provided coverage "over and above the coverage that [a franchisee]

would have if he [or she] was involved in an accident," and that

                                  6                               A-3151-15T4
the policy covered the franchisee's vehicles if there was an

accident and the franchisee was found liable.

      Ozen acknowledged the policy included a $100,000 self-insured

retention, which was identical to the amount of insurance each

franchisee was required to maintain.              Royal did not have any

insurance coverage for the self-insured retention.

      Ozen also testified that upon request, Royal provided a

"certificate of insurance" to its customers showing Royal had a

$1,000,000     automobile    liability      policy.         Royal    provided      a

certificate     of    insurance    to   Fontana's     employer,       which     had

contracted with Royal for transportation services.

      Robert   King,    Global's    senior    vice    president,       testified

concerning the underwriting process for the policy.                 He considered

the driving credentials, records and primary insurance coverage

of the franchisees in assessing the policy's insurance coverage

risk.     Through that process, Global arrived at the insurance

premium it charged for each of the designated covered vehicles

listed in the policy. King acknowledged that Global did not review

the credentials, driver history or insurance of any of Royal's

twenty-seven employees.

      King explained that Royal is the only named insured under the

policy.     He testified the policy does not insure Cheung for his

own     negligence,    but   instead    insures     Royal     for    its    active

                                        7                                  A-3151-15T4
negligence.      King testified that, for example, the policy provided

coverage    if   Royal   dispatched     an   intoxicated       driver     that   was

involved in an accident.

      Plaintiffs presented Edward Ragan as an expert in commercial

liability insurance underwriting.            Ragan described the policy as

"a non-owned automobile policy that appears to have been . . .

scheduling individual automobiles with individual premium charges

for each vehicle under . . . standard [insurance services office

(ISO)]     commercial    automobile     forms."        He   found    it     "rather

unorthodox" that the policy listed individual vehicles "on the

dec[larations] page," which suggested "that the policy is limiting

the scope of its coverage to those designated vehicles for which

a specific premium charge is" made.

      Ragan explained the "standard ISO" coverage for symbols 7 and

9 as those terms were defined in the Business Auto Coverage Form

of   the   policy,   stating   that     symbol    7   "seems    to   be    somewhat

redundant    because     [symbol]   7   is   only     for   specific      described

autos . . . referencing the non-owned vehicles" and the vehicles

are also listed in Item Three of the declarations section.                         He

testified that based on his experience with standard ISO forms,

the "symbol 9" coverage is "consistently worded," in a manner

intended to cover vehicles that are used for business purposes.

                                        8                                   A-3151-15T4
     Ragan also addressed the $100,000 self-insured retention,

which was set forth in what he described as "a manuscripted

endorsement."    He   testified   that   the   self-insured   retention

"seem[s] to interface with" the requirement that the franchisees

maintain their own insurance policies with liability limits of

$100,000.5

     Ragan testified that based on his experience, a non-owned

automobile coverage insurance policy "follows the car," meaning

"if there is a loss while that vehicle is in operation and it's

covered under the commercial auto policy, the policy covers that

auto."   He opined that the policy offered "clear coverage" for

Cheung's vehicle because "[i]t was being used pursuant to Royal['s]

business."   He also testified that the premium charged for the

policy was consistent with the provision of $1,000,000 in excess

coverage for the listed vehicles because each of the vehicles had

primary insurance of at least $100,000.

     During trial, Cheung briefly testified about the franchise

agreement and the details of his insurance policy.      He also stated

that he understood Royal provided additional insurance coverage

in excess of his personal insurance policy.

5
  By its express terms, the endorsement providing the $100,000
self-insured retention applies only to covered autos under symbol
9.

                                  9                             A-3151-15T4
     The court issued a written opinion and found the policy

described in detail the "non-owned automobiles providing services

to [Royal's] customers."           The court stated that "[i]t is clear

that Royal is the insured," but relied on what it determined were

the reasonable expectations of the parties and concluded "there

is coverage for the accident by virtue of the business auto

declarations which include . . . Cheung and his vehicle."                        The

court did not find that Cheung was an insured under the policy,

and did not otherwise explain or identify the policy provision

pursuant to which it concluded Cheung had coverage.                   Instead, the

court   relied   solely     upon   what      it   found   were   the   reasonable

expectations     of   the   parties     for   its   determination       there    was

coverage for "Cheung and his vehicle."

