author: Per Curiam.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. ISRAEL DANZIGER, DEFENDANT-APPELLANT. STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. MORRIS SCHWARTZ, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Submitted September 11, 1972
    Decided October 25, 1972.

      Before Judges Gaulkin, Lora and Allcorn.

      Mr. Robert S. Persky attorney for appellants.

      Mr. Bruce M. Schragger, Prosecutor of Mercer County, attorney for respondent (Mr. Randolph D. Norris, Assistant Prosecutor, of counsel and on the brief).
   Per Curiam.

Defendants Danziger and Schwartz were each charged, in separate complaints, with “having upon him” an offensive or dangerous weapon, namely “1 Karate weapon (non chuck) and 5 (pipe) bludgeons * * * with intent to assault any [sic] person,” contrary to N. J. S. A. 2A:170-3. They were tried jointly in the Municipal Court of East Windsor Township and convicted. The County Court affirmed and imposed the same sentences. Defendants appeal.

Defendants’ chief ground of appeal is that the weapons were not found “upon” them. This point was not raised in the municipal court (where defendants were represented by counsel, but the State was not) nor in the County Court (where the appeal was heard upon the record below). Because the issue was not raised below, the testimony was not directed to it as clearly as it otherwise would have been. Nevertheless, since the argument raises the question whether the offense charged was in fact committed, we shall consider it.

Defendants and a juvenile were seated on the front seat of a “van type truck,” the juvenile driving. There was “a steel black rod sticking out between the passenger, the seat in the middle and the driver.” Schwartz testified “it was behind the driver * * * tucked away under the seat.” The “non-chuck” (which is not described or defined in the record) and the other four pipes or bludgeons were in the space behind the seats occupied by defendants. That space was not closed off from the seats. Danziger testified that they had started from Brooklyn with 30 to 35 people in the back of the truck but, before they reached East Windsor Township, state troopers told them they could not transport people in a van. Consequently, said Danziger, “I went to the back of the truck to open the door and jumped out and told them all to get out.”

One of the pipes was “wrapped in tape”; another was “wrapped in steel wire with tape on each end”; another with tape wrapped around it and a wire thong on the end of the tape. There were other weapons not mentioned in the complaint •— a “bull whip” found under the front seat; in back of the truck, steel chains wrapped in leather, a billy club, a baseball bat, a chair leg, etc.

Defendants contend that State v. Wean, 86 N. J. Super. 283 (App. Div. 1965), is dispositive of the question. We disagree. In Wean the tools were locked in the trunk of a car in which Wean and his co-defendants were riding. To reach the tools, it would have been necessary to stop the car, get out and unlock the trunk. What was said in Wean must be read in the light of those facts. Here, on the contrary, the weapons were immediately at hand — within immediate reach.

N. J. S. A. 2A:170-3 does not require that the weapon be in a person’s hands or clothing. It is an ancient statute, dating from 1799. Today the statute speaks of “any offensive or dangerous weapon” without describing them, but in 1799 the statute specified “pistol, hanger [a short sword], cutlass, bludgeon or other offensive weapon.” In 1799 most people walked for good or for evil; the Legislature doubtless contemplated that their offensive weapons, pistols, cutlasses, bludgeons, etc., would be in their hands or clothes or upon them in the sense of a holster or scabbard or other receptacle. But people also rode on horseback and in wagons or coaches. Certainly the Legislature did not intend to exempt the man on horseback whose weapon was secured to or secreted in the horse’s harness or trappings, or the man in a wagon or coach whose cutlass or other offensive weapon was at his feet or on the seat alongside him. In short, the Legislature intended to reach those with forbidden tools and weapons at hand, within reach and immediately available for intended unlawful use.

Here the weapons were offensive, at hand and immediately available for assault.

Defendants contend there was no proof of an intent to assault or any other unlawful intent. On the contrary, the proof was overwhelming that the defendants and their 20 to 25 companions were prepared for and seeking conflict, and came from Brooklyn with the intention of using the weapons for assault.

We have considered the other points raised by defendants and find them to be without merit.

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    PARACHUTES, INCORPORATED, PLAINTIFF-APPELLANT, v. TOWNSHIP OF LAKEWOOD AND LESTER C. SCOTT, SANITARY INSPECTOR, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued September 19, 1972
    Decided October 27, 1972.

      Before Judges Gaulkin, Lora and Allcorn.

      Mr. Stanley Yacker argued the cause for appellant (Messrs. DeMaio and Yacker, attorneys).

      Mr. Norman D. Smith argued the cause for respondent.
   Per Curiam.

Plaintiff sued to invalidate Lakewood’s noise control ordinance or to enjoin its enforcement as against it. After plenary trial, judgment was entered in favor of defendants, and plaintiff appeals.

Plaintiff owns and operates a sport parachuting center and flying school at Lakewood Airport. It has occupied all of the airport for those purposes since 1963. There is no evidence that the field is. used for any other purpose — certainly none that would be affected by the ordinance.

Plaintiff claims that the ordinance will force it out of the sport parachuting business. That operation may be described as follows: plaintiff’s plane bearing parachutists takes off from the field and then circles over a fixed zone. At the appropriate time the engine is stopped and a parachutist jumps. The engine is then started again, the plane continues to circle, the engine is stopped again and another paraehustist jumps. This is continued until all parachutists aboard have jumped—usually eight or nine. Then the plane descends and another plane goes aloft and duplicates the operation. On weekends, when the weather is good, this often continues from morning until dark. It is the noise of the repeated starting of the engines in flight that runs afoul of the ordinance — take off, landing and ordinary sustained flight is not affected by the ordinance.

The ordinance forbids sound over 50 decibels during the night hours and 60 decibels during the day. Plaintiff claims that it cannot continue its stop-and-start operations in the air within those limits (at least, with its present equipment) and therefore the ordinance will force it out of business.

Plaintiff contends: (a) “municipal regulation of noise produced by aircraft in navigable air space is either preempted by federal law or in direct conflict with the federal regulatory scheme,” and (b) the ordinance “constitutes an abuse of the police power insofar as the scope and degree of regulation far exceed the need therefore and insofar as the ordinance arbitrarily discriminates against plaintiff.”

We know of no federal statute or regulation governing the noise levels of operations such as plaintiff’s. Plaintiff points to no specific federal statute or regulation with which the ordinance conflicts. It is not contended that the ordinance interferes with interstate commerce, PAA-regulated flights or flight patterns, scheduled or commercial flights, or point-to-point flights generally.

Plaintiff’s chief contention is that the Eederal Government has preempted the entire field of regulation of flights of all kinds, of all uses of aircraft in navigable air space whatever the purpose of the flight or the nature of the use may be, and of all noise levels incident thereto. Therefore, says plaintiff, a municipality may not enact a noise ordinance affecting aircraft in flight, even those which only cruise or hover in a limited intrastate space and even though the federal authorities have done nothing about regulating such noise.

