On appeal from the Superior Court of New Jersey, Law Division, Morris County.
Michels, Pressler and Trautwein. The opinion of the court was delivered by Michels, P.J.A.D.
Plaintiff American Home Assurance Company (American Home) appeals from a summary judgment of the Law Division that dismissed its declaratory judgment action against defendants Hartford Insurance Company (Hartford) and Allstate Insurance Company (Allstate). American Home sought a declaration that the automobile liability insurance policies issued by Hartford and Allstate provided primary and concurrent insurance coverage to its assured William Stivale (Stivale) for all claims made against him by David Bilicki (Bilicki) and his wife Rosemary Bilicki arising out of an accident that occurred at Stivale's service station.
The facts essential to a resolution of the issues raised in this appeal are not in dispute. On January 14, 1978 Stivale, trading as Bill's Service Center, owned and operated a service station in Ironia, New Jersey. At about 4:30 that day Bilicki drove his private passenger Ford automobile to the station and asked Stivale to replace the spare tire on the front wheel with a tire that Bilicki had left with Stivale for repair earlier in the day. Bilicki drove the automobile into the center bay of the station so that it could be raised from the floor by means of an hydraulic lift. While Stivale was adjusting the pads of the lift in preparation for raising the automobile, Bilicki got out of the automobile, walked to the rear of the automobile and opened the trunk. Stivale also walked to the rear of the automobile to adjust the pads on its right rear side. At this time Stivale observed Bilicki "reaching in, sort of bending over" the trunk. Stivale then
moved to the front of the automobile and adjusted the right front pad. At this time, Stivale noticed that the trunk lid was still open, but he did not see Bilicki.
Stivale, assuming that Bilicki had left the service bay and had gone into the office, activated the lift. Bilicki, however, had not left the service bay. Rather, Bilicki had climbed into the trunk of the automobile in an attempt to locate the clip used to hold down the automobile's jack and then to secure the jack. While Bilicki was in the trunk, Stivale raised the automobile approximately six or seven feet above the floor of the service bay. Stivale stopped the lift and changed the tire. According to Stivale, just as he finished tightening the fourth wheel nut he heard a "sort of a thud" and then a "groan." He looked toward the rear of the automobile, saw Bilicki on the floor, and realized that Bilicki had fallen out of the trunk of the automobile. Bilicki's version of the accident coincides with that offered by Stivale. Bilicki testified during depositions that when he finished securing the jack in the automobile he stepped back out of the trunk and fell the six or seven feet to the concrete floor below, sustaining severe personal injuries.
Thereafter, Bilicki instituted suit against Stivale to recover damages for the personal injuries he sustained in the accident. His wife sued per quod. Bilicki charged that Stivale was negligent in maintaining the premises and in operating the machinery and equipment, specifically in raising the automobile on the hydraulic lift without issuing any warning to him.
American Home had issued a service station policy of insurance to Stivale, which was in effect on the day of the accident. This policy provided liability coverage for bodily injury "caused by an occurrence and arising out of the service station operation hazard," with a limit of $500,000 for each occurrence. The Ford automobile that Stivale was servicing for Bilicki was owned by Industrial Leasing Corporation. Allstate had issued a general automobile liability policy to Industrial Leasing Corporation that also was in effect at the time of the accident, and which
provided, among other coverages, comprehensive automobile bodily injury liability coverage with limits of $1,000,000 for each occurrence. Industrial Leasing Corporation had leased the automobile to PPG Industries, Inc., Bilicki's employer. Hartford had issued a casualty insurance policy to PPG Industries, Inc., which also provided comprehensive automobile bodily injury liability coverage with limits of $1,000,000 for each occurrence. This policy provided that the comprehensive coverage applied to "All Owned, Non-Owned & Hired Autos." The insuring clauses in the Allstate and Hartford policies were identical and provided coverage for bodily injury "caused by an occurrence and arising out of the ownership, maintenance or use, including loading and unloading, of any automobile." Notice of Bilicki's claim and lawsuit against Stivale was given to Hartford and Allstate and demand made upon each of them to extend coverage to Stivale under their respective policies. Hartford and Allstate denied coverage.
American Home thereupon undertook the defense of the Bilicki suit on behalf of Stivale. Bilicki's claim was eventually settled for $100,000 and thereafter a consent judgment was placed on the record. American Home paid the full amount of the judgment and immediately instituted this action.
Hartford and Allstate denied that their policies afforded Stivale coverage for the Bilicki injury and moved for summary judgment. Allstate also argued that if coverage were found to exist under the two policies that covered the Bilicki automobile, Hartford's policy would be primary and Allstate's policy would provide excess coverage over and above that provided by Hartford. At the conclusion of argument, the trial judge held that if there were coverage under the Hartford and Allstate policies, Hartford would be primary and Allstate excess as between the two. However, the judge concluded that neither policy afforded coverage because there was not a substantial nexus between the use of the automobile in the circumstances and the injury, reasoning, in part, that
The injury didn't flow out of the maintaining. The injury flowed out of your insureds putting it up on the lift and not looking to see whether or not Mr. Bilicki was in it.
This appeal and cross-appeal followed.
The principal thrust of American Home's contention is that the omnibus provisions of the Hartford and Allstate comprehensive automobile liability policies afforded coverage for this accident. Specifically, American Home claims that Stivale was a permissive user of the automobile; that the injury to Bilicki arose out of the use and/or maintenance thereof, and that the trial judge erred in holding that there was not a substantial nexus between the injury and the use or maintenance of the automobile. We agree and reverse.
The insuring and omnibus provisions of the comprehensive automobile liability provisions of the Hartford and Allstate policies are virtually identical. The ...