Costanzo v. Pennsylvania Threshermen & Farmers' Mut. Cas. Ins. Co., A--131

• Decision Date: 30 June 1959
• Docket Number: No. A--131,A--131
• Citation: 152 A.2d 589,30 N.J. 262
• Parties: Peter COSTANZO and Peter Mazzolani, Plaintiffs-Appellants, v. PENNSYLVANIA THRESHERMEN & FARMERS' MUTUAL CASUALTY INSURANCE COMPANY, etc., Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 262

30 N.J. 262

152 A.2d 589

Peter COSTANZO and Peter Mazzolani, Plaintiffs-Appellants, v. PENNSYLVANIA THRESHERMEN & FARMERS' MUTUAL CASUALTY INSURANCE COMPANY, etc., Defendant-Respondent.

No. A--131.

Supreme Court of New Jersey.

Argued June 2, 1959.

Decided June 30, 1959.

Jerome L. Kessler, Newark, argued the cause for plaintiffs-appellants.

Gustave A. Peduto, Jersey City, argued the cause for defendant-respondent (Charles A. Rooney, Jersey City, attorney; Marian V. Rooney-Sheehy and Gustave A. Peduto, Jersey City, on the brief).

The opinion of the court was delivered by

PROCTOR, J.

The Superior Court, Law Division, after a trial without a jury, dismissed plaintiffs' action based on an automobile liability insurance policy. On our own motion we certified plaintiffs' appeal before the Appellate Division considered it.

The controversy arose out of the following factual situation: On July 2, 1953 there was in existence an automobile liability insurance policy issued by the defendant insurer to Dennis McKnight Sturgill, Sr., as the named insured. The policy contained the following omnibus clause:

'III Definition of Insured

'With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission.'

The automobile which was covered by the policy was one of two owned by Sturgill, Sr., who lived with his family on a farm in Maryland. His 17-year-old son, Dennis McKnight Sturgill, Jr., a member of the United States Navy, was stationed at Melville, Rhode Island. Sturgill, Sr., turned the car over to his son and 'told him to just use the car around the base there and going back and forth home with it, and not to be out running around.' The son drove the car home from Rhode Island 'about every two weeks' and when home he used it 'for dates and errands and that sort of thing.' Sturgill, Sr., considered the vehicle to be a 'family car.' Sturgill, Sr. neither expressly forbade nor authorized his son to permit others to operate the car. While at the base Sturgill, Jr., used the car to 'go out on dates.' These engagements sometimes took him as far as 50 miles from the base, others occasionally sharing the operation of the car with him.

On July 1, 1953 Sturgill, Jr., and four of his friends, Costanzo, Mazzolani, Nicolosi and Gleason, also sailors stationed at the base in Rhode Island, decided to go to a dance in Passaic, New Jersey. The five boys started out for Passaic in the Sturgill car and during the trip the driving was shared by Sturgill, Jr., Gleason and Costanzo. After the dance on the return trip Nicolosi drove the car at the request of Sturgill, Jr., as the latter was not familiar with the roads in New Jersey. Shortly after the journey began all the passangers fell asleep. Nicolosi continued to operate the car until it left the roadway and struck a tree in Columbia, Connecticut.

Costanzo and Mazzolani instituted an action in Connecticut against Sturgill, Sr., and Nicolosi to recover damages for the injuries which they sustained in the accident. Sturgill, Jr., was not made a party defendant. Nicolosi defaulted and a judgment was entered against him in the amount of $17,500 for Costanzo and $500 for Mazzolani. Sturgill, Sr., defended the action and there was a judgment in his favor which was affirmed by the Connecticut Supreme Court of Errors. Costanzo v. Sturgill, 145 Conn. 92, 139 A.2d 51 (1958).

In the present action the plaintiffs, Costanzo and Mazzolani, are seeking to obtain payment of their Connecticut judgments against Nicolosi from the defendant insurer. They contend that Nicolosi was an additional insured under the above quoted omnibus clause. The limitation of liability under the policy is $10,000--$20,000. It was accordingly stipulated that any recovery herein would be limited to $10,000 for Costanzo and $500 for Mazzolani. The defendant argued below that it is not liable to satisfy the judgments to the extent of the policy because: (1) Nicolosi was not an 'insured' under the omnibus clause in that he was operating the car without the permission of the named insured; (2) the plaintiffs are foreclosed from litigating the issue of permission as that issue was decided adversely to them in the Connecticut proceedings and (3) Nicolosi failed to give notice to the defendant insurer and did not 'cooperate' with it. It was stipulated that as the insurance contract was issued in Maryland, the law of that state should control.

