713 A.2d 557 | N.J. Super. Ct. App. Div. | 1998
Lead Opinion
The opinion of the court was delivered by
Jaime Skierski sustained injuries when she was assaulted by other students while a passenger on a school bus owned and operated by Irving Raphael, Inc. (Raphael). Through her guardian, she brought suit against Raphael, claiming that the driver was negligent in failing to stop the bus and quell the altercation. Raphael notified Home State Insurance Company (Home State), its automobile insurer, and Continental Insurance Company (Continental), its general liability insurer, of the underlying suit. Home State filed an answer on behalf of Raphael, but subsequently requested that Continental take over the defense, asserting that the incident was covered under Raphael’s general liability insurance. Continental refused Home State’s demand. Home State instituted a declaratory judgment action against Continental to compel the carrier to defend Raphael. While the declaratory judgment action was pending, SMerski’s suit against Raphael was settled. The Law Division granted Continental’s motion for summary judgment, finding that Skierski’s claim arose out of Raphael’s use and operation of the bus and thus fell within the purview of Home State’s insuring agreement. The court also concluded that Continental’s policy did not afford coverage. Home State appeals. We affirm.
We note at this point that, while Home State’s policy includes coverage for accidents that arise out of the “ownership, maintenance or use” of the school bus, Continental’s policy contains the same language excluding such coverage. In the proceedings below, both Home State and Continental took the position that their policies were mutually exclusive. In their appellate briefs, neither Home State nor Continental argues or suggests that their policies provide overlapping coverage. See Salem Group v. Oliver, 248 N.J.Super. 265, 274-75, 590 A.2d 1194 (App.Div.1991), aff'd, 128 N.J. 1, 607 A.2d 138 (1992); 7A Appleman, Insurance Law and Practice, § 4500, at 177-90 (1979). We thus assume for the purpose of this appeal, and without deciding the issue, that only one of the two policies affords coverage. See State of New
We must determine whether Skierski’s bodily injury claim related to an accident ‘‘arising out of the ownership, maintenance or use” of Raphael’s school bus. We are aided by several well-settled principles. While insurance policies are contractual in nature, they are not ordinary agreements but “contracts of adhesion between parties who are not equally situated.” Meier v. New Jersey Life Ins. Co., 101 N.J. 597, 611, 503 A.2d 862 (1986); see also Sparks v. St. Paul Ins. Co., 100 N.J. 325, 335, 495 A.2d 406 (1985); Di Orio v. New Jersey Mfrs. Ins. Co., 79 N.J. 257, 269, 398 A.2d 1274 (1979); Allen v. Metropolitan Life Ins. Co., 44 N.J. 294, 305-06, 208 A.2d 638 (1965). To that extent, insurance contracts are “unipartite in character.” Mazzilli v. Accident & Cas. Ins. Co. of Winterthur, 35 N.J. 1, 7, 170 A.2d 800 (1961). These circumstances long ago fathered the principle that doubts as to the existence of coverage must generally be resolved in favor of the insured. Id. at 8, 170 A.2d 800. Our courts “have adopted the principle giving effect to the ‘objectively reasonable expectations’ of the insured for the purpose of rendering a ‘fair interpretation’ of the boundaries of insurance coverage.” Meier v. New Jersey Life Ins. Co., 101 N.J. at 612, 503 A.2d 862 (quoting Di Orio v. New Jersey Mfrs. Ins. Co., 79 N.J. at 269, 398 A.2d 1274). Of course, this principle “is, and indeed always has been, one of construction, simply an aid to the proper interpretation of terms devised by the professional underwriter.” Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 246, 405 A.2d 788 (1979). Only genuine interpretational difficulties engage the doctrine of ambiguity. American White Cross Lab., Inc. v. Continental Ins. Co., 202 N.J.Super. 372, 381, 495 A.2d 152 (App.Div.1985). But if the language of a policy will support two meanings, one favorable to the insured and the other favorable to the insurer, that which will sustain coverage will be applied. Mazzilli v. Accident & Cas. Ins. Co. of Winterthur, 35 N.J. at 7, 170 A.2d 800.
It is against this backdrop that we consider whether Skierski’s claim for bodily injury stemmed from an accident “arising out of the ownership, maintenance or use” of the school bus. We do not write on a blank slate. In Westchester Fire Insurance Co. v. Continental Insurance Cos., 126 N.J.Super. 29, 312 A.2d 664 (App.Div.1973), aff'd o.b., 65 N.J. 152, 319 A.2d 732 (1974), a passenger in an automobile insured by Westchester threw a wooden stick out of the rear window, striking a pedestrian who then brought suit against the driver and owner of the vehicle. Westchester’s policy covered accidents “arising out of the ownership, maintenance or use” of the covered automobile. Id. at 35, 312 A.2d 664. Westchester instituted a declaratory judgment action against Continental, claiming that the risk fell within Continental’s homeowner’s policy. Continental’s policy contained an exclusionary clause making its coverage inapplicable to “the ... use of automobiles____” Id. at 33, 312 A.2d 664 (ellipses in original).
