Opinion
11-P-1446
05-01-2012
TEC-CAST, INC. v. THE FIRST LIBERTY INSURANCE CORPORATION.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Plaintiff Tec-Cast, Inc. (Tec-Cast), a New Jersey corporation, appeals the grant of summary judgment on its claim of breach of contract against defendant The First Liberty Insurance Company (First Liberty). The contract at issue is an insurance policy which covers, inter alia, unfired pressure vessels and boilers owned and operated by Tec-Cast at its facilities in New Jersey. The contract requires First Liberty, a Massachusetts corporation, as the insurer, to perform 'jurisdictional inspections,' e.g., those required by State or municipal boiler and pressure vessel regulations, on 'covered equipment.' The main dispute in this case is whether New Jersey law required inspection of unfired pressure vessels prior to January 15, 2008, the date on which one of Tec-Cast's unfired pressure vessels exploded.
Discussion. 1. Standard of Review. 'The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law.' Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991). 2. Jurisdictional inspection of unfired pressure vessels. Under the New Jersey boiler code, whether inspection of pressure vessels other than boilers is required is left up to the relevant commissioner to decide via regulations. N.J.S.A. § 34:7-14. Tec-Cast contends that the commissioner did just that by promulgating N.J.A.C. § 12:90-5.2 prior to the date on which Tec-Cast's pressure vessel exploded. Under that section, '[u]nfired pressure vessels shall be constructed, maintained and inspected in accordance with the standards referenced in (b) and (c) below.' N.J.A.C. § 12:90-5.2(a). Section (c) indicates that the National Board Inspection Code (the NBIC) and API-510 were adopted as safety standards under the subchapter pertaining to unfired pressure vessels. N.J.A.C. § 12:90- 5.2(c). Tec-Cast contends that the requirement that unfired pressure vessels be 'inspected in accordance with the standards' contained in the NBIC requires such vessels to be inspected at periodic intervals contained in the NBIC. First Liberty posits that N.J.A.C. § 12:90-5.2 merely mandates that, when such inspections are required by other provisions of the statute, they comply with the standards of inspection contained in the NBIC.
Section (b) makes certain sections of the ASME Boiler and Pressure Vessel Code (ASME Code) applicable. N.J.A.C. § 12:90-5.2(b). Tec-Cast has not included any portion of the ASME Code in the appellate record. We cannot take judicial notice of such provisions of the ASME Code as were incorporated into the regulations of New Jersey. See Mass. G. Evid. § 202(c) (2012), and cases cited (forbidding courts from taking judicial notice of regulations not published in the Code of Massachusetts Regulations). As a result, Tec-Cast's argument based on this section is without a basis in the record.
The text of N.J.A.C. § 12:90-5.2 does not definitively require either party's reading. However, two additional considerations eliminate any ambiguity in § 12:90-5.2. First, at the time of the explosion, N.J.A.C. § 12:90-5.14(a) required all unfired pressure vessels under the supervision of registered owner-user inspection agencies to be 'inspected at intervals required by the National Board Inspection Code or API-510, as applicable.' Ibid. This requirement would be entirely superfluous if, as Tec-Cast contends, N.J.A.C. § 12:90-5.2 already required all unfired pressure vessels to be inspected at such times as are required by the National Board Inspection Code, regardless of the identity of the owner. 'Courts should avoid a 'construction that will render any part of a statute inoperative, superfluous, or meaningless." State v. Sisler, 177 N.J. 199, 213-214 (2003), quoting from Strasenburgh v. Straubmuller, 146 N.J. 527, 539 (1996). See also Advanced Dev. Concepts, Inc. v. Blackstone, 33 Mass. App. Ct. 228, 233 (1992) (applying same concept to regulations).
It is undisputed that Tec-cast was not an owner-user inspection agency at any point prior to the explosion.
Second, in October, 2008, after Tec-Cast's unfired pressure vessel had already exploded, N.J.A.C. § 12:90-5.14 was amended to require initial and periodic inspection of all pressure vessels. In particular, it required that an initial inspection of all existing pressure vessels take place on October 6, 2011. N.J.A.C. § 12:90-5.14(b). The adoption of this regulation, with its requirement of a future, 'initial' inspection of existing pressure vessels, is strong evidence that such inspections were not required prior to the adoption of the regulation. See, e.g., TAC Assocs. v. New Jersey Dept. of Envtl. Protection, 202 N.J. 533, 542 (2010) (noting that 'amendments carry 'great weight' in determining the intention of the original statute'). This conclusion is buttressed by a statement in the regulatory history of the amendment that 'there have prior to now been no rules promulgated which explicitly require the field inspection of other pressure vessels.' Taken together, these two factors conclusively indicate that N.J.A.C. § 12:90-5.2 did not require inspections of the Tec-Cast's unfired pressure vessel prior to the explosion. As a result, First Liberty was not contractually required to do so.
Tec-Cast raises an argument based on the citations to N.J.S.A. § 34:7- 14 and N.J.A.C. § 5.2 in the penalty assessment worksheet prepared by the relevant administrative agency to levy fines on Tec-Cast in the aftermath of the explosion. Even given a reading charitable to Tec-Cast, those citations are ambiguous and do not warrant a conclusion that N.J.A.C. § 12:90-5.2 required inspections of Tec-Cast's unfired pressure vessel prior to the January 15, 2008, explosion.
3. Jurisdictional inspection of boilers. Tec-Cast additionally contends that First Liberty was required to inspect a boiler contained on Tec-Cast's property pursuant to N.J.S.A. § 34:7-14(a), did not do so prior to the explosion, and would have noticed the fractures in the unfired pressure vessel had it done so. Tec-Cast bases this final point entirely on statements by James Stiefel, one of the inspectors employed by First Liberty's reinsurer. Stiefel stated that there was a 'possibility' that he 'may have' seen unfired pressure vessels during visits to insured locations but that this was 'not a routine practice.' Without evidence beyond Stiefel's statements, the proposition that an inspector looking at the Tec-Cast's boiler would have noticed the defects in the unfired pressure vessel is completely speculative. Thus, Tec-Cast's argument on this point does not create a genuine issue of
Because we resolve this issue on other grounds, we assume, without deciding, that such an inspection was required.
material fact sufficient for its claim to withstand summary judgment. Information submitted in support of, or opposition to, a motion for summary judgment must have the quality of admissible evidence. See Mass.R.Civ.P. 56(e), 365 Mass. 824 (1974); e.g., Billings v. GTFM, LLC, 449 Mass. 281, 295 (2007); Key Capital Corp. v. M & S Liquidating Corp., 27 Mass. App. Ct. 721, 727-728 (1989).
Judgment affirmed.
By the Court (Katzmann, Sikora & Agnes JJ.),