[167 NJSuper Page 355] This is a declaratory judgment action in which the parties seek a determination of their respective rights and obligations relating to certain automobile liability policies. Cross-motions for summary judgment have been
filed. Although several issues are raised, the principal question is whether the omnibus coverage provided by defendant contravenes the requirements of N.J.S.A. 39:6-46(a). Not only is the scope of that coverage in question but also its monetary limits. The material facts are not in dispute and may be summarized as follows:
On February 21, 1977 Charles C. Roselle, while operating a vehicle owned by Atlantic Chrysler Plymouth, Inc., was involved in an accident with one Joan Brown. The vehicle was being "test driven" at the time with the owner's permission. As a result of the injuries Brown allegedly sustained, suit was instituted in the Superior Court against both Roselle and the owner. This action followed.
At the time of the accident Atlantic Chrysler Plymouth, Inc. had in effect a garage owner's policy, including general automobile liability, issued by Allstate Insurance Company. At the same time, Roselle was covered by a family automobile policy issued by Keystone Insurance Company. The Allstate policy provided general automobile coverage with limits of $1,000,000, but under Endorsement No. 7 restricted that coverage for certain insureds as follows:
It is agreed that garage customers are not Insureds with respect to the automobile hazard except in accordance with the following additional provisions:
1. If there is other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer and the limits of such insurance are sufficient to pay damages up to the amount of the applicable financial responsibility limit, no damages are collectible under this policy.
2. If there is other valid and collectible insurance available to the garage customer, whether primary, excess or contingent, and the limits of such insurance are insufficient to pay damages up to the amount of the applicable financial responsibility limit, then this insurance shall apply to the excess of damages up to such limit.
3. If there is not other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer, this insurance shall apply but the amount of damages payable under this policy shall not exceed the applicable financial responsibility limit.
4. As used in this endorsement:
"applicable financial responsibility limit" refers to the applicable limit of the financial responsibility law of the state where the automobile is principally garaged.
Keystone's policy provided $100,000 of automobile liability protection, including broad form omnibus coverage. However, its "other insurance" clause indicated that as to non-owned automobiles its coverage would be "excess" over any other ...