We are not convinced that there is such preemption. See Hanover Tp. v. Morristown, 108 N. J. Super. 461, 477-480 (Ch. Div. 1969); but see Lockheed Air Terminal, Inc. v. City of Burbank, 457 F. 2d 667 (9 Cir. 1972).

It seems to us that a municipality is not barred from regulating noise emanating from aircraft hovering and cruising in a circle to advertise something. By the same token, we conclude that it may regulate the noise from airplanes hovering and cruising at low levels for sport parachuting.

Finally, plaintiff argues that the ordinance is discriminatory in that it regulates only hovering aircraft noise and not other equally loud noises. We find no merit in this contention. The ordinance does proscribe other noises —• it is not essential that it reach all sudden, transient noises, such as those of passing trucks, the sources of which are too difficult to identify, measure or punish.

Affirmed.


author: Seidman, J. S. C.,

text:
    CLARK W. BROOKS, PLAINTIFF-RESPONDENT, v. PENNSYLVANIA MANUFACTURERS’ ASSOCIATION INSURANCE COMPANY, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued September 19, 1972
    Decided October 26, 1972.

      Before Judges Fritz, Lynch and Seidman.

      Mr. Robert N. McAllister, Jr., argued the cause for appellant (Messrs. Valore, McAllister & Westmoreland, attorneys).

      Mr. Frederick R. Grayer argued the cause for respondent (Messrs. Kent & Grayer, attorneys).
   The opinion of the court was delivered by

Seidman, J. S. C.,

Temporarily Assigned. Defendant Pennsylvania Manufacturers’ Association Insurance Company appeals from so much of an order entered below as vacates part of an arbitration award in plaintiff’s favor. The facts are not in dispute. At issue is whether, in arbitration pursuant to the terms of an uninsured motorist provision in an automobile liability policy, a credit is allowable for the present value of an amount which might be payable to the claimant as the result of a pending and undetermined workmen’s compensation action.

Plaintiff Clark W. Brooks, a truck driver, sustained bodily injury on June 3, 1970, in Pennsylvania, as the result of a collision with an uninsured vehicle. His employer was covered for both workmen’s compensation and automobile liability in a policy or policies issued by defendant.

On December 9, 1970, acting as the workmen’s compensation carrier, defendant filed a petition for termination with the Pennsylvania Department of Labor and Industry, Bureau of Workmen’s Compensation, claiming plaintiff had suffered no loss in earning power because of bis injuries. Challenging the allegations of the petition, plaintiff brought an action for workmen’s compensation in the Commonwealth of Pennsylvania. Those proceedings, apparently, are still pending, since, at oral argument, counsel did not advise us otherwise.

In February 1971 plaintiff made a demand for the arbitration of his claim under the uninsured motorist provisions of Iris employer’s liability policy. After a hearing the appointed arbitrator awarded plaintiff $10,000 less these deductions :

a. ONE THOUSAND FOUR HUNDRED SEVENTY-NINE DOLLARS AND FORTY-THREE CENTS ($1,479.43), previously paid by PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE COMPANY.
b. A credit shall be allowed for the present value of all amounts payable in proceedings presently pending in the Workmen’s Compensation Courts of the Commonwealth of Pennsylvania, the exact amount of which is presently unknown, but which will be determined when a final determination in the Pennsylvania proceeding's has been made.

Thereafter, plaintiff obtained in the court below an order to show cause why judgment should not be entered confirming the net award of $8520.57, and vacating that portion allowing a credit for the present value of all amounts payable in the workmen’s compensation proceeding. The trial judge modified the award by striking therefrom paragraph (b). The remainder was confirmed, and judgment was entered in favor of plaintiff and against the defendant in the sum of $8520.57.

Defendant complains only of that portion of the order which struck the deduction contained in paragraph (b). Two points are urged: (1) the trial judge lacked jurisdiction to vacate that part of the arbitration award, and (2), assuming he had power to do so, the vacation was improper and contrary to the terms of the policy.

I

The grounds for vacating an award made by an arbitrator are limited to those set forth in the Arbitration and Award Act, N. J. S. A. 2A:24-8, the pertinent one of which, contained in subparagraph (a), is where the award “was procured by corruption, fraud or undue means.” Neither corruption nor fraud is, of course, involved herein. “Undue means” is explained in Held v. Comfort Bus Line, Inc., 136 N. J. L. 640 (Sup. Ct. 1948):

The phrase “undue means” comprehends two other distinct classes of eases — i.e. (1) where the arbitrator meant to decide according to law, and clearly had mistaken the legal rule, and the mistake appears on the face of the award or by the statement of the arbitrator; and (2) where the arbitrator has mistaken a fact, and the mistake is apparent on the face of the award itself, or is admitted by the arbitrator himself, [at 641-642]

Neither party contends that there was a mistake of fact. Plaintiff’s position is that the arbitrator was mistaken as to the law. Defendant, however, urges that the arbitrator intended to decide the case pursuant to the contract provisions, in accordance not only with the law but also with his concept of what was just and right. It has been held that where an arbitrator has meant to decide a ease not according to law, but according to his concept of what was just and right, the court will not interfere. Collingswood Hosiery Mills v. American, etc., Worhers, 31 N. J. Super. 466, 471 (App. Div. 1954).

We have no doubt that the arbitrator in this case intended to decide the case in accordance with applicable law. There is nothing in the record below to suggest otherwise. Thus, the issue to be considered is whether the arbitrator, as a matter of law, mistakenly allowed a credit for the present value of a prospective future award in a pending workmen’s compensation action.

II

In the uninsured motorist coverage portion of the policy involved herein there is a section captioned “Limits of Liability,” subparagraph (b) of which, in pertinent part, is as follows:

(b) Any amount payable under the terms of this Part because of bodily injury sustained in an accident by a person who is insured under this Part shall be reduced by
* * *
(2) the amount paid and the present value of all amounts payable on account of such bodily injury under any workmen’s compensation law, disability benefits law or any similar law. [Emphasis added]

It is not clear whether the moneys previously received by plaintiff were paid under the uninsured motorist coverage or as workmen’s compensation. However, the deduction of those payments, regardless of their source, is not questioned. What is in dispute is whether the arbitrator’s award can further be reduced by the “present value of all amounts payable on account of such bodily injury under any workmen’s compensation law” where, as here, the amount, if any, is yet to be determined in the pending workmen’s compensation proceedings.

Uo reported case on the subject in this State has been cited by counsel, and our own research has disclosed none. Plaintiff relies, as he did below, on the cases of Rhodes v. Automobile Ignition Co., 218 Pa. Super. 281, 275 A. 2d 846 (Super. Ct. 1971), and Waggaman v. Northwestern Security Ins. Co., 16 Cal. App. 3d 571, 94 Cal. Rptr. 170 (D. Ct. App. 1971) Defendant contends that Rhodes is not applicable and that Waggaman is distinguishable. The trial judge, without referring to Waggaman, found Rhodes directly in point and a guiding principle.

