Wilkinson & Son, Inc. v. Providence Washington Ins. Co.

• Decision Date: 19 June 1973
• Citation: 124 N.J.Super. 466,307 A.2d 639
• Parties: WILKINSON & SON, INC., a New Jersey Corporation and Gulf Atlantic Tile & Terrazzo Corp., a Delaware Corporation, Plaintiff, v. PROVIDENCE WASHINGTON INSURANCE COMPANY, a Rhode Island Corporation, Defendant.
• Court: New Jersey Superior Court

Page 466

124 N.J.Super. 466

307 A.2d 639

WILKINSON & SON, INC., a New Jersey Corporation and Gulf Atlantic Tile & Terrazzo Corp., a Delaware Corporation, Plaintiff, v. PROVIDENCE WASHINGTON INSURANCE COMPANY, a Rhode Island Corporation, Defendant.

Superior Court of New Jersey Law Division.

June 19, 1973.

Lee A. Trucker, Somerville, for plaintiff (Norris, McLaughlin, Trucker & Marcus, Somerville, attorneys).

Edward M. Gurry, South Orange, for defendant (Gurry & Conlan, South Orange, attorneys).

GAYNOR, J.C.C., Temporarily Assigned.

This is a motion for summary judgment by plaintiff Wilkinson & Son, Inc. in its action for a declaratory judgment determining its rights under a certain contractor's liability policy issued to it by defendant company.

The facts giving rise to this proceeding are not complicated and have been stipulated by the parties as follows:

1. Plaintiff Wilkinson & Son, Inc. is a contractor and in 1966 was performing certain work as a subcontractor in connection with the construction of a luxury high-rise apartment building.

2. In the course of performing its work on said apartment building plaintiff was required to remove traces of tile in 34 of the apartments in said building.

3. An employee of plaintiff, while removing the traces of tile in the 34 apartments, damaged the carpeting in each of the apartments by tracking on the carpeting, or depositing on the carpeting when placing his cleaning pail down, some of the cleaning material which contained an acidic or alkaline substance.

4. The work by plaintiff's employee, during which time the damage to the carpeting took place, was performed over a period of one or possibly two working days.

5. At the time of the incident defendant insured plaintiff under a general liability policy for property damage caused by the acts of plaintiff or its agents.

6. The relevant provisions of said policy are as follows:

                                    SCHEDULE
                     AMOUNT AND BASIS OF DEDUCTIBLE COVERAGE
                -------------------------------------------------
                $ xxxx  per claim
                                        Bodily Injury Liability
                $ xxxx  per occurrence
                $ 250   per claim
                                        Property Damage Liability
                $ xxxx  per occurrence
                

APPLICATION OF ENDORSEMENT (Enter here any limitations on the application of this endorsement. If no limitation is entered, the deductibles apply to all loss however caused:

It is agreed that:

1. The company's obligation under the Bodily Injury Liability and property Damage Liability Coverages to pay damages on behalf of the insured applies only to the amount of damages in excess of any deductible amounts stated in the schedule above as applicable to such coverages.

2. The deductible amounts stated in the schedule apply as follows:

(a) PER CLAIM BASIS--If the deductible is on a 'per claim' basis, the deductible amount applies under the Bodily Injury Liability or Property Damage Liability Coverage, respectively, to all damages because of bodily injury sustained by one person, or to all property damage sustained by one person or organization, as the result of any one occurrence.

(b) PER OCCURRENCE BASIS--If the deductible is on a 'per occurrence' basis, the deductible amount applies under the Bodily Injury Liability or Property Damage Liability Coverage, respectively, to all damages because of all bodily injury or property damage as the result of any one occurrence.

3. The terms of the policy, including those with respect to (a) the company's rights and duties with respect to the defense of suits and (b) the insured's duties in the event of an occurrence apply irrespective of the application of the deductible amount.

4. The company may pay any part or all of the deductible amount to effect settlement of any claim or suit and, upon notification of the action taken, the named insured shall promptly reimburse the company for such part of the deductible amount as has been paid by the company.

The question before the court on this motion is whether the Entire damage to the carpeting in all the apartments caused by plaintiff's employee constituted 'one occurrence' or whether the damage to the carpeting in Each of the 34 apartments constituted 'one occurrence,' within the meaning of the above-quoted policy provisions. Plaintiff contends that the entire damage to the carpeting was one occurrence, and accordingly, under the terms of the policy, defendant is responsible for the total amount of the damage in excess of $250, the deductible amount. Defendant, on the other hand, claims that its liability under the policy is the amount of the damage in excess of the sum of 34 times $250, on the ground that the carpet damage resulted from 34 separate occurrences and the deductible amount is applicable to each occurrence. In other words, defendant contends that the damage in each of the 34 apartments arose from and constituted a separate occurrence, with the deductible amount applicable to each of the 34 occurrences. Defendant also asserts that there were 34 separate claims made, inasmuch as the claim submitted for payment in accord with the policy itemized the amount of the damages to the carpeting in each of the 34 apartments. The question posed in this proceeding is a novel one in our State.

