National Union Fire Ins. Co. of Pittsburgh, Pa. v. Falciani

• Decision Date: 23 March 1965
• Docket Number: A--1085,Nos. A--1068,s. A--1068
• Citation: 87 N.J.Super. 157,208 A.2d 422
• Parties: NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Plaintiff-Appellant, v. Marie FALCIANI, General Administratrix of the Estate of Eugene R. Lattanzi, Defendant-Crossclaimant-Appellant-Respondent, and The Estate of Douglas A. Veale, George C. Hinson, Romeo Lattanzi and Maryland Casualty Company, Defendants, and National Grange Mutual Insurance Company, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 157

87 N.J.Super. 157

208 A.2d 422

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PENNSYLVANIA, Plaintiff-Appellant, v. Marie FALCIANI, General Administratrix of the Estate of Eugene R. Lattanzi Defendant-Crossclaimant-Appellant-Respondent and The Estate of Douglas A. Veale, George C. Hinson, Romeo Lattanzi and Maryland Casualty Company, Defendants and National Grange Mutual Insurance Company, Defendant-Respondent.

Nos. A--1068, A--1085.

Superior Court of New Jersey, Appellate Division.

Argued Nov. 23, 1964.

Decided March 23, 1965.

William P. Doherty, Jr., Bridgeton, for National Union Fire Ins. Co. (David L. Horuvitz, Bridgeton, attorney).

James P. MacLean, III, Camden, for Marie Falciani, Gen. admx. of estate of Eugene R. Lattanzi (Archer, Greiner, Hunter & Read, Camden, attorneys, Angelo J. Falciani, Woodbury, attorney).

Frank F. Neutze, Jr., Camden, for estate of Douglas A. Veale and Maryland Cas. Co. (Taylor, Bischoff, Neutze & Williams, Camden, attorneys).

Michael A. Orlando, Camden, for National Grange Mut. Ins. Co. (Samuel P. Orlando, Camden, attorney).

Before Judges GAULKIN, FOLEY and COLLESTER.

The opinion of the court was delivered by

GAULKIN, S.J.A.D.

On January 2, 1961 Douglas A. Veale was driving a 1940 Ford coupe owned by Romeo Lattanzi when he ran into a tree. Veale and Eugene R. Lattanzi, son of Romeo, were killed; the other passenger, George C. Hinson, was injured.

National Union Fire Insurance Company (National Union) had issued a 'Family Combination Automobile Policy' covering Romeo Lattanzi from April 4, 1960 to April 4, 1961. National Grange Mutual Insurance Company (National Grange) had issued a policy covering Romeo Lattanzi from February 7, 1960 to February 7, 1961. Maryland Casualty Company had issued a policy covering Douglas A. Veale.

National Union instituted this action for a declaratory judgment, seeking to be exonerated from all liability with reference to the accident, or, in the alternative, to have National Grange declared a co-insurer. Romeo Lattanzi and those claiming damages because of the accident resisted National Union's effort to be relieved of liability, and also sought to have National Grange declared a co-insurer. Maryland Casualty took the position that National Union and National Grange were primary insurers and its policy was excess insurance. The Chancery Division adjudged that the policy of National Union insured Veale and Romeo Lattanzi with reference to the automobile involved in the accident, but that the policy of defendant National Grange did not, and therefore National Grange was free of liability. It held that the policy of Maryland Casualty was excess insurance. National Union appeals, and those seeking damages as a result of the accident cross-appeal from the exoneration of National Grange.

There appears to be no challenge of the holding that the policy of Maryland Casualty Company is excess insurance, and that holding is affirmed. We affirm, also, that portion of the judgment which holds that the National Union policy covers, for the reasons stated by Judge Wick. However, we hold the National Grange policy also covers, and that National Grange is a primary co-insurer with National Union.

The automobile which was involved in the accident was acquired by Romeo Lattanzi about December 15, 1960. Those claiming the benefit of the National Grange policy (including Romeo Lattanzi) contended that the automobile was automatically covered as soon as it was acquired because the policy provided:

'Condition No. 2

Premium If the named insured disposes of, acquires ownership of or replaces a private passenger, farm or utility automobile or, with respect to Part III, a trailer, he shall inform the company during the policy period of such change. Any premium adjustment necessary shall be made as of the date of such change in accordance with the manuals in use by the company. The named insured shall, upon request, furnish reasonable proof of the number of such automobiles or trailers, and a description thereof.'

For brevity, hereafter we shall call this provision 'Condition 2.'

