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Martusus v. Tartamosa

July 9, 1997

SUSAN MARTUSUS, ADMINISTRATRIX AD PROSEQUENDUM, AND SUSAN AND ERNEST MARTUSUS, CO-ADMINISTRATORS OF THE ESTATE OF DAVID E. MARTUSUS, DECEASED, PLAINTIFFS-RESPONDENTS,
v.
THOMAS J. TARTAMOSA, DEFENDANT-RESPONDENT, AND BARBARA L. HEIM, STEPHEN P. SERALE, RENEE C. LIBERONI, JOHN DOES I AND II (FICTITIOUS NAMES OF PERSONS MORE FULLY DESCRIBED HEREIN), JOINTLY, SEVERALLY AND/OR IN THE ALTERNATIVE, DEFENDANTS, AND GENERAL ACCIDENT INSURANCE COMPANY, DEFENDANT-APPELLANT. RENEE C. LIBERONI, PLAINTIFF, V. THOMAS J. TARTAMOSA, DEFENDANT-RESPONDENT, AND TIMOTHY HEIM, BARBARA L. HEIM, STEPHEN SERALE, JOHN DOE I TO V, JOHN DOE PARTNERSHIPS I TO V, JOHN DOE CORPORATIONS I TO V, INDIVIDUALLY, JOINTLY, SEVERALLY AND/OR IN THE ALTERNATIVE, DEFENDANTS. STEPHEN SERALE, PLAINTIFF, V. THOMAS J. TARTAMOSA, DEFENDANT-RESPONDENT, AND TIMOTHY HEIM, BARBARA L. HEIM, JOHN DOE I TO V, JOHN DOE PARTNERSHIPS I TO V, JOHN DOE CORPORATIONS I TO V, INDIVIDUALLY, JOINTLY, SEVERALLY AND/OR IN THE ALTERNATIVE, DEFENDANTS. SUSAN MARTUSUS, ADMINISTRATRIX AD PROSEQUENDUM, AND SUSAN AND ERNEST MARTUSUS, CO-ADMINISTRATORS OF THE ESTATE OF DAVID E. MARTUSUS, DECEASED, PLAINTIFFS-RESPONDENTS,V. THOMAS J. TARTAMOSA, DEFENDANT-RESPONDENT, AND BARBARA L. HEIM, STEPHEN P. SERALE, RENEE C. LIBERONI, JOHN DOES I AND II (FICTITIOUS NAMES OF PERSONS MORE FULLY DESCRIBED HEREIN), JOINTLY, SEVERALLY AND/OR IN THE ALTERNATIVE, DEFENDANTS, AND GENERAL ACCIDENT INSURANCE COMPANY, DEFENDANT-APPELLANT. RENEE C. LIBERONI, PLAINTIFF,V. THOMAS J. TARTAMOSA, DEFENDANT-RESPONDENT, AND TIMOTHY HEIM, BARBARA L. HEIM, STEPHEN SERALE, JOHN DOE I TO V, JOHN DOE PARTNERSHIPS I TO V, JOHN DOE CORPORATIONS I TO V, INDIVIDUALLY, JOINTLY, SEVERALLY AND/OR IN THE ALTERNATIVE, DEFENDANTS. STEPHEN SERALE, PLAINTIFF,V. THOMAS J. TARTAMOSA, DEFENDANT-RESPONDENT, AND TIMOTHY HEIM, BARBARA L. HEIM, JOHN DOE I TO V, JOHN DOE PARTNERSHIPS I TO V, JOHN DOE CORPORATIONS I TO V, INDIVIDUALLY, JOINTLY, SEVERALLY AND/OR IN THE ALTERNATIVE, DEFENDANTS.



On appeal from the Superior Court, Appellate Division.

The opinion of the Court was delivered by Coleman, J. O'hern, J., Dissenting. Justice Pollock joins in this opinion.

The opinion of the court was delivered by: Coleman

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Susan Martusus v. Thomas J. Tartamosa, et al. (A-124-96)

Argued April 29, 1997 -- Decided July 9, 1997

COLEMAN, J., writing for a majority of the Court.

