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Collins v. United States Fidelity and Guaranty Co.

April 13, 2006

MICHAEL COLLINS, PLAINTIFF-APPELLANT,
v.
UNITED STATES FIDELITY AND GUARANTY COMPANY AKA USF&G INSURANCE, DEFENDANT-RESPONDENT, AND NEW PENN MOTOR EXPRESS INC. AND THE PRUDENTIAL PROPERTY ND CASUALTY INSURANCE COMPANY OF NEW JERSEY AKA THE PRUDENTIAL COMMERCIAL INSURANCE COMPANY OF NEW JERSEY, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, L-411-03.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued February 7, 2006

Before Judges Kestin, Lefelt*fn1 and Seltzer.

The opinion of the court was delivered by SELTZER, J.S.C. (temporarily assigned).

This appeal requires us to consider the effect of a settlement with a possible tortfeasor on plaintiff's right to recover from his uninsured motorist carrier when both the possible tortfeasor and the carrier are named defendants in a pending suit. The motion judge initially considering this question believed that the settlement barred continuation of the action against the co-defendant and dismissed the suit against the carrier. We disagree and reverse.

The record on appeal reveals that plaintiff, Michael Collins, was a toll collector on the New Jersey Turnpike on March 7, 2001, when he was injured. Plaintiff's interrogatory answers described the incident as follows:

I was working as a toll collector on the New Jersey Turnpike. A tractor trailer entered my lane presumably to pay a toll. The tractor trailer stopped and I put my arm out of the booth anticipating payment of the toll. The vehicle then began moving out of my lane without paying the toll and the next thing I felt was my arm being pinned against the frame of the booth door by the trailer.

The tractor trailer driver took off from the scene without stopping and without paying the toll.

Plaintiff, without citation to the record, advises us that he obtained a partial license plate of the offending vehicle and that investigation led him to believe the vehicle causing his injury was owned by defendant, New Penn Motor Express Inc. (New Penn). An investigative report completed by plaintiff's "investigating supervisor" also identified New Penn as the owner of the vehicle causing plaintiff's injuries, although it is likely that this information came from plaintiff. In any event, plaintiff instituted a personal injury suit against New Penn.

At the time of the accident, plaintiff was insured by policies issued by Prudential Property and Casualty Insurance Company (Prudential) and by United States Fidelity and Guaranty Company (USF&G). Those policies included "uninsured motorist coverage" providing compensation for injuries caused by (1) a vehicle that either did not have a policy of liability insurance in effect or that had a policy in effect but the issuer of which had disclaimed coverage or professed an inability to pay pursuant to the policy (an "uninsured" vehicle) or (2) a vehicle that could not be identified (a "hit and run" vehicle).

N.J.S.A. 17:28-1.1(b) and 2(c); N.J.S.A. 39:6-78.

Because plaintiff was not certain that he was injured by a New Penn vehicle, he also instituted suit against both Prudential and USF&G. Neither carrier sought to arbitrate the claim*fn2 . The carriers were named to protect against the possibility that New Penn was not the owner of the vehicle involved in the accident. In that case, the vehicle actually involved would, of necessity, be a "hit and run" vehicle and the carriers would be contractually obligated to pay plaintiff's damages. The institution of an action against both a possible tortfeasor and the entity required to pay plaintiff if the putative tortfeasor, in fact, was not involved avoids the possibility of inconsistent verdicts. It is an appropriate mechanism for resolving the issues presented when the identity of the tortfeasor is in question. See Schaeffer v. Strelecki, 107 N.J. Super. 7 (App. Div. 1969). Prudential eventually settled the claim against it and is not involved in this appeal.

During discovery, it became reasonably clear that New Penn was not the tortfeasor. Although New Penn appeared likely to prevail at trial, it sent plaintiff an offer of judgment, see R. 4:58, in the amount of $7,500. Apparently, the offer was motivated by New Penn's desire to extricate itself from the litigation as cheaply as possible. Plaintiff, believing he would be unable to prevail against New Penn at trial, advised USF&G of his intention to accept the offer and requested consent to do so. The letter conveying this information and request made specific reference to Longworth v. Van ...


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