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Unsatisfied Claim and Judgment Fund Board v. Clifton

Decided: November 3, 1971.

THE UNSATISFIED CLAIM AND JUDGMENT FUND BOARD AND JOSEPH POLAND, PLAINTIFFS-APPELLANTS,
v.
JOHN CLIFTON, THE ATLANTIC REFINING CO., CURTIS HINCKLEY, HARLEYSVILLE MUTUAL INSURANCE CO., GEORGE HAROLD LAUTERWASSER AND GEORGE HENRY LAUTERWASSER, DEFENDANTS-RESPONDENTS



Sullivan, Leonard and Carton. The opinion of the court was delivered by Carton, J.A.D.

Carton

Involved in this declaratory judgment action is the interpretation of an exclusionary clause in an automobile liability policy and the extent of its effect on the omnibus clause of the policy.

The pertinent factual background is substantially undisputed. One Poland was employed by John Clifton, who operated a service station which he leased from Atlantic Refining Co. A customer, Curtis Hinckley, left his automobile at the station to have the brakes repaired. He requested Poland to deliver the car to his store nearby once the repairs had been completed. After Poland removed the car from a hydraulic lift he realized the repairs had not been made.

He asked his friend, Lauterwasser, to guide him while he returned the car to the lift. Unfortunately, the car slipped, pinning Lauterwasser to the wall.

Lauterwasser and his guardian ad litem sued Poland, Clifton, Hinckley and Atlantic. Poland and Clifton had no liability insurance and were represented by attorneys for the Unsatisfied Claim and Judgment Fund. Hinckley was insured by Harleysville Mutual Insurance Co. During the course of the trial of the negligence action the court granted Hinckley's motion for summary judgment. His insurer, Harleysville, thereupon took the position that, because the named insured was relieved as a defendant, it had no further obligations under the policy. The Fund and Poland then brought this declaratory judgment action to determine whether Harleysville was required to defend Poland.

After the denial of plaintiff's motion for summary judgment in the declaratory judgment action, plaintiffs Lauterwasser obtained verdicts against Poland aggregating $15,500. This appeal by the Fund and Poland is taken from the denial of summary judgment.

In denying plaintiffs' motion for summary judgment the trial court adopted in substance defendant-insurer's contention that the language of an exclusionary clause in the policy controlled. The court held that the clause must be deemed to be applicable to use of the automobile by Poland while he was employed or engaged in the automobile business. Therefore it had the effect of denying coverage. Cf. LeFelt v. Nasarow, 71 N.J. Super. 538 (Law Div. 1962), aff'd p.c. 76 N.J. Super. 576 (App. Div. 1962); cert. den. LeFelt v. Aetna Ins. Co., 39 N.J. 86 (1963); Providence Wash. Ins. Co. v. Glens Falls Ins. Co., 114 N.J. Super. 350 (Ch. Div. 1971), and Willis v. Security Insurance Group, 53 N.J. 260, aff'g 104 N.J. Super. 410 (Ch. Div. 1968).

The exclusionary clause involved provides:

EXCLUSIONS. This policy does not apply:

Under the Liability, Medical Expense and Accidental Death Benefit Coverages,


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