Patrick v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 28 February 1966
• Docket Number: No. L--14395,L--14395
• Parties: Robert J. PATRICK, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
• Court: New Jersey Superior Court

Page 442

90 N.J.Super. 442

217 A.2d 909

Robert J. PATRICK, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

No. L--14395.

Superior Court of New Jersey

Law Division.

Feb. 28, 1966.

Dimon, Haines & Bunting, Mount Holly, (Dominick J. Ferrelli, Mount Holly, appearing), for plaintiff.

Edgar E. Moss, II, Camden, for defendant.

WOOD, A.C., J.C.C. (temporarily assigned).

This case presents the question whether or not a policy of automobile liability insurance issued to plaintiff by defendant State Farm Mutual Automobile Insurance Company extended to and covered the automobile which plaintiff was driving at the time of an accident.

The facts are stipulated.

On February 16, 1959 defendant State Farm issued a policy of insurance to plaintiff, insuring him against liability for personal injuries and property damages to others resulting from the ownership and operation of a 1952 Nash sedan, of which the plaintiff was then the owner. The policy was in conventional form, insuring plaintiff as owner of said Nash automobile, with limits of $10,000 for injuries to one person and $20,000 for injuries arising out of one occurrence, and $5,000 for property damage resulting from one accident.

The provisions of the policy which are crucial in this action are as follows:

'Automobile--means the private passenger automobile, utility automobile or trailer described in the declarations and includes a temporary substitute automobile and a newly acquired automobile * * *.

Newly acquired automobile--means an automobile, ownership of which is acquired by the named insured if (1) it replaces an automobile owned by the named insured and covered by this policy, or the company insures all automobiles owned by the named insured on the date of its delivery, and (2) the name insured notifies the company within thirty days following such delivery date. The named insured shall pay any additional premium required because of the application of the insurance to such newly acquired automobile.'

On or about March 1, 1959 plaintiff returned the 1952 Nash sedan identified in the policy, to the vendor thereof, and received on the same date from said vendor a 1949 Cadillac. This transaction was not reported to defendant.

On or about March 15, 1959 plaintiff returned the 1949 Cadillac to the vendor, and on the same date received from the vendor a 1951 Chrysler. This transaction likewise was not reported to defendant.

On or about May 15, 1959 plaintiff returned the 1951 Chrysler to the vendor and demanded the return of his money. Thereafter, for a short period of time, plaintiff did not own any operable automobile. The return of the Chrysler was not reported to defendant.

In the meantime, sometime between February 16, 1959 (the date of commencement of the policy period) and June 11, 1959, plaintiff acquired a 1948 red Ford pick-up truck without a motor, and thus inoperable, and had it towed to his residence. The acquisition of the pick-up truck was not reported to defendant.

After the return of the 1951 Chrysler to the vendor, plaintiff purchased a 1948 used Ford motor from a junk yard and installed it in the frame of the pick-up. After this installation he immediately sold the pick-up truck to a used car dealer and with a portion of the proceeds purchased on June 11, 1959 a 1949 Chevrolet pick-up. On the evening of the same day, and before the acquisition of the Chevrolet was reported to defendant, plaintiff, while driving the said Chevrolet pick-up, was involved in an accident in Somerville, New Jersey. Notice of the happening of the accident was immediately given to defendant through a duly authorized agent of the company. The notice was given within 30 days after June 11, 1959.

On or about May 15, 1960 plaintiff was served with a summons and amended complaint joining him as an added defendant in an action for damages arising out of the accident of June 11, 1959. The action was brought by Herbert Ewan, a minor, by his guardian Ad litem, et al., in the Superior Court, Law Division, and bore Docket No. L--8139--59. Plaintiff forthwith forwarded the summons and amended complaint to defendant. Defendant returned the papers to plaintiff accompanied by a letter dated May 19, 1960, disclaiming liability.

Plaintiff engaged counsel to defend him in said action. The suit, consolidated with others arising out of the same accident, was tried in Mount Holly before Judge McGann and a jury, and on February 28, 1962 the jury returned a verdict in the total sum of $55,100 against several defendants, including plaintiff here. In proceedings subsequent to trial, judgment was entered in favor of Michael L. Kredowski and David P. Condict, defendants-crossclaimants in said action, and against Robert J. Patrick, plaintiff here, for $15,000. That judgment, bearing Docket No. J--15385--61, remains unsatisfied of record. Plaintiff demanded of defendant that it pay the sum of $10,000, the limit of its policy liability, in partial satisfaction of said judgment, but defendant refused. Defendant has never offered and does not now offer to return the unearned premium or any portion thereof to plaintiff.

