The opinion of the court was delivered by FRITZ, P.J.A.D.
This appeal concerns relative rights among an assigned risk insured, his apparently absconding insurance agent or broker and the firm of that individual, the organization that financed that insurance, the insurance company, a passenger in the insured's car, the driver of another car involved in an accident with the insured, and the Unsatisfied Claim and Judgment Fund. The matter is complex both procedurally and substantively. Its presentation to us is not without omissions and in some cases requires assumptions. To add to the burden inherent in the convoluted and intricate problem, important determinations in at least one of the trial courts involved arrive here without any findings by the trial judge in his grant and denial of a number of vital summary judgment motions. The ultimate irony resides in our conviction that a legal proposition neither argued nor considered below is sufficiently vital, both in the sense of its importance as a public question and with respect to
In June 1973 Lee D. Brown (Brown), an assigned risk under the Motor Vehicle Security-Responsibility Law (N.J.S.A. 39:6-23 et seq.), obtained auto liability insurance from Lumbermens Mutual Casualty Company (Lumbermens) through Walter Shaw Insurance Agency, a business operated by Walter Shaw as an insurance broker or agent (Shaw). This insurance policy became effective on June 1, 1973 and was to terminate one year later on June 1, 1974. Unable to pay the full amount of the insurance premium ($137), Shaw arranged for Brown to execute a premium finance agreement with Arista Factors, Inc. (Arista). This agreement required Brown to make payments to Arista of $16.38 a month for eight months commencing on July 4, 1973. Brown testified that he also gave Shaw an initial deposit of $40 when he executed the agreement. The finance agreement authorized Arista to pay Lumbermens the full premium due.
This contract further provided that the event of default by Brown in the payment of any installment when due
Another and different result said to eventuate upon ten-day default in payment appeared elsewhere in the agreement:
Although the agreement recited Brown's promise to pay to the order of Arista at its place of business and contained an express disavowal of any agency in Shaw, Brown's testimony that Shaw told him he was "to make the payments to him until my payment book came and my insurance policy" is unrefuted.
After receiving the premium finance agreement and the July 4, 1973 payment "on or about August 4, 1973," Arista processed the agreement and "mailed the entire premium for [the] policy to [Lumbermens]." There is evidence that Arista did not receive Brown's payment due on August 4. Accordingly, on August 9 Arista mailed a "late notice letter" to Brown which stated:
Brown, who claims that he had paid Shaw the August 4 payment, took the letter to Shaw. In Brown's presence Shaw dialed a number on the telephone and talked to someone apparently from Arista. After Shaw hung up he informed Brown
On August 14 Arista had still not received the August payment from either Brown or Shaw. On that date Arista sent a "cancellation notice" to Brown which stated in pertinent part:
Brown went back to Shaw. He showed him the notice. Shaw told him "the same thing he told me the first time. He told me sometimes the finance company and the service company get mixed up and he said that the policy was all right. He had called the finance company and I could continue driving."
It is apparent that Arista exercised its power of attorney and directed Lumbermens to cancel Brown's insurance policy. It seems that this was done by forwarding to Lumbermens a copy of the "cancellation notice" containing the following preface:
We pause to observe that Arista also thus assured Lumbermens that it had complied with § 13 (obviously N.J.S.A. 17:16D-13) of "New Jersey's Insurance Premium Finance Company Act."
Lumbermens complied, cancelled the policy and returned the premium.
Four days after the purported effective date of the cancellation Brown was driving his car when it was involved in an accident with a motor vehicle being operated by Oscar Johnson (Johnson). Brown and a passenger in his car, Dorothy Jackson (Jackson), were injured. After his release from the hospital Brown took his hospital bills to Shaw and reported the accident. Shaw said nothing to Brown with regard to the fact that his insurance policy had been cancelled.
Brown alleged that "roughly a month later" he called Lumbermens to see what was holding up his claim. He testified that he was told by a Mr. Jung that his policy was "okay" and that Lumbermens was waiting to hear from Oscar Johnson's insurance company before settling his claim. Brown continued to make his regular monthly insurance payments to Shaw through December 1973, and in that month Shaw gave Brown a written statement "saying my policy was good as far as [Shaw's] office is concerned."
Apparently Brown finally called Lumbermens again and this time was told that his insurance policy had been cancelled. Thereafter Lumbermens refused to reimburse Brown for his claim and refused to defend him in this lawsuit which followed.
[The court here reviewed the complicated procedural history of the case]
From the outset of this litigation, and at all times since, the question put in issue by Brown's reply brief [the propriety of
We are entirely satisfied that the matter is of considerable general public importance. In the first place, legislation affecting automobile insurance has always been considered remedial, to be construed to effect the broadest protection of auto accident victims and to limit exclusions by strict construction against the insurer. Motor Club of America v. Phillips, 66 N.J. 277, 293 (1974); Fellippello v. Allstate Ins. Co., 172 N.J.Super. 249,
The significance of the presence of Fund monies in the case highlights our concern. Judge Seidman, then sitting in the Law Division, aptly described our mission in this regard in Feliciano v. Oglesby, 102 N.J.Super. 378 (Law Div. 1968):
Accordingly, we have determined to review the issue despite the fact that it was not raised except at the very last minute and then improperly. That review persuades us that Arista did not comply with N.J.S.A. 17:16D-13.
Brown was never advised of the "intent of the premium finance company to cancel the insurance contract" or of his right to cure the default within the minimum ten-day period of the required written notice of intent to cancel. N.J.S.A. 17:16D-13(b). He was told instead that Arista "would not like to cancel your insurance" and that if the policy was cancelled it could not be reinstated. He was dunned for "your check within five (5)
Thus Arista clearly did not comply with the statute.
For reasons set forth above, we believe consideration of this failure to comply is essential to a proper and just determination of the rights among the parties contested in the matters on appeal. Because the issue was not raised the judges below did not consider that dereliction. Public policy and essential justice require that this now be done.
All motion orders and judgments below in the matters on appeal are vacated.