Ambrosio v. Affordable Auto Rental, Inc.

Page 114

307 N.J.Super. 114

704 A.2d 572

Darren AMBROSIO, Plaintiff, v. AFFORDABLE AUTO RENTAL, INC., Defendant-Respondent/Cross-Appellant, and Leonard Weinberger, Defendant/Third-party Plaintiff-Respondent, v. ALLSTATE INSURANCE COMPANY, Third-Party

Defendant-Respondent/Cross-Appellant.

Vincent OTTOMANO, Plaintiff, v. Darren AMBROSIO and Leonard Weinberger, Defendants, and Joel A. Nierenberg, Defendant-Respondent,

and

Affordable Auto Rental, Inc., Defendant-Respondent/Cross-Appellant,

and

Fortune Garden, Inc., Defendant-Appellant.

Superior Court of New Jersey Appellate Division.

Argued Dec. 8, 1997.

Decided Jan. 5, 1998.

Thomas Decker, Millburn, for defendant-appellant Fortune Garden, Inc. (Schechner & Decker, attorneys; Virginia T. Shea, on the brief).

Leonard Rosenstein, Livingston, for defendant-respondent/cross-appellant Affordable Auto Rental, Inc. (Hurley & Vasios, attorneys, Short Hills; Mr. Rosenstein, on the brief).

John F. O'Donnell, West Orange, for third-party defendant-respondent/cross-appellant Allstate Insurance Co. (O'Toole & Couch, attorneys; Michael Dellarovere, Whippany, on the brief).

Donald L. Crowley, for defendant-respondent Joel A. Nierenberg (Methfessel & Werbel, attorneys; Mr. Crowley, Rahway, and Lori Brown Sternback, on the brief).

Harold M. Hoffman, for defendant/third-party plaintiff-respondent Leonard Weinberger (Mr. Hoffman, on the brief).

Before Judges HAVEY, LANDAU and NEWMAN.

The opinion of the court was delivered by

NEWMAN, J.A.D.

This appeal involves the question of the respective obligations of various insurance companies under their automobile liability policies. Because we have determined that the various policies are all co-primary and shall share equally in the settlement up to the maximum of the lowest amount of coverage provided by any one insurer, we reverse.

The facts are not in dispute. Leonard Weinberger was part-owner of Fortune Garden, Inc., a restaurant in Teaneck. On September 12, 1993, Fortune Garden employed Joel A. Nierenberg on a trial basis. While making a food delivery, Nierenberg was involved in a car accident with Darren Ambrosio and Vincent Ottomano. At the time of the accident, Nierenberg was driving a vehicle owned by Affordable Auto Rental, Inc. (Affordable Auto) and leased to Weinberger.

Weinberger rented the vehicle driven by Nierenberg on September 5, 1993 because his own vehicle was "mechanically unreliable." Weinberger said that he "was having difficulty starting the car in the morning on numerous occasions, ... and it had been in and out of the shop to have that problem solved."

Ambrosio and Ottoman instituted an action for the injuries they sustained. They sued Nierenberg, Affordable Auto, Weinberger and Fortune Garden. Weinberger filed a third-party complaint naming Allstate Insurance Company (Allstate), the provider of Weinberger's personal automobile insurance policy, as a third-party defendant.

The trial judge directed the parties to submit briefs regarding coverage issues in order for him to determine the priority of insurance coverage available to plaintiffs. In a written opinion of January 10, 1997, the trial judge determined that the policy issued by Unity Fire and General Insurance Company (Unity) to Affordable Auto was primary. Secondary coverage was found to be shared by both Progressive Casualty Insurance Company (Progressive), the insurer of Fortune Garden and First Trenton Indemnity Company (First Trenton), the automobile insurer of Nierenberg's father. If the above policy limits were exhausted, further coverage would be provided by the Allstate policy issued to Weinberger.

The parties then agreed to settle the case with the understanding that the apportionment between the insurance carriers could be altered after review by this court.

Fortune Garden appealed and Affordable Auto and Allstate filed cross-appeals. We address each of the arguments directed at the various policies in the following order: First Trenton, Allstate, Unity and Progressive.

I

Fortune Garden contends that the First Trenton policy that was issued to Samuel Nierenberg, Nierenberg's father, should be deemed primary and all other applicable policies should be deemed co-secondary.

The liability insurance section of the First Trenton policy states:

We will pay damages for which the insured becomes legally responsible because of bodily injury or property damage caused by accident and arising out of the ownership, maintenance or use of your car or any non-owned car.