     The court granted a declaratory judgment that the policy's

coverage "extends to Cheung's vehicle."                   The court entered an

order stating that the "$1,000,000[] . . . bodily injury liability

coverage   set    forth     in   [the   policy]     extends      to   and   covered

[Cheung's] vehicle . . . in excess of [Cheung's] $100,000[] . . .

liability limit," and that the coverage "shall be available . . .

in the event the [j]ury awards damages to [plaintiff] in excess

of $100,000[]." (emphasis added).

     Global's counsel sought clarification as to whether the trial

court's order was limited to a finding the policy provided only

                                        10                                  A-3151-15T4
coverage for Cheung's vehicle or if the court also found the policy

provided coverage for Cheung's negligence.            In response, the court

held a conference and explained that the insurance policy named

"every vehicle, the make and model of the vehicle's identification

number with an individual premium," and that those vehicles "can

be matched to the drivers whose licenses and other information

were   attached   to    the   application    for   coverage    and    used    for

underwriting purposes."

       The court found the policy provided coverage "to the vehicle

and the drivers," regardless of whether Cheung's status with Royal

was as "an employee or an independent contractor."                   Thus, the

court determined that the policy provided coverage to Cheung for

his own negligence, even if Royal was without any fault and

Cheung's negligence could be not otherwise be attributed to Royal.

In essence, the court found that Cheung was an insured under the

policy and thereby covered by its terms.              The court entered an

order stating the insurance extends to Cheung's vehicle in excess

of Cheung's $100,000 liability limit and "covers and requires

Global    to   defend   and   indemnify"     Cheung    for    his    negligence

regardless of his status with Royal.

       The parties subsequently reached a settlement agreement which

stipulated     that   plaintiff   suffered    damages    in   the    amount    of

$750,000, and provided that $100,000 would be paid from Cheung's

                                    11                                  A-3151-15T4
policy.    The balance is to be paid by Global subject to the outcome

of this appeal.    The court entered a final order memorializing the

parties' settlement.        This appeal followed.

                                      II.

     Our review of a trial court's findings following a bench

trial is limited.         We owe "deference to those findings of the

trial judge which are substantially influenced by [the judge's]

opportunity to hear and see the witnesses and to have the 'feel'

of the case, which a reviewing court cannot enjoy."                  State v.

Locurto, 157 N.J. 463, 471 (1999) (quoting State v. Johnson, 42

N.J. 146, 161 (1964)).       Thus, an appellate court will "not disturb

the factual findings and legal conclusions of the trial judge

unless [it is] convinced that they are so manifestly unsupported

by or inconsistent with the competent, relevant and reasonably

credible    evidence   as    to    offend   the   interests    of justice[.]"

Seidman    v.   Clifton     Sav.    Bank,   S.L.A.,   205     N.J.   150,   169

(2011) (quoting In re Trust Created by Agreement Dated December

20, 1961, ex rel. Johnson, 194 N.J. 276, 284 (2008)).

     However, "[t]he interpretation of an insurance contract is a

question of law for the [appellate] court to determine . . . ."

Adron, Inc. v. Home Ins. Co., 292 N.J. Super. 463, 473 (App. Div.

1996) (citing Weedo v. Stone-E-Brick, Inc., 155 N.J. Super. 474,

                                      12                               A-3151-15T4
479 (App. Div. 1977), rev'd on other grounds, 81 N.J. 233 (1979)).

The trial court's resolution of such purely legal questions is

entitled to no deference.   Arthur Anderson, LLP v. Fed. Ins. Co.,

416 N.J. Super 334, 345 (App. Div. 2010).

     Although Global appeals both of the court's orders, it does

not argue that the court erred in first finding that Cheung's

vehicle was a covered automobile under the policy.6       Instead,

Global argues only that the court erred by finding the policy

covers Cheung for his own negligence.       Global argues that the

plain and unambiguous language of the policy provides coverage

only for Royal's negligence and that the court therefore erred by

relying on the expectations of the parties to interpret the

policy's clear terms.   We agree.