We rejected Westchester’s argument “that the words ‘arising out of the ... use’ requir[ed] or justified] the interpretation that before coverage exists it must appear that the injury is a direct and proximate result, in a strict legal sense, of the use of the automobile.” Id. at 37, 312 A.2d 664 (ellipses in original). We said that the policy language “does not require that the injury be directly or proximately caused by the automobile itself or by its motion or operation.” Ibid. Instead, we held “that the phrase ‘arising out of must be interpreted in a broad and comprehensive sense to mean ‘originating from’ or ‘growing out of the use of the automobile.” Id. at 38, 312 A.2d 664. It was said that “there
These principles were more recently applied by our Supreme Court in Smaul v. Irvington General Hospital, 108 N.J. 474, 530 A.2d 1251 (1987), and Lindstrom v. Hanover Insurance Co., 138 N.J. 242, 649 A.2d 1272 (1994), albeit in the context of first-party personal injury protection (PIP) benefits. In Lindstrom, the claimant sustained grave injuries resulting from a gunshot wound inflicted in a random, drive-by shooting. Id. at 244, 649 A.2d 1272. Citing our opinion in Westchester, the Court found that a “substantial nexus” existed between the claimant’s injuries and the use of an automobile. Id. at 250-53, 649 A.2d 1272. In reaching this conclusion, the Court noted its view that “the automobile did more than provide a setting or an enhanced opportunity for the assault.” Id. at 252, 649 A.2d 1272.
In Smaul, the claimant was pulled from his automobile, assaulted and then robbed after he had stopped his vehicle to ask for directions. 108 N.J. at 475-76, 530 A.2d 1251. Again applying the “substantial nexus” test, the Court held that “the injury, although not foreseen or expected, nevertheless [was of such a
We most recently applied these principles in Stevenson v. State Farm Indemnity Co., 311 N.J.Super. 363, 709 A.2d 1359 (App.Div. 1998). In Stevenson, we upheld entitlement to personal injury benefits in a consolidated case in which the claimants sustained serious injuries in separate carjacking incidents in Camden. Id. at 375-78, 709 A.2d 1359. In both cases, the victims picked up a stranger and offered to give him a ride to an unfamiliar location in the city. Id. at 366-67, 368-69, 709 A.2d 1359. Both victims were shot while they were inside their vehicles and, in both instances, the assailants were inside the vehicles as well. Id. at 372-74, 709 A.2d 1359. Relying on Lindstrom and Smaul, we held that the “vehicular nexus” between the carjackings and the plaintiffs’ respective vehicles was “demonstrable and undeniable.” Id. at 377, 709 A.2d 1359. We determined that the vehicles were not merely an attendant circumstance, but that they were “ ‘central to the incident.’ ” Ibid, (quoting Smaul v. Irvington General Hosp., 108 N.J. at 478, 530 A.2d 1251). Finally, we concluded that the “[d]enial of PIP coverage [under these circumstances would be] inconsistent with the latest legislative and judicial expressions directed to protect the public----” Id. at 374, 709 A.2d 1359.
We also applied these principles in Diehl v. Cumberland Mutual Fire Insurance Co., 296 N.J.Super. 231, 686 A.2d 785 (App.Div.), certif. denied, 149 N.J. 144, 693 A.2d 112 (1997). There, a dog in the open cargo area of a pick-up truck bit a pedestrian who brought suit against the owner of the vehicle. Id. at 233, 686 A. 2d 785. Both the homeowner’s and automobile insurers were notified of the claim and disclaimed liability. The Law Division found that the injury did not arise out of the use of an automobile and concluded the homeowner’s insurance policy provided coverage. We reversed. Id. at 236, 686 A.2d 785. We said that the incident
We do not suggest that our decisions on the subject are unanimous in affording coverage. The issue has received uneven treatment. See, e.g., Morgan v. Prudential Ins. Co. of Am., 242 N.J.Super. 638, 577 A.2d 1300 (App.Div.) (denying coverage where decedent was shot by estranged husband while seated in parked automobile), certif. denied, 122 N.J. 370, 585 A.2d 377 (1990); Vasil v. Zullo, 238 N.J.Super. 572, 570 A.2d 464 (App.Div.1990) (denying coverage where decedent was stabbed after an altercation with occupants of another automobile); Kordell v. Allstate Ins. Co., 230 N.J.Super. 505, 554 A.2d 1 (App.Div.) (denying coverage where insured died from acute myocardial infarction while stopped at red light), certif. denied, 117 N.J. 43, 563 A.2d 813 (1989); Uzcatequi-Gaymon v. New Jersey Mfrs. Ins. Co., 193 N.J.Super. 71, 472 A.2d 163 (App.Div.1984) (denying coverage where decedent was shot and killed by persons attempting to rob him of his automobile); see also Foss v. Cignarella, 196 N.J.Super. 378, 482 A.2d 954 (Law Div.1984) (denying coverage where insured was stabbed while seated in his vehicle after an automobile accident). Candor requires us to confess that there is a thin, wavery line between incidents involving the use of an automobile and those in which the presence of the vehicle at the scene is merely an “attending circumstance,” see Smaul v. Irvington General Hosp., 108 N.J. at 478, 530 A.2d 1251, and that several of our decisions are difficult to reconcile. We add that decisions of other jurisdictions are not greatly instructive because other states do not apply the “substantial nexus” test but instead require a strong showing of causality. See Trott v. Finlayson, 690 So.2d 718 (Fla.Dist.Ct.App.1997) (denying PIP and uninsured motorist coverage where plaintiff sustained injuries from shooting incident
