Wharton v. KnoxWharton v. Knox
This is an appeal by the Unsatisfied Claim and Judgment Fund Board (Board) from an order of the trial court directing the State Treasurer to pay plaintiffs’ claims from the Fund.
On January 19, 1964 plaintiffs, residents of New Jersey, were involved in an automobile accident with defendant Floyd Knox, a resident of Philadelphia, Pa. On April 15, 1964 plaintiffs, alleging personal injury and property damages, instituted suit against Knox, who at the time of the accident was insured by Lawn Mutual Insurance Company, a Pennsylvania corporation not authorized to do business in New Jersey.
On March 22, 1965 the operations of Lawn Mutual were suspended by order of the Pennsylvania Insurance Commissioner, and on April 7, 1965 plaintiffs received notice of the insolvency of the carrier. Thereupon, on April 14, 1965 plaintiffs gave notice to the Board of their intention to file a claim against it. This notice was acknowledged on April 19, 1965, and on May 11, 1965 the Board advised plaintiffs that “[i]nasmuch as the Notice of Intention was not filed within 90 days after the accident no further action by the Fund is indicated.”
On February 21, 1966 trial of the cause between plaintiffs and Knox was held. Judgment was entered in favor of plaintiff Otis H. Wharton, Sr. in the sum of $3,000 and in favor of plaintiff Mary C. Wharton in the sum of $2,000.
Subsequently, plaintiffs brought discovery proceedings against Knox but were unable to find any assets from which to satisfy their judgment claims. Plaintiffs then filed their petition for payment. Following a hearing thereon the order appealed from was entered.
The trial court, giving
Involved herein is the construction of
“Any qualified person * * *, who suffers damages resulting from bodily injury or death or damage to property arising out of the ownership, maintenance or use of a motor vehicle in this State on or after April 1, 1955, and whose damages may be satisfied in whole or in part from the fund, shall, within 90 days after the accident, as a condition precedent to the right thereafter to apply for payment from the fund, give notice to the board, the form and contents of which shall be prescribed by the board, of his intention to make a claim thereon for such damages if otherwise uncollectible; provided, any such qualified person may, in lieu of giving said notice within said time, make proof to the court on the hearing of the application for the payment of a judgment (a) that he was physically incapable of giving said notice within said period and that he gave said notice within 90 days after he became physically capable to do so or in the event he did not become so capable, that a notice was given on his behalf within a reasonable period, or (b) that he gave notice to the board within 15 days of receiving notice that an insurer had disclaimed on a policy of insurance so as to remove or withdraw liability insurance coverage for his claim against a person or persons who allegedly caused him to suffer damages. * * *”
The Board‘s primary contention is that the insolvency of Lawn Mutual cannot be construed as the equivalent of a disclaimer within the above statute. We disagree.
Although the particular point that the Board raises is one of novel impression, our courts have repeatedly held that our Unsatisfied Claim and Judgment Fund Law,
Two out-of-state cases, Katz v. Americn Motorist Ins. Co., 244 Cal. App.2d 886, 53 Cal. Rptr. 669 (D. Ct. App. 1966), and Pattani v. Keystone Insurance Co., 426 Pa. 332, 231 A.2d 402 (Sup. Ct. 1967), although not on all fours with the issue here involved, are worthy of note. Neither California nor Pennsylvania has enacted an unsatisfied claim and judgment fund law, but both states have statutes requiring all automobile insurance policies issued within those jurisdictions to provide coverage to an insured who suffers damages caused by uninsured owners and operators of motor vehicles. Both of these cases involved application of those statutes to circumstances where an insurance company had gone insolvent.
In Katz the applicable statute defined an uninsured motor vehicle to include, inter alia, one on which coverage under a policy had been denied by the carrier. 53 Cal. Rptr., at pp. 671-672. There, the individual with whom plaintiff had been in an accident had been insured at the time of the collision. After plaintiff instituted suit against the other driver for damages, the latter‘s insurance carrier became insolvent and its affairs were placed in the hands of a rehabilitator. The court stated:
“[The California statute] is a part of a pattern of statutes which are `designed to give monetary protection to that ever changing and tragically large group of persons who while lawfully using the highways
themselves suffer grave injury through the negligent use of those highways by others.’ * * * Such statutes must be liberally construed to carry out this objective of providing compensation for those injured through no fault of their own. * * * The statutory objective is not attained by giving the injured person a claim against an insolvent. Our conclusion is that an insurer who becomes insolvent `denies coverage’ within the meaning of [the California statute] * * * and that plaintiff here is entitled to the protection afforded by the policy written by defendant with respect to uninsured motorists.” 53 Cal. Rptr. at 672.
In Pattani the court quoted with approval from Katz and concluded that “insolvency of the tortfeasor‘s carrier occurring subsequent to the accident * * * constitutes a denial of coverage * * *.” 231 A.2d, at p. 405.
As noted, Lawn Mutual was a Pennsylvania corporation not authorized to do business in this State, and defendant Knox was a resident of Philadelphia, Pa. Since no proof was adduced that his motor vehicle was “principally garaged in this State,” plaintiffs cannot avail themselves of the benefits of our Motor Vehicle Liability Security Fund Act,
We disapprove of the logic employed in Uline v. Motor Vehicle Accident Indem. Corp., 28 Misc.2d 1002, 213 N.Y.S.2d 871 (Sup. Ct. 1961), upon which the Fund relies. Although recovery was denied in Uline under circumstances
Based upon all of the above we hold that the insolvency of Lawn Mutual was a “disclaimer” by it under
Judgment affirmed.