We do not agree with the trial judge’s concept of Rhodes. That case involved an application for benefits under the workmen’s compensation law by a widow whose husband had been struck and killed by an uninsured motorist. She had settled her claim under the uninsured motorist coverage of her husband’s liability policy and had given that insurer a subrogation release. The insurer was permitted to intervene in the workmen’s compensation proceeding and seek reimbursement of the amount paid to the widow. The referee made ail award to the widow and allowed the insurer’s claim of subrogation. On appeal the Workmen’s Compensation Board affirmed the award, allowed the employer a credit for the amount of the uninsured motorist settlement, and denied the claim of subrogation. The County Court affirmed; but the Superior Court reversed and remanded, holding that the uninsured motorist coverage was in the nature of an accident policy for the benefit of the insured rather than a liability policy covering the uninsured motorist, and that the payment under such coverage was not subject to the subrogation rights a compensation carrier would normally have against a tortfeasor under Pennsylvania law. Consequently, the Board had erred in not allowing the widow to receive the fuil amount of the workmen’s compensation award. The liability carrier was also denied the right of subrogation to the amount awarded because none was accorded by the Workmen’s Compensation Act.

Rhodes is clearly not in point. The problem before us does not involve a potential attempt by defendant, as compensation carrier, to seek a credit in the workmen’s compensation proceedings for the moneys paid under the uninsured motorist coverage. It is the extent of the defendant’s right, as liability carrier, to deduct from an award made under the uninsured motorist coverage, moneys paid or payable as workmen’s compensation.

As we noted earlier, the deduction of moneys previously paid to plaintiff is not disputed. Moreover, it is a reasonable assumption that if plaintiff had actually received a workmen’s compensation award, payable over a period of time, the determination of the present value of the amount so pay aide and the deduction thereof from the uninsured motorist coverage award would not have been challenged. However, no award had been made, although a workmen’s compensation action was pending. The point at issue is whether, in such case, provision can properly he made for the deduction of the “present value” of an undetermined compensation award.

Waggaman appears to be the only reported case which deals with this issue in depth. In that case plaintiff, who had been injured in a collision with an uninsured vehicle, submitted to arbitration his claim under the uninsured motorist portion of his liability policy. He was awarded $8250 in damages, reduced by $2985 in workmen’s compensation benefits previously paid. The arbitrator refused to permit the defendant insurer to offer expert testimony respecting the amount of future workmen’s compensation payment Waggaman would be eligible to receive by reason of permanent disability. In his formal award the arbitrator stated that “the present value of all amounts payable’,’ referred to instances where the claimant had already secured an amount which, though fixed and determined, had not yet been'paid.

A judgment confirming the award and denying the insurer’s petition to vacate it was affirmed. The court, noting that the determinative issue in the case was the meaning of the language “present value of all amounts payable,” contained in both the statute and the insurance policy, commented as follows:

There is a distinction between cases where an award has been applied for and made, and those where, as here, the injured party may be eligible for an award, but has not applied for such, or no award has been granted. In the former, there is no problem in determining “the present value of amounts payable”, the arbitrator may consult an actuarial table for that purpose. In the latter, the arbitrator is required to predict not only the amount of the award but also its existence, and then apply an actuarial table to his prediction. This procedure would encumber the arbitration proceedings with an inherently speculative trial within a trial.
It is virtually impossible to arrive at an accurate amount which will be paid under permanent disability awards of workmen’s compensation when the insured is not yet ratable for permanent disability. * * *
Clearly, the statute requires the damages under uninsured motorist recovery be reduced by the present value of an award under the workmen’s compensation procedure when the uninsured motorist coverage so provides.
However, when the phrase “present value of amounts payable” is considered in connection with the situation where an insured may be eligible for benefits but no award has been made, there is an ambiguity. Yet another ambiguity is presented by the silence of the policy as to methods of repayment or reimbursement for benefits still to be fixed. Where there is ambiguity, the court has the duty to construe the uninsured motorist law in favor of the person injured through no fault of his own * * * [94 Cal. Rptr. at 172-173]

The court, agreeing with the arbitrator, concluded that the phrase “amounts payable” referred to vested amounts and not to the sum an expert witness estimates the insured may receive some time in the future if he applies for and receives a disability rating.

Although defendant herein argues that the present case is distinguishable from Waggaman in that there no workmen’s compensation action had been instituted, it should be noted that the court, in Waggaman, spoke of cases not only where the claimant had not applied for an award, but also where no award had been granted. It makes little difference whether workmen’s compensation proceedings are actually pending, so long as no award has been made. In either case, the problem is how to compute the present value of an undetermined amount.

Hackman v. American Mutual Liability Ins. Co., 110 N. H. 87, 261 A. 2d 433 (Sup. Ct. 1970), not cited by counsel, also discusses the problem, though not so thoroughly as Waggaman. The insurer in that case had issued to plaintiff’s employer both workmen’s compensation and automobile liability policies, the latter containing uninsured motorist coverage with a limit of liability clause identical to the one now before us. In arbitration an award was made to plaintiff’, who then petitioned for the entry of judgment. The insurer sought the deduction from the award, not only of moneys it had paid plaintiff as workmen’s compensation, but also the estimated amount of future medical expenses and weekly payments. The court held that the insurer was entitled to the deduction of payments made, but not of estimated future payments. It reasoned that the right of the insurer as liability carrier to deduct compensation benefits is limited by the language “present value of all amounts payable.” Since the insurer’s potential obligation, as. compensation carrier, to pay future benefits was undetermined, to permit the insurer as liability carrier to deduct compensation benefits not payable would be contrary to the express terms of the policy.

We are convinced that the reasoning in Waggaman and Hackman is sound and does not offend our well-settled rules for construing insurance policies. It is fundamental that courts will interpret policy language in favor of the insured. Bowler v. Fidelity & Casualty Co. of New York, 53 N. J. 313, 331 (1969). In the case of ambiguity the insurance contract will be construed most strictly against the insurer. Williams v. State Farm Mutual Auto. Ins. Co., 99 N. J. Super. 377, 383 (Law Div. 1968), aff’d 104 N. J. Super. 403 (App. Div. 1969), aff’d 54 N. J. 580 (1969).

Like Waggaman, we find ambiguities in the phrase “present value of amounts payable.” Unless it is construed to mean an amount that has been determined but is payable over a period of time, there will be confusion and uncertainty. The use of the words “present value” of an amount payable strongly suggests an amount already fixed or determined. There are obvious difficulties in attempting to estimate or predict the amount of a potential future award. The dilemma is that there may be no award, or, if there is one, it may be greater or less than the estimate.

To provide, as was done in the case before us, merely for the deduction of the present value of the yet to be determined amount, is unsatisfactory. The arbitrators’ award is not final but must await the outcome of a workmen’s compensation case. It is not clear who, in that event, will determine the present value of the ultimate award, if any, or how a dispute with respect to such calculation is to be resolved. Even then the claimant has the right, in an appropriate case and for the period presented by statute, to seek additional compensation for increased disability. These events and contingencies could deprive the injured person for a long time of moneys to which he is otherwise rightfully entitled.

