[174 NJSuper Page 502] This action came on for trial before the court without a jury. The issue to be decided is one of first impression in this State. Simply stated the question is whether a husband, as the sole named insured under an automobile liability policy, may delete coverage for a motor vehicle insured under the policy but owned
and controlled by his separated spouse. For the reasons stated herein the court finds that the husband's amendment to the policy cancelling coverage for his wife's motor vehicle was void and without legal effect. Plaintiff therefore is entitled to coverage under the policy for liability, collision loss and personal injury protection benefits.
Plaintiff Marian Matland was the owner of a 1974 Pontiac she was operating on January 1, 1978 when it was involved in a motor vehicle accident. This accident resulted in personal injury to plaintiff, property damage to her vehicle and personal injury and property damage to the owner and/or occupant of another vehicle. About three weeks after the accident plaintiff was advised that coverage for her collision loss and personal injury protection benefits was being denied by defendant United Services Automobile Association (hereinafter USAA). Subsequent to that notification a liability suit was filed wherein Marian Matland was a named defendant, and USAA denied coverage in that litigation. As a result of the denial of coverage by USAA this suit was brought. The liability action of Lehman v. Matland and County of Middlesex has been stayed pending determination of coverage in this matter.
Plaintiff had been the registered owner of the 1974 Pontiac for about three years before the accident. She had been insured by USAA under the assigned risk program since 1976. Defendant Harold Matland had been involved in the sale of various kinds of insurance for about 16-17 years and, although not an agent for USAA, had been insured by them for about five years prior to the accident. The evidence indicates, through his testimony, that to be insured by USAA one must be or have been a commissioned officer in the military service. Thus, while he wrote the policy for plaintiff with USAA, he did so only under the assigned risk program.
In September or October 1978 there was a conversation between Mr. and Mrs. Matland in which the subject of Mrs. Matland's insurance was discussed. She contends that her husband suggested that she be placed under his insurance policy in order to save her money. He denies that the change was made at his suggestion. It is his position that Mrs. Matland requested that he place her vehicle under his policy for the purpose of
saving money. However, he did admit that he told her it would save her over $500 in premiums. The agreement was that she would pay her proportionate share of the premium on the policy. The resolution of this factual conflict is unimportant to the determination of the issue. Matland testified that he effected the policy change, adding Mrs. Matland's 1974 Pontiac as an insured vehicle to his policy on October 23, 1977.
In accordance with Mr. Matland's request, USAA issued an amended "Declarations" sheet effective as of October 23, 1977, but dated and apparently mailed on December 19, 1977. The declaration sheet is subdivided into six enumerated "items." Item 1 is entitled "Named insured and address." It contained the name of defendant Harold Matland and his address. Item 2 contained the policy period (October 23, 1977 to October 23, 1978) and a "Numerical designation of operators" which provided as follows:
Lic. # N.J. M08243150001223
Item 3 contained a description of "owned automobile or trailer" and read in part as follows:
Veh. Year Trade Name Model
02 74 Pontiac F/Bird Esp.
Item 5 dealt with coverages as to each vehicle and premium charges as to each vehicle and type of coverage. In the same item the insurer states that one of the reasons for the adjustment of premium is "added operator 02 -- added veh. 02." To further reflect the amendment, defendant USAA issued two insurance identification cards to plaintiff. One card read, "Marian L. Matland c/o Harold Matland, Lt. U.S.N. Ret., R.D. 2, Tullo Rd., Martinsville, N.J." The second card read simply, "Marian L. Matland, R.D. 2 Tullo Rd., Martinsville, N.J." Both cards referred to the same policy number, the same policy period, and the same 1974 Pontiac.
The policy itself is titled "Family Automobile Policy" and is divided into several parts. In "Part I -- Liability" coverage for
bodily injury and property damage is provided for "all sums which the insured shall become legally obligated to pay as damages . . .." An "insured" is defined as "a person or organization described under 'Persons Insured.'"
The "Persons Insured" paragraph says in part:
(a) with respect to the owned automobile,
(1) the named insured and any resident of the ...