     The interpretation of an insurance contract requires that we

first examine the plain language of the policy.      Oxford Realty

Grp. Cedar v. Travelers Excess & Surplus Lines Co., 229 N.J. 196,

207 (2017).   "[I]f the terms are clear, they 'are to be given

6
  In its reply brief, Global states that it "does not dispute that
. . . Cheung's vehicle is a 'covered auto'" under the policy. Our
independent review of the policy and the record confirms that the
234 vehicles are covered autos under symbol 7 because they are
listed in Item Three. We offer no opinion as to whether Cheung's
vehicle was a covered auto under symbol 9. The trial court did
not make that finding and resolution of the issue requires factual
determinations as to whether Cheung's vehicle was "lease[d],
hire[d], rent[ed] or borrow[ed]" by Royal when the accident
occurred, and whether Cheung was Royal's "employee[]" at the time.

                                13                         A-3151-15T4
their plain, ordinary meaning,'" Pizzulo v. N.J. Mfrs. Ins. Co.,

196 N.J. 251, 270 (2008) (citations omitted), and "that is the end

of the inquiry," Oxford Realty Grp. Cedar, supra, 229 N.J. at 207

(quoting Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195

N.J. 231, 238 (2008)).      "If the plain language of the policy is

unambiguous, we will 'not "engage in a strained construction to

support the imposition of liability" or write a better policy for

the insured than the one purchased.'"    Templo Fuente De Vida Corp.

v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 200

(2016) (quoting Chubb Custom Ins. Co., supra, 195 N.J. at 238);

accord Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001).

     Applying these principles, we begin our interpretation of the

Global policy, as we must, with the policy's language.    Cheung is

not a named insured under the policy.         To the contrary, the

policy's declarations section expressly states that Royal is the

named insured.   The declarations section also refers to covered

autos and includes the list of vehicles to which the coverage

under the policy applies.    It is devoid of any language suggesting

Royal's franchisees are insureds,7 and it makes no mention of

Cheung.

7
 The court's finding there was "coverage by virtue of the business
auto declarations which include . . . Cheung and his vehicle" is
contradicted by the policy's unambiguous language.             The

                                  14                         A-3151-15T4
      Section II of the Business Auto Coverage Form defines the

policy's automobile liability coverage.       There is nothing unclear

about its terms.      In pertinent part, it states that the policy

provides coverage for "all sums an 'insured' legally must pay as

damages because of 'bodily injury' or 'property' damage to which

[the] insurance applies, caused by an 'accident' and resulting

from the . . . use of a covered 'auto.'"         There is no ambiguity

in this provision, which grants coverage only to "insureds."

      The   policy   clearly   and   unequivocally   defines   the   term

"insured."   In the first instance, an insured is defined as "[y]ou

for any covered 'auto.'"       The term "you" refers solely to Royal.

Thus, Royal has automobile liability coverage as the insured for

sums it legally must pay for bodily injuries and property damage

caused by an accident resulting from the use of a covered auto.

Notably, Cheung is not an "insured" under the first definition,

and plaintiffs do not contend otherwise.

      The policy includes a second definition of an insured, but

Cheung does not meet the standard.        The policy defines an insured

as:

declarations section of the policy makes clear automobile
liability insurance is provided for covered autos. Contrary to
the court's finding, the declarations section does not "include,"
mention or list Cheung or any of the other franchisees.

                                     15                          A-3151-15T4
             b. Anyone else while using with [Royals']
             permission a covered 'auto' [Royal] own[s],
             hire[s] or borrow[s] except:

                  (1) The owner or anyone else from
                  whom you hire or borrow a covered
                  'auto[.]' . . .

                  (2) Your 'employee' if the covered
                  'auto' is owned by that 'employee'
                  or a member of his or her household.