Defendant’s suggestion that the award be paid into court to await the outcome of the workmen’s compensation case does not solve the problem; it merely offers a repository for the fund.

We do not share the concern expressed in Waggaman, and voiced by defendant herein, that the claimant may receive double compensation if no provision is made for the deduction of potential workmen’s compensation benefits, although, in Waggaman, the court concluded it had no power to do anything about it. If that be the result, the cause is the ambiguity of the policy language, for which the claimant is not to blame. The case of M. F. A. Mutual Ins. Co., v. McKinley, 246 Ark., 326, 432 S. W. 2d 484 (Ark. Sup. Ct. 1968), cited by defendant as resolving the issue of double compensation in favor of the insurer, is not in point, because it involved the deduction of workmen’s compensation benefits previously paid, not potential and undetermined future benefits.

We hold that the reasonable and sensible interpretation of the policy clause in question is that it refers only to amounts which have been paid or are fixed or determinable at the time of the award.

The judgment below is affirmed.

       Since the issue has not been raised, we need not consider and decide the enforceability of the clause which provides for the deduction of workmen’s compensation benefits paid or payable. It should be noted, however, that there is a conflict of opinion among the reported eases — none from New Jersey — with respect to the legal interpretation to be given such clause. Some cases have upheld the validity of the provision; others have declared it invalid as contrary to statute or public policy. Cases pro and contra are collected in Annotation, “Uninsured Motorist Coverage: Validity and effect of policy provision purporting to reduce coverage by amount paid under workmen’s compensation law”, 24 A. L. R. 3d 1369 (1969). See also 7 Appleman, Insurance Law and Practice (Cum. Supp. 1971), § 4331 at 154; 19 Couch on Insurance 2d, § 82.1:12 at 1076 (1968); Donaldson, “Uninsured Motorist Coverage”, 36 Insur. Counsel J. 397, 420-423 (1969).


text:
    MECHANICS NATIONAL BANK OF BURLINGTON COUNTY, A NATIONAL BANKING ASSOCIATION, APPELLANT, v. JAMES C. BRADY, JR., COMMISSIONER OF THE DEPARTMENT OF BANKING, STATE OF NEW JERSEY, AND FIDELITY BANK AND TRUST COMPANY, RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued January 10, 1972
    Decided January 19, 1972.

      Before Judges Sullivan, Leonard and Carton.

      Mr. William F. Tompkins argued the cause for appellant (Messrs. Lum, Biunno & Tompkins, attorneys; Mr. William F. Dowd, on the Brief).

      Mr. George F. Kugler, Jr., Attorney General, attorney for respondent James C. Brady, Jr., filed a Statement in Lieu of Brief (Mr. T. Robert Zochowski, Deputy Attorney General, of Counsel).

      Mr. Edward Suski, Jr., argued the cause for respondent Eidelity Bank and Trust Company (Messrs. Wilinski, Coruzzi & Suski, attorneys).
   Per Curiam.

We affirm. Mechanics’ contention that it had home office protection within the meaning of N. J. S. A. 17:9A-19 at the time the Commissioner approved Eidelity’s branch office application is without merit. As of the date of this approval Mechanics had not yet passed the necessary shareholder’s amendment to its Articles of Association and no formal certificate authorizing it to relocate its home office had been issued by the Comptroller of the Currency. As a fact these prerequisites were not accomplished until several months thereafter.

We find that Mechanics suffered no denial of due process, there being substantial compliance with N. J. S. A.

52:14B-9 and with the rules adopted by the Department. Further, it was not prejudiced by the Hearer’s denial of its request for an adjournment.

Finally, we conclude that there is substantial credible evidence in the record to support the Commissioner’s factual findings and that there is a reasonable basis for his decision and order.

Affirmed.


text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. ROBERT DRAUGHN, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division.
    Argued January 31, 1972
    Decided February 10, 1972.

      Before Judges Sullivan, Leonard and Carton.

      Mr. Edward Weisslitz, Assistant Deputy Public Defender, argued the cause for appellant (Mr. Stanley C. Van Ness, Public Defender, attorney).

      Mr. David Noah Dubrow, Assistant Prosecutor, argued the cause for respondent (Mr. Joseph P. Lordi, Essex County Prosecutor, attorney; Mr. Nicholas Turco, Assistant Prosecutor, on the brief).
   Per Curiam.

Defendant and a co-defendant were tried by a jury and convicted of robbery. Defendant was sentenced to an indeterminate term at the Youth Correction and Reception Center at Yardville.

Defendant appeals. He first contends that it was prejudicial error for the trial court to have admitted into evidence the police officers’ testimony concerning Mrs. Gary’s (the victim) pretrial identifications, since she could not identify defendant in court, and therefore the evidence could not be justified as corroboration. Alternatively, he asserts that even if the prior identifications were properly admitted into evidence, in the instant case, in the absence of an in-court identification, such evidence is insufficient to support a verdict of guilt, and therefore defendant’s motion for a judgment of acquittal should have been granted. Neither contention has merit. Evidence of an extra-judicial identification is admissible not only to corroborate an identification made at the trial but also as independent evidence of identity where there is no trial identification. People v. Gould, 54 Cal. 2d 621, 7 Cal. Rptr. 273, 354 P. 2d 865, 867 (Cal. Sup. Ct. 1960). Evidence Rule 63(1)(c) does not require as a condition precedent to the admissibility of such evidence that there first be an in-court identification by the declarant; it only mandates that he be a witness at the trial and available for cross-examination. See 1963 Report of New Jersey Supreme Court Committee on Evidence at p. 136. See also State v. Buffa, 31 N. J. 378, 380 (1960), cert. den. 364 U. S. 916, 81 S. Ct. 279, 5 L. Ed. 2d 228 (1960).

It is to be noted that the victim, immediately following the crime, gave the police an accurate description of defendant and his accomplice and of the clothes they were wearing. She also made three positive identifications of both — on the street after their apprehension, in the police station and at the voir dire hearing bfore the court. It was only during the actual trial that this 70-year-old victim became confused. She was able to identify the accomplice but unable to pick out defendant, who, incidentally, had moved from the audience section of the courtroom, where he had been sitting during the voir dire.

As to the alternative argument, there is other ample evidence present in the record, in addition to the identification testimony, which incriminates defendant and connects him with the crime. He and the co-defendant, who was identified in court, were apprehended together shortly after the event in the immediate vicinity thereof.

Defendant further urges that: (1) the State failed to establish a prima facie case of robbery as to him; (2) it was patently prejudicial to permit the State to cross-examine defendant as to his impecuniosity; (3) the trial judge erroneously charged the jury as to the law of aiding and abetting by including therein a reference to “an accessory after the fact” (raised as plain error) and (4) it was prejudicial error for the court to instruct the jury with regard to defendant’s flight. We conclude that all these arguments are without substance and that defendant was not prejudiced thereby.

