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Selected Risks Insurance Co. v. Nationwide Mutual Insurance Co.

Decided: March 14, 1975.

SELECTED RISKS INSURANCE COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT AND CROSS-RESPONDENT,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, A CORPORATION AUTHORIZED TO DO BUSINESS IN NEW JERSEY, DEFENDANT-RESPONDENT AND CROSS-APPELLANT, AND ANGELA V. DEL PLATO, HARRY A. DEL PLATO AND ELVERA F. PALUMBO, GENERAL ADMINISTRATRIX FOR THE ESTATE OF JOHN D. PALUMBO, DECEASED, DEFENDANTS-RESPONDENTS



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

Carton

This appeal concerns the scope of the respective coverages provided under an automobile liability insurance policy and a garage liability policy in an accident which occurred at the garage owner's service station.

The parties stipulated the facts. Harry A. Del Plato drove his station wagon to Battlehill Esso for the purpose of having it serviced and to correct an unsatisfactory idling condition in the engine. He was later joined there by his wife Angela. Del Plato was the named insured under an automobile liability insurance policy issued by defendant Nationwide Mutual Insurance Company. John D. Palumbo, t/a Battlehill Esso, operated the service station. He was insured by plaintiff Selected Risks Insurance Company under a garage liability policy.

Del Plato requested Palumbo to examine the car to determine the nature of the mechanical problem. Palumbo was leaning into the engine compartment in front of the automobile,

apparently testing various engine components, when the car suddenly lurched forward, striking both Palumbo and Mrs. Del Plato, who was also standing in front of the car. Palumbo died as the result of injuries sustained in the accident. Mrs. Del Plato was also injured.

The precise cause of the vehicle's movement was the subject of dispute and resulted in three lawsuits. The administratrix of the Palumbo estate brought action against Harry and Angela Del Plato. Harry and Angela Del Plato each brought action against the administratrix. All three actions were consolidated for trial. We were informed at the oral argument that while this appeal was pending the administratrix of the Palumbo estate settled the estate's action against Harry Del Plato. The actions by Harry and Angela Del Plato were tried as to the issue of liability only and the jury rendered special findings that both Harry Del Plato and Palumbo were negligent in causing the accident.

In this declaratory judgment action to determine the coverage provided by the two insurance carriers plaintiff Selected Risks, which issued the garage policy, moved for summary judgment. It sought an adjudication that defendant Nationwide as well as Selected Risks must provide primary coverage to the estate of Palumbo and that Nationwide must defend the negligence actions brought by the Del Platos against the Palumbo estate and contribute to any settlement or judgment resulting from Del Platos' actions. The trial judge denied plaintiff's motion, ruling that Nationwide was not obliged to provide coverage to the Palumbo estate under its automobile policy. The trial court also denied defendant Nationwide's cross-motion for summary judgment, holding that plaintiff Selected Risks was not required under its garage policy to Palumbo to provide coverage to Harry Del Plato. On this appeal each insurance company challenges the portion of the judgment adverse to it.

We consider first Selected Risks' motion for summary judgment. It was grounded on the premise that the omnibus

clause in Nationwide's automobile liability policy mandated coverage for Palumbo and that the exclusionary clause in that policy could not be given effect because it conflicted with the omnibus clause in that policy. Under the terms of this omnibus clause, which is in the broad form required by N.J.S.A. 39:6-46(a) to be included in every liability policy issued in the State of New Jersey, Nationwide agreed:

C. PROPERTY DAMAGE & BODILY INJURY -- LIABILITY

To pay all sums which those entitled to protection become legally obligated to pay as damages arising out of the ownership, maintenance or use, including loading and unloading, of the described automobile because of:

(1) destruction or damage of property including loss of use thereof;

(2) bodily injury, sickness, disease or death of any person except for liability under any workmen's compensation law. Those entitled to protection under these Coverages C (1) and C (2) are (a) the Policyholder; (b) any resident of the same household; and (c) any person or organization legally responsible for the use of the described automobile, provided the actual operation or (if he is not operating) the other actual use thereof is with the permission, expressed or implied, of the Policyholder or his spouse if such a resident. [Emphasis supplied]

The exclusionary language of the policy relied upon by Nationwide as the basis for denial of coverage provides in pertinent part:

EXCLUSIONS

There shall be no protection ...


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