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Casey v. Selected Risks Insurance Co.

Decided: October 10, 1980.

CAROL A. CASEY, ADMINISTRATRIX OF THE ESTATE OF WILLIAM BROWN, DECEASED, PLAINTIFF-APPELLANT,
v.
SELECTED RISKS INSURANCE COMPANY, ALLSTATE INSURANCE COMPANY, INTERNATIONAL BAKERAGE, INTERNATIONAL TRANSPORT, AND MIDLAND INSURANCE COMPANY, DEFENDANTS-RESPONDENTS



On appeal from Superior Court, Law Division, Hudson County.

Allcorn, Kole and Pressler. The opinion of the court was delivered by Kole, J.A.D.

Kole

This appeal, involving a question of insurance coverage, arises out of a motor vehicle accident in which plaintiff's decedent, William Brown, allegedly was injured by a tractor-trailer operated by Albert Coaxum. The tractor, owned by Coaxum, was insured by defendant Selected Risks Insurance Company (Selected Risks). The trailer was owned by International Bakerage, a division of International Transport Services (hereafter sometimes collectively referred to as International Transport), and insured by Midland Insurance Company (Midland). Plaintiff's decedent was insured by Allstate Insurance Company (Allstate).

On February 10, 1975 plaintiff's decedent Brown filed an action against Albert Coaxum for personal injuries claimed to have resulted from a motor vehicle accident on January 4, 1974

between an automobile in which plaintiff was a passenger and a tractor-trailer operated by Coaxum. Brown subsequently died for reasons unrelated to the accident. As a result, an amended complaint was filed in August 1975 naming Carol A. Casey as decedent's representative.

Selected Risks, which insured Coaxum's tractor, informed Coaxum on April 29, 1975 that it would not defend the action, relying on the "bob-tail" provision under its policy that excluded coverage when the tractor was pulling a trailer for business purposes. It advised Coaxum that he would have to look to the insurer of the trailer. Thereafter plaintiff filed a claim against Allstate, contending that if Selected Risks did not afford coverage, then Allstate, as her decedent's insurer, was liable to defend under its uninsured motorist endorsement. A demand for arbitration with Allstate was made on May 17, 1976. However, arbitration was postponed until the question of insurance coverage could be judicially resolved.

On January 28, 1977 a default judgment of $15,000 was entered against Coaxum. In order to satisfy that judgment plaintiff filed a complaint on February 22, 1977 in the present proceedings against Allstate and Selected Risks seeking a declaration that one or the other carrier was required to satisfy the default judgment against Coaxum. On March 15, 1978 plaintiff filed an amended complaint naming International Bakerage, International Transport and their insurer, Midland, as defendants.

At the time of the accident Coaxum was hauling a trailer owned by International Bakerage, a division of International Transport. They had entered into an equipment rental agreement whereby International Transport leased Coaxum's tractor and his services as a driver. The trailer was insured by Midland under a policy which covered trailers hauled by independently-owned tractors. Coaxum was not an employee of International Transport but rather was an independent contractor-driver.

It appears that International Bakerage or International Transport first received notice of plaintiff's claim on October 10, 1977 after being informed thereof by Allstate. However, plaintiff's attorney was unable to obtain the identity of the trailer's owner until sometime prior to July 13, 1977, when he was advised by Allstate's attorneys of their proposed motion for leave to file a third-party complaint against International Bakerage and International Transport. Plaintiff's complaint naming the latter and their insurance carrier, Midland, was filed as indicated, on March 15, 1978.

All parties moved for summary judgment. The judge granted summary judgment in favor of all of the defendants. After a rehearing of the matter with regard to Midland, he reaffirmed his determination. Plaintiff appeals.

The judge granted summary judgment in favor of Allstate, after finding that the vehicle was insured by Midland at the time of the accident; in favor of Selected Risks, after finding that the limited "bob-tail" coverage in this case was not void as against public policy since both the tractor and trailer were insured at all times by Midland, and in favor of Midland, after concluding that it could not be compelled to satisfy the default judgment since it had received late notice of the accident and the claims against "both the International companies . . ." and apparently Midland were "barred by the Statute of Limitations."

We reverse as to Midland and affirm as to Allstate and Selected Risks.

I

Midland

In the record below Midland concedes, and our review of Midland's policy endorsement plainly supports, the fact that Coaxum was included as an additional insured under the Midland policy insuring ...


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