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Chris Constant v. Pacific National Insurance Co.

Decided: June 3, 1964.


Yancey, J.c.c. (temporarily assigned).


[84 NJSuper Page 213] The plaintiffs in this action, Chris Constant, a minor, Louis Constant, a

minor, both by Andrew Constant, as their guardian ad litem , Helen Constant, Regina Arkovitis and Jack Arkovitis, instituted this suit against the defendant, Pacific National Insurance Company, to recover certain monies they were awarded for damages caused by defendant's alleged assured.

On August 24, 1957 Ignatius Fernandez was involved in a motor vehicle accident on the Pulaski Skyway, located in the State of New Jersey. This accident resulted in injuries to several persons who were passengers in the vehicle struck by Fernandez. The Manufacturers Casualty Insurance Co. (Manufacturers), Fernandez's insurer, in October of 1957, instituted a declaratory judgment action in the United States District Court, District of New Jersey, against its assured, Ignatius Fernandez, as well as against all persons who sustained injuries as a result of the accident of August 24, 1957. The ground upon which Manufacturers based the motion for declaratory judgment was that Fernandez failed to submit a written notice to it as soon as practicable after the accident of August 24, 1957.

The defendants in the declaratory judgment proceedings were Ignatius Fernandez, Anthony Constant, Chris Constant, Helen Constant, Andrew Constant, Marietta Campenella, Frank Campenella, Tony Campenella, Jack Arkovitis and Regina Arkovitis.

The United States District Court, after having heard the arguments of counsel and testimony of the witnesses ordered that the "declaratory judgment be and is hereby entered in favor of the plaintiff and against the defendants Ignatius Fernandez, Marietta Campenella, Frank Campenella and Tony Campenella * * *"

The United States District Court found that Fernandez failed to submit written notice to the plaintiff as soon as practicable after the accident and therefore plaintiff was not required to indemnify the defendant against loss arising from liability imposed upon him by law as a result of the accident.

Subsequently a suit was instituted in the Somerset County District Court by the plaintiffs named in the instant action.

On October 31, 1960 these plaintiffs, as a result of a settlement conference, recovered judgments against Fernandez. Unable to satisfy the judgments the plaintiffs commenced this suit against the present defendant, Pacific National Insurance Co. (Pacific), successor to Manufacturers.

In this suit, the plaintiffs allege that on the date of the accident "there existed and was in effect a valid and subsisting contract of insurance whereby Pacific's predecessor agreed to indemnify Fernandez against loss arising from an accident due to the negligent maintenance or use of the insured motor vehicle."

The defendant Pacific answered contending that these plaintiffs have no cause of action against it because of the failure of Fernandez to comply with the terms of the policy. It further contends that the declaratory judgment rendered by the United States District Court exculpated it from any liability to these plaintiffs.

Before proceeding to a determination of this proceeding, I must point out certain very important facts. First, the plaintiffs in this action are all residents of New York State and it is admitted that they were not served with personal notice of the declaratory judgment proceedings in the United States District Court, District of New Jersey. Second, these plaintiffs were represented by a New York attorney who was aware of the declaratory judgment action, having been forwarded a copy of the declaratory judgment complaint, but who did not enter any appearance on their behalf or accept any service of process for them. Third, none of the plaintiffs was served with a summons or any formal notice of the proceedings. Fourth, the District Court order of judgment does not name any of these plaintiffs, but only those persons that were named above.

Thus, the question before the court in the instant case is whether the declaratory judgment rendered by the Federal District Court in favor of the insurer, Manufacturers, against the assured Fernandez is res judicata as to any subsequent actions brought by other persons injured in the accident, but

who were not parties to the litigation between the insurer and the assured.

The doctrine of res judicata is plain and intelligible and amounts simply to this, that a cause of action once finally determined without appeal, between the parties, on the merits, by a competent tribunal, cannot afterwards be litigated by a new proceeding either before the same or any other tribunal. Freudenreich v. Mayor &c., Fairview , 114 N.J.L. 290, 292 (E. & A. 1934).

Where the matter is res judicata , there must be a concurrence of four conditions: (1) identity in the thing sued for; (2) identity of the cause of action; (3) identity of persons and of parties to the action, and (4) identity of the quality in the persons for or against whom the claim is made. Mershon v. Williams , 63 N.J.L. 398 (Sup. Ct. 1899); Hoffmeier & Sons v. Trost , 83 N.J.L. 358 (Sup. Ct. 1912); Smith v. Fischer Baking Co. , 105 N.J.L. 567 (E. & A. 1929).

In the instant case there is a concurrence of two conditions -- the identity of the thing sued for and identity of the cause of action. Whether the other two conditions regarding the identity of parties have been met depends upon whether the plaintiffs were required by the Federal Rules of Civil Procedure to be joined as parties in the Federal District Court proceeding.

Under a policy of this class involved here, "the rights of the judgment creditor are purely derivative. He stands in the shoes of the assured; and he sues in the right of the insured. Kindervater v. Motorists Casualty Ins. Co. , 120 N.J.L. 373 (E. & A. 1938)." Dransfield v. Citizens Casualty Co. of N.Y. , 5 N.J. 190, 194 (1950). The injured person has no greater right under the policy than has the assured. The cause of action accrues at the moment he is ...

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