Affirmed.


author: Lane, J. S. C.

text:
    THE BOROUGH OF EATONTOWN, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. BENJAMIN H. DANSKIN, COUNTY CLERK OF THE COUNTY OF MONMOUTH, DEFENDANT.
    Superior Court of New Jersey Law Division
    Argued October 6, 1972
    Decided October 6, 1972.

      Mr. Henry J. Saling argued the cause for plaintiff (Messrs. Saling, Moore, O’Mara & Coogan, Attorneys).

      Mr. William, E. Russell argued the cause for defendant (Messrs. Pillsbury, Barnacle, Russell & Carton, Attorneys).
   Lane, J. S. C.

This matter is before the court on the return of an order to show cause why defendant, County Clerk of Monmouth County, should not be required to place on the ballot for the general election to be held November 7, 1972 the question: “Shall the Eatontown Zoning Ordinance be changed to allow a second major regional shopping center in the Borough of Eatontown, N. J.”

On April 26, 1972 a complete revision of the Eatontown zoning ordinance was introduced and passed on first reading at a meeting of the Eatontown governing body. On August 30, 1972 the governing body adopted the ordinance as introduced, with certain amendments, laying the matter over for second reading, public hearing, and final consideration of the amendments.

The governing body gave particular attention to the rules and regulations affecting the B-3 zone (regional shopping area), and the extent of the district to which those rules and regulations should apply. At the public hearing and at regular meetings of the governing body, various opinions for and against the rules and the extent of the B-3 zone have been expressed.

On August 9, 1972 a resolution was introduced and seconded to initiate a non-binding referendum under N. J. S. A. 19:37-1. Of the five council members present, two voted for and three voted against the resolution.

On September 25, 1972 a petition signed by 550 registered and qualified voters was presented to the governing body at its regular meeting. The petition states:

Pursuant to N. J. S. A. 19:37-1.1, we the undersigned registered voters of the Borough of Eatontown request the Mayor and Council of the Borough of Eatontown to place upon the ballot in the November 1972 general election the following question:
Shall the Eatontown Zoning Ordinance be changed to allow a second major regional shopping center in the Borough of Eaton-town, N. J.

The governing body thereupon adopted a resolution:

WHEREAS, 10% or more of the registered voters have requested the following question pertaining to the internal affairs of the Borough of Eatontown be submitted to a vote of the electors in the Borough;
NOW, THEREFORE, BE IT RESOLVED by the governing body that the Clerk of the County of Monmouth be requested to print on the official ballot in the next ensuing general election, the following question:
“Shall the Eatontown Zoning Ordinance be changed to allow a second major regional shopping center in the Borough of Eatontown, N. J.”

On October 2, 1972 not yet approved minutes of the September 25 meeting containing the resolution were submitted to defendant. The Clerk of Elections and the Assistant County Counsel in a conference with the Borough Attorney concluded that the request that the question be placed on the November ballot did not comply with N. J. S. A. 19:37-1 et seq. On October 4, 1972 plaintiff received a letter from the Clerk of Elections advising that the proposition as proposed would not appear on the official ballots for the general election on November 7, 1972.

Plaintiff asserts that “the proposition proposed by the petition and the action of the governing body of the Borough of Eatontown constitutes substantial compliance with N. J. S. A. 19:37—1.1 et seq.” and that it is in the public interest that the proposition be printed on the ballots for the November election. It is contended that if the proposition is not included on the ballot, there will be harmful delays in putting into effect appropriate zoning legislation for the Borough of Eatontown and at additional cost to the taxpayers. The plaintiff further asserts:

The zoning issue to be resolved by the governing body is of overwhelming importance to the general public and citizens of the Borough of Eatontown and the action to be taken by the governing body relative to the B-3 zone transcends district lines if relief is not afforded, [sic] The governing body cannot practically obtain the sentiment of its citizenry without tedious, circuitous and unnecessarily burdensome acts.

Judgment is sought directing that the proposition be placed on the ballot for the November election.

The complaint is essentially one in lieu of mandamus. Mandamus is a coercive process which commands the performance of a specific ministerial act or duty or compels the exercise of a discretionary function, but does not seek to interfere with or control the mode and manner of its exercise or to influence or direct a particular exercise. Switz v. Middletown Twp., 23 N. J. 580, 587 (1957); Finn v. Wayne Tp., 45 N. J. Super. 375, 380 (App. Div. 1957).

A judgment in the nature of mandamus is available only where there is a clear and definite right to the performance of a ministerial duty, in essence mandatory and final. Unless the particular duty is peremptory, the fair exercise of judgment and discretion is the province of the functioning authority. Switz v. Middletown Twp., supra, 21 N. J. at 588; Vacca v. Stika, 21 N. J. 471, 476 (1956); Finn v. Wayne Tp., supra, 45 N. J. Super. at 380. If a statute imposes a command to act or the performance of a positive duty in compliance with defined certain standards on a local governing body, the matter is ministerial and mandamus would be available to compel obedience. Id.; Case v. Daniel C. McGuire, Inc., 53 N. J. Super. 494, 498 (Ch. Div. 1959).

N. J. S. A. 19:37-2 provides:

If a copy of the ordinance or resolution certified by the clerk or secretary of the governing body of any such municipality or county is delivered to the county clerk not less than 60 days before any such general election, he shall cause it to be printed on each sample ballot and official ballot to be printed for or used in such municipality or county, as the case may be, at the next ensuing general election.

The statute clearly imposes a positive duty on defendant to place the.proposed question on the ballot, if it is submitted in proper form to him not less than 60 days before the general election.

Plaintiff asserts that the petition and action of the governing body are in substantial compliance with N. J. S. A. 19:37-1 et seq.:

19:37—1. Ordinance or resolution for submitting question

When the governing body of any municipality or of any county desires to ascertain the sentiment of the legal voters of the municipality or county upon any question or policy pertaining to the government or internal affairs thereof, and there is no other statute by which the sentiment can be ascertained by the submission of such question to a vote of the electors in the municipality or county at any election to be held therein, the governing body may adopt at any regular meeting an ordinance or a resolution requesting the clerk of the county to print upon the official ballots to be used at the next ensuing general election a certain proposition to be formulated and expressed in the ordinance or resolution in concise form. Such request shall be filed with the clerk of the county not later than 60 days previous to the election.

19:37-1.1 Bequest by voters; petition

Whenever a governing body of a municipality has adopted an ordinance or resolution pursuant to section 19:37-l of the Revised Statutes, upon the presentation to the governing body of such municipality of a petition signed by 10% or more of the voters registered and qualified to vote at the last general election in such municipality, requesting the governing body of such municipality to ascertain the sentiment of the legal voters of the municipality upon any question or policy pertaining to the government or internal affairs thereof that is reasonably related to any proposition formulated and expressed in such ordinance or resolution, such municipality shall thereupon adopt at its next regular meeting following the presentation of such petition a resolution requesting the clerk of the county to print upon the official ballots to be used at the next ensuing general election a certain jn’oposition as formulated and expressed in the petition. Such request shall be filed with the clerk of the county not later than 30 days previous to the election.

