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Parrette v. Citizens Casualty Co.

Decided: October 20, 1949.

ANTHONY PARRETTE, PLAINTIFF-RESPONDENT,
v.
CITIZENS CASUALTY COMPANY OF NEW YORK, A CORPORATION, DEFENDANT-APPELLANT



McGeehan, Colie and Eastwood. The opinion of the court was delivered by McGeehan, S.j.a.d.

Mcgeehan

[5 NJSuper Page 259] The defendant appeals from a judgment of $5,254.10 in favor of the plaintiff, entered in the Superior Court, Law Division, Union County. Plaintiff sued defendant on its automobile liability policy to recover moneys paid by the plaintiff to satisfy a judgment obtained against him by one Brokes, and for moneys paid by the plaintiff to counsel to defend him in the Brokes suit. Two questions are raised: (1) the validity of the loan receipt involved, and (2) the admissibility of a certain financial statement.

In the early part of 1938 plaintiff, Parrette, owned three Packard cars (hereinafter referred to as cars A, B and C) which he used in his taxicab business, and one Packard car (hereinafter referred to as car D) which he used in his livery business. Pursuant to the compulsory insurance requirements concerning taxicabs (R.S. 48:16-1 et seq.), he had insured cars A, B and C with the Eureka Casualty Company. Pursuant to the compulsory insurance requirements concerning cars used in the livery business (R.S. 48:16-13 et seq.), he had insured car D with the Phoenix Indemnity Company for a one-year period beginning March 24, 1938, under a policy in which the use was stated "Funerals, weddings and occasional long trips." Later, he sold car A and substituted car D in lieu thereof for use in his taxicab business. This substitution was properly endorsed on the Eureka policy covering the cars used as taxis, but the Phoenix policy covering car D in the livery business was not cancelled. When the Eureka Casualty Company announced its termination of the taxicab insurance business, Parrette sought insurance from the Citizens Casualty Company to replace the Eureka policy. The Citizens issued its "Taxicab and Public Livery" policy to Parrette for a one-year term beginning June 1, 1938, covering three Packard taxicabs, but in copying the serial and motor numbers from the Eureka policy, the endorsement substituting car D for car A was overlooked and the policy as written covered cars A, B and C. The Citizens policy and the Phoenix policy each had a $5,000 maximum liability coverage for personal injuries, and each had a provision further limiting the coverage, which reads:

"OTHER INSURANCE. If the named insured has other insurance against a loss covered by this policy, the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability expressed in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss."

The premium for the personal injury liability coverage charged by both Eureka and Citizens was $120 per car covered

as a taxi, while the premium charged by Phoenix was $50 on the car covered for use in the livery business.

On June 7, 1938, one Brokes suffered bodily injury caused by automobile D while being used as a taxi. Parrette promptly notified Citizens of the accident, and when Brokes started suit Parrette forwarded the summons and complaint to Citizens, requesting it to assume liability and defend the action in accordance with the terms of its policy. Citizens refused to assume liability or to defend the action, and returned the summons and complaint to Parrette, contending that its policy did not insure Parrette for liability arising out of the accident.

After the Citizens returned the suit papers to Parrette, he communicated with the Phoenix Indemnity Company, which likewise denied coverage and refused to defend. Parrette then made an arrangement with a Mr. Dawson, a New Jersey attorney, who also was an attorney for the Phoenix Indemnity Company, under which Dawson defended Parrette in the Brokes action and also represented him in a policy reformation suit against Citizens. On July 21, 1938, Parrette's suit against Citizens for reformation of the policy was instituted. In Brokes' suit against Parrette, judgment was entered on June 29, 1939, in favor of Brokes, for $5,500 and $118.86 costs of suit. Although Phoenix had originally denied coverage, there was admitted in evidence a letter dated March 21, 1939, addressed to Parrette, from a Thomas F. O'Boyle, associated with the Phoenix Indemnity Company, as follows:

"Re: AL150728 -- Alador Brokes vs. Anthony Parrette

"In the beginning of this case we took a stipulation of non waiver on the coverage question. After the examination of all the facts that have been presented to us up to the present time, we feel that you have coverage under our policy, and we are therefore withdrawing the stipulation and defending the matter as covered and as if no stipulation had been taken."

The Brokes judgment was paid on November 28, 1939, by a check of Phoenix made payable to Brokes and his attorney, and warrant for ...


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