On appeal from Superior Court of New Jersey, Law Division, Essex County
Fritz, Kole and Lane. The opinion of the court was delivered by Fritz, P.J.A.D.
[174 NJSuper Page 34] This appeal concerns relative rights among an assigned risk insured, his apparently absconding insurance agent or broker and the firm of that individual, the organization that financed that insurance, the insurance company, a passenger in the insured's car, the driver of another car involved in an accident with the insured, and the Unsatisfied Claim and Judgment Fund. The matter is complex both procedurally and substantively. Its presentation to us is not without omissions and in some cases requires assumptions. To add to the burden inherent in the convoluted and intricate problem, important determinations in at least one of the trial courts involved arrive here without any findings by the trial judge in his grant and denial of a number of vital summary judgment motions. The ultimate irony resides in our conviction that a legal proposition neither argued nor considered below is sufficiently vital, both in the sense of its importance as a public question and with respect to
essential justice in this case, that we must not ignore it. Pursuant to the authority of R. 2:10-2 and consistent with its policy pronouncement, we reverse.
In June 1973 Lee D. Brown (Brown), an assigned risk under the Motor Vehicle Security-Responsibility Law (N.J.S.A. 39:6-23 et seq.), obtained auto liability insurance from Lumbermens Mutual Casualty Company (Lumbermens) through Walter Shaw Insurance Agency, a business operated by Walter Shaw as an insurance broker or agent (Shaw). This insurance policy became effective on June 1, 1973 and was to terminate one year later on June 1, 1974. Unable to pay the full amount of the insurance premium ($137), Shaw arranged for Brown to execute a premium finance agreement with Arista Factors, Inc. (Arista). This agreement required Brown to make payments to Arista of $16.38 a month for eight months commencing on July 4, 1973. Brown testified that he also gave Shaw an initial deposit of $40 when he executed the agreement. The finance agreement authorized Arista to pay Lumbermens the full premium due.
This contract further provided that the event of default by Brown in the payment of any installment when due
To effectuate the foregoing, said insurance company is hereby authorized and directed:
(a) To pay any return premium to said payee which may become due under the policy other than from cancellation; and
(b) To pay any unearned premium to said payee which may become due on account of cancellation of said policy at any time by the undersigned insured, the payee or the insurance company; and
(c) To include the name of the said payee as payee with the undersigned insured in any check or draft issued on account of any loss, which may be or become payable to the undersigned insured, but only in the event it reduces or voids the unearned premium of the policy, and subject however to all mortgagee interest, if any.
Another and different result said to eventuate upon ten-day default in payment appeared elsewhere in the agreement:
Failure to pay an installment within 10 days of due date will result in late charges of a charge equal to a minimum of $1.00 or 5% of such installment or $5.00 which ever is less.
Although the agreement recited Brown's promise to pay to the order of Arista at its place of business and contained an express disavowal of any agency in Shaw, Brown's testimony that Shaw told him he was "to make the payments to him until my payment book came and my insurance policy" is unrefuted.
After receiving the premium finance agreement and the July 4, 1973 payment "on or about August 4, 1973," Arista processed the agreement and "mailed the entire premium for [the] policy to [Lumbermens]." There is evidence that Arista did not receive Brown's payment due on August 4. ...