To comply with the statutory scheme, a governing body must first adopt a resolution or ordinance pursuant to N. J. S. A. 19:37-1 requesting the county clerk to place a certain proposition on the ballot. Under the statute such request must have been made to the county clerk 60 days before the election, in this case by September 8. Thereafter, and only thereafter, a petition may be presented by registered and qualified voters requesting the governing body to put a proposition to the voters “upon any question or policy * * * that is reasonably related” to the proposition already proposed by the governing body under N. J. S. A. 19:37-1. Thereafter the governing body must adopt a resolution at its next regular meeting requesting the county clerk to print on the ballot the proposition contained in the petition. This request must be filed with the county clerk 30 days before the election, here by October 10 (October 8 being a Sunday; and October 9, a holiday).

Since submission of a petition by voters is explicitly contingent on the governing body’s original resolution, which was not passed within the statutory period, neither petition nor the subsequent resolution are in compliance with N. J. S. A. 19:37-1 et seq. Whether substantial compliance is sufficient requires statutory interpretation.

It has been held that the statutory device considered here for ascertaining voter sentiment is so obviously useful to those who are burdened with the duty of promoting the public welfare that a court should interfere only where a misuse is plain and that the courts should favor every effort by those charged with the responsibility of government to canvass the sentiment of the electorate where public policy is concerned. Gamrin v. Mayor & Council of City of Englewood, 76 N. J. Super. 555, 557-558 (Law Div. 1962). The purpose of such referendum procedures is to encourage citizen interest and participation in municipal affairs. See Meridian Development Co. v. Edison Tp., 91 N. J. Super. 310, 313 (Law Div. 1966). Referendum provisions are to be liberally construed. Cuprowski et al. v. City of Jersey City, 101 N. J. Super. 15, 27 (Law Div.), aff’d 103 N. J. Super. 217 (App. Div. 1968). However, there is no constitutional right to a referendum, but only a statutory right where appropriate legislation exists. Smith v. Livingston Tp., 106 N. J. Super. 444, 452-453 (Ch. Div.), aff’d o. b. 54 N. J. 525 (1969)

Plaintiff presumably relies on the fact that the statute uses the generally directory verb “may” rather than the mandatory verb “shall” in N. J. S. A. 19:37-1 as to the adoption of an original request by the governing body. The general rule is that the purpose and intent of the Legislature should be considered in determining whether a statute is directory rather than mandatory. The choice of verb is not conclusive. Harvey v. Essex County Board of Chosen Freeholders, 30 N. J. 381, 391 (1959). However, even if it is assumed that the provisions for a referendum and for a voter’s petition in N. J. S. A. 19:37-1 et seq., are directory, the time limits are imposed by the mandatory verb “shall.” There is a presumption that the word “shall” is used in an imperative sense. While this presumption is not conclusive, it can only be overthrown by something in the character of the legislation or in its context which will justify a different meaning. Union Terminal Cold Storage Co. v. Spence, 17 N. J. 162, 166 (1954).

An amendment to an act may be considered in discovering the legislative intent in the act amended. Matawan Borough v. Monmouth Cty. Tax Bd., 51 N. J. 291, 298-299 (1968). N. J. S. A. 19:37-1 was amended by L. 1967, c. 101. This act changed the time ior filing the request with county clerk from 40 days to 60 days. It also adopted N. J. S. A. 19:3 7—1.1 These amendments suggest an effort to control the amount of time which must elapse between the adoption of resolutions concerning propositions to be put to the voters and the general election. The fact that the amendment enlarged that time period from 40 to 60 days suggests that the time was viewed as mandatory.

The statement attached to Assembly, No. 840 which became L. 1967, c. 101 was:

At present the election law makes no provision for nonbinding referendum at the request of citizens of a municipality. This bill will correct the omission by providing a means by which citizens of a municipality may compel a governing body to submit to public referendum questions alternate or related to those proposed for nonbinding referendum by the governing body. The bill also affords adequate time for such citizen action following the adoption of such a resolution or ordinance by the municipality.

Clearly the Legislature’s intent in providing time limits was to insure voters adequate time both to consider the governing body’s resolution, to frame appropriate related propositions and to express their opposition to any questions proposed. To compel defendant to place on the ballot a question which has not had the benefit of such consideration would appear to defeat the Legislature’s intent.

It has been held in other jurisdictions that the time periods in statutes providing for referendum are mandatory. E. g., Souther v. Butler, 195 Ga. 566, 24 S. E. 2d 668, 671 (Sup. Ct. 1943); Kochen v. Young, 252 Iowa 389, 107 N. W. 2d 81, 84 (Sup. Ct. 1961); Dubyak v. Kovach, 164 Ohio St. 247, 129 N. E. 2d 809, 812 (Sup. Ct. 1955); State v. Gibson, 183 Or. 120, 191 P. 2d 392, 393 (Sup. Ct. 1948); Nunn v. New, 148 Tex. 443, 226 S. W. 2d 116, 117 (Sup. Ct. 1950); State v. Melton, 66 Wash. 2d 157, 401 P. 2d 631, 633 (Sup. Ct. 1965). See also, 5 McQuillin, Municipal Corporations, § 16.64, p. 239 (3d ed., 1969 Revised Volume); 42 Am. Jur. 2d, Initiative and Referendum, § 33, p. 682 (1969); 62 C. J. S. Municipal Corporations § 456(c)(2), p. 882 (1949). Cf. French v. Board of Commissioners of Ocean City, 136 N. J. L. 57, 58-59 (Sup. Ct. 1947).

No claim is made that the proposition may be placed on the ballot under authority other than N. J. S. A. 19:37-1 et seq. No argument is made that the statutory scheme does not serve a public purpose as in In re Smith, 59 N. J. 263 (1971). Such an argument would fail because it is apparent from the statement attached to Assembly, No. 840 that the scheme serves a definite public purpose.

Since no resolution was submitted under N. J. S. A. 19:37-1 within the time period expressed therein, there was no authority for the governing body to act on the petition submitted to it. The provisions of N. J. S. A. 19:37-1 et seq., are mandatory so that substantial compliance is irrelevant. In any event, there has not been a substantial compliance with the statutory provisions. The county clerk correctly refused to place the proposition on the ballot for the general election to be held November 7, 1972.

The order to show cause will be discharged; and the complaint, dismissed.


author: Milmed, J. S. C.

text:
    SYLVIA YOUNG AND WILHELMINA MAYS, PLAINTIFFS, v. EDITH GILBERT, EILEEN GILBERT, JAMES ZIMMERMAN, THOMAS FINLAND, CEDAR TAVERN CORPORATION, A NEW JERSEY CORPORATION, t/a FRONTIER ROOM AND KING PIN ALLEYS, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided October 26, 1972.

