Before this court are motions by both plaintiff and defendant for summary judgment pursuant to CPLR 3212 in an action for a declaratory judgment seeking to determine the liabilities of the two insurance companies named as parties herein. The plaintiff, Mills, a resident of the State of New York, is the owner of a passenger automobile covered by the usual insurance policy issued by the coplaintiff, Government Employees Insurance Company. This insurance policy contains the customary clause to the effect that: if the assured has other insurance covering same loss the liability shall be prorated between said companies but with respect to temporary substitute automobiles shall be excess insurance over any other valid and collectible insurance but that coverage will not apply to any accident arising out of the operation of an auto sales agency.
On June 4, 1966 the said Mills was interested in purchasing a new automobile and called upon the defendant, Dowdall Lincoln-Mercury, Inc., an automobile agency, for that purpose. He was permitted to take the agency's car home so as to try it, show it to his wife and thus make up his mind whether he wished to purchase it. That very night, while driving said car in its permitted use, he had an accident involving another car. The passengers in both cars are now suing Mills, as well as the Dowdall Agency, and said lawsuits are now pending in this court.
The Dowdall agency was insured with the defendant, Liberty Mutual Insurance Company under a policy known as a garage liability policy with a rider entitled and reading in pertinent part as follows:
"Limited Coverage for Certain Insureds Garage Liability Policy
"(3) With respect to an automobile to which the insurance applies under paragraph 1 (a) of the Automobile Hazards, any of the following persons while using such automobile with the permission of the named insured, provided such person's actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission:
"(b) any other person, but only if no other valid and collectible automobile liability insurance, either primary or excess, with limits of liability at least equal to the minimum limits specified by the financial responsibility law of the state in which the automobile is principally garaged, is available to such person; provided that with respect to Coverage C, such person shall be deemed to be a person whom insurance is afforded, whether or not there is any other valid and collectible automobile insurance."
In consideration of the said rider, Dowdall received the benefit of a cheaper premium rate. Said rate and rider were approved by the New York State Superintendent of Insurance.
Liberty has undertaken the defense of Dowdall but refuses coverage to Mills, claiming that by reason of this rider and of the fact that Mills has excess coverage with the Government Employees Insurance Company, Mills is not covered under its policy. Thus this action is a controversy between the two named insurance companies, each seeking a judicial determination in its favor.
The court readily recognizes that each policy involved herein is merely a contract between the insurer and the insured, and that the contract and the intent of the parties is controlling; but when said policy is certified by the insurance company and filed with the Motor Vehicle Department to satisfy the requirement of a statute said contract ceases to be just a private contract because then the public interest is involved and the public interest supervenes and the policy must then conform to the requirements of the statute. Any provision to the contrary is void and the requirements of the law are considered as being included therein. (Teeter v. Allstate Ins. Co., 9 A.D.2d 716.) The policy of Liberty has a paragraph to this effect as follows:
"Financial Responsibility Laws:
"When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, such insurance as is afforded by this policy for bodily injury liability or for property damage liability shall comply with the provisions of such law to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits of liability stated in this policy. The insured agrees to reimburse the company for any payment made by the company which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph."
The subject policy was written in the State of New York for a garage business in the State of New York and therefore, was meant to and must necessarily ...