[95 NJSuper Page 144] This action was instituted for a declaratory judgment that plaintiff is not obligated under its home-owners' policy issued to defendants August and Margaret Campbell to defend them and their son Patrick Campbell in connection with a suit brought against them by Stephen
McGuire and his parents to recover damages as the result of an accident that occurred to Stephen on July 4, 1965.
The Campbells and the McGuires had been friends for a number of years before the date of the accident. Up to that date they visited with each other frequently. On July 4, 1965 the McGuires and their children joined the Campbells at a picnic being given by Mr. Campbell's employer. After the picnic they went to the Campbell home. The two McGuire boys and Patrick Campbell left the house to watch a parade. They came back and obtained something from upstairs and then left again. When they returned shortly thereafter it was obvious that Stephen had received an injury to his eye. He was immediately taken to the hospital where he stayed for about two weeks. As a result of the injury he lost one of his eyes.
On the night of the accident the boys had told their parents a story as to how the accident happened which was not true. The following day, however, Patrick Campbell, who was then 12 or 13 years old, told his father the truth. The three boys had taken a cherry bomb that had been obtained by Patrick Campbell to a brook. There Patrick held the cherry bomb while Stephen's brother lit it. After it was lit Patrick threw the bomb into the brook. They waited for the explosion. When the bomb exploded it forced a foreign object into Stephen's eye.
After this incident the McGuires stayed at the Campbell house for approximately two weeks while their son was in a local hospital, and then returned to their home in Hoboken. Since that time the two families have not visited, and there has been very little communication between them.
On the date of the accident there was in force a homeowners' policy of Allstate Insurance Company insuring August and Margaret Campbell. It provided that the company would pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, and that the company would defend any suit against the insured alleging bodily injury. Condition 3, applicable to
the comprehensive personal liability and medical payments coverages, provided:
"When an occurrence takes place, written notice shall be given by or on behalf of the insured to this Company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the Insured and also reasonably obtainable information respecting the time, place and circumstances of the occurrence, the names and addresses of the injured and of available witnesses."
It was stipulated that no notice of the accident was given to plaintiff until January 22, 1966. Immediately upon receiving notice of the accident the company proceeded to investigate the accident. On January 25 it took a statement from August Campbell and obtained a nonwaiver agreement from August and Margaret Campbell, specifically referring to the late notice received. It also took a statement from Patrick Campbell and ascertained that Stephen McGuire had in fact lost one of his eyes.
At no time did Mr. or Mrs. McGuire say that they were not going to sue for the injuries received by their son. Mr. Campbell had offered to help pay the medical expenses. There was a definite damper on the relationship between the McGuires and the Campbells after the accident.
To justify not giving notice Mr. Campbell said he did not understand the policy pertained to anything occurring off the property. Although he had glanced at the policy prior to the date of the accident, he had not thoroughly read it. He and his wife had submitted four claims to plaintiff under the provisions of this or prior policies for property damage loss. In 1960 they submitted a claim for wind storm loss. In 1963 they submitted a claim for fire loss to a washing machine. In 1964 they submitted a claim for loss of a jacket that was stolen from their son at school. It is significant that this loss occurred off the property of the Campbells. It is also significant that in ...