Court Opinion

ID: 9644377
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:54:38.239464+00
Date Added: 2024-06-11T12:45:13.361234
License: Public Domain

Pashman, J.,
dissenting. Today’s majority departs from both this Court’s earlier decision in this very case, DiOrio v. New Jersey Manufacturers Ins. Co., 63 N. J. 597 (1973) (DiOrio I), and our well-established policy of effectuating the “reasonable expectations” of insured parties. See, e. g., Kievit v. Loyal Protective Life Ins. Co., 34 N. J. 475, 482-483 (1961). Although the majority pays lip service to DiOrio I and acknowledges the rule of “reasonable expectations,” it in fact adopts the reasoning contained in the dissenting opinion of that decision in order to find in favor of the insurer.
The second trial mandated by DiOrio I has thus been rendered a cruel and unnecessary hoax. I believe that we should not now deviate from the principles which we earlier announced. Accordingly, I would vindicate the insured’s “reasonable expectations” by holding that the policy at issue does provide excess coverage as to the DeSoto.
In Mazzilli v. Accident & Cas. Ins. Co., 35 N. J. 1 (1961), we set out certain principles applicable to the construction of insurance policies. We there stated that:
Solution of a problem of construction of an insurance policy must be approached with a well settled doctrine in mind. If the controlling language will support two meanings, one favorable to the insurer, and the other favorable to the insured, the interpretation sustaining coverage must be applied. Courts are bound to protect the insured to the full extent that any fair interpretation will allow. * * * [D]oubts as to the existence of coverage must be resolved in favor of the insured. * * * [I]f the clause in question is one of exclusion or exception, designed to limit the protection, a strict interpretation is applied.
[ 35 N. J. at 7-8]
*272Furthermore, because insurance contracts are contracts of adhesion, based on standard forms, couched in technical language and prepared by the insurer’s experts, they are to be construed in accordance with the reasonable expectations of the average insured. See, e. g., Perrine v. Prudential Ins. Co., 56 N. J. 120, 126 (1970); Allen v. Metropolitan Life Ins. Co., 44 N. J. 294, 305 (1965); Bauman v. Royal Indem. Co., 36 N. J. 12, 25 (1961); Kievit v. Loyal Protective Life Ins. Co., supra, 34 N. J. at 482.
The majority attempts to avoid the application of these salutary principles by claiming that the clause is unambiguous. In so doing it directly contradicts this Court’s statements in two prior cases. In Butler v. Bonner & Barnewell, Inc., 56 N. J. 567 (1970), we declared that the very terminology here at issue was “confusing” with regard to its application to the occasional driver of a non-owned car regularly used by a relative of the driver. Id. at 577. In DiOrio I the Court noted the prior discussion in Butler and expanded upon the existence of the ambiguity. We emphasized that
A sense of ambiguity arises from a sense of surprise when its terms are applied literally, for under a literal reading, it would follow that tbe named insured himself would never be covered, even on an isolated occasion, while driving a car owned by a relative living with him. Thus a most common familial situation is excluded from the coverage of a “family” insurance policy. That exclusion so undercuts the coverage the buyer of a policy would expect under a non-owned automobile provision as to raise a doubt that the insurer could have so intended. * * * Surely no one would expect every member of a household to buy specific coverage for every automobile owned by every other member of the household. The more natural expectation is that each driver would carry his own policy, which policy would be excess insurance as to his operation of the other car or cars. * * * [H]ere there was no purpose to overreach the insurer; the automobile was owned by a business partnership which carried liability insurance on the car. It would be extraordinary to expect the father to take out a second policy on that car.
[ 63 N. J. at 606-607 (emphasis in original) ]
*273Although the Court did uot decide the issue, preferring a remand in order to create a full factual record, there can be no doubt that had it made a determination it would have mandated “the sensible result that coverage as to each insured be determined on the basis of Ms own utilization of the ear.” Id. at 607 (emphasis added). This conclusion is supported by cases in other jurisdictions. See, e. g., Travelers Indem. Co. v. Pray, 204 F. 2d 821 (6th Cir. 1953); Juzefski v. Western Cas. & Sur. Co., 173 Cal. App. 2d 118, 342 P. 2d 928 (Dist. Ct. App. 1959); Dairyland Ins. Co. v. Ward, 83 Wash. 2d 353, 517 P. 2d 966 (Sup. Ct. 1974) (en banc).
The majority, in discussing the issue of reasonable expectations, specifically questions whether the DiOrios in fact believed that the situation here at issue was covered under the policy. Its conclusion is erroneous on two counts. First, in utilizing the “reasonable expectations” test, it is the expectations of the average insured which are considered, not those of the particular insured involved in the specific dispute. Perrine v. Prudential Ins. Co., supra, 56 N. J. at 126. The majority’s reasoning would bring about the undesirable result that the meaning of a standard form contract would vary according to the state of mind of the particular insured. Second, the majority’s fact-finding is nothing more than pure speculation. Although Generoso DiOrio removed the DeSoto from the N. J. Manufacturers’ policy and insured it instead under the partnership name, this does not mean that he did not expect excess or secondary coverage. A perfectly reasonable interpretation would be that DiOrio intentionally relinquished only primary coverage when he changed his insurance scheme and that excess coverage was still expected. This is exactly what this Court called “natural” in DiOrio I as quoted above. 63 N. J. at 606-607. As there stated, it would be unreasonable to expect Mr. DiOrio to insure the same car twice. Moreover, even if it was believed that excess coverage was denied Generoso DiOrio, it might still be expected that his son Gennaro, an occasional user of the *274ear, would have excess coverage under the family policy. Thus, the majority’s speculation into the DiOrios’ state of mind is unfounded as well as being legally irrelevant.
The majority today ignores the strong and explicit language of DiOrio I. It does so despite the finding of the trial court that “the evidence at this second trial has added little to that which was elicited upon the first trial.” I believe that in the absence of any new evidence the proper approach is to follow DiOrio I and vindicate the reasonable expectations of the insured.
Eor the foregoing reasons, I would hold that the “regular use” provision should only exclude from coverage an insured person by whom the car is actually regularly used. Inasmuch as DiOrio I held that the car was not regularly furnished for the use of the son, the judgment below should be reversed.1
For affirmance — Justice Sullivan, Clieeord, Schreiber and Handler and Judges Coneord and Halpern — 6.
For reversal — Justice Pashman — 1.

Plaintiffs in this case do not question the underlying validity of the exclusion and the majority does not address the issue. Under these circumstances I would only note that a strong argument could be made that the clause lacks any statutory or regulatory authorization and thus operates as an unauthorized and unwarranted curtailment of coverage. It could also' be persuasively argued that this clause should be invalidated on public policy grounds in light of this State’s paramount public policy that injured accident victims be compensated to the fullest extent possible. This is especially compelling in view of the anomalous result, from the viewpoint of the injured son, that he is penalized by the fortuitous fact that the borrowed car he was driving was regularly furnished for his father’s use when, had he been driving any other borrowed car, he would have been covered.