On appeal from final judgment in the Superior Court, Law Division, Burlington County.
Fritz, Bischoff and Morgan. The opinion of the court was delivered by Morgan, J.A.D.
Defendant St. Paul Fire and Marine Insurance Company (St. Paul) appeals from summary judgment entered in favor of its insured, Burlington County Abstract Company (Burlington), based upon the finding that St. Paul was being asked to pay on account of one claim rather than upon many separate claims and that consequently the $500 deductible amount, provided for in the insurance policy issued by St. Paul to Burlington would apply only once as against that one claim instead of being applied to each separate claim.*fn1
The pertinent facts appear undisputed. Burlington, the plaintiff and insured, is a title abstracting company which, as part of its business, undertakes to conduct real estate settlements. St. Paul insures it against liability for errors and omissions. Its policy committed St. Paul:
To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay * * * on account of any claim made against the Insured and caused by any negligent act, error or omission of the Insured or any other person for whose acts the Insured is legally liable in the performance of professional services for others in the Insured's professional capacity as a title insurance agent * * *. [Emphasis supplied]
With respect to the $500 deductible amount, it was agreed that
The policy limits of liability were $100,000 with respect to each claim, that is, "liability for all damages arising out of all acts or omission in connection with the same professional service regardless of the number of claims or claimants," and $200,000 as to total limit of St. Paul's liability for all damages during each policy year.
Plaintiff's factual statement submitted in support of its motion for summary judgment disclosed that in early 1970 codefendant QMQ Associates, presently insolvent, owned a tract of land located in Edgewater Township, Burlington County, New Jersey. This tract was originally developed as an apartment complex and was taxed as a single parcel. Thereafter, however, QMQ converted the apartment complex to a group of condominiums slated for sale and individual ownership. It was in connection with the anticipated sales of these condominium units that QMQ contracted with Burlington to perform all title service work, including supervision of the settlements on the sales of the 84 condominium units. Plaintiff performed this undertaking during 1972 and 1973 when the 84 units were sold to different purchasers. At each of these settlements, certificates of occupancy were presented to the title clerk for the condominium being conveyed.
Although QMQ was responsible for property taxes with respect to each unit accruing prior to the date title was transferred, and the purchaser was liable for taxes accruing thereafter, Burlington failed to ascertain the taxes due on the date of closing with respect to each condominium sold. In point of fact, there were past due taxes owing, later allocated to each unit with respect to the date title thereto was transferred, but those taxes were not collected from QMQ or reflected in the closing adjustments. Burlington admits its liability with respect to its failure to make individual searches, or even spot checks, so as to alert the purchasers to the past due taxes on the unit being purchased that were the liability of QMQ.*fn2 Accordingly, no escrow accounts were set up and no provision made by which QMQ's liability could be enforced. When the results of this dereliction were made known to Burlington, it paid those past due taxes, which totalled $15,821.30, the amount it now seeks from St. Paul less the $500 deductible.
St. Paul, however, refused to pay the amount sought, contending that the $500 deductible applied to each of the condominium owners' claims for taxes due for the period preceding their assumption of title. No individual claim, as St. Paul understood that term, exceeded the deductible amount and, accordingly, St. Paul was not obligated to pay Burlington anything.
The trial judge's ruling in Burlington's favor to the effect that only one claim was being made and that the deductible amount therefore applied only once as against that claim was based upon a number of considerations. First, ...