We are satisfied that there was a substantial nexus between Skierski’s injuries and the use of the covered automobile. In our view, the bus provided more than a “mere setting” for the assault. See Lindstrom v. Hanover Ins. Co., 138 N.J. at 252, 649 A.2d 1272; Morgan v. Prudential Ins. Co. of Am., 242 N.J.Super. at 642, 577 A.2d 1300. Instead, the assault upon Skierski and the resulting injuries, as alleged in her complaint, “ ‘originate[d] from,’
The fight between the student passengers while being transported to school was a foreseeable consequence of the “use” and “operation” of the school bus. The simple and overriding fact is that dogs bite, as in Diehl, and children fight, as in this case. However antisocial such conduct may be, everyday experience tells us that children fuss and fight while enroute to school. Moreover, we take particular note of the fact that Skierski’s negligence claim against Raphael was rooted in the driver’s failure properly to operate the bus. Specifically, Skierski alleged in her complaint that the bus driver was negligent in driving on and failing to stop the vehicle and quell the altercation. We have no doubt that part of the essential duties of a school bus driver is to supervise the children and provide safe passage to and from school. Such altercations, then, and the need to prevent them, are natural incidents of the “use” and “operation” of a school bus. See Jackson v. Hankinson, 51 N.J. 230, 233-34, 238 A.2d 685 (1968). We thus hold that Skierski’s claim resulted from an “accident,” see Property Cos. Co. of MCA v. Conway, 147 N.J. 322, 327-28, 687 A.2d 729 (1997); Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 181-183, 607 A.2d 1255 (1992); Stevenson v. State Farm Indem. Co., 311 N.J.Super. at 375-77, 709 A.2d 1359, “arising out of the ... use of the [covered] automobile.” Because the issue of overlapping coverage has not been raised, we also affirm the Law Division’s conclusion that Skierski’s claim was a risk falling within the coverage of Home State’s policy and the exclusion of Continental’s policy.
II.
Ours is a collegial court, but no member is obliged to sacrifice his or her conscientiously held view. It is, nevertheless, unfortu
But insurance problems have spawned a mountain of litigation in recent times. The point to be stressed is that the uncertainty generated by contractual language in different types of policies, and the corresponding need to litigate, are exactly what the insured sought to guard against when it purchased insurance.
Here, the rights of the insured are fully protected. The light is between insurers. But the need to provide the insured with certainty requires that insurers know in advance exactly what risks are embraced within the insurance contracts they issue. Against this backdrop, it is reasonable to suggest that the Commissioner of Banking and Insurance may wish to work with the insurance industry to address and resolve the type of problem with which this fractured court is now confronted.
Concurrence Opinion
(concurring).
Judge Baime’s opinion has convinced me that if the facts of this case were presented in the context of a claim by Home State’s insured or by its insured’s injured victim against the motor vehicle insurer, the expansive interpretation which New Jersey law gives to the statutory phrase, “resulting from ownership, maintenance or use” of a motor vehicle, would require us to hold that Home State is obligated to defend and to indemnify. Judge Wefing’s opinion has convinced me that if the same facts were presented in an action by Continental’s insured or by its insured’s injured victim against the general liability insurer, the logic of the sitúa
Because the policy language defining the scope of Home State’s coverage is the same as the policy language defining the motor vehicle exclusion from Continental’s coverage, this conclusion seems anomalous. However, because public policy considerations have led us to construe coverage provisions broadly, particularly in motor vehicle policies, and to construe exceptions from coverage narrowly, see Salem Group v. Oliver, 248 N.J.Super. 265, 271, 590 A.2d 1194 (App.Div.1991), aff'd, 128 N.J. 1, 607 A.2d 138 (1992), requiring both insurers to share the duty to indemnify their insured would be the just result.
