Court Grants Summary Judgment in Favor of Insurer in Declaratory Judgment Action with Regard to Claim for Defense and Indemnity by Another Party as Covered Vehicle was Under Lease Not Related to Named Insured’s Business

In this Declaratory Judgment Action, a New Jersey Federal District Court Judge granted relief to an Insurer against a party not named as an insured under the policy who was seeking coverage for claims being pursued against them by a driver and passengers of a motor vehicle involved in a collision with a vehicle owned by the Named Insured, but while under lease and not on the Named Insured’s business. Although procedurally the matter was ruled upon pursuant to a Motion for Default Judgment, the Court found the party seeking coverage had no meritorious defense to the claim for declaratory judgment, as they were not a named insured under the policy. The Court also found that, at the time of the underlying accident, the vehicle at issue was being used under a lease agreement for a business not related to the named insured and, thus, excluded for coverage under the terms of the Policy.