On appeal from Superior Court, Appellate Division, whose opinion is reported in 9 N.J. Super. 106.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling and Ackerson. For reversal -- None. The opinion of the court was delivered by Ackerson, J.
The Indemnity Insurance Company of North America (hereinafter referred to as the "company"), acting through its agent, Carl Bruck, doing business as the Bruck Agency, issued to Anthony Falzarano a comprehensive personal liability insurance policy with respect to a two-story private residence being constructed by Falzarano on his property in North Arlington. The policy provided that the insurer would assume all liability for personal injury and property damage caused by accident and arising out of the use or maintenance of the insured premises and would also pay all medical and other expenses incident to such injuries and losses, as well as defend the insured in "any suit against the insured alleging such injury, * * * and seeking damages on account thereof, even if such suit is groundless, false or fraudulent, * * *."
During the construction of the building, Carl Petersen, an independent contractor, engaged by Falzarano to scrape and polish the floors, sustained personal injuries when a temporary stairway on which he was descending collapsed. Falzarano notified the company of the accident but it disclaimed liability. Thereafter Petersen instituted suit against Falzarano in the Superior Court, Law Division, to recover damages for his injuries and losses, and the latter forwarded the summons and complaint to the company requesting that it defend him in the action as required by the policy. This the company declined to do, again disclaiming any liability on the ground that the construction of the house was not in the exclusive charge of an independent contractor within the provision of the policy making its coverage applicable only to a private residence "being erected * * * by [an] independent contractor * * *."
Consequently the defendant, Falzarano, moved for and obtained an order permitting him to serve a summons and complaint on the company and its agent as third-party defendants pursuant to Rule 3:14-1 on the ground therein specified that they are or "may be liable" to the third-party plaintiff for the claim asserted against him by Petersen. Accordingly this was done, service on the company being effected through the Commissioner of Banking and Insurance. In his third-party complaint Falzarano demanded that the liability of the insurer be declared and that the company and its agent be ordered to defend the action brought against him by Petersen and also to pay all expenses, costs and damages "which have been and may be incurred" by Falzarano in that action.
The company thereupon moved to dismiss the third-party complaint on the ground (the only one here pertinent) that under a so-called "no action" clause of the policy, suit against the company will not lie until there has been a judgment recovered against the insured by the injured party, and therefore the court lacked jurisdiction of the subject matter, since the condition precedent, giving rise to such a suit under this clause, had not arisen. This "no action" clause provides as follows:
"No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all of the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company. * * * Nothing contained in this policy shall give any person or organization any right to join the company as a co-defendant in any action against the insured to determine the insured's liability. * * *."
The trial judge denied the motion to dismiss the third-party complaint but also provided that there would be a severance of the main action and the third-party action for the purpose of trial and that the main action of Petersen against Falzarano would be tried first. From this order of the trial court denying its motion for a dismissal of the third-party
complaint the company appealed to the Appellate Division of the Superior Court and that court on August 14, 1950, dismissed the appeal on the ground that the order appealed from is interlocutory and not within the category of interlocutory orders appealable under Rule 4:2-2 as that rule then stood. (Rule amended in certain particulars December 7, 1950, after the foregoing appeal was decided.) Notwithstanding the unanimous decision of the Appellate Division, the company, without certification, has appealed to this court in reliance on Rule 1:2-1(a), which authorizes appeals to the Supreme Court as of right where constitutional questions are involved, claiming as its right to do so that the trial court, in denying the company's motion to dismiss the third-party action, disregarded the "no action" clause of the insurance contract thereby, in effect, impairing the company's contractual rights as guaranteed by the State and Federal Constitutions.
Our examination of the points argued on behalf of the company on this appeal, however, has led us to the conclusion that there are no real constitutional questions presented thereby and that the appeal is without merit as will presently appear.
In the first place the company contends that the Appellate Division erred in holding that the order of the trial court denying its motion to dismiss the third-party action is interlocutory. It is insisted that the order, in view of the "no action" clause in the policy, amounted to "a final judgment in respect to jurisdiction," thereby rendering it appealable as such to the Appellate Division under Rule 4:2-1 (applicable only to final judgments), and consequently the affirmance thereof by the Appellate Division is likewise a final judgment appealable to the Supreme Court under Rule ...