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Kolker Chemical Corp. v. Lumbermens Mutual Casualty Company.

Decided: December 13, 1963.

KOLKER CHEMICAL CORPORATION, ET AL., PLAINTIFFS,
v.
LUMBERMENS MUTUAL CASUALTY COMPANY., DEFENDANT



Herbert, J.s.c.

Herbert

On March 9, 1960 an explosion took place at the Kolker plant on Doremus Avenue in Newark, causing damage to property and interrupting the course of business. Before the explosion Kolker Chemical Corporation, a New Jersey corporation, and L. A. Kolker had procured insurance policies from plaintiff insurance companies and from defendant. Losses resulting from the explosion have been paid to Kolker Chemical Corporation (a Delaware corporation and assignee of the New Jersey corporation of the same name) and to L. A. Kolker by plaintiff companies. Defendant having refused to bear any share of the loss, this suit is brought for contribution and for other equitable relief.

Defendant has moved for summary judgment and, in the alternative, to dismiss the second count (contribution) and the fourth count (reformation) of the complaint. Plaintiffs have moved to strike the first separate defense of the answer insofar as it relates to plaintiffs' claims for contribution and reformation. Arguments for and against the motions have concentrated upon the clause of defendant's policy which is the basis for the first separate defense. The clause reads:

"10. Action Against Company

Coverages A and B

No action shall lie against the Company unless, as a condition precedent thereto, the Assured shall have fully complied with all the terms of this policy, nor unless commenced within fourteen months from the date of the Accident."

This suit was started March 21, 1962, a few days more than two years after the explosion. The defendant contends

that the 14-month limitation thus applies, and bars all relief sought. In opposition, plaintiff insurance companies urge that the limitation does not apply to their demands for contribution and reformation.

The right to contribution depends upon the existence of a burden to be borne by two or more parties and upon an unequal distribution of that burden which, because of the inequality, should be corrected. The common burden may be created in various ways; for example, by a contract or group of contracts (as in the present case), or by participation in a tort. Yet no matter how a defendant in an action for contribution joined the burden-bearing group, the courts have used the date when a plaintiff in fact assumed more than his share of the load as the point at which a time limit begins to run. They have held the cause of action arises with the payment to which a defendant is asked to contribute. Frew v. Scoular , 101 Neb. 131, 162 N.W. 496, L.R.A. 1917F, 1065 (Sup. Ct. 1917); Van Winckel v. Carter , 198 Va. 550, 95 S.E. 2 d 148 (Sup. Ct. App. 1956); 13 Am. Jur., Contribution , ยง 88, p. 77.

Frew and Van Winckel, supra , involved common obligations created by contract. The cases on contribution between joint tortfeasors appear to be more numerous. They, too, calculate time limits from the date the party who seeks contribution definitely assumed more than his proper share of the obligation due to the victim of the tort. For a collection of such authorities see the annotation in 20 A.L.R. 2 d 925.

The authorities referred to require the conclusion that the 14-month limitation in the defendant's policy does not bar the claim for contribution asserted by the plaintiff insurance companies. Grollimund v. Germania Fire Ins. Co. , 82 N.J.L. 618 (E. & A. 1912), and American Surety Co. of New York v. American Ind Co. , 8 N.J. Super. 343 (Ch. Div. 1950), cited by defendant, do not ...


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