Simpson, J.c.c. (temporarily assigned).
[103 NJSuper Page 347] Christina Deblon, widow of Charles Deblon, instituted suit against the owner and driver of a motor vehicle in which her decedent was a passenger, charging negligence and claiming per quod damages individually, Survival Act damages as general administratrix of decedent's estate, and Wrongful Death Act damages as administratrix ad prosequendum. Allstate Insurance Company's ["Allstate"] liability policy, with a $50,000 limit of bodily injury liability for one person, covered the named insured owner, Catherine Foley, and also covered the driver, Leslie Beaton, under the usual omnibus clause. Leslie Beaton was also the named insured under a liability policy issued by Jersey Insurance Company of New York of the Pacific of New York Group ("Jersey"), which policy, if effective, would be "excess insurance" up to its $10,000 limit, after the primary Allstate insurance, under the standard "other insurance" clause. Jersey apparently denies coverage and has filed a disclaimer, for reasons not germane to the
present inquiry, but if its policy is effective, it is only as excess insurance and there is no question of mutually repugnant excess coverage clauses as in Cosmopolitan Mut. Ins. Co. v. Continental Cas. Co., 28 N.J. 554 (1959).
Christina Deblon, in all three capacities as a plaintiff, executed a "covenant not to sue on claim," reciting a consideration of $46,500 and purporting to release only Leslie Beaton, Catherine Foley and Allstate Insurance Company while "reserving unto her as general administratrix and administratrix ad prosequendum of the estate of Charles Deblon the right to proceed against * * * the Jersey Insurance Company of New York * * *." Additional language of the instrument stated that "Christina Deblon in no way releases (Jersey) and no rights are waived against said parties [Beaton and Foley] as named assureds under * * * said policy * * *."
Plaintiff originally sought an order construing the covenant as effectively preserving her rights against defendants Beaton and Foley as named assureds under the Jersey policy, and this court directed that Jersey be added as a party defendant and indispensable to such a binding determination. R.R. 4:32-1 and 4:34. A count was added to the complaint and directed to Jersey, resulting in the latter's motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to R.R. 4:12-2(e). Matters outside the pleadings, such as insurance policies, have been presented to the court by the parties; there is no genuine issue as to any material fact and the questions presented are matters of law, so that the motion under R.R. 4:12-2(e) is treated as one for summary judgment under R.R. 4:58.
Jersey contends that the wording of the covenant released its assured, Leslie Beaton, thus precluding any effective reservation of rights against it; and further contends that regardless of the efficacy of the words used, the goal of plaintiff to release the individuals and the primary insurance carrier, while retaining the right to recover from the excess insurance carrier, is legally impossible and a nullity.
The first question is the meaning of the words used in the covenant not to sue. Taken out of context, as Jersey reads the instrument, certain clauses appear to release Leslie Beaton and Catherine Foley generally, so it is argued that the result is to preclude any claims against Jersey. The entire instrument, however, clearly reveals an intention to release Beaton and Foley only to the extent of their personal assets and their Allstate insurance coverage, while retaining a claim to their Jersey coverage. The intention of the parties to the instrument governs, of course, and that intention binds strangers to the instrument. Atlantic Northern Airlines, Inc. v. Schwimmer, 12 N.J. 293, 301 (1953). Even if there was any doubt as to the meaning of the words used, the intention is clear when the general tenor and purpose of the instrument is considered in the light of the surrounding circumstances. Casriel v. King, 2 N.J. 45, 53 (1949). The circumstances are claims against an owner and driver, both covered by a primary insurer up to $50,000, with an excess carrier disclaiming as to coverage. Furthermore, the excess coverage is a maximum of $10,000, and plaintiff has settled with all except the excess carrier for $46,500 of the $50,000 available primary coverage.
The intention of the parties is therefor crystal clear, with a question only raised because of the clumsiness of the language employed in the instrument. Doubtless this results from the common law distinction between a covenant not to sue and a general release, with the additional aspect of an attempt to reserve only a right to proceed against what might be described as the excess insurance portions of alleged tortfeasors.
The covenant in question is therefore construed to release Beaton and Foley to the limit of their personal assets and the protection of their Allstate coverage, with a reservation of rights against any coverage afforded by Jersey.