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Kook v. American Surety Co.

Decided: May 28, 1965.

PHILIP KOOK AND LIONEL KRONBERG, PLAINTIFFS-RESPONDENTS,
v.
AMERICAN SURETY COMPANY OF NEW YORK, A CORPORATION, ETC., DEFENDANT-APPELLANT



Conford, Kilkenny and Lewis. The opinion of the court was delivered by Lewis, J.A.D.

Lewis

[88 NJSuper Page 46] Plaintiffs Philip Kook and Lionel Kronberg are partners in a plumbing business, under an alleged

oral agreement of partnership. On May 31, 1960 defendant American Surety Company of New York issued a "Comprehensive General Liability Policy" to "Philip Kook & Lionel Kronberg T/A Harry Kook & Son 656 Grand St. Jersey City, New Jersey," for a term of one year. That quoted designation is Item 1 of "Declarations" reading, "Name of insured and Address." Under the same Item 1, after the subheading "Locations of all premises owned, rented or controlled by named insured," is set forth "Same."

On June 8, 1960 a multiple-family dwelling at 359 Montgomery Street, Jersey City, New Jersey, was purchased in the names of Philip Kook and Lionel Kronberg, allegedly with funds of the partnership. Some time thereafter a personal injury suit was instituted against plaintiffs individually by one Flor Maria Rivera, whose cause of action was predicated upon the improper maintenance of the afore-mentioned residential property. It is undisputed that plaintiffs gave timely notice of the impending suit to defendant, and it is not contended that the contractual obligations of plaintiffs under the policy were unfulfilled. The insurance company, however, refused to defend the action on the ground that the liability claimed therein was outside the coverage of the policy it had issued. That litigation was ultimately settled between the parties for $400.

The instant proceedings were thereafter commenced by plaintiffs against American charging the latter with failure to meet its contractual insurance obligation. The damages sought were for the amount paid to Rivera in settlement of her tort action and the sum of $150 expended by plaintiffs for counsel fees in defending their interest. The Essex County District Court, sitting as the trier of facts, determined that American erroneously disclaimed liability under its policy and accordingly entered judgment in favor of plaintiffs. The amount of the judgment is not disputed.

Three issues are raised on appeal: (1) was evidence offered on behalf of defendant improperly excluded; (2) did the insurance coverage extend to the after-acquired dwelling structure

purchased with partnership funds, and (3) was the property in question in fact an asset of the partnership?

I.

The record before us contains a "Statement of the Evidence" prepared pursuant to R.R. 1:6-3. It appears therefrom that plaintiffs' case was concluded upon the admission of the insurance policy in evidence and the reception of testimony proffered by plaintiff Lionel Kronberg; and that defendant rested its case after presenting in evidence a demand for admissions and answers thereto and the taking of the testimony of one John Rebeika. The examination of Rebeika and the trial court's rulings thereon were summarized in the agreed statement:

"He is engaged in the Underwriting Department of the defendant American Surety Company. He has a long association with said defendant and is familiar with the terms and provisions of various types of comprehensive policies. Upon examination, he testified that P-1 was an insurance policy issued by the defendant company. A series of questions was then presented to this witness calling upon him to describe the nature and scope of the policy issued, the type of coverage afforded, the type of incident or accident covered and what accidents the named insureds Philip Kook and Lionel Kronberg T/A Harry Kook and Son were insured against. These questions were objected to by counsel on the ground that they called upon the witness to characterize the provisions of a document which must be permitted to speak for themselves. The objections were sustained."

The precise questions propounded to that witness, one of defendant's employees, are not revealed. It is not shown that he qualified as an expert for the purpose of adducing proofs concerning any special or trade-custom meaning or usage of any of the terms of the policy. Rather, it is inferable that he was produced to testify only as to defendant's intent regarding the scope of the insurance coverage. The uncommunicated subjective understanding or intent of one party to a written agreement as to its meaning is not admissible in a contest as to its interpretation or construction. Garden State Plaza Corp. v. S.S. Kresge Co., 78 N.J. Super. 485, 500 (App. Div. 1963),

certification denied 40 N.J. 226 (1963). That rule would have particular cogency in relation to an insurance contract and the insurer's intent. The trial court properly excluded the irrelevant testimony.

II.

The insurance document we are called upon to construe is characterized as a "Comprehensive General Liability Policy," and by its terms, when considered as a whole, is susceptible of an interpretation of broad liability coverage. The following provisions therein are pertinent:

Item 5 under "Declarations":

"The schedules disclose all hazards insured hereunder known to exist at the effective date of this policy, unless otherwise stated herein:"

Item I under "Insuring Agreements":

" Coverage A -- Bodily Injury Liability

To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting ...


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