At the conclusion of the evidence the trial judge stated: 'I am satisfied that under the Maryland law the judgment in this case is covered by the policy issued by the defendant company.' He was concerned, however, with the question of cooperation on the part of Nicolosi, and he requested the parties to submit briefs on that subject. Subsequently, the trial judge filed a written opinion in which he held that the Maryland case of Hardware Mut. Casualty Co. v. Mitnick, 180 Md. 604, 26 A.2d 393 (Ct.App.1942) was controlling and precluded the plaintiffs' action. He concluded: 'There being no judgment against the named insured or his son, who had permissive use of the insured automobile, there must be a judgment of dismissal as to both claims.' He found it unnecessary to pass upon the other questions raised by the defendant although he did not 'believe they are insurmountable.'

On this appeal the defendant has abandoned its defense that the adverse judgment in the Connecticut proceedings forecloses the plaintiffs from litigating the issue of permission. With this exception the parties urge the same grounds before us as were advanced in the trial court.

We do not agree with the trial court that the case of Hardware Mut. Casualty Co. v. Mitnick, supra, is applicable to the present situation. In that case the named insured kept the car for the use of his granddaughter. He told her not to let anyone but herself operate the car. While she was using the car she permitted one, Harrison, who accompanied her, to drive. When he was driving a collision occurred which resulted in property damage to Mitnick. A judgment was recovered for such damages against the granddaughter and Harrison. No satisfaction was obtained on either judgment and an action was brought by Mitnick against the insurer, alleging that the granddaughter was an additional insured under the omnibus clause of the policy. The court held that the granddaughter was an insured under the omnibus clause in that she was actually using the car at the time of the accident, even though she had delegated its operation to another in violation of the instructions of the named insured. The question whether the driver Harrison was also an insured under the omnibus clause was neither decided nor alluded to by the court. We find nothing in the cited case which furnishes any indication as to the law of Maryland upon the issue presented before us. Neither party has provided us with any other Maryland authority and our own research has disclosed none.

The generally recognized approach of the courts is to give an omnibus clause in an automobile liability policy a liberal interpretation to effectuate the public policy of affording injured persons protection. Rikowski v. Fidelity & Casualty Co., 117 N.J.L. 407, 189 A. 102 (E. & A. 1937); Chatfield v. Farm Bureau Mut. Auto. Ins. Co., 208 F.2d 250 (4 Cir., 1953).

It is undisputed that Sturgill, Jr., had permission to take and use the car at a place several hundred miles from his home in Maryland. Though Sturgill, Sr., did not give him the general use of the car in the sense that he could do with it as he pleased, he did allow him a somewhat broad discretion by telling him he could use it around the base. It was a family car which the son was accustomed to use at home for his personal affairs. It is not suggested that Sturgill, Sr., intended to withdraw the protection of the policy from his son if he did not follow the fatherly advice 'not to be out running around.' It is evident that Sturgill, Sr., was primarily concerned about his son's welfare while he was away from home. Indeed, a parent who has purchased a policy of the type here involved would be astonished to learn that it did not protect his son while driving with his permission because the son disobeyed parental admonitions of this nature.

In 7 Appleman, Insurance Law and Practice, § 4368 (1942), the author states:

'(W)hen permission is given for the use of the automobile, a more extended use than that expressly permitted will be covered, and it is immaterial that the operator may have deviated from the intended route or use, or from the instructions of the owner.'

Among the authorities cited in support of the above statement is Rikowski v. Fidelity & Casualty Co., supra. In that case the former Court of Erors and Appeals held that the omnibus clause in an insurance liability policy extended coverage to the named insured's chauffeur, whose use of the car at the time of the accident was beyond the scope of the instructions of his employer. The statement in Appleman should be afforded an even broader application when we are dealing with the permissive use of an automobile in a family relationship than with an employer-employee situation. In the present case we are of the opinion that even if the instructions of Sturgill, Sr., to his son be taken as a limitation on the use of the car, and as indicated above we do not think they were so intended, the trip to Passaic was not such a deviation as would serve to terminate the son's permissive use of the car. See cases collected in Annotation, 72 A.L.R. 1375, 1401 (1931); 7 Appleman, supra, §§ 4366--68.

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