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NJ - Towing & Storage Fees Constitute a Claim Under Auto Policy -3/5/1974
State Farm Mutual Automobile Insurance Co. v. Toro, 316 A.2d 745, 127
N.J.Super. 223 (N.J.Super.Law Div. 03/05/1974)
[1]
[2]
[3] 316 A.2d 745, 127 N.J.Super. 223, 1974.NJ.40440
[4] Decided: March 5, 1974.
[5] STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, ETC., PLAINTIFF,
v.
EUGENIO TORO, DEFENDANT
[6] Mr. Allan B. Stein for plaintiff (Messrs. Soriano & Henkel,
attorneys; Mr. George B. Henkel on the brief).
[7] Mr. Irvin L. Solondz for defendant.
[8] Kimmelman, J.s.c.
[9] Kimmelman
[10] This is a declaratory judgment action brought by an insurance
company against its insured to determine whether towing and storage
charges incurred following a collision are recoverable under an uninsured
motorist endorsement.
[11] Plaintiff State Farm Mutual Automobile Insurance Company (State
Farm) issued an automobile insurance policy to defendant Eugenio Toro,
among the provisions of which was an endorsement entitled "Coverage U --
Uninsured Motorists." On October 30, 1970, while the insurance policy was
in force and effect, Violeta Toro, the wife of the insured (also an
insured under the policy), was driving the insured vehicle and was
involved in a motor vehicle accident with an uninsured motorist. The
insured's vehicle was disabled as a result of the collision and,
accordingly, he arranged to have it towed from the scene and taken to
notified of the accident; its agent was advised of the towing and storage
charges, and it was requested that their adjuster inspect the vehicle and
honor the claim in order that defendant might arrange for repairs. For
some reason the inspection was not made until February 24, 1971, and then
State Farm took the position that there was contributory negligence on the
part of the insured driver which barred recovery against the uninsured
motorist. Thereafter the matter was submitted to arbitration and was
determined in favor of the insured. The arbitrator made an award for the
property damage but withheld determination on the claim for towing and
storage charges pending a declaratory judgment by a court as to the extent
of coverage afforded by State Farm's uninsured motorist endorsement.
[12] The above facts are undisputed and thus the sole issue to be
resolved is whether towing and storage charges are included and
recoverable under an uninsured motorist endorsement. The insured seeks to
hold State Farm responsible for such charges from the date of the accident
to the date of inspection at a rate of $5 a day, for a total of $755.
[13] The pertinent provisions of N.J.S.A. 17:28-1.1, which fixes the
standards for uninsured motorist coverage, provide that the insurance
policy:
[14] The uninsured motorist endorsement written into the instant policy
properly adopts the language of the statute by promising to pay "all sums
which the insured or his legal representative shall be legally entitled to
recover as damages from the owner or operator of an uninsured highway
vehicle because of bodily injury or property damage, caused by accident
and arising out of the ownership, maintenance or use of such uninsured
highway vehicle * * *."
[15] However, other sections of the policy expressly exclude the
payment of towing, storage and other "salvage" charges in the event the
insured makes claim for property damages under the uninsured motorist
endorsement.
[16] Faced with such exclusionary clauses the insured here argues that
it is against the public policy considerations which prompted the
requirement for uninsured motorist coverage to so limit the sum to which
he is "legally entitled to recover" where the tortfeasor is an uninsured
motorist, as opposed to a situation where the tortfeasor is an insured
motorist represented by his own insurance carrier.
[17] The question for decision, therefore, turns upon whether the
insured is "legally entitled to recover" towing and storage charges
because of the property damage sustained in a reasonable effort to protect
the damaged property, irrespective of the cited terms of the policy which
purport to exclude such coverage.
[18] In the interpretation of insurance policies the law is settled
that ambiguities are to be resolved in favor of the insured.
Co., Inc. v. Employers' Surplus Lines Ins. Co., 60 N.J. 375, 377 (1972);
Bauman v. Royal Indem.
Cameron, 122 N.J. Super. 51 (Ch. Div. 1973). "[W]here the language of the
policy is capable of two reasonable interpretations, the court will adopt
that which permits recovery rather than the one which would deny
coverage." State Farm Mut. Auto. Ins. Co. v. Cocuzza, 91 N.J. Super. 60,
63 (Ch. Div. 1966). However, "the court will not make a new agreement for
the parties, and exceptions, exclusions, and reservations in a policy
which are not inconsistent with public policy will be construed in
accordance with their language and the usual rules governing the
construction of insurance contracts".
McHugh, 124 N.J. Super. 105, 110 (Ch. Div. 1973).
[19] State Farm's policy defines "property damage" as "injury to or
destruction of" an insured vehicle owned by the named insured or his
spouse. That definition must be interpreted as comprehending as well
damages flowing as a proximate result of the basic property damage. The
general rule usually applied in fixing such damage under principles of
tort law is the difference in market value of the automobile immediately
before and immediately after the injury. Hintz v. Roberts, 98 N.J.L. 768
(E. & A. 1923); Parodi v. Universal Ins. Co., 128 N.J.L. 433 (Sup.
1942). The proper measure of damages is the amount which will compensate
for "all the detriment naturally and proximately caused," and where
plaintiff is temporarily deprived of the use of the vehicle, this has been
held to include the value of its use during the time reasonably required
to repair it. Hintz v. Roberts, supra 98 N.J.L. at 770-771;
Baltimore & N.Y.R. Co., 76 N.J.L. 362, 364 (Sup.
earnings or business profits have been allowed as damages where the proofs
showed such loss to be the proximate result of the damage to the motor
vehicle. Nightengale v. Public Service Coord. Transport, 8 N.J. Misc. 238,
149 A. 526 (Sup.
[20] In the instant case defendant seeks compensation for towing and
storage charges as part of his consequential damages. Such charges were
clearly sustained as the proximate result of the damage to his vehicle.
