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Westchester Fire Insurance Co. v. Continental Insurance Companies

Decided: November 27, 1973.

WESTCHESTER FIRE INSURANCE CO., RICHARD B. HOLCOMBE, ALICE HOLCOMBE AND WILBUR S. HOLCOMBE, PLAINTIFFS-APPELLANTS,
v.
THE CONTINENTAL INSURANCE COMPANIES, NEW JERSEY MANUFACTURERS INSURANCE CO., MOTOR CLUB FIRE & CASUALTY CO., JACKIE W. EISNER, ETC., DEFENDANTS-RESPONDENTS. ELMER RICHARD POTENT, GUARDIAN AD LITEM FOR RICHARD M. POTENT, AN INFANT, ELMER RICHARD POTENT AND CHARLOTTE POTENT, INDIVIDUALLY, PLAINTIFFS, V. JACKIE W. EISNER, HALLIE EISNER, ELMER EISNER, SR. AND RICHARD B. HOLCOMBE, SR., ETC., DEFENDANTS



Carton, Seidman and Goldmann. The opinion of the court was delivered by Carton, P.J.A.D.

Carton

[126 NJSuper Page 32] This case presents novel questions as to coverage afforded under automobile and homeowner's insurance policies by reason of the act of a passenger who threw a stick from a moving automobile, which struck a passing bicyclist. The basic issue is whether the injury sustained by the bicyclist was one "aris[ing] out of the ownership, maintenance or use of the owned automobile * * *" within the

meaning of the automobile insurance policies. Corollary to this issue is the applicability of an exclusionary clause of the homeowner's policy making its coverage inapplicable to "the * * * use of automobiles * * *."

The underlying facts are stark and briefly stated. Jackie Eisner was driving his father's automobile. Richard Holcombe, a passenger in the right rear seat, threw a piece of wooden molding with a nail in it out of the right rear window. The stick struck Richard Potent, an infant, above the left eye as he was riding his bicycle.

The Potent boy, through his guardian ad litem, and his parents per quod, brought action against Eisner, the driver of the automobile, and his parents, and also against the passenger, Holcombe, and his parents, on various theories:

(1) against Jackie, the driver, because Holcombe, the passenger, threw the piece of wood from the car allegedly with his knowledge and consent;

(2) against the Eisners, Sr. for negligence in the care, control and discipline of their child;

(3) against Jackie for placing the piece of wood in the car knowing that it would constitute a nuisance because of temptation to a passenger to throw it from the car;

(4) against passenger Holcombe for negligently throwing it from the vehicle, and

(5) against Holcombe's parents for negligence in the care, control and discipline of their child.

Motor Club Fire & Casualty Company and Westchester Fire Insurance Co. had issued homeowner's insurance policies for the Eisners and Holcombes, respectively. They filed answers on behalf of these defendants.

Later Westchester and the Holcombes sought a declaratory judgment to declare that (1) the National Union Insurance Company (Eisner's automobile liability carrier) was obligated to defend the action and pay any judgment which might result; (2) New Jersey Manufacturers was obligated to defend and pay its proportionate share of any judgment,

or alternatively, to provide excess insurance coverage, and (3) the Westchester Fire and Motor Club homeowner's policies were inapplicable.

On cross-motions for summary judgment in the declaratory judgment action, the trial judge ruled that the homeowner's insurance carriers, and not the automobile liability insurance carriers, were obligated to defend and be responsible for any ensuing judgment. Motor Club, the Eisners, Westchester Fire and the Holcombes all appealed.

We consider first whether coverage is afforded under the automobile policies. Parenthetically, we note that the automobile carriers for the Eisners and the Holcombes have agreed as to which has primary responsibility in the event coverage under the automobile policies is held to exist. Hence we need not consider the question of primary and excess coverage.

Both Eisner, Sr. and Holcombe, Sr. had standard family automobile liability policies on their cars. The Eisner policy was issued by National Union Insurance Company, with policy limits of $25,000 and $50,000. Holcombe, Sr.'s New Jersey Manufacturers' policy had limits of $250,000 and $500,000.

Under the terms of each policy the carrier agreed with the insured named in the declaration (Eisner, Sr. and Holcombe, Sr., respectively),

To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:

A. bodily injury * * * sustained by any person

arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile, and * * * defend any suit alleging such bodily injury * * * and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent * * *. [Emphasis added]

The carrier also agreed to insure the ...


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