[103 NJSuper Page 526] In this action plaintiff seeks a judgment directing defendant Concord Insurance Company to reinstate a certain automobile liability insurance policy issued to him by Concord in July of 1966, and to require Concord to
defend him against certain claims asserted by third parties for damages arising out of an automobile accident. Claims for alternate relief have been asserted against Flaherty, Sheedy & Ryan, Inc., the broker who placed the policy in question, and against the principals of that corporation, Thomas M. Flaherty, John J. Sheedy and John P. Ryan, individually. Subsequently, by leave of court the complaint was amended to include defendants Pers, Radumsky, Zvinakis, Rea, Cobb, County of Hudson and Public Service Electric & Gas Company as persons being interested in the action in that each had a damage claim against plaintiff arising out of the automobile accident aforementioned.
I find the following facts. Plaintiff, who was then 22 years of age, purchased a new motor vehicle during the month of July 1966. During the course of negotiations with the automobile dealer over the method of financing the purchase he was advised that he would have to have both collision and liability insurance coverage. At the suggestion of the automobile dealer, and accompanied by one of its representatives, plaintiff went to the offices of defendant Flaherty, Sheedy & Ryan, Inc. (hereinafter broker) for the purpose of obtaining the insurance. At the broker's he conferred with defendant John Ryan, one of its principles. Ryan advised plaintiff that he would place his insurance with defendant Concord Insurance Company in Newark and that the annual premium would amount to $283. Shortly thereafter plaintiff completed the purchase of the motor vehicle and received an automobile liability insurance policy issued by defendant Concord through defendant broker. No bill accompanied the policy. During the latter part of August 1966 plaintiff received a communication from the broker reminding him that the premium was due on the Concord policy. Plaintiff immediately called the broker and talked to Ryan. He informed Ryan that he had misunderstood him at their meeting and that he thought the liability insurance premium would be included in the monthly car payments, as the collision insurance
was included. Ryan then offered to finance the liability insurance premium in the event plaintiff could not make the payment due at that time. Plaintiff informed Ryan that he would pay the premium in full immediately, and shortly thereafter sent to the broker a money order in the amount of $283, representing full payment. Payment was received September 3, 1966.
On October 6, 1966 Concord mailed a notice of cancellation to plaintiff, to be effective October 16, 1966. The notice of cancellation contained a rubber-stamped legend advising the recipient to see his broker immediately. On receipt of the notice of cancellation plaintiff called Ryan. Ryan advised him to come into the office the next day. Plaintiff did so. After seeing the notice of cancellation, Ryan informed plaintiff that he did not understand why the policy was to be cancelled. Ryan then, in plaintiff's presence, dialed a number on the telephone and apparently talked to someone in the Concord office in Newark. After Ryan hung up he informed plaintiff that his policy was still in effect and that the notice of cancellation was due to a clerical error. He further informed plaintiff that he would personally see to the reinstatement and that the same should be effective in approximately one week. When plaintiff did not hear from Concord as to the reinstatement after the expiration of a week, he called Ryan again. Ryan informed plaintiff over the telephone that he was going to Newark personally and that he would check on it. Hearing nothing, after the expiration of another week or so plaintiff called Concord directly. He was connected with the underwriting department, where someone informed him that his policy had been cancelled at the request of his broker. After talking to Concord plaintiff immediately got in touch with Ryan and thereafter went to the broker's office. He informed Ryan of his telephone conversation with Concord and Ryan ostensibly again called Concord in his presence. During that telephone conversation Ryan stated to the person at the other end of the telephone that
he had not requested the policy to be cancelled. After Ryan hung up, he wrote out a statement on a sheet of the broker's stationery, stating that the policy in question was still in effect. During the month of December 1966 plaintiff was involved in an automobile accident in New York State. Upon returning home he immediately called Concord to report the accident. Since it was after business hours, the recipient of the call, upon ascertaining that no one was injured, advised plaintiff to call back in the morning or get in touch with his own broker. Plaintiff called Ryan the next morning, and then a few days later went to the broker's office. At that meeting Ryan helped plaintiff fill out a New York accident form and informed him that he would notify Concord of the accident. Plaintiff was apparently faultless in the New York State accident since his vehicle was repaired by the insurance company covering the other vehicle involved in the accident.
In January 1967 plaintiff again went to see Ryan, accompanied by a friend who had some knowledge of the insurance industry. Plaintiff and his companion informed Ryan that they could not understand why no formal reinstatement had been received from Concord despite the representations that had been made by Ryan. Ryan again called Concord in the presence of plaintiff and his companion. After a conversation on the telephone he hung up and informed both plaintiff and his companion that plaintiff was still insured by Concord. Ryan also informed plaintiff and his companion that he could not understand why the reinstatement had not been sent by Concord.
Again, early in February 1967, plaintiff called Ryan to remind him that he had not received formal reinstatement of the policy. Ryan told plaintiff that he was going to Newark to attend to the matter personally. On February 27, 1967 plaintiff was involved in a motor vehicle accident in which one person was killed and two others were injured. Concord, on being informed of the accident, refused to defend
on the ground that its policy had been cancelled on ...