[123 NJSuper Page 242] This is a declaratory judgment action to decide which of two insurance carriers is responsible for a
previously agreed upon settlement. In Victor Gortfai v. Elson T. Killam Associates, Inc. v. Ernest Renda Construction Co. , (L-16594-68) and Columbus Glenn v. Elson T. Killam Associates, Inc. v. Ernest Renda Construction Co. , (L-27168-68), the two insurance carriers for Killam Associates, Atlantic Mutual Insurance Co. and Continental National American Insurance Co., agreed that one of them would compensate plaintiffs Gortfai and Glenn a total of $68,500. Since each carrier denied coverage under its policy, it was agreed that the issue of responsibility be decided by the court upon a stipulation of the essential facts.
On November 13, 1961, Killam Associates, a professional engineering firm, entered into a contract with the Township of Green Brook under which it agreed to "furnish general supervision of the work of the contractor as the construction progresses, to assist in a correct interpretation of the plans and specifications and to safeguard the Township against defects and deficiencies on the part of the contractor."
On August 16, 1967 the Ernest Renda Contracting Company, Inc., was the contractor performing the sewer work referred to under defendant's contract with the township. On that day Victor Gortfai and Columbus Glenn, two employees of the Ernest Renda Contracting Company, were injured when the sewer trench in which they were working collapsed. As a result of this accident both men instituted suit against both Killam Associates and the Ernest Renda Contracting Company.
Paragraph 3 of the Gortfai complaint and paragraph 6 of the Glenn complaint charged that Killam Associates "negligently and carelessly supervised, controlled and directed" the work of the contractor, thereby proximately causing their injuries. Plaintiffs' factual and legal contentions as set forth in the pretrial order alleged that defendant Killam Associates maintained a supervisory engineer at the job site and was therefore in actual control of the work being done. That Killam Associates through its employees, in opposition to a safe method of bracing the trench, approved
the use of a steel cage device to protect workers in the excavation. The route taken for excavation did not permit sufficient area for storage of the dirt removed, creating a dirt mound 18' high close to the slope of the trench. Plaintiffs asserted that "despite these indications of cave-in likelihood and absence of sound engineering practice, Killam, through its employees and agents, permitted plaintiffs * * * to descend into the excavation to perform labor."
The bracing used in the trench violated the New Jersey Construction Safety Code and it was the express responsibility of Killam Associates to advise the township of any such deviation.
It was this violation, coupled with the daily log of Jubanowsky, Killam's employee at the job site, which contained numerous notations on the safety of the cut that apparently caused defendants to seek a settlement on November 9, 1971. As stated, the total settlement was for $68,500, said amount to be paid by which ever insurance company was found by adjudication to be responsible by way of insurance coverage.
It is stipulated that all times material, plaintiff Atlantic Mutual Insurance Co., had issued to Elson T. Killam Associates, Inc. a comprehensive general liability insurance policy. It is also agreed that defendant Continental National American Ins. Co. had issued to Elson T. Killam Associates, Inc. an Architects and/or Engineers' Professional Liability Policy.
The Atlantic Mutual policy contains two clauses which are important to the instant controversy. It contains a "pro rata" clause under the title "other insurance" as follows:
If the insured has other insurance against a loss covered by this policy the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of ...