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Newark Insurance Co. v. Concord Insurance Co.

Decided: June 14, 1971.

NEWARK INSURANCE COMPANY, ETC., PLAINTIFF-RESPONDENT,
v.
CONCORD INSURANCE COMPANY, ETC., DEFENDANT-APPELLANT AND MARY A. FENNELLY, ET AL., DEFENDANTS



Sullivan, Collester and Labrecque. The opinion of the Court was delivered by Sullivan, P.J.A.D.

Sullivan

This appeal involves a question of automobile liability insurance coverage.

On April 29, 1966 Concord Insurance Company (Concord) issued a three-year automobile liability policy insuring John Purpura as owner of a motor vehicle.

Purpura was acquainted with Joseph L. Fennelly (Fennelly), who lived with his paternal grandparents in Mountain Lakes. Newark Insurance Company (Newark) had issued its automobile liability policy covering a motor vehicle owned by Fennelly's grandmother. This policy extended apparent coverage to Fennelly while operating a motor vehicle since he was a resident of the same household as the insured.

On October 22, 1966 Purpura, driving his own car, attended a party at the Fennelly home.

There was evidence that, while at the party, Purpura became sick and intoxicated and was unable to drive. After some persuasion, Purpura agreed to allow Fennelly to drive him home and handed over the car keys. Another car from the party followed to bring Fennelly back. Fennelly was 17 years of age and unlicensed at the time, although he had driven vehicles, including Purpura's car, on previous occasions.

While driving the Purpura car, Fennelly was involved in a collision with two other cars. Several lawsuits resulted.

Concord denied that its policy covered Fennelly and refused to defend him on the ground, originally, that Fennelly was operating the Purpura car without the consent of the owner. Later it added the ground that its policy extended coverage to persons driving with the permission of the insured only if "duly licensed to operate an automobile," and that Fennelly was unlicensed at the time of the accident.*fn1

As a result of Concord's refusal to defend Fennelly, Newark undertook his defense in the several lawsuits and filed answers on his behalf. Newark then commenced the instant suit for a declaratory judgment seeking a determination that Concord was liable to defend Fennelly under its policy

issued to Purpura and pay any judgments recovered against Fennelly up to the policy limit.

At trial there was conflicting evidence as to whether Purpura had given permission to Fennelly to drive Purpura's car. However, the trial judge found that such permission had in fact been given, and we are ...


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