A definition of the term 'one occurrence' is not included in the policy which was issued by defendant. In the absence of such definition the term must be given its plain, ordinary and popular meaning, and must be interpreted as understood by the average insured when purchasing the policy. See Cooper v. Government Employees Ins. Co., 51 N.J. 86, 237 A.2d 870 (1968); Edgewater National Bank v. Safeguard Ins. Co., 81 N.J.Super. 383, 195 A.2d 653 (App.Div.1963); Arthur A. Johnson Corp. v. Indemnity Ins. Co.,6 A.D.2d 97, 175 N.Y.S.2d 414 (1958), and Elston-Richards Storage Co. v. Indemnity Co. of North America, 194 F.Supp. 673 (W.D.Mich.1960). In the event of ambiguity or doubt as to the meaning of language used in an insurance policy, such language is to be resolved in favor of the insured. See Rotwein v. General Accident Group & Cas. Co., 103 N.J.Super. 406, 247 A.2d 370 (Law Div.1968); American Policyholders Ins. Co. v. Portale, 88 N.J.Super. 429, 212 A.2d 668 (App.Div.1965); and Elston-Richards Co. v. Indemnity Ins. Co. of North America, Supra.

A succinct statement of these accepted rules of construction, as applied in a case involving a policy provision similar to the one involved in the present case, is set forth in Arthur A. Johnson v. Indemnity Ins. Co., Supra, as follows:

In seeking to ascertain the scope to be given words or phrases not explicitly defined in an insurance policy, we usually ascribe to them the ordinary and popular meaning, importing the construction that would be given them by the average assured when he purchased the policy (Abrams v. Great American Insurance Co., 269 N.Y. 90, 199 N.E. 15; Johnson v. Travelers' Insurance Co., 269 N.Y. 401, 408, 199 N.E. 637, 640.) When a substantial uniformity of opinion on a question of interpretation may be expected, resort to such popular standards is quite appropriate. However, when as in this case, the popular concept cannot be determined with comfortable assurance, other or at least supporting guides to construction must be explored to resolve the question.

When uncertainty and doubt arise from policy language susceptible of more than one meaning, we may adopt the oft-quoted but seldom decisive formula of resolving all ambiguity against the insurer (Hartol Products Corp. v. Prudential Insurance Co. of America, 290 N.Y. 44, 47 N.E.2d 687). However, reliance on this standard makeweight does not furnish a ready solution to the controversy, since the difficulties stem not so much from doubt as to the meaning of policy language as from uncertainty as to the manner in which the contracting parties intended such language to be applied to an unusual factual situation.

* * * An accident, according to generally accepted definitions, is a sudden, fortutious mischance, unexpected, out of the ordinary, and injurious in impact (Lewis v. Ocean Accident and Guarantee Corp., Limited, of London, England, 224 N.Y. 18, 21, 120 N.E. 56, 7 A.L.R. 1129; Woodruff v. R. H. Howes Const. Co., 228 N.Y. 276, 278, 127 N.E. 270; Meyer v. New York Life Ins. Co., 249 App.Div. 243, 245, 291 N.Y.S. 912, 914; Berkowitz v. New York Life Ins. Co., 256 App.Div. 324, 10 N.Y.S.2d 106; 1 C.J.S. Accident p. 427). There is no doubt that there was an accident in this case; the question is whether there was more than one.

The question of what constitutes a single occurrence within the meaning of a liability policy limiting the insurer's liability to a specified amount or to the excess over a specified amount has been presented for judicial determination in a variety of factual situations. In these decided cases the courts have considered, without any indication of distinction, the various terms, such as 'one or each occurrence,' 'one or each accident,' 'any one occurrence,' 'claims arising from one accident,' used to express the singleness of the event insured against. Although it has been suggested that a construction of a 'one accident or one occurrence' clause in a liability policy depends upon the court's philosophical approach as to whether such language refers to the cause or to the result of the event insured against, we are of the opinion that the instant proceeding can be determined without selecting either of such approaches to the exclusion of the other. See 55 A.L.R.2d 1300.

The cases relied upon by both parties are not factually analogous to the present case. The defendant relies heavily upon Elston-Richards Storage Co. v. Indemnity Co. of North America, Supra, and Arthur A. Johnson Corp. v. Indemnity Ins. Co., Supra. In Elston-Richards several thousand appliances...