National Grange admits in its brief that under Condition 2 'the named insured has the right to extend coverage to after-acquired or substitute automobiles by giving notice to the company during the policy period.' However, it argues that the insured has the option not to submit a newly acquired automobile for coverage, and that here Romeo Lattanzi had elected, before the accident, not to have National Grange cover the automobile.

The evidence shows that in December 1960, after Lattanzi purchased the automobile, he went to Bertram E. Harper, the agent of National Union, and arranged for the National Union policy to cover it. In addition, he arranged with Harper for National Union to take over the insurance on the two automobiles described in the National Grange policy when that policy expired, on February 7, 1961. Lattanzi did not notify National Grange of the acquisition of the automobile prior to the accident. Indeed, we find no evidence in the record to indicate when National Grange first learned of the acquisition of the automobile, or whether it was 'during the policy period.'

National Grange argues that the foregoing facts show clearly that Lattanzi elected not to have its policy cover this automobile, and therefore there was no contract between Lattanzi and National Grange to cover it. We disagree.

There is nothing in the evidence to show that Lattanzi understood that Condition 2 provided coverage for after-acquired vehicles, and that he knowingly rejected the coverage. Therefore, we need not pass upon the question whether a knowing election not to avail himself of coverage, not communicated to the insurer, debars an insured from thereafter claiming the coverage.

The facts in the case at bar are similar to those in Imperial Casualty & Indemnity Co. v. Relder, 308 F.2d 761 (8 Cir. 1962). In that case the policy contained Condition 2. The policy period was from August 12, 1959 to August 12, 1960. On October 1959 Relder purchased a new automobile but made no report thereof to Imperial Casualty & Indemnity Company. Instead, he obtained a policy from Home Indemnity Company covering the new automobile. In June 1960 the automobile was involved in an accident. The court held that the Imperial Casualty & Indemnity Company policy covered, saying:

'* * * The construction of this contract should be upon the basis of the written contract itself and not upon any subjective intention of the parties. Many individuals acquiring or purchasing insurance policies do not know and are not aware of the extent of coverage of such policies. (at page 763)

Appellant's primary contention is that the intent of the parties, as shown by their actions, was that the policy should not provide coverage for the after-acquired 1959 Oldsmobile which was involved in the collision. Appellant directs attention to the fact that when Relder acquired the 1959 Oldsmobile approximately two months after the issuance of the policy with which we are here concerned he did not advise the appellant; that instead he called the agent of another insurance company and directed insurance on the 1959 Oldsmobile from Home Indemnity Company; that he at no time reported to the appellant or its agent the acquisition of the 1959 Oldsmobile until subsequent to the accident of June 19, 1960; that in answer to the question, 'Was it your intention that the policy of insurance issued by the Imperial Casualty & Indemnity Company cover the 1959 Oldsmobile?', he stated, 'Well, I didn't intend that it did or that it didn't.'; and that he had not intended to pay the Swade agency (appellant's representative) additional premium for the 1959 Oldsmobile. (at page 764)

The meaning of condition 2 in the policy with which we are here involved seems to us open and clear. It requires no construction, strained or otherwise. It is not susceptible of different interpretations. Each of the three possibilities described--that is, if the named insured 'disposes of, acquires ownership of or replaces a private passenger * * * automobile'--are separate and distinct and refer to automobiles the insured may 'dispose of', 'acquire ownership of', or 'replace'. That two or more automobiles are contemplated by the policy is also made clear by the sentence 'The named insured shall, upon request, furnish reasonable proof of the number of such automobiles * * * and a description thereof.'

The policy provides for notice to the company only 'during the policy period of such change', an extremely liberal provision which undoubtedly the appellant used in its sales advertising by drawing comparison with standard policies requiring notice of change, acquisition or replacement of automobiles within a much more limited period. Further, the policy provided, 'Any premium adjustment necessary shall be made as of the date of such change in accordance with the manuals in use by the company.'

Appellant argues that to construe automatic coverage herein would throw the door open to possible fraud against the company by persons who acquired additional automobiles during the policy period but would not report them unless they became involved in an accident. There is indeed that possibility, but the policy is the appellant's own handiwork. The remedy, if it desires one, is obvious. (at page 765)

It may well be that the insured was unaware of the fact that he had purchased additional or 'other insurance' as it is referred to in appellant's policy. That does not obviate the fact that the policy that he purchased and paid for on August 12, 1959, extended coverage to after-acquired automobiles and that no notice thereof to the company needed to be given excepting only within the policy period and That he was liable for the additional premium thereon dated from the time of the acquisition of the additional automobile. (Emphasis ours; at page 766) * * *.'

See also ...