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London and Lancashire Insurance Co. v. Government Employees Insurance Co.

Decided: March 16, 1961.

LONDON AND LANCASHIRE INSURANCE COMPANY, LTD., A CORPORATION, AND MALLON SUBURBAN MOTORS, INC., A CORPORATION, PLAINTIFFS,
v.
GOVERNMENT EMPLOYEES INSURANCE COMPANY, A CORPORATION, CHARLES SAYOUR, ADMINISTRATOR AD PROSEQUENDUM OF THE ESTATE OF GEORGE M. SAYOUR, DECEASED, WERNER BLOCH, AND GENERAL MOTORS CORPORATION, A CORPORATION, DEFENDANTS



Mintz, J.s.c.

Mintz

[66 NJSuper Page 270] This is a declaratory judgment proceeding. The respective insurance companies cross-motion for judgment on the pleadings. R.R. 4:12-3. The essential facts are undisputed.

On February 13, 1960 Dr. Werner Bloch, a prospective purchaser of an automobile from Mallon Suburban Motors, Inc., was operating a Mallon-owned vehicle on his private driveway adjoining his residence. The Mallon salesman, George M. Sayour, was in front of the vehicle, giving directions to the doctor who was endeavoring to enter his garage. The vehicle struck Sayour, fatally injuring him. Thereafter, the administrator ad prosequendum of Sayour's estate instituted suit for the resultant damages, naming Dr. Bloch and General Motors Corporation as defendants. That suit is still pending.

At the time of the collision Mallon was insured by London and Lancashire Insurance Company, Ltd. ("London") under a comprehensive general automobile liability policy with maximum coverage of $200,000 per person and $500,000 for each accident. Dr. Bloch was an additional insured under this policy. Dr. Bloch also was a named insured under two separate policies, both issued by Government Employees Insurance Company ("Government"). One was a comprehensive personal liability policy with maximum coverage of $10,000 which covered accidents on the doctor's premises, with "premises" defined as including the private approaches to a residence. The other was a family automobile policy which included coverage of accidents arising out of the use of a "non-owned" automobile.

Plaintiff London instituted this action seeking a determination that the Government comprehensive policy be declared the first applicable policy to the loss in question to the full extent of its coverage, and, should there be liability above this coverage, that the Government automobile policy and the London automobile policy share equally in the amount of settlement or judgment and expenses to the full extent of their respective coverages. Government counterclaimed for an adjudication that the policy issued by London to Mallon be declared the primary insurance for all claims asserted against Dr. Bloch arising out of the accident on

February 13, 1960, and that the automobile policy issued by Government be declared excess insurance over and above the limits of the London policy. Government further asserts that its comprehensive personal liability policy affords no coverage for the accident, but if it does, that it be deemed excess insurance to that of London and defendant's automobile policy, or, in the alternative, that it be deemed coinsurance to the extent of prorating its limit of liability with the limit of liability of both automobile liability policies.

This action is not prematurely brought. The litigants have demonstrated possession of truly adverse legal interests of sufficient immediacy and reality amply to justify resort to declaratory judgment procedure. See Hartford Accident and Indemnity Co. v. Selected Risks Indemnity Co. , 65 N.J. Super. 328 (App. Div. 1961); Condenser Service & Engineering Co., Inc. v. American Mutual Liability Insurance Co. , 45 N.J. Super. 31 (App. Div. 1957).

The issues are to be resolved upon a determination of the legal effect of the "Other Insurance" provisions appearing in the respective policies. London's provision is as follows:

"OTHER INSURANCE: If the 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 stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss; provided, however, the insurance under this policy with respect to loss arising out of the maintenance or use of any hired automobile insured on a cost of hire basis or the use of any non-owned automobile shall be excess insurance over any other valid and collectible insurance."

The "Other Insurance" provision in Government's automobile policy issued to Dr. Bloch is substantially the same. Under that provision, Dr. Bloch's operation of the Mallon vehicle constituted use of a non-owned automobile.

The "Other Insurance" provision in Government's comprehensive personal liability policy issued to ...


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