Staller, J.s.c. (temporarily assigned).
This is a motion brought by State Farm Mutual Automobile Insurance Company (hereinafter State Farm) to remove the execution of judgment brought against it pursuant to a default judgment entered against defendant William Austin, Jr., on September 21, 1979. The unique factual situation giving rise to this motion, and to a question of first impression in this jurisdiction, is as follows:
On March 10, 1972 plaintiff William White and defendant, both residents of New Jersey, were involved in an automobile accident which allegedly resulted in damage to plaintiff's automobile in the amount of $725. Wishing to initiate suit to recover that amount, plaintiff filed a complaint and instructed the sergeant-at-arms of the Cape May County District Court to personally serve defendant at his address in Cape May, New Jersey. The sergeant-at-arms attempted such service on April 11, 1973 but was unable to locate defendant. The United States Post Office provided the sergeant-at-arms with a forwarding address in Watsika, Illinois, for use by plaintiff.
Thereafter, unable either to locate defendant in New Jersey or to secure further information about him, plaintiff attempted to serve defendant via the Division of Motor Vehicles at the Illinois address provided by the Post Office. N.J.S.A. 39:7-3. The Division of Motor Vehicles forwarded copies of the summons and complaint to this address by certified mail, but the papers were returned unclaimed on or about September 20, 1973.
Finally, plaintiff obtained an order of this court on October 25, 1973 permitting him to serve defendant by mailing a copy of the summons, complaint and order to State Farm, the company which defendant had named as his insurance carrier for the purpose of registering his automobile in New Jersey. N.J.S.A. 39:6A-3. This manner of serving a resident motorist who
becomes unavailable for personal service was approved by the Supreme Court in Feuchtbaum v. Constantini , 59 N.J. 167 (1971). R. 4:4-4(i). State Farm acknowledges having received such process in November of 1973.
It is now evident that defendant's automobile was not insured by State Farm and that defendant represented that he was so insured in order to avoid the insurance requirement of New Jersey law. The policy under which defendant claimed to be covered, No. 1861-451-F12-13, had been issued to one Virgil Wilborn of Gilman, Illinois, the father of defendant's former wife. It pertained to a 1966 Ford sedan owned by Wilborn, and was in force from June 12, 1971 to September 29, 1971, when Wilborn sold that vehicle. As such, it appears not only that neither defendant nor his automobile were insured under the policy in question, but also that the policy was not even in force at the time of the accident.
However, State Farm took no action in response to this substituted service to inform either plaintiff or the court of defendant's false representation. It did not answer the complaint. It virtually ignored the series of letters sent by plaintiff's attorneys during the period of December 19, 1974 to September 20, 1977, and it failed to oppose plaintiff's motion for default judgment of August 24, 1979. In that motion plaintiff requested that execution of the judgment be limited solely to the State Farm policy which defendant had represented to be his. This was requested because plaintiff could not in good conscience submit an affidavit of nonmilitary service regarding defendant. Plaintiff submits uncontroverted proof that notice of said motion was sent to State Farm, as well as to defendant's last known address on August 21, 1979. A copy of the signed order was sent to State Farm on October 3, 1979.
It was at this stage that State Farm finally responded to the court proceedings and, on November 29, 1979, filed the current motion for the removal of the execution of judgment. The now
obvious reasons for State Farm's denial of liability are that defendant (1) was not an insured on the policy and (2) the policy had been cancelled prior to the accident. While these would unquestionably have been valid reasons for a finding in an action for declaratory judgment that there was no coverage, they are now being relied upon by State Farm to justify its failure to respond to the substituted service of process, to the subsequent correspondence of the plaintiff and, finally, to plaintiff's motion for default judgment.
Plaintiff claims that State Farm is estopped by its conduct over a period of six years to now assert the defense of noncoverage though it would have been a valid defense if timely made. I agree. State Farm has been inexcusably dilatory in asserting its rights. ...