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Tooker v. Hartford Accident and Indemnity Co.

Decided: October 24, 1975.

VINCENT TOOKER, JR., PLAINTIFF, AND ALLSTATE INSURANCE COMPANY, PLAINTIFF-RESPONDENT,
v.
HARTFORD ACCIDENT AND INDEMNITY COMPANY, DEFENDANT-APPELLANT, AND JOSEPH PIORKOWSKI AND ELIZABETH ORLANDO, AN INFANT BY HER GUARDIAN AD LITEM, ALEX ORLANDO, AND ALEX ORLANDO, INDIVIDUALLY, DEFENDANTS



Halpern, Crane and Michels. The opinion of the court was delivered by Michels, J.A.D.

Michels

[136 NJSuper Page 574] Defendant Hartford Accident and Indemnity Company (Hartford) appeals from that portion of a judgment of the Law Division awarding plaintiff Allstate Insurance Company (Allstate) counsel fees and costs incurred by Allstate in successfully prosecuting a coverage

action on behalf of Vincent Tooker, Jr. (Tooker) against Hartford.

Tooker was involved in an automobile accident while driving an automobile owned by Joseph Piorkowski with the permission of Piorkowski's son. When Hartford, which had issued its family automobile liability insurance policy to Piorkowski, refused to defend or indemnify Tooker in connection with a suit instituted against him by his injured passenger, Allstate, which had issued an automobile liability policy to Tooker as its insured, undertook the defense and paid the judgment recovered by the passenger. Allstate and Tooker thereupon instituted a declaratory judgment action to have Tooker declared an additional insured under the Hartford policy. The trial court held that Tooker was not an additional insured under that policy and entered judgment against Allstate and Tooker. On appeal we held that Piorkowski's son was an insured under the omnibus clause of the Hartford policy with implied permission to use the car, thus enabling him to give permission to Tooker, the second permittee; coverage of the Hartford policy was thereby extended to Tooker as an additional insured. We reversed the judgment and remanded the matter to the trial court for the entry of judgment in accordance with our opinion. Tooker v. Hartford Acc. & Indem. Co. , 128 N.J. Super. 217, 224 (App. Div. 1974). The trial judge on remand entered judgment in favor of Allstate against Hartford for the amount of the judgment recovered by the passenger against Tooker and awarded Allstate counsel fees and costs incurred in defending that suit, as well as counsel fees and costs incurred in prosecuting the coverage action in the trial court and the Appellate Division, together with interest, aggregating a total award of $9,973.80.

Hartford does not appeal from that portion of the judgment requiring it to reimburse Allstate for the amount of the judgment recovered against Tooker or from the award of counsel fees and costs incurred by Allstate in defending

that action. Hartford concedes that Allstate was entitled to recover the expenses incurred in defending the underlying liability action. See National Farm U. Prop. & Cas. Co. v. Farmers Ins. Group , 14 Utah 2d 89, 377 P. 2d 786, 787-788 (Sup. Ct. 1963); Continental Nat. Amer. Group v. Pluda , 115 N.J. Super. 206, 210-212 (Law Div. 1971), rev'd on other grounds 119 N.J. Super. 570 (App. Div. 1972); Zurich Ins. Co. v. New Amsterdam Cas. Co. , 117 Ga. App. 426, 160 S.E. 2d 603, 606 (Ct. App. 1968); Annotation, "Right to subrogation, as against primary insurer, of liability insurer providing secondary insurance," 31 A.L.R. 2d 1324 (1953). Cf. Burd v. Sussex Mutual Ins. Co. , 56 N.J. 383, 394 (1970). Rather Hartford contends that the trial court lacked the power to award counsel fees and costs incurred by Allstate in prosecuting the coverage action because Allstate was actually the real party in interest in that action and was not a "successful claimant" within the intendment of R. 4:42-9(a)(6), which provides:

(a) Actions in which fee is allowable. No fee for legal services shall be allowed in the taxed costs or otherwise, except

(6) in an action upon a liability or indemnity policy of insurance, in favor of a successful claimant.

We are entirely satisfied that the rule applies to all successful claimants, including an excess or secondary carrier which successfully prosecutes a coverage action against the primary carrier when the latter has wrongfully refused to defend its assured. The award of counsel fees and costs in such a case is equitable and just, and accords with the purpose of R. 4:42-9(a)(6) to discourage groundless disclaimers by carriers by assessing against them the expenses incurred in enforcing coverage for their assureds. Cf. Felicetta v. Commercial Union Ins. Co. , 117 N.J. Super. 524, 528 (App. Div. 1971), certif. den. 60 N.J. 141 (1972); N.J. Mfrs. Ins. Co. v. Consolidated , 124 N.J. Super. 598, 600-602

(Law Div. 1973). Accordingly, the trial judge had the power under R. 4:42-9(a)(6) to award to Allstate reasonable counsel fees and costs incurred in prosecution of the declaratory judgment action in the trial court.

The trial judge did not mistakenly exercise his discretion by awarding such fees and costs to Allstate even though Hartford may have had an arguable basis for denying coverage, or even though the precise issue involved may have been somewhat novel. Cf. Corcoran v. Hartford Fire Ins. Co. , 132 N.J. Super. 245-246 (App. Div. 1975); N.J. Mfrs. Ins. Co. v. Consolidated, supra , 124 N.J. Super. at 602. It seems only fair and proper that the costs incurred by ...


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