However, the parties to this ease have not given us the option to hold both of them liable to provide coverage. They have both asked us to choose which one of them, whether the automobile liability insurer or the general liability insurer, is responsible to indemnify the insured. In view of that limitation, I join in the result reached by Judge Baime and vote to hold Home State Insurance Company liable to provide coverage.
Dissenting Opinion
(dissenting).
My colleagues conclude, in this inter-company coverage dispute between two insurance carriers, that the insured’s automobile insurer, Home State Insurance Company (Home State) is responsible to provide coverage to Irving Raphael, Inc. (Raphael), rather than Raphael’s commercial general liability insurer, Continental Insurance Company (Continental). I am unable to agree and I therefore dissent.
The record presented to us in this declaratory judgment action contains only a limited description of the underlying incident. The following is taken from interrogatory answers supplied by Jaime Skierski during the course of her first party suit for damages.
According to Ms. Skierski, in August 1992, she was attending a summer program at the Perth Amboy Vocational School. On
Raphael held two policies of insurance, one a business auto policy issued by Home State and the other a commercial general liability policy issued by Continental. Under the Home State policy, Home State agreed it would:
pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ ... caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.’
Under the Continental policy, Continental agreed it would:
pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’____caused by an ‘occurrence’ —
Continental, however, excluded from its coverage claims “arising out of the ownership, maintenance, use or entrustment to others of any ... ‘auto’ ...”
I approach this issue in a different manner than my colleagues in recognition that the parties to this dispute are Home State and Continental. Their mutual insured, Raphael, is not a party and is not affected by its disposition. Neither, from all that appears, is the injured victim, Ms. Skierski. The parties to this dispute agree
I do not disagree with my colleagues that the out-of-state cases they cite provide little guidance to the resolution of this issue for they are often the result of differing statutory language. Niglio v. Omaha Property & Cas. Ins. Co., 679 So.2d 328 (Fla.Dist.Ct.App. 1996), rev. denied, 689 So.2d 1071 (1997), for instance, which denied coverage to a pedestrian injured in a drive-by shooting, involved a statutory requirement that there be physical contact between the pedestrian and the automobile. New Jersey has eliminated such a requirement. Lindstrom v. Hanover Ins. Co., 138 N.J. 242, 248-49, 649 A.2d 1272 (1994). Horney v. Tisyl Taxi Corp., 93 A.D.2d 291, 461 N.Y.S.2d 799 (1983), which denied coverage to a passenger assaulted by a taxi driver, involved a statute which called for coverage for injuries proximately caused by the operation of a vehicle.
Nor do I disagree with my colleagues that the proper test to determine whether Home State is obligated to afford coverage is whether there is a “substantial nexus between the injury and the use of the vehicle.” Westchester Fire Ins. Co. v. Continental Ins. Cos., 126 N.J.Super. 29, 38, 312 A.2d 664 (App.Div.1973), aff'd o.b. 65 N.J. 152, 319 A.2d 732 (1974). Under this test, it is not necessary that there be a direct causal link between the two for a substantial nexus to exist. Ibid.
We recognized in Westchester that “[wjhether the requisite connection or degree of relationship exists depends upon the circumstances of the particular ease.” Ibid. The judgment whether there is a “requisite connection or degree of relationship” can only be made in terms of the description of the underlying incident that has been provided to us. I am satisfied that the connection which exists in this matter is too tenuous to justify imposing responsibility upon Home State.
My colleagues conclude that, as in Lindstrom v. Hanover Ins. Co., supra, the school bus “did more than provide a setting or an enhanced opportunity for the assault.” 138 N.J. at 252, 649 A.2d
I cannot subscribe to my colleagues’ view that the assault upon Ms. Skierski was “a foreseeable consequence of the ‘use’ and ‘operation’ of the school bus.” (op. at 594, 713 A.2d at 562). I am unable to equate a dog’s instinctual bite with a concerted physical attack by a number of teenagers upon another.
1 am, finally, troubled by my colleagues’ conclusion that one of the essential duties of a school bus driver is to supervise the conduct of the children who are on the bus. I agree that in certain instances a school bus company or school district may have a duty to provide supervision of the children who are riding on a school bus. Thus, if either Raphael or the school district were aware of the tensions which apparently existed between the students of South Amboy and Perth Amboy, a duty may well have existed either to place an aide on the bus to prevent disruptions or to construct a route which would avoid placing the students upon the same bus. A violation of any such duty by Raphael, however, would, in my opinion, clearly fall within the commercial general liability policy issued by Continental, not the business auto policy issued by Home State. The overarching duty of the driver,
Because I view the assault upon Ms. Skierski as fundamentally unrelated to the “ownership, maintenance or use” of the school bus, I would impose responsibility for coverage upon Raphael’s commercial general liability carrier, Continental.