* * * * * *

Our obligation to pay or defend ends when the applicable limit of liability is used up by the payment of judgments or settlements. The limits of liability are shown on the declarations page of this policy.

For a "non-owned" car, an insured is defined, in part, as "you and any relative ... while using that car if the use is (or is reasonably believed to be) with the owner's permission." The trial judge found that Nierenberg, the son of the insured listed on the declaration page of First Trenton's policy, was a permissive user of the vehicle leased by Weinberger. This finding is not manifestly unsupported by the competent, relevant and reasonably credible evidence. See Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 483-84, 323 A.2d 495 (1974). Thus, Nierenberg falls under the definition of an "insured" under the policy.

Referring to two "other insurance" clauses in First Trenton's policy, Fortune Garden argues that First Trenton's policy is primary as to any other available insurance. The first "other insurance" clause quoted by Fortune Garden is found in the uninsured/underinsured motorists insurance section of the policy and is inapplicable. Fortune Garden's reliance on the "other insurance" clause of the liability section of the policy, however, is appropriate.

Under this section:

If the insured is covered by the other liability insurance, we will pay only the share of the damages that this policy's applicable limit of liability bears to the total of the limits of all collectible insurance. However, for a substitute car or non-owned car, we will pay, up to the limit of our liability, only that part of the damages not covered by the other insurance.

Fortune Garden argues that since this provision does not mention excess liability, the First Trenton policy should be deemed to afford primary coverage. We disagree.

Generally, an insurance policy is interpreted according to its plain and ordinary meaning. Maimone v. Liberty Mutual Ins. Co., 302 N.J.Super. 299, 306, 695 A.2d 341 (App.Div.1997) (citing Voorhees v. Preferred Mutual Ins. Co., 128 N.J. 165, 175, 607 A.2d 1255 (1992)). The first sentence of the "other insurance" provision quoted above provides that if the insured is covered by other insurance, First Trenton will only provide its share of the damages of all collectible insurance. Thus, based on its plain and ordinary meaning, the First Trenton policy would be co-primary with other insurance policies that cover the insured. However, when a substitute car or non-owned car is involved, First Trenton will only pay "that part of the damages not covered by other insurance."

A "non-owned car" is defined in the policy as "a land motor vehicle with at least four wheels designed to be used mainly on public roads" that is not "owned by or furnished or available for the regular use of you or a relative." In the instant matter, Nierenberg was driving a vehicle owned by Affordable Auto and rented by Weinberger. In accordance with the policy definition of a "non-owned car," the second sentence of the "other insurance" provision, compelling First Trenton to pay "only that part of the damages not covered by the other insurance," is applicable.

To interpret First Trenton's policy as the sole primary policy is at odds with its plain meaning. The policy clearly states that for non-owned vehicles, First Trenton is only liable for damages not covered by other insurance policies. The car which Nierenberg owned was directly insured by Unity, and the Allstate and Progressive policies could also apply. Furthermore, there would be no reason for First Trenton to differentiate between substitute or non-owned vehicles in the second sentence of its "other insurance" clause and owned vehicles in the first sentence unless different coverage provisions were intended. Thus, while the word "excess" is not included in the coverage provision, the language employed clearly provides for excess coverage.

II

The trial judge determined that the Allstate policy, the personal automobile policy issued to Weinberger, "attaches only after all coverage available to [Nierenberg] is exhausted." The court stated that, because Weinberger was not a tortfeasor, the Allstate policy "comes into play only by virtue of the fact that the Affordable Rental vehicle is a temporary substitute vehicle." Allstate contends that the trial judge's decision was in error because the vehicle being operated by Nierenberg was not a temporary substitute vehicle which would receive coverage under the Allstate insurance policy.

Regarding liability coverage, the Allstate policy provides that Allstate "will pay damages for bodily injury or property damage for which any insured becomes legally responsible because of an auto accident." "Insured" includes "any person using your covered auto." "Your covered auto" is defined as any auto that "you do not own while used as a temporary substitute for any other vehicle described in this definition which is out of normal use because of its: a. breakdown; b. repair; c. servicing; d. loss; or e. destruction."

Allstate contends that Weinberger did not establish that the vehicle that he rented was a "temporary substitute" vehicle. Moreover, Allstate argues that the trial judge improperly decided the issue summarily, despite outstanding issues of material fact.

Allstate's arguments are based on Weinberger's failure to distinguish whether his own vehicle was broken down, being...