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New Jersey Manufacturers Insurance Company v. Helmrich Transportation Systems

December 28, 2012

NEW JERSEY MANUFACTURERS INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
HELMRICH TRANSPORTATION SYSTEMS, INC., H. ALFRED KING, JR., INDIVIDUALLY, DEFENDANTS-RESPONDENTS. BURLINGTON COUNTY BOARD OF CHOSEN FREEHOLDERS, INTERVENOR-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-1021-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted September 19, 2012

Before Judges Messano, Lihotz and Kennedy.

This appeal presents a procedural quagmire almost wholly the making of plaintiff, New Jersey Manufacturer's Insurance Co. (NJM). We begin our opinion by setting forth the history of the litigation, and by stating clearly that our decision is based upon the narrow grounds set forth hereafter. We do not reach the merits of this dispute, leaving NJM the opportunity to properly challenge the essential holding of the trial court in future litigation.

I.

On October 17, 2008, NJM filed a verified complaint and order to show cause in Mercer County naming Helmrich Transportation Systems, Inc., and its principal, Alfred King, Jr., as defendants.*fn1 The complaint alleged violations of the New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 to -30, and the Consumer Fraud Act, N.J.S.A. 56:8-1 to -195, and asserted the common law claim of replevin. The complaint stated that defendant, pursuant to instructions from the Burlington County Prosecutor's Office (BCPO), had towed and stored a motor vehicle, owned by Paul Fontenot (the Fontenot vehicle) and insured by NJM. The vehicle, which had been reported stolen by Fontenot, was involved in a traffic accident injuring a police officer, and the BCPO was investigating the incident.

NJM contacted defendant and advised that neither Fontenot nor NJM consented to, nor would be responsible for, storage fees incurred during the investigative impoundment. Defendant moved for a change of venue, and NJM consented and agreed to "resolve the replevin aspect of the case." An order entered March 18, 2009, reflected settlement of the replevin claim, transfer of the complaint to Burlington County, and permitted defendant to file an answer within thirty days. It also provided that the "interim agreement" was reached without prejudice to NJM's other claims or any potential claims filed by defendant.

Defendant moved to dismiss the complaint and filed a counterclaim, claiming it was owed additional monies associated with the Fontenot vehicle and two other vehicles (the Riegel and Levy vehicles), which were also insured by NJM and impounded by the Camden County Prosecutor's Office (CCPO).*fn2 The judge denied defendant's motion to dismiss, but ordered that NJM amend its complaint within forty-five days of May 5, 2009. NJM failed to do so, and, on June 30, 2009, the judge dismissed the complaint and ordered the matter to proceed only on defendant's counterclaim.

The counterclaim was administratively dismissed, and, when defendant moved for reinstatement, it also sought entry of default against NJM. In a letter to the court dated December 11, 2009, NJM did not oppose reinstatement, seeking only the opportunity to file an answer to the counterclaim because of the "considerable amount of confusion over the procedural status of the case . . . ." NJM never sought to reinstate its complaint, which had been dismissed not on the merits, but for failure to file an amended complaint. Although the record does not include an order permitting NJM to file its answer to the counterclaim, the relief was apparently granted because NJM's answer was filed on February 25, 2010. NJM never asserted a claim against the BCPO, the CCPO or any other parties.

On May 17, the judge entered an order reinstating defendant's counterclaim. A series of emails in the record reflect another interim settlement agreement. Essentially, NJM agreed to pay defendant for the towing and other related charges involved with the "three vehicles." NJM further agreed to abide by defendant's "fee schedule" for the remainder of 2010, "as long as [defendant] can demonstrate that its fee schedule was filed and approved by the local governmental agency requesting the towing services." According to defense counsel, what remained unresolved was defendant's counterclaim relating to fees for "storage subsequent to release from impoundment" and interest. (Emphasis added).

A case management order was entered on October 12, 2010, which permitted additional discovery requests to be served and set a discovery end date of October 29. The order also set December 10 as the date for the filing of summary judgment motions.

NJM timely moved for summary judgment. In his certification in support of the motion, NJM's counsel argued that as to the Fontenot vehicle, NJM was not responsible for storage charges during the time the car was held in defendant's facility pursuant to orders from the BCPO, and after NJM and its insured sought its release. As to the Levy vehicle, NJM agreed to pay storage charges for "a reasonable amount of time," four days, but not for storage "that accrue[d] during the time that the vehicle was stored at law enforcement's direction." As to the Riegel vehicle, NJM offered only to pay for the towing charges, and not "for the storage charges incurred as a result of the impoundment by the [CCPO]." NJM never claimed that defendant's fee schedule was not properly adopted or approved by any government entity or agency involved in the impoundment of the three cars.

NJM argued two legal grounds in support of the motion. First, citing our decision in Harvey v. Twp. of Deptford, 402 N.J. Super. 156 (App. Div.), certif. denied, 197 N.J. 16 (2008), it contended that N.J.S.A. 40:48-2.50 limited the fees that defendant could charge a governmental entity to $400, and, by analogy, this limitation applied to the "owner of the vehicle or its insurer."*fn3 Second, NJM contended that pursuant to the New Jersey Garage Keeper's Lien Act, N.J.S.A. 2A:44-20 to -31 (the Lien Act), defendant was not entitled to maintain possession of the vehicles ...


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