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Ryan v. Henderson

Decided: January 21, 1986.

KATHLEEN RYAN, PLAINTIFF,
v.
MELANIE A. HENDERSON, ALLSTATE INSURANCE COMPANY, CLIFFORD W. SNEDEKER, DIRECTOR OF THE DIVISION OF MOTOR VEHICLES AND UNSATISFIED CLAIM & JUDGMENT FUND, DEFENDANTS



Selikoff, J.s.c.

Selikoff

This matter comes before the Court on two motions for summary judgment. Plaintiff, Kathleen Ryan moves for summary judgment on the third count of her complaint regarding her claim for relief from the Unsatisfied Claim and Judgment Fund. Defendant, Allstate Insurance Company also moves for summary judgment as to the issue of coverage concerning co-defendant, Melanie Henderson, under her insurance policy.

The facts are not in dispute. On February 2, 1983, Melanie Henderson went to her insurance broker, Artom, Inc., and completed and signed an application for automobile insurance to be placed with the New Jersey Automobile Insurance Plan (AIP). At the same time, she executed a financing agreement with Intech Premium Funding Corporation to finance the premium due to the carrier assigned to insure her, that being Allstate. Intech forwarded their draft for the initial premium of $127.20 along with their notice of financing to the AIP.

The financing agreement executed by Henderson required her to make her first financing payment of $55.10 on March 2, 1983. She failed to make this payment to Intech. On March 30, 1983, Intech, pursuant to the power granted them by Henderson, sent a notice of cancellation to Henderson, Allstate and Artom, Inc. The cancellation was to become effective on April 3, 1983.

Prior to the processing of the cancellation notice, however, Allstate issued a premium notice to Henderson indicating that $251.40 was due on or before April 9, 1983. Due to a change of address, Ms. Henderson received this sometime in mid-April. Based upon this billing, Ms. Henderson sent a check for the full amount to Allstate on May 1, 1983.

On May 2, 1983, plaintiff Ryan was injured when she was allegedly struck by a vehicle operated by Ms. Henderson. Four days after the accident, Allstate claims to have received the check for $251.40, issued by Ms. Henderson.

Believing that Ms. Henderson was not insured at the time of the accident, plaintiff thereafter sought relief from the Unsatisfied Claim and Judgment Fund (UCJF). Notice of Intention to make a claim was received by the UCJF on July 5, 1983. On July 27, 1983, the UCJB was advised of the possibility that Ms. Henderson was not covered by Allstate on May 2, 1983. However, plaintiff was then advised by the UCJB on October 9, 1984, that payment would not be forthcoming because of their belief that defendant Henderson was insured by Allstate at the time of the accident.

Plaintiff now argues that she is entitled to relief from the UCJF pursuant to N.J.S.A. 39:6-62 et seq. Based on this, plaintiff contends that summary judgment on the third count of her complaint is warranted.

Additionally, Allstate contends that because Ms. Henderson legally empowered Intech to cancel her policy for non-payment of a premium, the cancellation notice effective April 1, 1983 was valid. Thus, Allstate argues that on the date of the accident, Ms. Henderson was not covered. Allstate therefore seeks summary judgment as to the second count of the complaint and all crossclaims against Allstate which may assert coverage.

It is the position of the defendants, Henderson and the UCJF, that the cancellation notice sent by Intech is ineffective pursuant to N.J.S.A. 17:29 c -8. This statute provides that the insurer shall give 15 days notice of cancellation when the cancellation is

for non-payment of premium. However, this insurance agreement involves the services of a ...


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