Nuzzi v. U. S. Cas. Co.

• Citation: 121 N.J.L. 249,1 A.2d 890
• Decision Date: 17 October 1938
• Docket Number: Nos. 37, 38.,s. 37, 38.
• Parties: NUZZI et al. v. UNITED STATES CASUALTY CO. PIARULLI v. SAME.
• Court: United States State Supreme Court (New Jersey)

1 A.2d 890

121 N.J.L. 249

NUZZI et al.

v. UNITED STATES CASUALTY CO.

PIARULLI

v. SAME.

Nos. 37, 38.

Court of Errors and Appeals of New Jersey.

Oct. 17, 1938.

Appeal from Supreme Court.

Two separate actions by Salvatora Nuzzi and husband, and by Francesco Piarulli, against the United States Casualty Company to recover on an accident policy issued to plaintiffs' judgment debtor. From summary judgments entered for plaintiffs, the defendant appeals.

Affirmed.

Walter S. Keown and George D. Rothermel, both of Camden, and Merritt Lane, of Newark, for appellant.

Samuel P. Orlando, of Camden, for respondents Salvatora and Vincenzo Nuzzi.

Albert S. Woodruff, of Camden, for respondent Francesco Piarulli.

BROGAN, Chief Justice.

These are appeals from two summary judgments entered in the Supreme Court. Judge Palmer heard the case without a jury and his disposition of the defenses in each case amounted to a striking out of the answer and the separate defenses. Judgments were entered against the defendant insurance company for reduced amounts within the coverage of the insurance contract. A review of the facts is essential.

The plaintiffs recovered judgments in the Camden County Common Pleas Court on October 23, 1935, against the Diamond Fuel Company and its driver, Albert Mosely, for the following sums: Salvatora Nuzzi $16,780; Vincenzo Nuzzi, her husband, $17,434; and Francesco Piarulli, $1,595. These judgments arose out of personal injuries suffered by the Nuzzis and personal injury and property damage by Piarulli. Mr. and Mrs. Nuzzi were passengers in Piarulli's car when it collided with an automobile truck of the Diamond Fuel Company. The accident happened on Sept. 28, 1934, and on that day the truck of Diamond Fuel Company had been included within the coverage of a policy of insurance by a rider issued by one Alex. M. Malamut. The insurer, United States Casualty Company, saw fit to disclaim liability on the contract of insurance and refused to defend the assured or the driver. Pending the trial of the negligence action in the Pleas, the United States Casualty Company filed a bill in the Court of Chancery seeking an annulment of the policy on the ground that the rider which was issued on September 28, 1934, the date of the accident, and which included the automobile truck involved in the accident, was procured by fraud, in that Malamut, a sub-agent of the insurance company, and who was at the same time the president (although inactive) of the Diamond Fuel Company, had the rider issued after he learned that the accident had happened. This proceeding in Chancery, to cancel the policy, resulted in a decree, dated Jan. 11, 1937, dismissing the bill of complaint. Vice Chancellor Davis, who heard the case, held that the alleged fraud was not proved. The decree was affirmed by this court. United States Casualty Co. v. Diamond Fuel Co., 122 N.J. Eq. 369, 194 A. 169. The plaintiffs, holders of the judgments, unable to have same satisfied by the assured, brought suit thereon in the Supreme Court against the insurer, the defendant in this cause.

The complaints allege the entry of the judgments mentioned, the return of execution against the tort feasors unsatisfied, and that the defendant's contract of insurance was valid and in full force and effect.

The answer of the insurance company consisted of a general denial of liability; in addition, four separate defenses were pleaded: (1) That Malamut had no authority to issue a valid policy, rider or endorsement binding upon the defendant; (2) that the insurance policy was invalid because it carried the endorsement of Malamut, who was at the time president of the assured, Diamond Fuel Company which affiliation was altogether unknown to the insurance company until after the loss.

The third separate defense—failure to cooperate in the trial of the original suit in the Common Pleas—was abandoned, and the fourth—that the insurance company tendered the return of the premium paid for the insurance to the Diamond Fuel Company—was not argued and is considered as abandoned.

A special defense to the second and fourth counts of the complaint was interposed, viz, that the defendant's limit of liability as contained in the said policy is stated to be the sum of $10,000 for the injury or death of one person and $20,000 for the injury or death of more than one person arising out of a single accident; that the judgment for Mrs. Nuzzi exceeds the limit of liability as stated in the policy, to wit, $10,000; and that the claim of Vincenzo Nuzzi, in the sum of $17,434.20, includes damages not only for his bodily injuries, loss of earnings and personal incidental expenses, but also included the hospital and medical expenses of his wife, Salvatora, and loss of services and loss of consortium visited on him by reason of his wife's injuries. In fine, it is the claim of the appellant that its contract makes it answerable for bodily injuries and nothing more.

