On appeal from Superior Court, Law Division, Essex County.
Michels, Pressler and Bilder. Bilder, J.s.c. (temporarily assigned). Michels, J.A.D. (dissenting).
This is an appeal by an insurance broker from a determination that a Broad Form Contractors' Equipment Floater did not cover damage to an after-leased but yet unscheduled item of heavy equipment and from judgments in favor of the insured against the broker for negligence in interpreting the policy and in favor of the insurance company and against the broker for common law indemnity.
On June 5, 1973 Fenwick Machinery, Inc. leased a piece of heavy construction equipment to A. Tomae & Sons, Inc. On June 13, while in Tomae's possession, the equipment was damaged. At that time Tomae (hereinafter the insured) was insured under a Broad Form Contractors' Equipment Floater issued by The American Insurance Company (American) and acquired by the insured through its insurance broker Brounell, Kramer, Waldor, Insurance Brokers (hereinafter the broker), an agent of American. American disclaimed coverage of the loss and litigation ensued.
Fenwick sued the insured; the insured brought a third-party action against the broker and the insurance company, and the insurance company cross-claimed against the broker for indemnity. Fenwick obtained a judgment of $21,907.50
against the insured; the insured obtained a similar judgment against the broker and the insurance company, and the insurance company obtained an indemnity judgment against the broker.
Prior to trial the broker and the insured brought motions for summary judgment against the insurance company, asserting that as a matter of law the policy covered the loss. The insurance company brought a cross-motion for summary judgment contending noncoverage. The trial judge found that the policy did not by its terms afford coverage and therefore denied the broker and insured's motions and granted the insurance company partial summary judgment with respect to the policy language -- leaving open the question as to whether the company might still be bound by representations of its agent.
The insurance policy and its effectiveness are undisputed. The terms relevant to this dispute are as follows -- from the first page of the policy:
This policy insures Contractors' Equipment (as set forth in schedule on or attached to this policy) the property of the Insured or the property of others held by the Insured and for which the Insured is liable.
9. ADDITIONALLY ACQUIRED PROPERTY
Subject otherwise to all its terms and conditions, this policy is extended to cover additional items of a nature similar to those scheduled herein or usually covered under a Contractors' Equipment Floater, the property of the Insured, which items have been acquired subsequent to the attachment date and during the term of this policy. In consideration of this extension the Insured agrees to report such additions within thirty (30) days from the date acquired and to pay premium thereon from the date acquired at pro-rata of the policy rate. It is specifically agreed and understood, however, that this policy shall cease to cover such additional items if they are not reported to the Company within the said thirty (30) day period. The Company shall not be liable under the ...