Carr v. State Farm Mut. Ins. Co.
| Decision Date | 24 May 1971 |
| Citation | 278 A.2d 239,115 N.J.Super. 103 |
| Parties | Harry G. CARR, Plaintiff, v. STATE FARM MUTUAL INSURANCE COMPANY, a body corporate authorized to do business in the State of New Jersey; and Julia Solan, Defendants. |
| Court | New Jersey Superior Court |
Alan M. Wallack, Princeton, for plaintiff (Jamieson, Walsh, McCardell, Moore & Peskin, Princeton, attorneys).
Richard I. Wood, Trenton, for defendant State Farm Mutual Ins. Co. (Lewis, Siegel & Wood, Trenton, attorneys).
Stephen J. Zielinski, Trenton, for defendant Julia Solan.
SEIDMAN, J.C.C. (temporarily assigned).
This is a declaratory judgment action wherein plaintiff Harry G. Carr seeks a determination of coverage under a policy of automobile liability insurance issued by defendant insurer. By agreement of counsel the matters in controversy have been submitted to the court for decision on the basis of the pleadings, the deposition on file, the insurance policy and the memoranda of law.
The main issue presented is whether, under an automobile liability policy which covers a replacement automobile if the insured notifies the insurer thereof within 30 days following the delivery date, the insurer is obligated to defend the insured and pay any judgment that might be obtained in an action brought by a person injured in an accident involving the replacement automobile occurring beyond the 30-day period, the insured having notified the insurer of the acquisition of the automobile after the accident. The precise point involved does not appear to have been decided in any reported case in this State.
A secondary issue is whether notice of the accident was given to the insurer or its agent as soon as practicable.
The parties have stipulated that a policy of automobile liability insurance issued to the plaintiff was in effect on August 5, 1967, when an accident occurred in which Julia Solan was injured. That the vehicle in question was not specifically described in the policy is also stipulated.
Although Julia Solan is joined as a party defendant, she has not participated actively in these proceedings.
In his complaint plaintiff alleges that he became the owner of a Chevrolet Corvair on or about July 14, 1967 (actually, the purchase was in April), and that on or about August 5 of that year, while operating the automobile, he was involved in an accident resulting in bodily injury to his passenger, Julia Solan. A negligence suit against plaintiff was instituted by the passenger and is now pending in the Law Division of this court. The complaint further alleges the issuance of the policy and the refusal of defendant insured to defend the lawsuit and to pay any adverse judgment that might result.
State Farm disclaims any obligation to plaintiff, contending that while it had issued a policy of insurance to him, it was for another automobile, and plaintiff never made application for coverage on the Corvair. The insurer also alleges plaintiff's failure to give timely notice of the occurrence, in accordance with the terms of the policy.
It is not in dispute that for some years prior to the accident in question plaintiff had owned a standard policy of automobile liability insurance issued by State Farm. The one submitted to the court is for a six-month period commencing October 24, 1963, and renewable for like periods thereafter upon the payment of the premium. The described automobile is a 1963 Ford.
From plaintiff's deposition it appears that he occasionally bought used automobiles, worked on them to make them operable, and then either sold the automobile or kept it in replacement of or in addition to one he already owned. He bought the Corvair for $25 in April 1967, and in July, when it was operable, he took it for inspection. On the way back a head gasket blew and the car then remained in his yard until repairs were completed two days before the accident.
Carr admits he did not apply for coverage when he bought the Corvair. He acknowledges, in a statement he gave to a State Farm representative, that 'my intention was to get the Corvair insured by State Farm after I felt that the car was in good mechanical condition.' It appears that the first time a State Farm agent learned of either the Corvair or the accident was in October 1967, when Carr went to the local office to pay the renewal premium and the agent, observing a bandage on Carr's head, made inquiry. When asked why he had not reported the acquisition of the Corvair, Carr's response was that he had not intended to insure it until it was working properly. Carr also claims he did not understand he was required to give notice to the company within 30 days after delivery of the automobile. He thought he could do so when he was ready to operate the vehicle, having heard he could do so anywhere from 30 to 90 days after registration.
There is essentially no controversy respecting these facts and they can be considered as having been found by the court.
It is now necessary to examine the pertinent provisions of the policy. One of the insuring agreements is to pay all damages which the insured shall become legally obligated to pay because of bodily injury sustained by other persons, caused by accident arising out of the ownership, maintenance or use of the owned automobile. By definition, the term 'owned automobile' includes 'a newly acquired automobile,' which is described as follows:
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 named insured notifies the company within 30 days following such delivery date. * * * (Emphasis supplied)
Plaintiff argues, first, that the Corvair was a replacement automobile, citing Wojciechowski v. Hardware Mutual Casualty Co., 105 N.J.Super. 144, 251 A.2d 316 (Law Div.1969) but the point is conceded by State Farm's counsel, whose supplemental memorandum of law stipulates that the Corvair replaced the previously insured automobile.
The next contention is that clauses identical or very similar to the one at bar provide automatic insurance for the newly acquired automobile regardless of notice, At least for the period described in the policy. It has been held that where a policy requires notice of a newly acquired automobile within 30 days of the delivery date, interim coverage is automatic and gives protection for an accident occurring within that period, even though notice of acquisition has not been given in that time. Patrick v. State Farm Mut. Auto. Ins. Co., 90 N.J.Super. 442, 217 A.2d 909 (Law Div.1966). See also National Union Fire Ins. Co. v. Falciani, 87 N.J.Super. 157, 208 A.2d 422 (App.Div.1965), holding that when automatic coverage of after-acquired automobiles is provided and the insured acquired an additional automobile, notice during the policy period was not a condition precedent to coverage and coverage was not forfeited by the insured's failure to give notice within the policy period.
In the case now before the court State Farm knew nothing about the Corvair until October, six months after its acquisition; in fact, the accident itself was not reported for more than two months, and then only indirectly.
State Farm stipulates that had the accident occurred within 30 days of the date of delivery of the Corvair, the automatic insurance clause would have been operative and coverage would have been afforded and that notice within the 30-day period is not necessary to effect coverage...
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