Insurance Co. of State of Pa. v. Palmieri
| Citation | 195 A.2d 205,81 N.J.Super. 170 |
| Decision Date | 15 November 1963 |
| Docket Number | No. A--128,A--128 |
| Parties | The INSURANCE COMPANY OF the STATE OF PENNSYLVANIA, a corporation of the State of Pennsylvania, Plaintiff-Respondent, v. Pasquale V. PALMIERI et al., Defendants-Respondents, and R. Louis Ruberton, individually, and t/a Parkview Distributors and North River Insurance Company, etc., Defendants-Appellants, and Roseann Tagliaferri et al., Defendants. ZURICH INSURANCE COMPANY, etc., Plaintiff-Respondent, v. Pasquale V. PALMIERI et al., Defendants-Respondents, and R. Louis Ruberton, individually, and t/a Parkview Distributors and North River Insurance Company, etc., Defendants-Appellants, and Roseann Tagliaferri et al., Defendants. |
| Court | New Jersey Superior Court – Appellate Division |
Sidney M. Schreiber, Newark, for appellants (Schreiber, Lancaster & Demos, Newark, attorneys, Sidney M. Schreiber, Newark, of counsel, Leonard I. Weinglass, Newark, on the brief).
Michael Patrick King, Camden, for respondent The Insurance Co. of the State of Pennsylvania (Kisselman, Devine, Deighan & Montano, Camden, attorneys).
Burchard Martin, Camden, for respondent Zurich Ins. Co. and Sinclair Refining Co. (Taylor, Bischoff, Neutze & Williams, Camden, attorneys).
Before Judges GOLDMANN, KILKENNY and COLLESTER.
The opinion of the court was delivered by
KILKENNY, J.A.D.
Defendants R. Louis Ruberton, individually and t/a Parkview Distributors (hereinafter 'Ruberton'), and North River Insurance Company (hereinafter 'North River') appeal from a declaratory judgment adverse to them entered in the Chancery Division.
The Insurance Company of the State of Pennsylvania (hereinafter 'Pennsylvania') and Zurich Insurance Company (hereinafter 'Zurich') sought declaratory judgments under N.J.S. 2A:16--50 et seq., N.J.S.A., fixing their respective obligations and that of North River under certain insurance policies issued by them, by reason of a negligence action instituted by Roseann Tagliaferri and her husband against their respective insureds in the United States District Court for the District of New Jersey. Pennsylvania insured Pasquale V. Palmieri; Zurich insured Sinclair Refining Company; and North River insured Ruberton.
The facts underlying the insurance controversy are not in dispute. Palmieri was the sole proprietor of a service station in Waterford, New Jersey. On Sunday, April 3, 1960, he noticed that the supply of gasoline in the station was low. He phoned his distributor, Ruberton, who marketed gasoline for Sinclair Refining Company, and asked Ruberton if he would deliver an order of gasoline to him that day. Ruberton told him that he had company for dinner, was going out later and would be unable personally to make the delivery. Whereupon, Palmieri asked Ruberton if it would 'be all right if I came down and picked the truck up and made my own delivery.' Ruberton consented. Palmieri came to Ruberton's house and picked up the keys, went to the plant, loaded Ruberton's truck with gasoline, drove the truck to his own service station and unloaded 1500 gallons of gasoline thereat and one case of motor oil, which he had also purchased from Ruberton, at a total cost of $367.90. Palmieri, pursuant to his understanding with Ruberton that he would return the truck at his convenience within the same day, was driving the truck back to Ruberton's plant by a direct route when the accident occurred for which the Tagliaferris brought their suit in the Federal Court. Following the accident Palmieri returned the tank truck to Ruberton's plant.
Before going into the service station business Palmieri had worked for Ruberton as a driver. Ruberton ordinarily delivered gasoline to Palmieri's service station. On several prior occasions when Palmieri was in need of gasoline and Ruberton was preoccupied and unable personally to make the delivery, Palmieri himself made the deliveries in Ruberton's truck with Ruberton's approval. Palmieri was the only customer allowed by Ruberton to make such a delivery and this was simply because of Palmieri's previous employment by Ruberton. In making such deliveries Palmieri received no compensation and was charged the regular rate for the gasoline purchased by him.
The Tagliaferris charged in their District Court complaint that at the time of the accident Palmieri was acting as an employee of Ruberton and that, in turn, Sinclair Refining Company had employed Ruberton as its representative and he was then and there acting within the scope of his employment in the business of Sinclair. However, the declaratory judgment proceedings in the Chancery Division did not assume any such relationships, but proceeded on the assumptions that Palmieri was the sole proprietor of his own service station and happened to be driving Ruberton's truck at the time of the accident under the circumstances above mentioned, and that Ruberton marketed Sinclair's products, not as an employee of Sinclair, but in the conduct of his own independent business.
North River contends that the accident arose out of Palmieri's operation of his service station and that its policy issued to Ruberton did not insure Palmieri because of the following language therein:
'III. DEFINITION OF INSURED.
(a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word 'insured' includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household, 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 such spouse or with the permission of either. The insurance with respect to any person or organization other than the named insured or such spouse does not apply: (1) To any person or organization, or to any agent or employee thereof, Operating an automobile sales agency, repair shop, Service station, storage garage or public parking place, With respect to any accident arising out of the operation thereof, * * *' (Emphasis added)
Pennsylvania's policy insured Palmieri against liability arising out of the conduct of his service station and contained this provision:
'Division 2--Premises--Operations--Automobiles Not Owned or Hired.
The ownership, maintenance, or use of the premises for the purpose of * * * (a) service station * * * and all operations necessary or incidental thereto; and the use in connection with the above defined operations of any automobile not owned or hired by the named insured, * * *.'
The Pennsylvania policy, as well as that issued by North River, contained the standard 'Other Insurance ' clause.
The policy of Zurich, liability carrier for Sinclair, provides that its insurance 'shall be excess insurance over any other valid and collectible insurance.' Therefore, its basic position is that its responsibility is only for losses in excess of the North River and Pennsylvania policies.
The Chancery Division, 75 N.J.Super. 350, 183 A.2d 154 (1962), held that the accident was not one 'arising out of the operation' of the service station, so that the North River exclusion clause did not apply. At the same time, it found that the accident did occur in the course of an operation 'necessary or incidental' to the service station, so that the Pennsylvania coverage provision applied. Since both policies contained the standard clause as to 'Other Insurance,' it determined that both of these companies should bear co-responsibility for the defense of the defendants in the District Court action. It also adjudged that Pennsylvania and North River shall be liable for any judgment obtained against one or more of the defendants by the Tagliaferris, North River to pay such proportion of the judgment as the applicable limit of its liability shall bear to the total applicable limit of both Pennsylvania and North River; Pennsylvania to pay the balance of the judgment to the extent of the applicable limit of its liability.
As to Zurich, the Chancery Division held that it shall not become liable for the defense of its named insured, Sinclair...
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