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Allstate Insurance Co. v. Moraca

Decided: October 18, 1990.

ALLSTATE INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
JO ANN MORACA, ET AL., DEFENDANTS-RESPONDENTS



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

Deighan, R.s. Cohen and Brochin. The opinion of the court was delivered by Deighan, J.A.D.

Deighan

[244 NJSuper Page 6] The question to be resolved on this appeal is whether a claim for negligent supervision or entrustment of a motor vehicle is covered by a homeowner's insurance policy that excludes claims

for injuries arising out of the ownership or use of a motor vehicle.

On April 15, 1986, Daniel Moraca's automobile struck another vehicle and caused the death of two persons and injury to two others. Four actions were instituted against Daniel Moraca and his mother, defendant Jo Ann Moraca, now known as Jo Ann Moraca Yodice (Yodice), an insured of plaintiff Allstate Insurance Company. Yodice then made claims against Allstate under her homeowner's policy for defense and indemnity of the claims against her. Allstate then filed a declaratory judgment to determine coverage. Allstate appeals from an order denying its motion and granting Yodice's cross-motion for summary judgment. We reverse.

The facts in this matter are not disputed. Daniel Moraca, seventeen, had been involved in two accidents within the first four months after he began driving, one of which he pleaded guilty to a charge of careless driving. On April 15, 1986, seven months after he began driving, Moraca was driving his automobile when he struck another automobile owned by Gerald Ramiza, causing the death of two persons and injury to two others. Four personal injury actions against Moraca and his mother, Yodice, arose out of the accident. The claims asserted against Yodice each contended that she failed to exercise sufficient control and supervision of her son in the operation of his automobile and was negligent in permitting her son to own and operate his automobile because she had reason to know of his reckless and negligent driving habits.

Yodice forwarded the complaints to Allstate for defense and indemnification under her Allstate homeowner's policy, which provides:

Section II FAMILY LIABILITY AND GUEST MEDICAL PROTECTION

Coverage X

Family Liability Protection

Losses We Do Cover:

Allstate will pay all sums arising from an accidental loss which an insured person becomes legally obligated to pay as damages because of bodily injury or property damages covered by this part of the policy.

Allstate reserved its rights and filed this action for a declaration of its obligations under its policy of insurance for the negligent supervision claims against its insured. Allstate contends that Yodice's homeowner's policy expressly precludes coverage for the claims asserted against her under the following exclusion:

Losses We Do Not Cover:

5. We do not cover bodily injury or property damages arising out of the ownership, maintenance, use, occupancy, renting, loaning, entrusting, loading or unloading of any motorized land vehicle or trailer. [Emphasis supplied.]

Yodice's homeowner's policy was in effect at the time of the accident. She also carried an automobile liability policy issued by Liberty Mutual Insurance Company, insuring Yodice and her personal automobile. Moraca was insured by an automobile insurance policy issued by Allstate.

Allstate determined that Yodice was an additional insured under her son's automobile policy and defends both under that policy in the underlying tort litigation. However, Allstate argued that Moraca and Yodice were entitled to excess coverage under Yodice's Liberty Mutual automobile policy, but not under the homeowner's policy specifically excluding such coverage.

Yodice answered Allstate's complaint and counter-claimed for a declaratory judgment that her homeowner's policy provided coverage for the negligent supervision claims. The other defendants -- plaintiffs in the personal injury actions -- also answered alleging that Allstate was obligated under the homeowner's policy to defend and indemnify Yodice.

The trial judge denied Allstate's motion for summary judgment and granted summary judgment in favor of Yodice. He determined that the homeowner's policy, not Yodice's automobile policy issued by Liberty Mutual, provided coverage and

required Allstate to indemnify and defend Yodice for negligent supervision claims in the personal injury action. An order was entered consistent with the trial judge's determination and Allstate appeals. Yodice has not appealed from the determination that Liberty Mutual does not provide coverage under her automobile insurance policy.

Allstate, relying on Scarfi v. Aetna Casualty and Surety Co., 233 N.J. Super. 509, 559 A.2d 459 (App.Div.1989), contends that the trial court erred in concluding that its homeowner's policy provided coverage for the negligent supervision claims against its insured, Yodice, arising out of her son's use of his motor vehicle.

Defendants Yodice and Gerald Ramiza, individually and as executor of the estate of Carol Ramiza, et al., and Katherine Ramiza contend that Scarfi continues the status quo and the exclusion does not ...


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