Bryan Const. Co. v. Employers' Surplus Lines Ins. Co.
| Decision Date | 24 April 1972 |
| Citation | 290 A.2d 138,60 N.J. 375 |
| Parties | BRYAN CONSTRUCTION CO., Inc., Plaintiff-Appellant, v. EMPLOYERS' SURPLUS LINES INSURANCE COMPANY et al., Defendants-Respondents. |
| Court | New Jersey Supreme Court |
Joseph J. MacDonald, Ridgewood, for the appellant (Harrison, Hartman & MacDonald, Ridgewood, attorneys).
Brian C. Harris, East Orange, for the respondent Employers' Surplus Lines Insurance Company (Braff, Litvak, Ertag & Wortmann, East Orange, attorneys).
Gerald W. Conway, Newark, for the respondent Employers Mutual of Wausau (Schreiber, Conway, Reiseman & Michals, Newark, attorneys).
William J. Cleary, Jr., Jersey City, for the respondent The Aetna Casualty and Surety Company (Lamb, Blake, Hutchinson & Dunne, Jersey City, attorneys).
We agree essentially with the views expressed by Judge Conford in his dissenting opinion in the Appellate Division (116 N.J.Super. 88, 98--105, 281 A.2d 97 (1971)); accordingly the judgments in favor of The Aetna Casualty and Surety Company and Employers Mutual of Wausau are affirmed and the judgment in favor of Employers' Surplus Lines Insurance Company is reversed.
We are satisfied that here the plaintiff-assured reasonably expected that the policy issued to it by the Employers' Surplus Lines Insurance Company would provide coverage against negligence claims relating to its construction of the building where the underlying policies failed to do so. It must be borne in mind that the underlying policies were in substantial amounts and that the policy which the assured sought and obtained from Surplus Lines was intended to operate as and was expressly called an 'umbrella policy' by the insurer. Its very nomenclature suggested a purpose to protect against gaps in the underlying policies and indicated more than mere excess coverage. Cf. Gerhardt v. Continental Ins. Co., 48 N.J. 291, 295--96, 225 A.2d 328 (1966). The policy was undoubtedly ambiguous but under settled principles the ambiguity is to be resolved against the insurer. See Bauman v. Royal Indem. Co., 36 N.J. 12, 21, 174 A.2d 585 (1961); Hunt v. Hospital Service Plan of N.J., 33 N.J. 98, 102, 162 A.2d 561 (1960). Despite repeated cautions from the courts, insurers still persist in using obscure terminology which laymen find unfathomable. Cf. Allen v. Metropolitan Life Ins. Co., 44 N.J. 294, 302, 208 A.2d 638 (1965). While the courts are in no position to dictate the terminology they are in a position to mold the pertinent legal doctrines with a view toward affording just measures of protection to the assured. Professor Keeton recently noted that insurance law has been moving steadily towards the principle that 'the objectively reasonable expectations of applicants...
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