This appeal focuses on the scope of permission to use an automobile. The specific question addressed by the Court is whether the initial permission rule, first enunciated in Matits v. Nationwide Mutual Insurance Co., should be applied to excess catastrophe ("umbrella") policies.

General Accident Insurance (GAI) issued a $300,000 single-limit-liability policy to Timothy P. Heim, covering a 1989 Chevrolet Caprice and a 1989 Ford Mustang. GAI also issued to Timothy Heim an umbrella policy with a liability limit of $1,000,000. That policy provided coverage for damages arising from a person driving a covered vehicle "with your permission." The Heim's son, Michael, was the primary driver of the Mustang that was registered in the name of Barbara Heim, Michael's mother. The umbrella policy is in issue because the Heim and Tartamosa insurance policies are likely to be insufficient to cover the claims against Tartamosa.

On May 9, 1993, Tartamosa was driving the Heim's Mustang southbound on Route 42. Tartamosa had been given permission to drive the Mustang by Michael. Tartamosa lost control of the vehicle, drove across the median into oncoming traffic, and caused a collision with another car. David Martusus, the sole passenger in the Mustang, was killed in the accident.

Three people involved in the accident filed separate complaints against Tartamosa as the driver of the car and against Barbara Heim as the owner of the car. Liberty Mutual Insurance Company, the primary carrier for Tartamosa, and GAI, the Heim's primary and excess carrier, were also named as defendants in order to determine coverage and priority of coverages. All actions were consolidated.

GAI filed a motion for summary judgment, claiming that its umbrella policy did not cover Tartamosa because he had not been given permission to drive the Mustang either by Timothy or Barbara Heim, the named insured and his spouse. The trial court agreed and granted GAI's motion denying coverage under the umbrella policy.

The Appellate Division summarily reversed the decision of the trial court.

The Supreme Court granted leave to appeal.

HELD:

The initial permission rule applies to excess catastrophe ("umbrella") policies.

1. It must be determined, by a review of the language of the policy in light of controlling legal principles, whether Michael's permission to Tartamosa to drive the Mustang was sufficient to trigger coverage.

(pp. 5-6)

2. Under Matits, once a person obtains permission to drive a vehicle, the driver becomes an additional insured under a typical omnibus clause in an automobile liability policy for the duration of the driver's use of the car. This rule applies to any deviation from the initial scope of the permitted use, so long as the subsequent use does not constitute theft or a similar offense. This rule is to be liberally construed in favor of insureds. (pp. 6-9)

3. There is a public policy of protecting innocent victims of automobile accidents by broadly interpreting: 1) which users are "permissive users;" and 2) which actions should be covered by the insured's policy. Absent statutory or policy language stating otherwise, the same public policy should prevail, regardless of whether a primary automobile or umbrella policy is involved. (pp. 9-11)

4. GAI relies on Weitz v. Allstate Insurance Co. to support its position that the initial permission rule should not apply to umbrella policies because those policies are different and primary policies are mandated by law. Weitz is distinguishable. In that case, an express exclusion under the policy was controlling and the driver's permission to operate the vehicle was not at issue. (pp. 11-13)

5. The fact that primary automobile coverage is mandatory and umbrella policies are optional changes neither the principles of interpreting insurance policies nor the public policy underlying the initial permission rule. The policy of ensuring collectability of damages caused to innocent victims is advanced by applying the permissive user rule to umbrella policies. Moreover, the reasonable expectation of the insured should control to the extent permitted by the policy language. (pp. 13-15)

6. The disparity between the premiums charged for the umbrella policy and the primary liability policy does not demonstrate that the Heim's did not reasonably expect coverage under their umbrella policy for this type of accident. (pp. 15-16)

Judgment of the Appellate Division is AFFIRMED and the matter is REMANDED to the Law Division for Disposition of the personal injury complaints.

Justice O'HERN, Dissenting, is of the view that the legislative policies that sustain a broad interpretation of compulsory automobile liability insurance are inapplicable in the context of this case. The purpose behind the excess policy is different from the liability policy and the public policies undergirding the permissive user rule do not extend with equal force to umbrella policies.

CHIEF JUSTICE PORITZ and JUSTICES HANDLER, GARIBALDI and STEIN join in JUSTICE COLEMAN'S opinion. JUSTICE O'HERN filed a separate Dissenting ...


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