On appeal from the Superior Court, Law Division, Atlantic County.
Ard, Morton I. Greenberg and Trautwein. The opinion of the court was delivered by Morton I. Greenberg, J.A.D.
This matter is on appeal from a judgment of July 19, 1982 holding that respondent Newark Insurance Company (hereinafter called "Newark") was not responsible for insurance coverage for claims arising from a two-car automobile accident on March 10, 1978. Also on appeal is a judgment dated May 17, 1983 declaring the earlier judgment to be final as of the latter date.
One of the vehicles was owned by the Sugar Lo Company and was insured by Newark at the time of the accident.*fn1 Newark disclaimed coverage on the theory that the operator of the vehicle, David B. Kligerman, then 14 years old, was using it
without permission of its owner. Newark's contentions were accepted by the trial court, thereby relieving it of liability. Subsequently Continental Casualty Company (hereinafter called "Continental"), which had written an excess policy covering David's family, settled the damage claims arising from the accident.*fn2 Continental then took assignments of the claims against Newark by the injured parties and Continental's insureds so it could pursue them on appeal against Newark. Continental contends that David B. Kligerman, while not expressly authorized to use the vehicle on March 10, 1978, had initial permission for its use so that his subsequent use should be regarded as permissive and therefore Newark was responsible for insurance coverage pursuant to the policy it issued to Sugar Lo. Disposition of this appeal requires that both the extraordinary factual background of this case and its unusual procedural history be set forth at length.*fn3
There is no question but that David drove with his parents' consent at times before the accident. When he was 12 or 13 years old he first operated a motor vehicle. This was at Bader Field, an airport in Atlantic City. At that time David sat on the lap of his father, Alan Kligerman, and steered his father's car. Subsequently David's parents, Alan and Shirley Kligerman, permitted him, under their supervision, to drive in the driveway of their home and at Bader Field. Shirley Kligerman on perhaps two occasions stood in the driveway overseeing his driving. She considered David to be a good driver but she did not permit him to drive on public roads.
Alan Kligerman also permitted David to drive his car in the driveway approximately two times under his supervision. Alan
Kligerman permitted David to drive at Bader Field between two and five times. At Bader Field, David started the car and drove it for approximately one-half mile, making U and K turns. David's father, like his mother, considered David to be a good driver. He complimented David on his driving ability, stating that David was a rather "gifted" driver. Nevertheless he specifically prohibited David from driving on public roads. Indeed, on March 9, 1978, the day prior to the accident, Alan expressly told David that he was not permitted to drive on such roads.
David disobeyed his parents' directives to stay off public roads. Prior to March 10, 1978 David had driven his mother's car, a 1973 Volvo wagon, registered to Sugar Lo Company, a partnership in which Alan and Shirley were partners, on public roads approximately 14 times. He took the car from the driveway at his home by using his father's key to the car which he obtained from his father's key chain. David never told his parents about these excursions. He was able to conceal what he had done by usually returning the car and keys to the spots from where they had been taken and by replacing the gasoline used during the trip.
On March 10, 1978, while his father was at work and his mother was in California, David took the Volvo. At approximately 1:00 p.m., while driving with Richard Keen and Richard Blum as passengers, he was involved in an accident on a public road with another vehicle operated by Henry Nicholas. Nicholas, Keen and Blum were injured. After this accident David's parents learned for the first time that he had been operating the vehicle on the highway.
The accident generated three damage actions. In one Richard D. Blum sought damages from David as the driver of the Volvo for David's negligence and from Sugar Lo, as its owner, on an agency basis. Blum also sought recovery from David's parents and Sugar Lo on a theory they were negligent in allowing David to have access to the automobile. ...