Home State Insurance Company v. Continental Insurance Company

SYLLABUS
 

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Home State Insurance Company v. Continental Insurance Company (A-41-1998)

 
(NOTE: The Court wrote no full opinion in this case. Rather, the Court's affirmance is based substantially on the written opinion of Judge Baime of the Appellate Division.)

Argued March 16, 1999 -- Decided April 20, 1999

PER CURIAM

This appeal involves a dispute over coverage between the insured's automobile insurer and its general liability carrier.

Jaime Skierski sustained injuries when she was assaulted by other students while a passenger on a school bus owned and operated by the insured, Irving Raphael, Inc. (Raphael). She brought suit against Raphael through her guardian, claiming the bus driver was negligent in failing to stop the bus and quell the disturbance. Raphael notified Home State Insurance Company (Home State), its automobile insurer, and Continental Insurance Company (Continental), its general liability insurer, of Skierski's claim. Home State filed an answer on behalf of Raphael, but later requested Continental to take over the defense. Continental refused, and Home State instituted this declaratory judgment action.

Raphael settled with Skierski while the declaratory judgment action was pending. The Law Division granted Continental's motion for summary judgment, finding that the claim arose out of Raphael's use and operation of the bus and thus fell within the purview of Home State's automobile policy. The court also concluded that Continental's policy did not afford coverage.

The Appellate Division affirmed, filing three separate opinions. Judge Baime, writing for the court, held that there was a substantial nexus between Skierski's injuries and the use of the covered automobile, the bus. He reasoned that one of the essential duties of a school bus driver is to supervise the children and provide safe passage to and from school, and therefore concluded that the fight between student passengers was a foreseeable consequence of the use and operation of the school bus. Judge Baime also suggested that the Commissioner of Banking and Insurance might wish to work with the insurance industry to resolve the problem through regulation.

Judge Brochin, concurring, concluded that because insurance policy provisions are to be construed broadly to provide coverage, the just result would be to require both insurers to share the duty to indemnify Raphael. Nonetheless, he noted that the insurers had not given the court this option, instead asking it to choose which one of them is liable. In view of that limitation, Judge Brochin therefore joined in holding the automobile carrier liable.

Judge Wefing dissented, disagreeing with the conclusion of Judge Baime that a physical attack by a group of teenagers upon another was a foreseeable consequence of the use and operation of a school bus. Judge Wefing reasoned that if there is a duty to prevent disruptions in a school bus, a violation of that duty should fall within the coverage of the commercial general liability policy.

Home State appealed as of right to the Supreme Court, based on the dissent filed below.

HELD: There was a substantial nexus between the injuries sustained by the student-passenger and the use of the school bus, and coverage therefore is provided by the automobile insurance policy.
 
The judgment of the Appellate Division is AFFIRMED substantially for the reasons expressed by Judge Baime in the opinion below. Home State Insurance Co. v. Continental Insurance Co., 313 N.J. Super. 584 (App. Div. 1998).

JUSTICES STEIN AND COLEMAN filed a separate, concurring opinion, expressing the view that coverage should be apportioned between the automobile insurer and the general liability insurer in accordance with the "other insurance" clauses of the policies for the reasons stated by Judge Brochin in his concurring opinion below.

CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, and GARIBALDI join in this opinion. JUSTICES STEIN and COLEMAN have filed a separate concurring opinion.

SUPREME COURT OF NEW JERSEY
A- 41 September Term 1998
 

HOME STATE INSURANCE COMPANY, through its Liquidator, Elizabeth Randell, and her successors as Commissioner of Banking and Insurance of the State of New Jersey,

Plaintiff-Appellant,

v.

CONTINENTAL INSURANCE COMPANY,

Defendant-Respondent,

and

JAIME SKIERSKI, an infant by her Guardian Ad Litem, BEVERLY SKIERSKI, and BEVERLY SKIERSKI, individually, IRVING RAPHAEL, INC., LEILA STEINNAGEL, JOHN DOE and JANE DOE, names being fictitious, real names unknown,

Defendants.

Argued March 16, 1999 -- Decided April 20, 1999

On appeal from the Superior Court, Appellate Division, whose opinion is reported at 313 N.J. Super. 584 (1998).

David A. Mazie argued the cause for appellant (Nagel Rice & Dreifuss, attorneys; Mr. Mazie and Robert G. Lavitt, on the briefs).

Jamie D. Happas argued the cause for respondent (Hoagland, Longo, Moran, Dunst & Doukas, attorneys).

PER CURIAM

The judgment is affirmed, substantially for the reasons expressed in Judge Baime's opinion of the Appellate Division, reported at 313 N.J. Super. 584 (1998).
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, and GARIBALDI join in this PER CURIAM opinion. JUSTICES STEIN and COLEMAN have filed a separate concurring opinion.

SUPREME COURT OF NEW JERSEY
A- 41 September Term 1998
 

HOME STATE INSURANCE COMPANY, through its Liquidator, Elizabeth Randell, and her successors as Commissioner of Banking and Insurance of the State of New Jersey,

Plaintiff-Appellant,

v.

CONTINENTAL INSURANCE COMPANY,

Defendant-Respondent,

and

JAIME SKIERSKI, an infant by her Guardian Ad Litem, BEVERLY SKIERSKI, and BEVERLY SKIERSKI, individually, IRVING RAPHAEL, INC., LEILA STEINNAGEL, JOHN DOE and JANE DOE, names being fictitious, real names unknown,

Defendants.

STEIN, J. and COLEMAN, J., concurring.

This appeal is before the Court as of right, R. 2:2-1(a), based on Judge Wefing's dissent below in which she concluded that Continental Insurance Company's (Continental) comprehensive general liability (CGL) policy rather than Home State Insurance Company's (Home State) automobile policy should provide coverage for plaintiffs injury claim. Home State Ins. Co. v. Continental Ins. Co., 313 N.J. Super. 584, 596-600 (App. Div. 1998) (Wefing, J., dissenting). In our view, that dissent fairly presents to this Court for resolution the issue whether either or both policies provide coverage. Essentially for the reasons expressed in Judge Brochin's concurring opinion, id. at 595-96, we are of the view that a sufficient nexus between plaintiff's injuries and the use of the school bus exists to sustain coverage under the automobile policy. We also believe that the supervisory responsibilities of the bus driver, as distinguished from his obligation to drive safely, are sufficiently implicated by the claim to warrant the conclusion that the CGL policy's exclusionary clause should not bar coverage under that policy. Accordingly, we would affirm and modify the judgment of the Appellate Division and remand to the Law Division to apportion coverage in accordance with the "other insurance" clauses of the policies.

SUPREME COURT OF NEW JERSEY
 

NO. A-41

SEPTEMBER TERM 1998
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO

HOME STATE INSURANCE COMPANY,
through its Liquidator, Elizabeth Randell,
and her successors as Commissioner of
Banking and Insurance of the State of
New Jersey,

Plaintiff-Appellant,

v.

CONTINENTAL INSURANCE COMPANY,

Defendant-Respondent,

and

JAIME SKIERSKI, etc., et al.,

Defendants.

DECIDED

April 20, 1999
Chief Justice Poritz PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY Justices Stein and Coleman CONCURRING/DISSENTING OPINION BY
CHECKLIST
AFFIRM CONCUR IN RESULT CHIEF JUSTICE PORITZ X JUSTICE HANDLER X JUSTICE POLLOCK X JUSTICE O'HERN X JUSTICE GARIBALDI X JUSTICE STEIN (X) X JUSTICE COLEMAN (X) X TOTALS
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