The reply alleges that the issues touching the validity of the policy of insurance were adjudicated in the Court of Chancery; and that the policy undertook to protect the insured from damage resulting from personal injuries as distinguished from bodily injuries up to $10,000 in the case of injury or death to one person and $20,000 where in one accident more than one person were injured or killed.

In Piarulli's action the pleadings were substantially the same except that a fifth separate defense set up by the casualty company asserted that this plaintiff cannot have satisfaction of his judgment under the policy because the lump sum judgment recovered by him represents damages for his injuries and property damage to his automobile as well and that the respective sums for each should have been found as separate items by the jury. Counsel, however, stipulated that the only evidence as to property damage offered in the Piarulli case on the trial of the same was for the sum of $1,065. The total judgment for this plaintiff was $1,595 and the court concluded that the jury had accepted the property damage figure and that the balance of the judgment represented the award for personal injuries. If this theory be correct, then the property damage would be within the $5,000 limit for property damage mentioned in the policy and the holder of the judgment would have to look to the maximum limit of $20,000 out of which to satisfy his claim for injuries.

The learned trial judge, to whom the parties submitted the legal questions raised by the pleadings before the trial of this cause, determined that the plea of res judicata was valid and effectual as to the first and second separate defenses, i. e, lack of authority in Malamut to countersign the endorsement and invalidity of contract of insurance because of the fact that Malamut, when he countersigned the endorsement, was an officer and director of the assured company; and that the first special defense to the second and fourth counts, which brought into issue the extent of the protection afforded by the policy, was not a good defense. This special defense, as mentioned above, sets out with particularity that the judgment for the husband, Vincenzo, included damages for his bodily injuries and also other items of injury and damage, e. g, loss of wages and hospital expenses, as well as loss of his wife's services and consortium, etc, and that such judgment cannot stand because the items making up the total sum have not been, and now are incapable of being separated, and that therefore no recovery whatever can be had on this judgment.

The trial court overruled this special defense, holding that while the policy, under the "General Agreement" speaks of "bodily injuries," the succeeding paragraph of the contract, headed "Personal Injury" (Par. 1), insures the assured against loss from liability imposed by law on account of such injuries or death. In this determination the court below was clearly right. The term "personal injury" is broader and more comprehensive than the term "bodily injury," and a covenant to protect the assured "against loss from the liability imposed by law upon the assured" comprehends a broader field than that mentioned under the "general agreement," viz, bodily injuries. For instance, a husband, from the earliest times at common law, was entitled to recover for any wrongful act per quod consortium amisit. 3 Blackstone's Com. 140. This loss is a personal injury. See, also, American Motorists, Inc. v. Kopka, 88 N.H. 182, 186 A. 335; Bakker, et al. v. Aetna Life Ins. Co. of Hartford, 148 Misc. 162, 265 N.Y.S. 231; Floyd v. Consolidated Indem. & Ins. Co., 237 App.Div. 190, 261 N.Y.S. 61. In any event, where, as here, the several provisions of the insurance contract as to liability for damages are inconsistent and therefore ambiguous, courts will adopt a construction, permitted by the terms of the agreement, against the insurer. Harris v. Amer. Casualty Co., 83 N.J.L. 641, 85 A. 194, 44 L.R.A.,N.S., 70, Ann.Cas. 1914B, 846; Weiss v. Union Indemnity Ins. Co., 107 N.J.L. 348, 153 A. 508; Jasion v. Preferred Acc. Ins. Co., 113 N.J.L. 108, 172 A. 367.

The several claims of the individuals for bodily and personal injuries were reduced pro tanto so as to bring the total of all claims for injuries, as reduced, within the maximum coverage of $20,000. Piarulli had judgment for the full amount claimed as property damage (Limited to $5,000 by the contract), namely, $1,065. Additions of interest and costs were added to the judgments.

The main question in this case is whether or not the decree of the Court of Chancery was res judicata and concluded the issues here raised as to the validity of the contract of insurance. The court below held that the issues in the case in Chancery, and the case presently under discussion, were identical. This judgment of the Supreme Court, we think, was correct. Such part of the record of the proceedings in the Court of Chancery, as appears in the State of case...