                  (3) Someone using a covered 'auto'
                  while he or she is working in a
                  business of selling, servicing,
                  repairing,   parking  or   storing
                  'autos' unless that business is
                  yours.

                  . . . .

                  [(emphasis added).]

     Under this definition, "anyone" using a covered auto with

Royal's     permission   that   Royal    owns,   hires   or    borrows    is    an

insured.8    But there is an unambiguous exception:           when the "owner"

of a covered auto uses the vehicle, the owner is not an insured

under the policy and is thereby expressly excluded from coverage.

Cheung falls directly within this plainly worded exception to the

second definition of insured because he owned the covered auto he

8
  We need not address the other requirement necessary to qualify
as an insured under this provision; that the covered auto is
"own[ed], hire[d] or borrow[ed]" by Royal. We observe only that
if those requirements are not satisfied, "[a]nyone else while
using with [Royal's] permission a covered 'auto'" is not an
insured.

                                    16                                   A-3151-15T4
used to transport Fontana when the accident occurred.                Again,

plaintiffs do not argue otherwise.

     Based on our review of the policy's plain language, we are

satisfied   Cheung   was   not   an    insured   entitled   to   automobile

liability coverage.    As the owner of the vehicle he was driving

when the accident occurred, he was expressly excluded from the

policy's definition of insured and therefore not entitled to

coverage.

     We are mindful that insurance policies have been recognized

as "contracts of adhesion and, as such, are subject to special

rules of interpretation."        Progressive Cas. Ins. Co. v. Hurley,

166 N.J. 260, 272 (2001).        We will construe policies "liberally

in [the insured's] favor to the end that coverage is afforded 'to

the full extent that any fair interpretation will allow.'"               Id.

at 273 (quoting Kievit v. Loyal Protective Life Ins. Co., 34 N.J.

475, 482 (1961)).    However, having found the clear language of the

policy excludes Cheung as an insured, our inquiry concerning

coverage ends and we cannot rewrite the policy's terms or find

coverage where the policy plainly provides none. See Oxford Realty

Grp. Cedar, supra, 229 N.J. at 207; Progressive Cas. Ins. Co.,

supra, 166 N.J. at 273.

     The trial court did not address the policy's plain language.

Instead, the court relied upon the reasonable expectations of the

                                      17                            A-3151-15T4
parties as the basis for its determination Cheung was entitled to

coverage regardless of his status as "an employee or an independent

contractor."     A court may rely on the reasonable expectations of

the   parties    to   construe   a    contract       of   insurance    in   two

circumstances: "to reflect the reasonable expectations of the

insured in the face of ambiguous language and phrasing, and in

exceptional circumstances, when the literal meaning of the policy

is plain.'"     Abboud v. Nat'l Union Fire Ins. Co., 450 N.J. Super.

400, 408 (App. Div. 2017) (quoting Doto v. Russo, 140 N.J. 544,

556 (1995)).     Here, the court erred by relying on the reasonable

expectations     of   the   parties       because     neither   of    the   two

circumstances were present.

      First, as noted, the policy was not ambiguous.             "[T]he test

for determining if an ambiguity exists is whether 'the phrasing

of the policy is so confusing that the average policyholder cannot

make out the boundaries of coverage.'"         Nunn v. Franklin Mut. Ins.

Co., 274 N.J. Super. 543, 548 (App. Div. 1994) (quoting Weedo v.

Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979)); accord Templo Fuente

De Vida Corp., supra, 224 N.J. at 200.              "An 'insurance policy is

not ambiguous merely because two conflicting interpretations of

it are suggested by the litigants.'"           Oxford Realty Grp. Cedar,

supra, 229 N.J. at 207       (quoting Fed. Ins. Co. v. Campbell Soup

Co., 381 N.J. Super. 190, 195 (App. Div. 2005), certif. denied,

                                     18                                A-3151-15T4
186 N.J. 365 (2006)).         Nor does the separate presentation of an

insurance policy's declarations sheet, definition section, and

exclusion section necessarily give rise to an ambiguity.               Id. at

207-08.   Here, the plain language of the policy makes clear that

Cheung was not an insured, and the trial court did not find any

ambiguity concerning Cheung's status as an insured under the

policy.   Thus, there was no ambiguity in the policy permitting the

court's reliance on the reasonable expectations of the parties to

provide Cheung with coverage under the policy.            See Abboud, supra,

450 N.J. Super. at 408.

     Second,    there    is    no   evidence    supporting    a   finding    of

exceptional circumstances permitting coverage in contravention of

the policy's plain language, see id. at 408-09, and the court made

no findings of exceptional circumstances permitting its reliance

upon the reasonable expectations of the parties.              "[E]xceptional

circumstances are narrowly confined" and apply "to policy forms

that have characteristics of an adhesion contract."               Id. at 409.

A court "may vindicate the insured's reasonable expectations over

the policy's literal meaning 'if the text appears overly technical

or   contains   hidden    pitfalls,        cannot   be   understood   without

employing subtle or legalistic distinctions, is obscured by fine

print, or requires strenuous study to comprehend.'" Ibid. (quoting

Zacarias v. Allstate Ins. Co., 168 N.J. 590, 601 (2001)).

                                      19                              A-3151-15T4
      The "expectations of coverage must be real and "objectively

reasonable." Id. at 410.          In the assessment of the expectations,

"a   court   will    consider    communications        regarding   the    coverage

between the insured or its broker and the insurer or its agent

that relate to the insured's expectations," ibid., "whether the

scope of coverage is so narrow that it 'would largely nullify the

insurance' and defeat the purpose for which it was obtained,"

ibid. (internal citation omitted), and "whether policies with

'unrealistically       narrow    coverage'     cause    'broad   injury    to   the

public at large[,]' which may preclude enforcement on public policy

grounds," ibid. (quoting Sparks v. St. Paul Ins. Co., 100 N.J.

325, 340-41 (1985)).

      Again, the policy here defines insured in a simplistic and

straight-forward manner, clearly excludes from the definition of

insured the owners of vehicles leased, hired, rented or borrowed

by Royal, and does not include any language suggesting Cheung was

an insured. There is no evidence showing communications supporting

a reasonable expectation that Cheung was covered under the policy.

The court's finding that Royal had a reasonable expectation of

coverage     was    based   on   Ozen's    deposition    testimony   about      his

subjective belief the policy would cover Cheung's negligence.                   His

opinion concerning coverage is untethered to any communication

                                          20                               A-3151-15T4
with Global, policy language or other evidence supporting an

objectively reasonable expectation that Cheung was an insured.

       The court also relied on Ragan's testimony that the $100,000

self-retention endorsement was a "manuscript endorsement" that

addressed Royal's "special needs" to support its finding Royal

reasonably expected Cheung would be covered under the policy.

However, the endorsement does not expand the definition of insured

or the coverage provided under the policy.           The endorsement simply

provides a self-insured retention for covered autos under symbol

9.   There is nothing in the endorsement or Ragan's testimony about

it that supports an objectively reasonable expectation that Cheung

was an insured under the policy.

       The court also concluded Royal had a reasonable expectation

that   Cheung   was   covered   based    on   its   finding   that    the   only

reasonable interpretation of the policy was that it provided

contingent coverage "on driver owned vehicles" and Royal would not

have spent in excess of $94,000 unless coverage under the policy

extended to Cheung's vehicle.            It therefore appears the court

applied   the   principle   permitting        reliance   on   the    reasonable

expectations of the insured where the plain language would nullify

coverage or result in unrealistically narrow coverage that would

cause broad injury to the public.             See Abboud, supra, 450 N.J.

Super. at 410.

                                    21                                  A-3151-15T4
    We disagree with the court's application of the principle

because the court interpreted the policy too narrowly.              Coverage

under the policy is not limited to Royal's liability for its

employees' negligence while driving covered autos or to Royal's

negligence   in    dispatching    a   franchisee.       Although   there     was

testimony the policy provides that coverage, the court erred in

viewing   the     policy's    coverage     as   being   limited    to     those

circumstances.