It was further stipulated that, at the time of the accident, plaintiff was driving his pick-up on the business of and as the agent of the aforesaid Kredowski and Condict, trading as Contended Warden Service, who normally supplied plaintiff with a vehicle for use in his employment. Plaintiff could have used such vehicle but chose instead to use his own. The crossclaim of Kredowski and Condict against Patrick was on the theory that he was under a contractual duty to indemnify them. In view of the subsequent judgment entered against plaintiff, any question as to his personal liability in the accident litigation would appear to be moot.

It is clear that the accident occurred within the policy period. Defendant, nevertheless, denies liability upon the grounds that:

(1) The vehicle involved in the accident was not a 'newly acquired automobile' because it was not a 'replacement' for an automobile owned by the insured and covered by the policy;

(2) Plaintiff-insured failed to give notice of the acquisition of the vehicle in question, as required by the policy.

I shall deal with those contentions in that order.

1. In my opinion the pick-up truck was a replacement vehicle. It is clear that plaintiff never, during the period in question, owned more than one operable vehicle at a time. The Nash described in the policy was replaced by the Cadillac, which was in turn replaced by the Chrysler. The parties stipulate that the red pick-up truck without a motor was acquired by plaintiff sometime between February 16, 1959 and June 11, 1959. Conceivably, plaintiff acquired this while he was the owner of one of the vehicles mentioned. But before he made it operable by acquiring and installing a motor, plaintiff had disposed of the Chrysler, so that when it became operable the Ford was his only vehicle. Until that time it was not an automobile within the meaning of the policy. An automobile is just what its name implies--a self-propelled vehicle capable of being operated on the streets and highways. The motorless truck body was simply that and no more. Without an engine it was inert and useless. It became an automobile when plaintiff acquired and installed a motor, and was then his only automobile. As an automobile, therefore, it replaced the Chrysler. When plaintiff sold it, he replaced it by purchasing the Chevrolet pick-up which was involved in the accident. Never at any time did he own more than one operable vehicle. It follows that each was a replacement for its predecessors. Cf. Maryland Indemnity & Fire Ins. Exchange v. Steers, 221 Md. 380, 157 A.2d 803 (Ct.App.1960).

Defendant argues that the Chevrolet pick-up was not a replacement because it was not a vehicle 'of equivalent use' with the passenger automobiles. The court must disagree. The policy defines 'automobile' as 'the private passenger automobile, Utility automobile or trailer described in the declarations and includes * * * a newly acquired automobile * * *.' 'Utility automobile' is defined as: 'An automobile with a load capacity of fifteen hundred pounds or less of the Pick-up body, sedan delivery or panel truck type.'

Clearly, these definitions equate pick-up and private passenger automobile under the generic head of automobile, for purposes of coverage. There is no requirement that the replacement be 'of equivalent use.'

The Delaware case of Nationwide Mutual Ins. Co. v. Mast, 2 Storey 127, 153 A.2d 893 (Super.1959), does not support defendant's contention. It merely held that a tractortrailer acquired by the policyholder in substitution for a stake body truck was a replacement within the meaning of the policy. Indeed, the consideration of 'equivalent use' was raised simply by way of dictum to support the court's conclusion. Here there is no apparent reason why the use of a passenger automobile and a pick-up cannot be equivalent. Passenger automobiles are widely used for commercial and business purposes. And, by the same token, pick-up type trucks are frequently used for private passenger use. I deem the purpose for which the pick-up was being used at the time of the accident to be immaterial.

2. I turn to the question of notice. The definition of newly acquired automobile as it related to notice must again be referred to:

'* * * an automobile, ownership of which is acquired by the named insured if (1) it replaces an automobile owned by the named insured and covered by this policy * * * and (2) the named insured notifies the company Within thirty days following such delivery date. The named insured shall pay any additional premium required because of the application of the insurance to such newly acquired automobile.' (Italics supplied).

Defendant contends that, assuming the vehicle was a replacement within the meaning of the policy, plaintiff is still not covered because of his...