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Hansen v. Hansen

April 17, 2001


On appeal from Superior Court of New Jersey, Law Division, Middlesex County, L-4798-97.

Before Judges Keefe,*fn2 Eichen and Steinberg.

The opinion of the court was delivered by: Steinberg, J.A.D.


Argued October 18, 2000

Defendant-Intervenor State Farm Insurance Company (State Farm) appeals from an order, dated October 8, 1999, denying the following: 1) its application to amend its answer to assert cross- claims against co-defendant Denise Hansen (Denise) and counter- claims against plaintiff Heather Hansen (Heather), an infant by her Guardian ad Litem, Margaret Hansen, for declaratory judgment; 2) denying its application "to bifurcate and join the UM claim;" and 3) compelling State Farm to proceed with binding arbitration of Denise's claim. The effect of the order was to deny State Farm's application to stay the Law Division proceedings instituted on behalf of Denise and Heather, pending uninsured motorist (UM) arbitration proceedings.

In addition, State Farm appeals an order of October 28, 1999, which: 1) denied its application "to bifurcate and join the UM claim;" 2) denied its applications to compel Denise to participate in the liability trial regarding her affirmative claim; 3) denied State Farm's application to seek declaratory judgment; and 4) directed State Farm to participate in an uninsured motorist arbitration of Denise's claim within forty-five days.

Finally, State Farm appeals an order of December 17, 1999, denying its motion for reconsideration and to supplement the record. On December 17, 1999, the motion judge also stayed that order to allow State Farm time to decide whether to appeal and seek a further stay from this court. As previously noted, State Farm appeals those orders and we stayed them pending this appeal. We affirm in part, and reverse in part.

On March 24, 1996, Denise was operating her motor vehicle in the southbound lane of Cranbury Road in East Brunswick, New Jersey. Her daughter Heather, a minor, was a passenger in the front seat of the vehicle. Denise's car struck the rear of a stopped vehicle operated by Michael Thomas. The East Brunswick police were called to the scene. The police report reflects that the Hansen vehicle struck the rear of the Thomas vehicle and pushed the Thomas vehicle into a vehicle operated by Medhat Hannah.

In April 1996, Denise notified State Farm of a potential uninsured motorist claim, contending that a northbound unidentified vehicle crossed into her lane of travel causing her to veer to the right, strike the curb, bounce off the curb, and strike the Thomas vehicle. The police report does not mention a "phantom" vehicle. At his deposition, when asked whether he saw any vehicle in the northbound lane of Cranbury Road, Thomas said, "I don't think I was paying much attention to the northbound traffic. You know, it's away from you. I'm always interested in what's behind me and in front of me."

On April 14, 1997, Heather filed her Law Division complaint. Thereafter, on May 13, 1997, Heather also notified State Farm of her intention to make a claim for UM coverage through her parents' policy of insurance.

On September 25, 1998, State Farm was granted permission to intervene in the Law Division action. On August 2, 1999, State Farm moved for an order "to bifurcate the trial of September 13, 1999, and join all pending UM Claims."*fn4 The object of the application was to have the issue of liability for both Denise and the alleged phantom driver resolved in one forum, avoiding piecemeal litigation. Apparently, counsel representing State Farm was unaware of the fact that on July 30, 1999, Heather's attorney, and the attorney designated by State Farm to defend Denise in the Law Division action, had entered into a stipulation of dismissal. In their appellate briefs, State Farm and Denise agree that the stipulation of dismissal was without prejudice.*fn5

State Farm also moved to amend its pleadings to assert declaratory judgment claims against Denise and Heather based upon its contention that they were not entitled to UM coverage and benefits due to their failure to fulfill statutory and policy preconditions to coverage, such as timely police notification, reasonable efforts to identify the phantom vehicle and prompt and accurate notification to the carrier.

On October 25, 1999, the return day of State Farm's motions, the judge concluded that the question of whether Denise satisfied the preconditions of the policy was to be resolved in arbitration, rather than by the court, and therefore denied the motion to amend to seek declaratory relief. He also rejected State Farm's conclusion that the stipulation of dismissal was invalid since it was not signed by its attorney. In addition, the judge directed that the arbitration proceedings take place within sixty days, but stayed the orders pending appeal provided State Farm filed a notice of appeal within forty-five days.*fn6 Finally, by letter dated December 23, 1999, Heather's attorney reaffirmed Heather's intention to assert a UM claim, and further asserted that Heather would "be bound on all issues submitted to the same arbitration panel" that would hear Denise's claim.

On appeal, State Farm raises the following arguments: 1) the motion judge erred by failing to join Denise's affirmative claim in the Superior Court with Heather's claim "so that the shared issue of liability within these claims could be resolved in one forum"; 2) the motion judge erred by permitting Heather to voluntarily dismiss her Law Division claim without the consent of all parties, and without a motion and good faith basis; and 3) the motion judge ...

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