On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Before Judges Havey, Landau and Newman.
The opinion of the court was delivered by: Newman, J.A.D.
This appeal involves the question of the respective obligations of various insurance companies under their automobile liability policies. Because we have determined that the various policies are all co-primary and shall share equally in the settlement up to the maximum of the lowest amount of coverage provided by any one insurer, we reverse.
The facts are not in dispute. Leonard Weinberger was partowner of Fortune Garden, Inc., a restaurant in Teaneck. On September 12, 1993, Fortune Garden employed Joel A. Nierenberg on a trial basis. While making a food delivery, Nierenberg was involved in a car accident with Darren Ambrosio and Vincent Ottomano. At the time of the accident, Nierenberg was driving a vehicle owned by Affordable Auto Rental, Inc. (Affordable Auto) and leased to Weinberger.
Weinberger rented the vehicle driven by Nierenberg on September 5, 1993 because his own vehicle was "mechanically unreliable." Weinberger said that he "was having difficulty starting the car in the morning on numerous occasions, ... and it had been in and out of the shop to have that problem solved."Ambrosio and Ottoman instituted an action for the injuries they sustained. They sued Nierenberg, Affordable Auto, Weinberger and Fortune Garden. Weinberger filed a third-party complaint naming Allstate Insurance Company (Allstate), the provider of Weinberger's personal automobile insurance policy, as a third-party defendant.
The trial Judge directed the parties to submit briefs regarding coverage issues in order for him to determine the priority of insurance coverage available to plaintiffs. In a written opinion of January 10, 1997, the trial Judge determined that the policy issued by Unity Fire and General Insurance Company (Unity) to Affordable Auto was primary. Secondary coverage was found to be shared by both Progressive Casualty Insurance Company (Progressive), the insurer of Fortune Garden and First Trenton Indemnity Company (First Trenton), the automobile insurer of Nierenberg's father. If the above policy limits were exhausted, further coverage would be provided by the Allstate policy issued to Weinberger.
The parties then agreed to settle the case with the understanding that the apportionment between the insurance carriers could be altered after review by this court.
Fortune Garden appealed and Affordable Auto and Allstate filed cross-appeals. We address each of the arguments directed at the various policies in the following order: First Trenton, Allstate, Unity and Progressive.
Fortune Garden contends that the First Trenton policy that was issued to Samuel Nierenberg, Nierenberg's father, should be deemed primary and all other applicable policies should be deemed co-secondary.
The liability insurance section of the First Trenton policy states:
"We will pay damages for which the insured becomes legally responsible because of bodily injury or property damage caused by accident and arising out of the ownership, maintenance or use of your car or any non-owned car."
Our obligation to pay or defend ends when the applicable limit of liability is used up by the payment of judgments or settlements. The limits of liability are shown on the declarations page of this policy.
For a "non-owned" car, an insured is defined, in part, as "you and any relative ... while using that car if the use is (or is reasonably believed to be) with the owner's permission." The trial Judge found that Nierenberg, the son of the insured listed on the declaration page of First Trenton's policy, was a permissive user of the vehicle leased by Weinberger. This finding is not manifestly unsupported by the competent, relevant and reasonably credible evidence. See Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). Thus, Nierenberg falls under the definition of an "insured" under the policy.
Referring to two "other insurance" clauses in First Trenton's policy, Fortune Garden argues that First Trenton's policy is primary as to any other available insurance. The first "other insurance" clause quoted by Fortune Garden is found in the uninsured/underinsured motorists insurance section of the policy and is inapplicable. Fortune Garden's reliance on ...