      Mr. Leslie S. Kohn and Mr. Emanuel Needle, appeared for plaintiffs (Messrs. Kohn, Kirsch & Needle, attorneys).

      Mr. Thomas M. Falkowski, for defendants James Zimmerman and Thomas Finland (Messrs. Gurry and Conlan, attorneys) .

      Mr. Jerome S. Lieb, for defendant King Pin Alleys (Mr. Donald B. Kaufman, attorney; Messrs. Lieb, Teich & Berlin, of counsel).
   Milmed, J. S. C.

Defendant King Pin Alleys, a bowling establishment, cocktail lounge and -snack bar, located in West Kyack, Kew York, served with summons and a copy of the amended complaint by certified mail, return receipt requested, moved to dismiss this personal injury auto negligence action for lack' of jurisdiction in personam and for failure of the complaint to state “a cause of action” against it. On the same grounds it also seeks summary judgment dismissing crossclaims against it for indemnity and contribution. Annexed to the notice of motion is the affidavit of Louis Pasternak, vice-president of Ripvan Corporation, a corporation of the State of New York, trading as King Pin Alleys, the gist of which is that the corporation has no business contact or any type of contact with New Jersey and that its sole business is the operation of a bowling alley, restaurant and bar at its only location, i. e., at 20 Virginia Avenue in West Nyack, New York.

By their amended complaint plaintiffs, passengers in an automobile owned and operated by defendant Edith Eileen Gilbert, claim damages from all defendants for injuries sustained by them as a result of a collision between the automobile in which they were riding and an automobile owned by defendant Thomas Finland and operated at the time by defendant James Zimmerman. The collision occurred on Knickerbocker Boad in Demarest in Bergen County in this State late on the night of December 12, 1969. In regard to defendants Cedar Tavern Corporation, a New Jersey corporation trading as Frontier Boom, and King Pin Alleys, the amended complaint alleges, among other things, that they “were the owners and operators of certain premises engaged in the selling and serving of alcoholic beverages to the public”; that they

* * * negligently served alcoholic beverages to the defendants, James Zimmerman and Thomas Finland causing them to become intoxicated and become involved in * * * [the] motor vehicle collision * * *;

and that they

* * * served alcoholic beverages to the defendants, James Zimmerman and Thomas Finland, in violation of State and local law and are therefore liable to plaintiffs by reason of strict liability in tort.

The depositions of Louis Pasternak and James Zimmerman were taken upon oral examination and used on the motion. It appears that defendant James Zimmerman, 20 years of age at the time of the collision, was driving defendant Finland’s car when it was involved in the collision on the night of December 12, 1969. He and defendant Finland, who was 21 years old at the time, had been together continuously that night from about 7 p.m. They both lived in Bergenfield. Starting at defendant Zimmerman’s home, each had two cans of beer. They then proceeded to New York, stopping along the way for about 20 to 30 minutes at the Erontier Room, a tavern, in Dumont in Bergen County, and having while there four or five glasses of beer. They then left for New York, arriving at the King Pin Alleys in West Nyack at about 8 o’clock in the evening.

It further appears from the deposition of defendant Zimmerman that King Pin Alleys was well known in the Bergenfield area; that during the course of the evening on December 12, 1969 about 30 people were in the cocktail lounge, about half of them from the Bergenfield area; and that the “approximate age group” of those in the cocktail lounge at the time he was there was “Seventeen through twenty.” While he and defendant Finland were at the cocktail lounge of the King Pin Alleys, each consumed between 12 and 14 bottles of beer, each bottle containing 12 ounces of beer. At this cocktail lounge they also engaged in a “chug-a-lug” contest, which involved attempting to consume the contents of a bottle of beer by one uninterrupted long drink. Neither had anything to eat at the Erontier Room or at King Pin Alleys, and neither of them was refused service by either of the two bartenders on duty at the cocktail lounge of King Pin Alleys.

At about 11:30 that night when they left King Pin Alleys to go home to Bergenfield, each was intoxicated. Defendant Finland drove the car for about ten minutes to Knickerbocker Road, in Norwood in Bergen County, when he said he was too intoxicated to drive and turned the car over to defendant Zimmerman. After taking over the driving of the car, Zimmerman drove south from Norwood into Demarest, where the accident occurred. He drove “in excess of a hundred, to a hundred and twenty miles an hour” on Knickerbocker Road, a two-lane roadway, one lane for traffic in each direction, the posted speed limit being 40 miles an hour. He drove the car back and forth from one lane to the other and “made a three car pass just prior to the accident and almost had a head-on collision” with a car going in the opposite direction. He approached the intersection where the collision occurred traveling at 100 miles an hour.

As previously indicated, defendant King Pin Alleys contends that the court has no in personam jurisdiction over it since it is a New York corporation and has no business contacts with New Jersey. Mr. Pasternak, vice-president of Ilipvan Corporation trading as King Pin Alleys, resides in Pair Lawn in Bergen County in this State. Pie testified that King Pin Alleys has only one business location and that is at 20 Virginia Avenue in West Nyack, New York, and that he is the accountant for the business and also manages its day-to-day operations. Alcoholic beverages are served on the premises to anyone over 18 years of age. Some of the supplies for the bar are purchased from an establishment in Port Lee in Bergen County. Life insurance coverage for the employees and officers of the corporation is provided by an insurance company in Newark. King Pin Alleys does no advertising for business in New Jersey. Pasternak’s residence in Pair Lawn is 22 miles from the King Pin Alleys in West Nyack, which is five to seven miles from the New Jersey State line. He has observed New Jersey cars parked in the parking lot of King Pin Alleys. He maintains, however, that the number was small since their business is dependent on local trade.

So much for the factual setting of the motion now before the court. At the outset, in dealing with the legal sufficiency of the amended complaint, plaintiffs are “entitled to a liberal intrepretation of its contents and to the benefits of all of its allegations and the most favorable inferences which may reasonably be drawn from them.” Rappaport v. Nichols, 31 N. J. 188, 193 (1959). Applying this well settled principle to the allegations of the amended complaint in this action, it is clear that this pleading, as against the defendant King Pin Alleys, sets forth, under the substantive law of this State, a common law action grounded on negligence. Id.

As previously indicated, the amended complaint alleges, among other things, that defendant King Pin Alleys owned and operated premises engaged in selling and serving alcoholic beverages to the public and that it negligently served alcoholic beverages to the defendants Zimmerman and Finland, causing them to become intoxicated and involved in the motor vehicle collision which is the subject of this litigation. Accordingly, the amended complaint as against King Pin Alleys sets forth a claim upon which relief can be granted. It follows that if this defendant is amenable to suit in this State, the determination of that claim must await a plenary trial. See Judson v. Peoples Bank & Trust Co. of Westfield, 17 N. J. 67, 74 (1954).

