Eastwood, Jayne and Francis. The opinion of the court was delivered by Francis, J.A.D.
Appellants Julius J. Hommer and Katheryn Hommer, trading as Hommer Tool Manufacturing Co., sued respondent insurance carrier to recover counsel fees and costs incurred in defending a damage action brought against them, which action, they claimed, respondent was obligated to defend under certain policies of insurance. The trial court concluded that the action in question was not within the coverage extended by the policies and consequently the carrier had no such duty. Accordingly, an adverse summary judgment was entered.
The Hommers operated a factory at 45 McWhorter Street, Newark, N.J. In connection therewith, respondent insurance carrier issued two policies of insurance to them, one a combination standard workmen's compensation and employers liability insurance policy, and the other a public liability policy. In view of the disposition of the matter, as hereinafter set forth, it is not necessary to consider the public liability policy.
The combination insurance contract covered the Hommers' liability as employers to employees under the Workmen's Compensation Act, and also their common law liability on account of injuries to their employees. More specifically with respect to the latter undertaking, the carrier agreed "as respects personal injuries sustained by employees":
"One(b). To indemnify this employer against loss by reason of the liability imposed upon him by law for damages on account of such injuries to such of said employees as are legally employed * * *."
By indorsement it stipulated also:
"To indemnify this employer against loss by reason of the liability imposed upon him by law for damages on account of disease, including death at any time resulting therefrom, suffered by any of his employees * * *, whether regular or casual, arising out of a business operation of this employer covered by this policy * * *."
The company further agreed:
"Three. To defend, in the name and on behalf of this employer, any suits or other proceedings which may at any time be instituted against him on account of such injuries , including suits or other proceedings alleging such injuries and demanding damages or compensation therefor, although such suits, other proceedings, allegations or demands are wholly groundless , false or fraudulent."
Appellants had one Anna Danek in their employ in the business described in the policy; she was a machine operator. On October 27, 1947, she suffered a compensable accident when her right hand was caught in the machine on which she was working. The hand was amputated. Thereafter she filed a petition for compensation under the Workmen's Compensation Act and the respondent paid her claim.
Subsequently, on August 25, 1950, John Danek, the husband of Anna, instituted a common-law action against the Hommers. The complaint charged them with negligence in failing to furnish her with a reasonably safe place in which to work and in failing to have the machine on which she worked equipped with the necessary guards and protective devices, as the result of which she sustained the amputation of her hand. The husband then claimed, among other things, that because of his wife's injury, he had lost her society and services, and he sought damages therefor.
The suit papers were forwarded to the carrier which refused to defend. Appellants engaged personal counsel and, after obtaining leave of the court, filed a third-party complaint against respondent seeking a declaration of its duty to defend the negligence action and to pay the judgment, if Danek was successful.
Various motions and counter-motions were made and the parties agreed the Hommers' motion for summary judgment against Danek should be disposed of first, it being predicated on the ground that the sole remedy for Mrs. Danek's injuries was under the Workmen's Compensation Act and that this act had been substituted not only for any common law tort action which she might have had previous to its enactment,
but for the per quod claim of her husband as well. The motion was granted (Danek v. Hommer , 14 N.J. Super. 607 (Cty. Ct. 1951)), and the trial court was affirmed by the Supreme Court, 9 N.J. 56 (1952), the Chief Justice dissenting.
Danek's action appears to be the first time the question was raised squarely as to whether an award of workmen's compensation to a wife barred a per quod action of the husband against her employer based upon a charge of negligence. Undoubtedly it was fostered by the recent decision of the Court of Appeals of the District of Columbia Circuit in Hitaffer v. Argonne Co. , 87 U.S. App. D.C. 57, 183 F.2d 811, 23 A.L.R. 2 d 1366 (decided May 29, 1950, about three months earlier), certiorari denied 340 U.S. 852, 71 S. Ct. 80, 95 L. Ed. 624 (1950). That court declared that the Federal Longshoremen's & Harbor Workers Compensation Act (33 U.S.C.A. , § 901, 905), the language of which with respect to substitution of remedies is very much like our own Compensation Act, did not bar the per quod claim of a wife. The theory of the preservation of the claim was that consortium is an independent right growing out of the marital relation and not subject to extinction unless through express legislative declaration or clear repugnancy to the compensation legislation. Substantially the same view was the theme of the dissent in our Supreme Court. However, the majority of the court felt that even though the precise problem was making its first appearance in New Jersey, it was not new or novel because the language of the Workmen's Compensation Act and the decisions construing it had made clear that the compensation benefits supplied were in substitution for the preexisting common-law remedy for torts of the character involved.
Further research reveals the following earlier and later cases which are specifically opposed to the Hitaffer rule: McVey v. Chesapeake & Potomac Telephone Co. , 103 W. Va. 519, 138 S.E. 97 (Sup. Ct. App. 1927); Holder v. Elms Hotel Co. , 338 Mo. 857, 92 S.W. 2 d 620, 104 A.L.R. 339 (Sup. Ct. 1936); Bevis v. Armco Steel Corp. , 156 Ohio St. 295,
102 N.E. 2 d 444 (Sup. Ct. 1951); Nelson v. A.M. Lockett & Co. , 206 Okla. 334, 243 P. ...