    "Nonownership         motor       vehicle    coverage     insures          an

employer .   .     . against liability imputed to [it] by reason of

the negligence of employees and other persons using vehicles not

owned by the insured on the business of the insured. It affords

protection      against   liability      incurred   under    principles        of

respondeat superior."        Ins. Co. of N. Am. v. Gov't Employees Ins.

Co., 162 N.J. Super. 528, 535 (App. Div. 1978).                That is the

coverage Royal obtained here.           The policy provides coverage if

Royal is found vicariously liable for the negligence of anyone

driving any of the 234 covered autos listed in the policy in

furtherance of Royal's business.           As such, the plain language of

the policy does not nullify the coverage or result in narrow

coverage inconsistent with the protection of the public.                     See

Abboud, supra, 450 N.J. Super. at 410.              To the contrary, the

policy provides Royal, which dispatches 234 franchisee vehicles

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to provide services to its customers, with $1,000,000 in coverage

if Royal, as the insured, is held vicariously liable for damages

caused by a driver of a covered automobile.

     Because a plain reading of the policy does not result in a

nullification of the insurance coverage or so narrowly limits

coverage to cause broad injury to the public, see Abboud, supra,

450 N.J. Super. at 410, the court erred in ignoring the policy's

plain language in favor of what it determined were the reasonable

expectations of the parties, id. at 410-11.          Under the policy's

clear language, Cheung was not an insured and it was error to

conclude he had coverage "regardless of whether his status, at the

time he operated the operated the covered vehicle . . .           was an

employee of, or independent contractor of," Royal.

     Our determination that Cheung was not an insured under the

policy does not end the inquiry.       The policy may provide coverage

for Cheung's negligence, but not because he is an insured.             The

policy provides coverage if it is determined that Royal, as the

insured, is vicariously liable for Cheung's putative negligence

that resulted in plaintiffs' alleged injuries.

     Issues concerning the status of an individual as an employee,

independent   contractor   or   agent,   and   vicarious   liability   are

factually and legally complex.     See, e.g., Estate of Kotsovska v.

Liebman, 221 N.J. 568, 592-95 (2015) (explaining standards used

                                  23                             A-3151-15T4
to distinguish employees and independent contractors); Baboghlian

v. Swift Elec. Supply Co., 197 N.J. 509, 518 (2009) (explaining

principal's    vicarious     liability       for   actions   of    employees       and

independent contractors).        The complaint alleged Cheung was acting

as Royal's agent, servant or employee when the accident occurred.

It is unclear why Cheung's status, and Royal's potential vicarious

liability   for   Cheung's    alleged        negligence,     was   not   litigated

before the trial court.9       The trial instead focused solely on the

parties'    interpretations      of    the    policy   language.         As    noted,

however, under the unambiguous language of the policy, there is

coverage only if Royal is vicariously liable for Cheung's alleged

negligence.

      In any event, we affirm the court's order finding Cheung's

vehicle was a covered auto under the policy, reverse the court's

order finding Cheung was covered under the policy regardless of

his status as an employee or independent contractor, and remand

for further proceedings to determine if there is coverage under

the   policy   because   Royal    is    vicariously     liable     for    Cheung's

putative negligence.

9
 During the litigation, the court denied cross-motions for summary
judgment on the issue of Cheung's status as an independent
contractor or agent of Royal. The court found there were genuine
issues of material fact requiring resolution by a jury.

                                       24                                     A-3151-15T4
     We offer no opinion as to whether Royal is vicariously liable

for Cheung's negligence.          There is an insufficient evidentiary

record upon which that determination can be made.                 That issue

must, however, be resolved in the first instance because under the

clear language of the policy Cheung is not an insured.              If it is

determined     Royal   is   not     vicariously    liable   for     Cheung's

negligence,     plaintiff    may     renew   its    application      for     a

determination that there are exceptional circumstances permitting

the reasonable expectations of the parties to overcome the policy's

clear language.    See Abboud, supra, 450 N.J. Super. at 410.

     Affirmed in part, reversed in part, and remanded for further

proceedings.    We do not retain jurisdiction.

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