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Elger v. Lindsay

Decided: November 30, 1961.


Civil action. Findings.

Featherer, J.c.c.


On or about March 1, 1959 plaintiff James Elger was a passenger in the automobile owned and operated by defendant Donald E. McConnell, when it was involved in an accident with an automobile owned and operated by the defendant Joseph M. Lindsay. Plaintiff sustained serious injuries. The pretrial order lists hospital and medical expenses in excess of $4,000, as well as loss of wages and other expenses not specifically enumerated. The plaintiff instituted his suit against both drivers. It would appear that both defendants undertook to turn the suit papers over to their respective insurance carriers, and both companies denied liability, resulting in each defendant's bringing in his respective carrier by third-party action. The defendant Lindsay sued Selected Risks Insurance Company as a third-party defendant, and defendant McConnell sued All-State Insurance Company and James A. Snyder, its alleged agent, as third-party defendants.

In view of the decision in Wormack v. Howard , 33 N.J. 139 (1960), and pursuant to R.R. 4:43-2(a), the trial of the issues involved in the third-party actions was brought on for trial before the court, without a jury. The primary case has not as yet been tried.

In the action by Lindsay against Selected Risks Insurance Company, it was admitted that there was a policy in force at the time of the accident; that Lindsay failed to give notice to said carrier for a period of more than nine months after the accident, and in the meantime had paid a property damage claim (not involving any of the parties to this action) without permission of the carrier and in violation of said policy. These facts were fully substantiated at the trial, and a judgment of no cause of action entered in favor of this third-party defendant.

McConnell's action against All-State and Snyder is not based upon a policy but rather sounds in an action of

deceit and indemnification for loss which he may sustain in the action by plaintiff.

McConnell's testimony as to claim against All-State and Snyder was that he purchased the 1958 Chevrolet automobile involved in the subsequent accident from a dealer Smith in Woodstown in October 1958; that he purchased collision insurance from Smith, and applied to third-party defendant Snyder for liability insurance, for which he signed an application at the top of which he claims the name of All-State appeared, and that his policy was to be delivered in ten days or two weeks; that the premiums for both policies were financed and paid to the respective agents by the financing bank. Defendant Snyder by his answer admits receiving a premium in the amount of $184.50, which it was stipulated would be the premium on a standard $10,000/$20,000 liability policy, and that he still retains the sum of $184.50 for McConnell's use. McConnell testified that he stopped at Snyder's home for the policy and was told by Snyder that he was covered and the policy would be forthcoming, and that in all he made four requests by visits and telephone requests; that he understood he was buying All-State insurance; that the familiar All-State sign of hands with "You are in Good Hands with All-State" was erected on Snyder's premises; that after the accident in which Elger was injured on or about March 1, 1959, he promptly reported the accident to Snyder and for the first time was told that All-State had not issued a policy.

The third-party defendant, Snyder, testified that in September 1957 he became an agent of All-State; that he had been trained solely by All-State; that he was employed as a soliciting agent, under an agreement whereby he was not to represent or solicit for any other company. His contract was introduced into evidence and indicated that he was to procure applications and forward them to the company for approval or disapproval. Snyder's testimony was that when McConnell sought insurance he called

the office about it and was informed that they would not issue a policy; that he thereafter had McConnell sign an application under the assigned risk plan, but that this application was never processed; that he did not tell McConnell the nature of the application, and never told McConnell that he did not have All-State coverage, which was the only company for which he wrote insurance, until after the accident. He also testified to the existence of the All-State sign conspicuously displayed upon his premises. He gave some indication that he tried to broker the coverage with another agency but did not succeed before the accident, but it was not indicated that McConnell had any knowledge of such efforts.

It was clear from the testimony that McConnell, either by reason of extensive advertising or acquaintance with agent wanted -- and sought to obtain -- a policy with All-State; that he knew Snyder to be an All-State agent by reputation and/or the sign displayed on his premises; that he gave his business to the agent, made provisions for the payment of the premium, and relied upon the agent's representations of coverage; that such representations were in fact false; and that by reason of the false representations he has suffered loss in that he has been required to employ personal counsel to represent him in the present suit, and stands ...

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