For reversal and remandment -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Jacobs, J.
The Appellate Division affirmed the trial court's judgment of dismissal which was entered at the close of the plaintiff's case. See Bauman v. Royal Indem. Co., 66 N.J. Super. 110 (1961). We granted certification on application pursuant to R.R. 1:10-2. 34 N.J. 474 (1961).
The plaintiff lives in West Orange, New Jersey and has lived there for many years. He testified that before he moved there he went to Frenkel & Co. in New York City and "requested from them every type of insurance that was necessary to cover myself on my house, any people that came and worked at the house, any fire or theft or anything else that might happen." During the period under consideration he purchased his policies in the defendant company "through Frenkel." These policies included "comprehensive personal liability policy" No. 428394 for the three-year period from April 1953 to April 1956 and its renewal policy No. 56-23-86 for the three-year period from April 1956 to April 1959. In 1957 Mrs. Cornelison, a part-time domestic employed by the plaintiff, suffered an accident while working at the plaintiff's home. The plaintiff notified Frenkel and subsequently received a letter from the defendant stating that there was a question regarding the policy coverage. At an informal hearing before the Division of Workmen's Compensation, Mrs. Cornelison received an initial award of $232 which was paid by the plaintiff after he received a check in that amount from Frenkel. Thereafter Mrs. Cornelison filed a formal complaint in the Division of Workmen's Compensation. The defendant declined to participate in this proceeding which was defended by the plaintiff through his
own attorney. Mrs. Cornelison received an award of $1,230.18 which was paid by the plaintiff along with fees in the sum of $200.
In 1958 the plaintiff filed a complaint in the Law Division against the defendant seeking recovery of the sum of $1,230.18 plus the costs incurred by him in defending against Mrs. Cornelison's claim for compensation. The answer of the defendant denied liability and referred specifically, in a separate defense, to paragraph (d) of the exclusions set forth in policy No. 56-23-86. In 1959 the plaintiff filed an amended complaint which added a count alleging that policy No. 56-23-86 was a renewal policy which contained certain language modifications in its exclusion clauses, and that none of the changes had been brought to the plaintiff's attention. The plaintiff demanded that the renewal policy covering the period from April 1956 to April 1959 be reformed to conform to the policy covering the period from April 1953 to April 1956. The matter came on for trial in the Law Division in 1960, and during the trial the plaintiff sought to introduce the defendant's answer under oath to an interrogatory which had requested that the defendant state the relationship of Frenkel & Company to the defendant in 1957. The answer stated that "Frenkel & Company was authorized agent of the defendant." The trial court refused to permit the plaintiff to introduce the answer upon its appearing that before the trial the defendant had filed an amended answer to the interrogatory which set forth that "Frenkel & Company, Inc. is not an agent of the defendant, but a general insurance broker."
At the close of the plaintiff's case the defendant moved for a judgment of dismissal on the ground that under the pertinent exclusion clause in policy No. 56-23-86, all workmen's compensation claims were excluded from the coverage of the policy. The plaintiff resisted the motion on the ground, inter alia, that the exclusion clause in policy No. 428394 was the controlling one and that an identical exclusion clause to that contained in policy No. 428394 had been
soundly construed in Gunther v. Metropolitan Cas. Ins. Co., 33 N.J. Super. 101 (Law Div. 1954), as not excluding coverage of a workmen's compensation claim by a residence employee where the insured had no specific workmen's compensation policy. The plaintiff pointed out that when the company issued its renewal policy, no changes were called to his attention, and he urged that he was consequently entitled to the coverage afforded by policy No. 428394 rather than any lesser coverage afforded by the renewal policy. The trial court recognized that, if the terms of policy No. 428394 were controlling, the plaintiff's showing would, under the Gunther case, be sufficient to withstand the motion. It noted, however, that the language change in policy No. 56-23-86 was "to negative the effect of the decision of the Gunther case" and found the exclusion clause of the renewal policy, rather than the earlier policy, to be controlling. It expressed the view that Frenkel & Company was the plaintiff's insurance broker rather than the defendant's agent, and pointed out that the plaintiff had failed to introduce proof as to whether Frenkel & Company had been made aware of the change in the exclusion clause. In concluding its oral ruling granting the defendant's motion to dismiss, it expressed serious doubt that a "change made without notice to policyholders" would warrant reformation or comparable relief.
In affirming the trial court's dismissal, the Appellate Division recognized the force of the Gunther case if the terms of policy No. 428394 were deemed to be controlling. It pointed out that after Gunther was decided, the particular language upon which it relied was eliminated from later policies such as policy No. 56-23-86, and concluded that under the terms of that policy, workmen's compensation claims by domestic employees as well as other employees were excluded. It expressed the view that the trial court had properly declined to admit into evidence the original answer to the interrogatory with respect to the relationship of Frenkel & Company to the defendant and noted that no
other proof was offered to establish that Frenkel & Company was the defendant's agent rather than the plaintiff's broker. It rejected the plaintiff's contention that, absent notification from the company of the change in the terms of the renewal policy, he was entitled to the coverage of the earlier policy rather than any lesser coverage in the renewal policy. It pointed out that there was nothing in the record to indicate that Frenkel & Company was not aware of the change in the renewal policy, and stated that it was "not convinced that there was any duty upon the insurance company to give express warning to the broker or the insured of changes such as this." See Bauman v. Royal Indem. Co., supra, 66 N.J. Super., at p. 115; but cf. Maryland Casualty Company v. Kramel, 80 So. 2 d 897, 900 (La. App. 1955); Schock v. Penn Tp. Mut. Fire Ins. Ass'n, 148 Pa. Super. 77, 24 A. 2 d 741, 743 (1942); Mike Occhiato Mercantile Co. v. Allemannia Fire Ins. Co., 98 F. Supp. 888, 892 (D.C.D. Colo. 1951). See also Lumbermen's Ins. Co. v. Heiner, 74 Ariz. 152, 245 P. 2 d 415, 418 (1952); Coal Operators Casualty Co. v. F.S. Neely Co., 219 Ark. 579, 243 S.W. 2 d 744, 746 (1951); Crowell v. New Hampshire Fire Ins. Co., 147 So. 762, 766 (La. App. 1933); Glaser v. Alexander, 247 Minn. 130, 76 N.W. 2 d 682, 687 (1956); Hay v. Star Fire Insurance Company, 77 N.Y. 235, 241, 33 Am. Rep. 607, 610 (1879); 13 Appleman, Insurance Law and Practice § 7653 (1943); 29 Am. Jur. Insurance § 363 (1960).
We are satisfied that the trial court erred in refusing to permit the plaintiff to introduce the defendant's sworn statement that Frenkel & Company was authorized agent of the defendant. It was a deliberate answer to an interrogatory submitted by the plaintiff and, when proffered by the plaintiff, was admissible in evidence as such. See R.R. 4:23-10; 4 Moore's Federal Practice § 33.29 (2 d ed. 1950). It is true that the defendant amended its answer, well in advance of trial, to assert that Frenkel & ...