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Ross v. C.D. Mallory Corp.

Decided: June 2, 1944.


On plaintiff's rule to show cause why a judgment for defendant should not be vacated.

For the plaintiff, Samuel M. Cole.

For the defendant, John W. Ockford.

Before Justice Heher, at chambers.


[132 NJL Page 1] HEHER, J. On July 19th, 1943, final judgment was entered for defendant on the pleadings. Thereafter, it was pleaded in bar of an action pending between the parties for the same cause in the United States District Court for the Southern District of New York. Plaintiff now moves for the vacation of the judgment on the ground that it was improvidently entered, in that he did not have actual notice of the motion for judgment and the pleaded cause of action is well-founded in law and in fact.

On September 5th, 1940, plaintiff suffered personal injuries while serving the New York Stevedoring Co., Inc., as a long-shoreman on an ocean-going steamship of defendant moored in the navigable waters of the United States at a Jersey City pier. The complaint herein was filed on July 16th, 1941, by the Globe Indemnity Company, the employer's insurance carrier, "for itself and for the use and benefit" of the injured employee, to enforce what was conceived to be defendant's common-law liability for negligence in the construction, maintenance and management of the vessel and its appliances. It alleged that the plaintiff insurer had paid compensation to the employee under the Federal Longshoremen's and Harbor Workers' Compensation Act of 1927, as amended by chapter 685 of the Public Laws of 1938 (44 U.S. Stat. 1424; 52 Id. 1164, 1168; 33 U.S.C.A., ยงยง 901, et seq.), and that thereby such right of action for negligence as the employee might have had against defendant became vested in the employer, and passed to the insurer by right of subrogation. Sections 33 (b) and 33 (i), supra. Thereafter, on June 4th, 1942, the employee filed with the Federal Employees' Compensation Commission, under section 33 (a), supra, a notice of his election to sue the alleged third-party tortfeasor.

On September 16th, 1942, it was determined on a motion to strike out the complaint that, since no "award" had been made "in a compensation order filed by the deputy commissioner" under the statute, there had been no assignment of the asserted right of action to the employer under section 33 (b), supra, and hence no subrogation to the rights of the employer under section 33 (i), supra; and therefore an order was made eliminating the insurance carrier as a party plaintiff and substituting the employee as the sole plaintiff, with leave to defendant to interpose the defense of "election of remedies." An answer was filed setting forth that, under the cited statute, plaintiff was obliged to elect whether he would take compensation as therein provided, or proceed against the alleged tortfeasor, and that he elected "to receive and accept compensation, and he did in fact receive and accept compensation, and is thereby precluded from bringing this suit." Plaintiff moved to strike out this defense as insufficient in

law, in that "upon the facts to be presented on said motion, plaintiff has not made such election as to preclude him from instituting and prosecuting the cause of action" thus pleaded. Judge Ackerson, sitting as a commissioner of this court, ruled that the design of the statute was to compel the injured employee to choose between the right to compensation thereunder and the right to proceed against the tortfeasor, and the motion was denied. An order to that effect was entered on May 11th, 1943. Meanwhile, plaintiff commenced the like action in the Federal District Court, now pending.

Plaintiff interposed no reply to the answer filed in the instant action; and, on July 14th, 1943, defendant served upon plaintiff's attorney of record notice of a motion to be made before me on July 19th, ensuing, one of the summer motion days, for the entry of a rule for final judgment in its favor on the ground that the "separate defenses" had been sustained as "valid and complete," and the motion to strike out the defenses had been denied, "and no reply" had "been made thereto." There was no appearance on behalf of plaintiff at the time thus fixed for the hearing of the motion; and a rule for "final judgment in favor of defendant and against plaintiff" was entered. It was therein recited that, on the motion to strike out the defense of plaintiff's election of another remedy, it was determined that "the defense was valid," and plaintiff was "precluded as a matter of law from maintaining" the action; and that plaintiff "did not reply to the defense and his time in which to reply has expired."

It is conceded that plaintiff himself did not have actual notice of this application for the entry of judgment final. His non-appearance is sufficiently excused. His attorney of record was the attorney of the insurance carrier; and the action seems to have been treated as one for the benefit of the insurer and wholly within its control. Apparently, the insurer lost interest in the litigation after the denial of the motion to strike out the defense of election of remedies. Thereupon, on notice to plaintiff, the judgment was pleaded in bar of the action pending in the Federal District Court. On October 16th, 1943, plaintiff's present attorney was substituted as his attorney of record; and five days later a notice

of appeal from the judgment to the Court of Errors and Appeals was filed. On the ensuing October 27th, the petition to vacate the judgment was filed, and ...

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