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Hartford Insurance Co. v. Allstate Insurance Co.

Decided: November 7, 1975.

HARTFORD INSURANCE COMPANY, A CORPORATION OF THE STATE OF CONNECTICUT, RESPONDENT,
v.
ALLSTATE INSURANCE COMPANY AND JOSEPH YUHAS, APPELLANTS



For affirmance -- Chief Justice Hughes, Justices Mountain, Sullivan, Clifford and Schreiber and Judge Conford. For reversal -- Justice Pashman. The opinion of the Court was delivered by Mountain, J. Pashman, J. (dissenting).

Mountain

The appellant, Joseph Yuhas, was injured as the result of an automobile accident caused by the negligence of an uninsured driver of a second car. At the time of the collision, Yuhas was a passenger in a car insured by Allstate Insurance Company and he himself was covered by a policy issued by Hartford Insurance Company. Both policies contained "uninsured motorist endorsements," as required by N.J.S.A. 17:28-1.1, providing coverage for injury caused by an uninsured driver.

Allstate conceded its liability and paid Yuhas the full amount of its uninsured motorist coverage, $10,000.*fn1 Although this sum was inadequate to compensate Yuhas for his injuries, Hartford declined to make any payment, basing

its refusal on the ground that its policy provision limited its obligation to those occasions where the amount required by statute -- $10,000 -- was not available to the claimant under any other policy. To test the question of Hartford's liability, Yuhas instituted suit and was successful at the trial level. The Appellate Division, however, reversed and entered judgment in Hartford's favor. Hartford Insurance Co. v. Allstate Insurance Co., 127 N.J. Super. 460 (1974).

Argument before the Appellate Division took place at the same time as argument in an unrelated suit involving different parties but raising the identical issue. In this latter case, Motor Club of America Insurance Company was the carrier and one Phillips the claimant. The two cases were scheduled for argument at the same time before the same part of the Appellate Division solely because they presented the identical legal issue. Following the decisions in the two cases, both favorable to the carriers, the claimant Phillips sought certification as to the judgment in favor of Motor Club of America Insurance Company. His petition was granted. 65 N.J. 556 (1974). The claimant Yuhas, who is now the appellant before us, did not seek certification with respect to the judgment in his suit entered in favor of Hartford. In due course this Court reversed the judgment of the Appellate Division in the Phillips case, holding the asserted limitation of liability to be repugnant to N.J.S.A. 17:28-1.1. Motor Club of America Insurance Co. v. Phillips, 66 N.J. 277 (1974). Yuhas then moved in the Appellate Division for a rehearing, but the application was denied as being untimely. See R. 2:11-6a. We granted his petition for certification, 67 N.J. 93 (1975) and now affirm.

Yuhas claims that to deny him relief constitutes a grave injustice and results in a windfall to the carrier. We have concluded otherwise. It is conceded that after conferring with his attorney, he made a deliberate choice to forego any review of the adverse Appellate Division judgment and, accordingly, did not seek certification. It cannot be said that in making this decision he, or his attorney, was relying

upon any well-settled rule of law. Indicative of the unsettled state of law within our own jurisdiction was the contrast between McFarland v. Motor Club of America Insurance Co., 120 N.J. Super. 554 (Ch. Div. 1972), in which a decision was rendered favorable to the claimant, and the appellate decisions in the Yuhas and Phillips cases favorable to the carriers. Furthermore, decisions involving similar or identical statutes throughout the country had reached varying results, the majority determining the issue in favor of coverage. Motor Club of America Insurance Co. v. Phillips, supra, 66 N.J. at 288-90.

Appellant urges that this case can and should be brought within the favor of the rule followed by this Court in E & K Agency, Inc. v. Van Dyke, 60 N.J. 160 (1972). We there held that a party to a suit who failed to join in an appeal was nevertheless entitled to the benefit of a favorable judgment of an appellate court.

Recently, in Pierce v. Cook & Co., Inc., 518 F.2d 720 (10th Cir. 1975) the Court of Appeals granted a similar type of relief when faced with rather unusual factual circumstances. Three persons, all occupants of the same car, sustained serious injuries in an accident which occurred in Oklahoma. They instituted separate suits, one of which was removed to the federal court on the basis of diversity of citizenship. Applying what was then conceded to be the law of the State of Oklahoma, the federal district court found for the defendant and the judgment was affirmed on appeal. The state court judge before whom the other two suits were brought also ruled in favor of the defendant for the same reason. Plaintiffs in the state court suits appealed and the Supreme Court of Oklahoma reversed, at the same time overruling the case upon which the federal and state courts had relied in ruling in favor of the defendant. The reversal was followed by a settlement favorable to the plaintiffs-appellants. The plaintiff in the federal court suit then applied for relief, basing his application upon Federal Rule

60(b) which specifies five stated grounds for relief and then concludes, "(6) any other reason justifying relief from the operation of the judgment."*fn2 The court granted relief, emphasizing the fact that the plaintiffs in the various suits had all been injured at the same time in a single accident and that to deny relief to one but not the others would be manifestly offensive to notions of elementary justice. Considerable reliance was placed upon Gondeck v. Pan American World Airways, Inc., 382 U.S. 257, 86 S. Ct. 153, 15 L. Ed. 2d 21 (1961), wherein relief was forthcoming ...


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