Price, Conford and Gaulkin. The opinion of the court was delivered by Conford, J.A.D.
[55 NJSuper Page 189] The Unsatisfied Claim and Judgment Fund Board ("Board" hereinafter) appeals in the name of defendants from an order entered in the Passaic County District Court, over its objection, directing the State Treasurer to pay out of the Fund administered by the Board judgments separately recovered against defendants by the
male and female plaintiffs for $3,412.80 and $1,810, respectively, plus costs, and less the statutory deductions of $200 on each judgment. N.J.S.A. 39:6-61 et seq. , 69; L. 1952, c. 174, § 9 (since reduced to $100, L. 1958, c. 99). The disputed question is whether the judgments were recovered under circumstances which constitute them judgments "which were entered by default" without prior notice to the Board, within the intendment of N.J.S.A. 39:6-74, L. 1952, c. 174, § 14, so as to entitle the Board to have them reopened and to resist the underlying claims by use of any of the remedies specified for that purpose in N.J.S.A. 39:6-75, L. 1952, c. 174, § 15.
Plaintiffs were injured June 30, 1957, while riding a motorcycle in the City of Paterson, as a result of a collision with an automobile then being operated by the defendant Cave, Sr., and said to have been owned by the defendant Cave, Jr. The consequent complaint filed in the Superior Court July 16, 1957 states that Cave, Sr. was operating the vehicle as agent of Cave, Jr., but no substantiation of that fact appears in the limited portion of the proceedings reflected in the appendix of appellants' brief. At the time of the accident Cave, Sr. was on the revoked drivers list.
The complaint in the action was served on the manager of the Board July 18, 1957 and at the same time a notice of intention to file a claim against the Board was served upon it, as required by N.J.S.A. 39:6-65, L. 1952, c. 174, § 5. Defendants personally engaged a lawyer, Andrew Pecora, to defend the action. He filed an answer on their behalf and participated in pretrial discovery proceedings. The Board assigned the action to Zurich Insurance Company ("Zurich" hereinafter) for defense August 5, 1957 and sent it a copy of the complaint. This was apparently done under N.J.S.A. 39:6-66, L. 1952, c. 174, § 6, which permits assignments to insurers for investigation or defense of all actions instituted after service of notice of claim on the Board (and requires assignments to insurers for
investigation and defense of all "default actions" described in section 14).
It appears that the Board and Zurich, relying on the fact that the defendants were being represented by their own counsel, paid no further attention to the case until the later events which were brought to their attention under the circumstances which are related hereinafter.
A pretrial conference was held January 29, 1958, at which counsel for defendants did not appear. The case was at that time transferred to the Passaic County District Court pursuant to R.R. 4:3-4. The case was set down for trial for May 13 to 15, 1958, but was adjourned at the request of counsel for defendants and set down peremptorily for trial June 12, 1958. On the morning of that day counsel for defendants telephoned plaintiffs' trial counsel to say that defendants would not appear to defend. Plaintiffs' counsel had already arranged for their parties and witnesses to be in court. He telephoned the Zurich representatives that defendants were not going to defend. An affidavit by a Zurich representative states that plaintiffs' counsel said he would arrange for a continuance of the matter so that Zurich could defend for the Board, but that he failed to do so. Plaintiffs' counsel apprised the trial judge of the situation, but the latter ordered or suggested (it is not clear which) that he proceed with his proofs forthwith. He did so, and the judgments aforementioned were entered on the basis of plaintiffs' undefended proofs. There is nothing before us to indicate whether the judgments are excessive in any regard.
On August 13, 1958 plaintiffs brought on by motion before the same judge who entered the judgments an application for an order that the Board pay the judgments. Affidavits were submitted showing satisfaction of all of the conditions prerequisite specified in sections 9, 10 and 11 of the act (N.J.S.A. 39:6-69, 70 and 71). At this hearing the Board was represented by counsel. He took the position that the judgments had been entered by default, within the meaning of section 14 of the act (N.J.S.A. 39:6-74), and
that since the Board had not been given adequate advance notice of intention by plaintiffs to enter them, a fact he offered to prove by witnesses, the order for payment by the Fund was not allowable under the statute. The Board did not claim, nor does it now, that the Fund is irremediably immune from subjection to plaintiffs' claim because of the failure of notice, but only that it is ...