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Smock v. Atlantic Casualty Insurance Co.

Decided: April 6, 1953.


McGeehan, Bigelow and Jayne. The opinion of the court was delivered by McGeehan, S.j.a.d.


[25 NJSuper Page 325] George S. Kulik was granted leave to intervene in the suit of Jane B. Smock against the Atlantic Casualty Insurance Company. By his complaint in intervention he sought reformation of an automobile liability policy No. 510035, issued by the defendant company to him, covering a 1937 Chevrolet panel delivery truck for the period beginning at 7 P.M. on January 13, 1949, and ending at 7 P.M. on January 13, 1950. The reformation he sought was "that the time '7 P.M.' inserted in the policy be stricken therefrom and that the court decree that the policy in question was effective from 12:01 A.M." on January 13, 1949. After a separate trial before the judge of the Law Division of the issues raised by this complaint in intervention, a judgment of dismissal in favor of the defendant Atlantic Casualty

Insurance Company, and against the intervenor George S. Kulik, was entered.

The trial judge made the following findings:

"Mr. George S. Kulik owned a Ford automobile that was insured by the defendant company under Policy No. 543428 [453428], from June 1948 to June 1949; that that policy was in effect during that time; that on November 22, 1948 Mr. Kulik made written application to the Company, through its agent the Automobile Association of New Jersey, for coverage of a 1937 Chevrolet panel delivery truck; that that application became mislaid or was never acted upon; although sent to the Atlantic Casualty Insurance Company on November 22, 1948 it was not acted upon until attention was called to it on January 13, 1949; on that day an accident occurred to a truck which had been borrowed to replace the 1937 Chevrolet from a man by the name of Horodysky and was to be used in the place of the 1937 Chevrolet, which was laid up for repairs; that the company made a partial investigation, through its claim adjuster, and then notified Mr. Kulik, under date of January 18, 1949, that they did not cover him under the Policy No. 453428. That letter was immediately taken to counsel for Mr. Kulik by him and it was answered; Mr. Lipetz answered that by Exhibit P-9, which starts in, 'in re Kulik Policy 453428,' in which he states, 'I note in your letter that you make no mention of any insurance covering a truck owned by Mr. Kulik; If you will examine your records you will note there was an endorsement issued which covered the truck.'

There is no proof of any reply ever having been made to that letter.

Subsequently, a suit was started by Jane D. Smock against Kulik and Horodysky. Service was made upon George Kulik, who in turn turned it over to his counsel, Mr. Lipetz. Mr. Lipetz proceeded to defend the action, which resulted in a $15,000 judgment, and costs, in favor of Smock and against Kulik. There was also a judgment at the same time against Horodysky, but that judgment was subsequently set aside because service had never been made upon him and it was taken by default.

A second copy of the application was sent on the evening of the 13th of January to the Company. The Company sent it back with a notation on it that it was to be dated at 7 P.M or the date 7 P.M. inserted on it, as shown in Exhibit P-6. The policy was then written without the 7 P.M. being on it by Mr. McKenzie's office. It was again sent back to the Home Office, where the 7 P.M. was inserted. The Home Office, of course, had learned of the accident and this policy was written for the sole purpose of excluding the accident, which was the reason for its being dated at 7 P.M. instead of as it is printed at 12.01 A.M.

Nothing was ever done to correct this error; no attempt was made until 2 years later when Mr. Kulik, in the suit of Jane D. Smock vs. Atlantic Casualty Insurance Company, obtained an order

permitting him to intervene and have this policy reformed to go back to the time of 12.01 A.M., which would cover this accident.

It is rather inconceivable to me that had he thought it should be this policy should have covered the accident that immediate action would not have been taken to have it reformed, that the conditions of the policy would have been complied with, and those conditions, among others, are that papers, summons and complaint, should have been served upon the Company. That, admittedly, was not done.

And it was not until after the judgment and after Smock sued Atlantic Casualty Insurance Company that Kulik then ...

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