On appeal from Superior Court of New Jersey, Law Division, Passaic County.
Botter, Pressler and O'Brien. The opinion of the court was delivered by Botter P.J.A.D.
[195 NJSuper Page 600] Defendant Royal Indemnity Company (Royal),*fn1 appeals from a judgment entered in this declaratory judgment action which provided that the Royal policy affords primary coverage for Joseph Gerbino up to $100,000 for injuries claimed by Karen Malmendier, a passenger in a car driven by Gerbino which was rented by Peter Marker and Spruce Scaffold & Ladder Co., Inc. (Spruce) from Passaic-Clifton Driv-Ur-Self (Passaic). The judgment also provided that the policies issued by Allstate Insurance Company (Allstate), covering a car owned by Gerbino, and by Liberty Mutual Insurance Co. (Liberty Mutual), covering a car owned by Marker, afforded excess coverage pro rata for any portion of the claim not satisfied by Royal. The judgment also provided that Royal must indemnify Gerbino for counsel
fees and costs in the sum of $4,303.99 incurred in his defense of the action brought by Malmendier. After the trial judge delivered his oral decision in the case, the Malmendier claim was settled for $50,000. That sum was paid by Royal. On this appeal Royal contends that its coverage was not primary, that its coverage was limited to $15,000 for one claimant and $30,000 in the aggregate, that Royal's obligation should be pro rated with the obligations of Allstate and Liberty, and that no counsel fee should have been awarded to Gerbino, but if one was payable it should have been shared by the other carriers. We reject these contentions and affirm.
On September 8, 1980, Joseph Gerbino, age 20, was driving a car which collided with a tree, injuring his passenger Malmendier. The car had been rented on September 5, 1980 by Passaic to Peter Marker, and nominally to Spruce. The vehicle was rented for Marker's personal use. Gerbino was Marker's stepson and a member of his household. Marker had given permission to Gerbino to use the car. Malmendier brought an action for her injuries against Gerbino, Marker, Spruce and Passaic. Allstate then brought this action to determine the obligations of the three insurance carriers involved. Allstate furnished the defense for Gerbino in the personal injury action and sought an adjudication that Royal was obligated to indemnify Gerbino for the cost of the defense which Royal refused to furnish.
The policy issued by Royal termed Passaic an insured and also provided:
Anyone else is an insured while using with your permission a covered auto you own, hire or borrow. . . .*fn2
Endorsement #3 provided that a person or organization renting an automobile from Passaic is not an insured unless Passaic is obligated by written contract to provide liability insurance for such person or organization. In such event, the endorsement provided:
. . . the insurance afforded under this policy shall apply to such person or organization, provided such person's or organization's actual operation or (if he is not operating) his other actual use of the automobile at the time of the accident was within the scope of the permission granted by the named insured licensee, subject to the limits of liability stated in endorsement #4 of the policy. It is further agreed that in the event that coverage is imposed, by operation of law, to the benefit of the customer, any person other than the customer or any authorized operator, the limits of such coverage shall be the minimum requirements of the financial responsibility law or other applicable statue [ sic ] of the state or other jurisdiction in which the accident occurred.
The endorsement also provided:
It is still further agreed that if the limits of liability stated, in the written contract, exceed the limits in item 2 of the declarations, the limits in the written contract ...