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Bernstein v. Palmer Chevrolet & Oldsmobile Inc.

Decided: January 6, 1965.

EDWARD D. BERNSTEIN, PLAINTIFF,
v.
PALMER CHEVROLET & OLDSMOBILE, INC., A CORPORATION OF NEW JERSEY, DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLANT, V. REX SALES CO., INC., A CORPORATION OF NEW JERSEY, THIRD-PARTY DEFENDANT-RESPONDENT



Goldmann, Sullivan and Labrecque. The opinion of the court was delivered by Goldmann, S.j.a.d.

Goldmann

Palmer Chevrolet & Oldsmobile, Inc. (Palmer) appeals from a Law Division summary judgment dismissing its third-party complaint against Rex Sales Co., Inc. (Rex).

On March 23, 1960 Palmer leased its premises at 600 Asbury Avenue, Ocean City, to Rex for a period of three years, with option of renewal. The lease provided, among other things, that

"It is further mutually understood and agreed that the party of the second part [Rex] shall be responsible for carrying public liability insurance in the amount of $200,000. and $400,000., effectively endorsed to protect the party of the first part against risk of damages or injuries upon the premises in question. Said policy shall be submitted for the approval of the party of the first part."

On February 26, 1960 the New Amsterdam Casualty Co. issued its comprehensive general liability policy LGC 313130 to Rex for the premises at 600 Asbury Avenue, the bodily injury liability limits being $200,000 for each person and $400,000 for each accident, with property damage liability limits set at $25,000 for each accident and $50,000 for aggregated operations. By rider attached and dated the same day, the policy was endorsed so as to make Palmer, the lessor, an additional assured.

On February 3, 1961 there was an explosion and fire on the leased premises, allegedly caused by defective electrical wiring in the walls. As a result, Edward D. Bernstein, president of Rex, suffered injuries for which he received workmen's compensation benefits under a policy issued by New Amsterdam to that company.

Bernstein thereafter brought an action against Palmer to recover damages for his injuries, allegedly caused by Palmer's failure to repair the electrical wiring in the Rex Building. Palmer was given leave to file a third-party complaint against Rex demanding judgment for all sums found due to plaintiff and paid by Palmer under such judgment as he might recover.

The basis of the third-party action is set out in paragraph 3 of the complaint:

"At the time specified in the [Bernstein] complaint, Rex Sales Co., Inc. was a tenant of Palmer Chevrolet & Oldsmobile, Inc., under a written lease whereby Rex Sales Co., Inc. agreed to save harmless and indemnify Palmer Chevrolet & Oldsmobile, Inc., for any losses sustained in the operation of the demised premises."

Rex filed an answer which denied that allegation and, among other defenses, alleged that Palmer was barred from recovery because Rex was under no liability to it, contractual or otherwise.

Rex served interrogatories upon Palmer which included the following question:

"10. State all facts, agreements or leases whereby third party plaintiff contends that Rex Sales Co., Inc., agreed to save harmless and indemnify Palmer Chevrolet & Oldsmobile, Inc., for any losses sustained in the operation of the demised premises ...


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