Many policies of automobile insurance obviate the need to resort to a
common-law damage formula by including a "protection of salvage" or "duty
to protect" clause, under which any act of the insured in recovering,
saving and preserving the property, in case of loss or damage, shall be
considered as done for the benefit of all concerned, and all reasonable
expenses thus incurred constitute a claim under the policy. Under such a
provision towing and storage charges have uniformly been held to be
recoverable. See, e.g., Parodi v. Universal Ins. Co., supra; Harper v.
Pelican Trucking
International Indem. Co., 47
Southwestern Fire & Cas. Co. v. Kendrick, 281 S.W. 2d 344 (
1955); City Coal & Supply Co. v. Amer. Auto Ins. Co., 99
133 N.E. 2d 415 (Ct. App. 1954). The towing and storage charges herein
sought would have been covered by the "duty to protect" clause contained
in the general section of the State Farm policy but for the fact that the
insured was involved in an accident with an uninsured motorist.
[21] In the absence of a "duty to protect" clause applicable to the
uninsured motorist endorsement the court considers the towing and storage
charges to have been naturally and proximately caused by the accident
under the rule of Hintz v. Roberts, supra. They are damages which the
insured is "legally entitled to recover." It is highly foreseeable that
the owner of a damaged vehicle will have to tow it from the scene of an
accident and store it at some location to await repair. Policy exclusions
notwithstanding, an insured is entitled as part of his property damage
claim to reimbursement of the expenses incurred in protecting his insurer
against further property loss and safeguarding the damaged vehicle by
application of general principles of law. A tortfeasor, as well, would
expect his victim to take reasonable measures to safeguard damaged
property. Harper v. Pelican Trucking
v. Amer. Indem.
Blashfield, Automobile Law and Practice, § 480.13 at 45 (1969); 7
Appleman, Insurance Law and Practice, § 4327 at 110 (1971 pocket part).
The legislative policy behind N.J.S.A. 17:28-1.1, providing for mandatory
uninsured motorist coverage, would be defeated were State Farm allowed to
create an arbitrary deletion from such coverage. Although the primary
purpose of N.J.S.A. 17:28-1.1 was to relieve the Unsatisfied Claim and
Judgment Fund of some of its financial burdens, Exum v. Marrow, 112 N.J.
Super. 570, 574 (Law Div. 1970), the Legislature had other concerns which
are highly relevant here. Statutes providing for unsatisfied judgment or
uninsured motorist plans have been adopted to alleviate the economic
hardship imposed upon victims of negligently operated automobiles where
compensation is otherwise thwarted either by reason of lack of knowledge
of the tortfeasor's identity or his financial irresponsibility. 7
Blashfield, Automobile Law & Practice, § 274.1 at 43 (1966).
[22] The decisions are uniform throughout the country to the effect
that uninsured motorist laws are designed to provide the same right to
recompense to a person injured by an uninsured motorist as he would obtain
if he were involved with an insured motorist. E.g., Peterson v. State Farm
Mut. Auto. Ins. Co., 238 Or. 106, 393 P. 2d 651 (Sup.
Wolverine Ins. Co., 105
aff'd, 48
& Ins. Co. v.
Vehicle Acc. Indemnif. Corp., 20 A.D. 2d 242, 246 N.Y.S. 2d 548 (App. Div.
1964), mod. on other grounds, 15 N.Y. 2d 408, 260 N.Y.S. 2d 1, 207 N.E. 2d
600 (Ct. App. 1965), rearg. den., 16 N.Y. 2d 716, 261 N.Y.S. 2d 1028, 209
N.E. 2d 565 (Ct. App. 1965).
[23] In providing for uninsured motorist coverage the Legislature
undoubtedly intended to place automobile victims in as good a position to
recover damages to the extent of the coverage dollar amounts whether or
not the tortfeasor was insured. If under ordinary principles of negligence
a tortfeasor is legally responsible to pay towing and storage charges as
part of the proximate damages of a claimant, a fortiori an uninsured
motorist tortfeasor would bear the same legal responsibility to an injured
claimant. Conversely, any injured party is legally entitled to recover
that which a tortfeasor is legally responsible to pay. The existence or
non-existence of insurance coverage applicable to the tortfeasor does not
and cannot alter his legal responsibility.
[24] By requiring endorsements to afford coverage for sums which an
injured person shall "be legally entitled to recover" as damages, the
Legislature evinced no purpose to limit the legal responsibility of any
category of motorist tortfeasor but rather clearly mandated equal
protection for the injured claimant regardless of whether he makes his
claim against an insured or uninsured motorist.
[25] Consequently, to deny to the victim of an uninsured motorist the
coverage which he would otherwise be afforded under the "duty to protect"
provision of the policy or under ordinary principles of negligence law
would contravene the public policy embodied in N.J.S.A. 17:28-1.1. To the
extent that the uninsured motorist endorsement in the State Farm policy
attempts to narrow the required statutory protection, the same will be
held invalid.
[26] For the foregoing reasons the coverage afforded to defendant under
the uninsured motorist endorsement will be construed to include towing and
storage charges, and any provision of the policy purporting to exclude
such coverage will be denied effect. This result coincides with the
reasonable expectations of the insured. Harr v. Allstate Ins. Co., 54 N.J.
287, 303 (1969); Bryan Const. Co., Inc. v. Employers Surplus Lines Ins.
minimize the extent of the damage to the vehicle pending its inspection,
for the mutual benefit of himself and State Farm. It would be incongruous
to defeat his reasonable expectations merely because the driver of the
other car happened to be uninsured.
[27] Counsel are directed to submit an appropriate order for
declaratory judgment construing the State Farm policy in accordance with
this decision.