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Christian v. Ormsby12/18/1992
[267 NJSuper Page 240] This case involves a determination of the validity of a notice of cancellation for non-payment of premiums of an automobile insurance policy issued by Liberty Mutual Insurance Company ("Liberty Mutual") as servicing carrier for the New Jersey Automobile
Full Insurance Underwriting Association ("JUA" or "defendant") to the plaintiffs James and Linda Christian. The insurer seeks further clarification of the methods by which proof of compliance with the requirements of N.J.S.A. 17:29C-10 for the mailing of a notice of cancellation may be satisfied. A second issue requiring resolution is whether an automobile insurer may, pursuant to N.J.S.A. 17:29C-8, issue to its insured, prior to the premium due date, a notice of cancellation effective the day following the premium due date. This latter issue appears to be one of first impression in New Jersey.
At the outset of the trial, a motion was granted to substitute the JUA for Liberty Mutual as the defendant to the fourth count of the complaint seeking declaratory judgment. That motion to amend was granted pursuant to R. 4:9-2. The answer of Liberty Mutual was also deemed amended to substitute the JUA for Liberty Mutual. On plaintiff's motion the sixth count of the complaint which charges defendant, John Randolph ("Randolph"), the broker through whom plaintiffs purchased the policy in issue, with negligence, was dismissed with prejudice.
This matter was tried to the court without a jury. Three witnesses testified at the trial. These witnesses included the plaintiff, Linda Christian ("Mrs. Christian"), Christopher Brewer ("Brewer"), the production supervisor for Liberty Mutual and the broker, Randolph. In reaching the findings of the fact set forth below, the court has had to evaluate the credibility of these witnesses.
During the period between May 1985 and February 1988 plaintiffs resided at 24 Valley Street, Newark, New Jersey. In early 1988 plaintiffs, who then owned a 1973 American Gremlin, secured an automobile insurance policy through Randolph from Liberty Mutual, acting as servicing carrier for the JUA. The policy insured the Gremlin for the period February 28, 1987, through February 28, 1988 (Exhibit P-2).
On October 7, 1987, Mrs. Christian signed a contract for the purchase of a 1987 Oldsmobile Ciera coupe. Upon execution of
the contract of purchase Mrs. Christian, at the recommendation of the car salesman, called Randolph's office to ask that the new car be added to her existing insurance policy. She spoke with "Phyliss," a clerical employee of Randolph, and later went to Randolph's office and picked up a temporary insurance identification card for the Oldsmobile (Exhibit P-5). The temporary I.D. card, which was issued in the name of James Christian ("Mr. Christian"), stated that the effective date of coverage for the Oldsmobile was October 7, 1987. On that date Randolph sent a request for policy change to Liberty Mutual seeking to add the 1987 Oldsmobile to plaintiffs' policy (Exhibit P-4). Pursuant to that request for policy change, Liberty Mutual issued a policy endorsement (Endorsement # 3), adding the 1987 Oldsmobile Ciera as the second automobile on the policy and listing United Jersey Bank as the loss payee (Exhibit P-6). The effective date of Endorsement # 3 was October 7, 1987.
When Mrs. Christian went to Randolph's office to obtain the temporary insurance I.D. card, she inquired about payment of the premium and was told by Randolph's secretary, Phyliss, not to worry about payment of the premium at that time. Phyliss info
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