All three parties have moved for summary judgment. Insurance coverage is the basic question. On April 21, 1964 Mrs. Irene Vetro, while shopping at Vornado's store in Kearny, allegedly fell and suffered injuries. The incident was reported promptly to defendant Consolidated, which was then Vornado's liability insurance carrier. An investigation by Consolidated followed and included taking statements from two employees at the store, an interview with Mrs. Vetro (though without a written statement), a questionnaire to Mrs. Vetro's doctor, and obtaining information about her employment record. Early in December 1964 Vornado forwarded to Consolidated a claim letter from Mrs. Vetro's lawyer. Consolidated answered that by sending out a form giving the name of its man in charge of the claim and suggesting discussions about adjustment. To this the attorney responded by stating that he was waiting for a report and would be in contact with Consolidated later. Thereafter Consolidated heard nothing more about the case from anyone prior to May 25, 1966. The period of the statute of limitations apparently having run without suit being started -- as Consolidated thought -- the file was closed in due course.
In October 1965 Mrs. Vetro started suit. Her attorney of record was the same one who had exchanged communications about her case with Consolidated. The complaint contained an error which led to others, and the whole group of errors led to the present case. Mrs. Vetro's fall in the store was alleged to have happened on August 21, 1964. By that date defendant Liberty Mutual was Vornado's insurance carrier. Mr. Matusik, Vornado's insurance manager, being unaware of the prior history of the Vetro claim, relied on the date in the complaint and sent it to Liberty Mutual for defense. That company assumed responsibility, turned the papers over to its regular attorney and began routine investigation and trial preparation. No objection to the application of its policy was raised by Liberty until October 1967, when two of its men called upon Vornado's insurance manager, stated that
the Vetro accident really occurred before Liberty's policy had been issued, and presented a draft of letter for Vornado to send to Consolidated turning the case back to that company. The suggested letter was not sent, but on October 17, 1967 another one was, and suit papers were delivered to Consolidated so that it might take over the defense. This Consolidated refused to do, giving two reasons: failure of Vornado to notify Consolidated promptly of the Vetro suit, and Liberty's continued defense of that suit without objection for more than a year after learning that the accident happened in April 1964.
After disclaiming responsibility Liberty sought to withdraw from the defense of the Vetro suit. This case was then started and an order to show cause with restraints against Liberty's withdrawal was issued on January 4, 1968, followed by an interlocutory injunction, so that Liberty through its attorneys is still in charge of the defense of the Vetro action, an action which apparently can be reached for trial in the Law Division in the near future.
After getting the Vetro case Liberty quite promptly began to turn up information indicating that the alleged accident had occurred in April 1964 rather than in August 1964. From a central index bureau it was learned that a Vetro claim had been presented to Consolidated, and on or about May 25, 1966 Liberty addressed an inquiry about that to Consolidated. The latter answered promptly, but no one at Liberty realized at the time that there was only one mishap alleged by Mrs. Vetro. In or shortly before the summer of 1966 she furnished answers to interrogatories, one of the answers being that the accident occurred on April 22, 1964, a mistake by one day. After the interrogatories were answered her deposition was taken on July 19, 1966, and during the questioning both Liberty's attorney and Mrs. Vetro adopted the April 22 date as the correct one. By November 17, 1966 Mr. Cole, of Liberty's claims department, prepared a two-page memorandum on the Vetro case, at the end of which he said:
"The question as to the date of the accident seems to have been resolved at least in the plaintiff's mind, since now interrogatories state that the accident occurred on April 22, 1964 and not the original date indicated, August 21, 1964."
Thus Liberty knew, for more than a year prior to its attempt to withdraw from the case, that the Vetro claim was based on an alleged fall in April 1964. It also knew, of course, the period of coverage specified in its own policy. Apparently no one drew the obvious conclusion, and Liberty went forward with the defense of the case until October 1967 without questioning its responsibility to defend and pay.
Vornado demands judgment against either Liberty Mutual or Consolidated. By the first count of its complaint it alleges that it is entitled to judgment against Liberty on grounds of estoppel arising out of Liberty's actual defense of the Vetro case. The second count of the complaint alleges that the accident happened during the period of Consolidated's policy and that Consolidated should, therefore, be held responsible. Both insurance companies argue for exemption from liability and, in effect, for imposition of liability on the other.
The contention of Vornado on this motion is that Liberty should be held liable on principles of estoppel which were stated in Merchants Ind. Corp. v. Eggleston, 37 N.J. 114 (1962), and which were stated and applied in Sneed v. Concord Ins. Co., 98 N.J. Super. 306 (App. Div. 1967). Vornado's argument against Consolidated is based upon Cooper v. Government Employees Ins. Co., 51 N.J. 86 (1968), and urges that the two-year delay in forwarding Mrs. Vetro's summons and complaint does not relieve Consolidated of responsibility in spite of a policy provision requiring that such papers be forwarded "immediately," this result flowing from Consolidated's failure to make a showing of a likelihood of appreciable prejudice from the delay. Reading Merchants Ind. Corp. v. Eggleston and Sneed v. Concord ...