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Gerhardt v. Continental Insurance Companies

Decided: December 19, 1966.

LYDIA GERHARDT, PLAINTIFF-APPELLANT,
v.
CONTINENTAL INSURANCE COMPANIES AND FIREMEN'S INSURANCE COMPANY OF NEWARK, CORPORATIONS AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS



For reversal -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Jacobs, J.

Jacobs

The trial court dismissed the insured Gerhardt's claim that her comprehensive homeowner's policy covered a workmen's compensation proceeding by a residence employee injured while working at the insured's home. The Appellate Division affirmed in a per curiam based on Gordon v. New Hampshire Ins. Co., 89 N.J. Super. 246 (1965). We granted certification in both Gerhardt and Gordon but Gordon has since been settled and is not now before us. 46 N.J. 315 (1966).

In 1963 the plaintiff purchased a homeowner's policy which was issued to her in comprehensive form. The face sheet contained typewritten as well as printed material and was of

course the most prominent part of the policy. It set forth the name and home address of the insured, the policy term of 3 years and the net prepaid premium of $368.50. It stated that insurance was being provided only with respect to those coverages which were indicated by "a specific limit of liability applicable thereto." Under Section 1A through D varying limits relating to the insured's dwelling, contents, etc. were specified. Under Section II E, which was captioned "Comprehensive Personal Liability (Bodily Injury and Property Damage)," the stated limit was "$10,000.00 each occurrence." Section II F contained the limit for "Medical Payments" and II G the limit for "Physical Damage to property of others." Later on, but still on the face sheet, the following appeared: "Section II Only: (a) The described premises are the only premises where the Named Insured or spouse maintains a residence other than business property and farms. (b) Insured employs not more than two full-time residence employees."

After the face sheet, the policy continues over many printed pages in small print and with much obscure terminology. Toward its latter part we find the following insuring agreement captioned "Coverage E -- Comprehensive Personal Liability:

(a) 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 or property damage, and the company shall defend any suit against the Insured alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy even if any of the allegations of the suit are groundless, false or fraudulent; but the company may make such investigation and settlement of any claim or suit as it deems expedient."

On a separate page we find special exclusions which set forth that Section II does not apply to the following:

"(a) (1) to any business pursuits of an Insured, other than under Coverages E and F, activities therein which are ordinarily incident to non-business pursuits, (2) to the rendering of any professional service or the omission thereof, or (3) to any act or omission in connection with premises, other than as defined, which are owned, rented or controlled

by an Insured, but this subdivision (3) does not apply with respect to bodily injury to a residence employee arising out of and in the course of his employment by the Insured;

(b) under Coverages E and F, to the ownership, maintenance, operation, use, loading or unloading of (1) automobiles or midget automobiles while away from the premises or the ways immediately adjoining, except under Coverage E with respect to operations by independent contractors for non-business purposes of an Insured not involving automobiles owned or hired by the Insured, (2) watercraft owned by or rented to an Insured, while away from the premises, if with inboard motor power exceeding fifty horsepower or if twenty-six feet or more in over-all length and a sailing vessel, with or without auxiliary power, (3) watercraft while away from the premises and powered in whole or in part by an undeclared outboard motor owned by an Insured, or (4) aircraft; but, with respect to bodily injury to a residence employee, arising out ...


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