On certification to the Superior Court, Appellate Division, whose opinion is reported at 309 N.J. Super. 406 (1998).
The opinion of the court was delivered by: O'hern, J.
This appeal presents a conundrum -- a riddle without an apparent solution -- in part because of the case's procedural posture. In May 1992, twenty-one-year-old plaintiff Margaret Samuel was returning to the home of her aunt and uncle on Long Beach Island from her college in West Virginia. After the long drive home from West Virginia, she stopped at the Ketch, a tavern on the south end of Long Beach Island. She there met old friends and made new acquaintances. Samuel appears to have overindulged and in the enjoyment of the homecoming to have made an ill-advised choice of a designated driver. All that is known for certain thereafter is that she was involved in a serious one-car automobile accident. When police arrived at the scene of the accident, they found that her car had run into a telephone pole. There was no one in the driver's seat. Samuel was in the back seat with her seatbelt fastened. She was bleeding and appeared dazed. Her injuries were serious and disabling. Because of her condition, Samuel could not later recall the name of her companion who was driving the car, even after hypnosis. The Ketch tavern appears to have been the antithesis of Cheers, the tavern of legend. The Ketch is a place where no one knows your name. No witnesses to either the accident or of the identify of the driver have ever come forward. Although no one saw Samuel leave the Ketch, a manager at a local 7-Eleven convenience store said that he saw someone fitting Samuel's description with two males approximately fifteen minutes before the accident.
The automobile insurance policy on Samuel's car provided personal injury protection benefits (PIP) to cover Samuel's medical expenses and income continuation benefits; liability coverage for her bodily injuries; and uninsured motorist/underinsured motorist coverage. Due to the extent of her injuries, she sought compensation for her pain and suffering and permanent loss of bodily function.
Here began her procedural problems. A question arose as to whether she would pursue uninsured motorist benefits or liability coverage under the provisions of her father's automobile insurance policy that had been issued by the Market Transition Facility (MTF). Samuel filed a complaint in the Law Division seeking damages for her personal injuries that were allegedly caused by the driver's negligence in operating the automobile. Samuel used a fictitious John Doe designation for the defendant because the identity of the driver of the vehicle was unknown. The trial court allowed substituted service of the John Doe complaint upon MTF. On an interlocutory appeal, the Appellate Division required service by publication, which was made on the John Doe defendant in The Trenton Times.
Meanwhile, MTF filed a declaratory judgment action that it was not obliged to indemnify or defend the fictitious defendant; cover Samuel under the policy's liability coverage; or provide Samuel uninsured (UM)/underinsured (UIM) benefits under the policy. According to MTF, Samuel was not entitled to UM coverage because the vehicle was insured. MTF also asserted that it could not be required to defend or indemnify plaintiff under the liability policy unless the driver were identified. The liability and UM issues were consolidated, and the John Doe personal injury action was stayed until the declaratory judgment action was resolved. The parties settled the PIP claim.
The trial court granted MTF's motion for summary judgment, ruling that Margaret Samuel was not covered under either the UM/UIM or liability provisions of the policy. Concerning liability and UM/UIM coverage, the trial court concluded that
"[Samuel] has no direct claim against MTF under the liability provisions of its policy issued to her father. He is not a party to this action. He has not been shown to be legally responsible for her motor vehicle accident in any way and its resulting damage . . . to her. The plaintiff has also not shown entitlement to UM and UIM endorsement coverage, since the language of the policy which is standard statutory text excludes from its definition of uninsured motor vehicles any vehicle owned by or furnished for the regular use of you -- that is the insured -- or any family member. Here, the motor vehicle in question was owned by the insured, William Samuel. It was provided for the regular use of his daughter. It is, therefore, excluded from the definition of uninsured motor vehicle."
The court also found that Samuel was precluded from recovering under the bodily injury provisions of the liability policy because she had not first recovered judgment from the driver, and that such recovery would be impossible under the fictitious pleading rule if the driver remained unidentifiable.
On appeal, the Appellate Division agreed with the trial court that Ms. Samuel was not entitled to coverage under the UM provisions of the policy.*fn1 Although the unknown operator may be thought of as an uninsured phantom or hit-and-run operator, he was not operating an unknown vehicle. The vehicle was insured. The Appellate Division held, however, that if there were a permissive operator of Mr. Samuel's vehicle, the John Doe defendant, although unidentified, would be considered a "person" entitled to coverage under the bodily injury provisions of the father's automobile insurance policy.*fn2 The issue that divided the panel was a procedural question -- how a judgment could be entered against a fictitious defendant.
Although Rule 4:26-4 allows actions to be brought against fictitious defendants, it states that, "[n]o final judgment shall be entered against a person designated by a fictitious name." Under the language of the rule, Samuel could not proceed to judgment against Doe if his name remained unknown. To ensure that Samuel's case did not "fall through the cracks," thereby leaving her without coverage, 309 N.J. Super. 406, 410 (1998), the majority ruled that the fictitious defendant rule should be relaxed because Justice so required under Rule 1:1-2. The court stated, however, that although plaintiff "does not have to prove [the driver's] identity, she still has the burden of proving the existence of the driver. . . ." Id. at 411.
One member of the Appellate Division Dissented in part. He saw no need to relax Rule 4:26-4. Id. at 412 (Shebell, J., Dissenting). He would allow plaintiff to file a counterclaim in the declaratory judgment action. Id. at 413. He left the order of the procedures to the discretion of the trial court. Id. at 414. In the declaratory judgment action, plaintiff would be required to demonstrate that she was injured due to the negligence of an authorized driver of the car, and that reasonable efforts were made to locate the driver. Ibid. In the liability and ...