Both in New Jersey and in New York the sale of alcoholic beverages by a tavern keeper to a person “actually or apparently” intoxicated is unlawful. See Rule 1 of State Regulation No. 30, Division of Alcoholic Beverage Control; Division of Alcoholic Beverage Control in the Department of Law and Public Safety v. Bruce Zane, Inc., 99 N. J. Super. 196, 198 (App. Div. 1968); and Alcoholic Beverage Control Law (New York), § 65(2), 3 McKinney’s Consolidated Laws of New York Annotated, c. 3-B, Alcoholic Beverage Control Law, § 65(2) at 89. In this State, if the tavern keeper knows, or should know, that the patron is intoxicated, his service to him of alcoholic beverages may also constitute common law negligence. In such a situation the unreasonable risk of harm, not only to the intoxicated person “but also to members of the traveling public may readily be recognized and foreseen; this is particularly evident in current times when traveling by car to and from the tavern is so commonplace and accidents resulting from drinking are so frequent.” Rappaport v. Nichols, supra, 31 N. J. at 202. While under these circumstances liability for damages is, in this State, grounded in common law negligence, liability for damages in New York proceeds from its version of the “Dram Shop Act,” General Obligations Law, § 11-101, 23A McKinney's Consolidated Laws of New York Annotated, c. 24-A, General Obligations Law, § 11-101 at 538. Paragraph 1 of that statute reads as follows:

Any person who shall be injured in person, property, means of support, or otherwise by any intoxicated person, or by reason of the intoxication of any person, whether resulting in his death or not, shall have a right of action against any person who shall, by unlawful selling to or unlawfully assisting in procuring liquor for such intoxicated person, have caused or contributed to such intoxication ; and in any such action such person shall have a right to recover actual and exemplary damages.

And see, Mitchell v. Shoals, Inc., 19 N. Y. 2d 338, 280 N. Y. S. 2d 113, 227 N. E. 2d 21 (Ct. App. 1967).

Our applicable long-arm rule, B. 4:4-4(c)(1), authorizes substituted service of process on a foreign corporation, where service cannot be made in one of the other ways set forth in that rule, “consistent with due process of law, * * * by mailing, by registered or certified mail, return receipt requested, a copy of the summons and complaint to a registered agent for service, or to its principal place of business, or to its registered office.” The purpose of the rule is “to vest our courts with jurisdiction over foreign corporations to the outer limits permitted by due process.” Schaffer v. Granit Hotel Inc., 110 N. J. Super. 1, 3-4 (App. Div. 1970); Amercoat Corp. v. Reagent Chem. & Research, Inc., 108 N. J. Super. 331, 336 (App. Div. 1970); Roland v. Modell's Shoppers World of Bergen County, 92 N. J. Super. 1, 7 (App. Div. 1966). And see, Avdel Corporation v. Mecure, 58 N. J. 264, 268 (1971).

In International Shoe Co. v. State of Washington, 326 U. S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), the Supreme Court of the United States held that:

* * * due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it sucb that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” [326 U. S. at 316, 66 S. Ct. at 158, 90 L. Ed. at 102]

See also, McGee v. International Life Ins. Co., 355 U. S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957); Hanson v. Denckla, 357 U. S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958), and J. W. Sparks & Co. v. Gallos, 47 N. J. 295 (1966). As noted in Schaffer v. Granit Hotel Inc., supra.

Those demands of due process may be met by such contacts of the corporation with the State or the forum as make it reasonable to require the corporation to defend the particular suit which is brought here. Amercoat Corp., supra, [108 N. J. Super.] at 340; Corporate Development Specialists, Inc., supra [Corporate Development Specialists, Inc. v. Warren-Teed Pharmaceuticals, Inc.], 102 N. J. Super. [143] at 148. There is a steady trend toward expanding the permissible scope of state jurisdiction over foreign corporations and other non-residents. Id., at 149. The application of the rule to each case depends upon the facts in that particular case. Roland, supra [92 N. J. Super.], at 6. [110 N. J. Super. at 4]

The question remains whether King Pin Alleys had such “minimum contacts” within this State “that the maintenance of the suit does not offend Traditional notions of fair play and substantial justice.’ ” In light of the total factual setting presently before the court on this motion, I am satisfied that it unquestionably did. This despite the fact that its sole substantial contact with New Jersey was the sale by it, at its cocktail lounge in New York, of alcoholic beverages to a defendant resident of this State who became intoxicated at the cocktail lounge and, while driving home in this State, became involved in the auto collision which is the subject of the suit.

In the present case King Pin Alleys’ sole business location is in West Nyack, New York. It does purchase some of its supplies from an establishment in this State and also maintains life insurance coverage for its employees and officers through an insurance company in this State. While such “contacts” in themselves may be insufficient for New Jersey to exercise jurisdiction in respect of the nonrelated cause of action, based upon long-arm service, in this case (see “Developments in the Law—State-Court Jurisdiction,” 73 Harv. L. Rev. 909, 926 (1960), 1 Restatement, Conflict of Laws 2d [1971], § 49 at 178, and Corporate Development Specialists, Inc. v. Warren-Teed Pharmaceuticals, Inc., 102 N. J. Super. 143, 151-152 [App. Div. 1968], certif. den. 52 N. J. 535 [1968]), there do exist compelling reasons for holding this defendant King Pin Alleys, amenable to suit here on the claim set forth against it in the amended complaint.

There clearly is no special inconvenience to this defendant, since New Jersey and New York are contiguous, King Pin Alleys’ single business location being no more than seven miles from the New Jersey State line . Its management had on occasion observed New Jersey cars parked in its parking lot, but maintains that the business is dependent on local trade. On the other hand, the difference in the minimum ago requirements for service of alcoholic beverages in New York and New Jersey has long been a matter of common knowledge, sales being prohibited to minors under 18 in New York and under 21 in New Jersey. See Alcoholic Beverage Control Law (New York), § 65 (1), and N. J. S. A. 33:1-77. In this context should be noted the observations of defendant Zimmerman that on the night of the accident there were about 30 people in the cocktail lounge, that their approximate age group was “Seventeen through twenty,” and that about half of them were from the Bergenfield, New Jersey, area. Plaintiffs are, on the motion now before the court, “entitled to the benefit of every favorable inference of fact.” Di Christofaro v. Laurel Grove Memorial Park, 43 N. J. Super. 244, 252 (App. Div. 1957); and see, Independent Dairy Workers Union of Hightstown v. Milk Drivers and Dairy Employees Local No. 680, 23 N. J. 85, 89 (1956). Assuming, therefore, as the amended complaint alleges, that King Pin Alleys unlawfully and negligently sold alcoholic beverages to Zimmerman causing his intoxication, which in turn caused or contributed to his negligent operation of Finland’s car which he was driving at the time of the accident, a jury could reasonably find not only that plaintiffs’ injuries resulted in the ordinary course of events from Zimmerman’s negligence and that such negligence was a substantial factor in bringing about such injuries, but additionally, that Zimmerman’s negligent operation of the car while driving home after leaving King Pin Alleys in an intoxicated state was an event which King Pin Alleys, under all of the circumstances, could reasonably have foreseen. See, Rappaport v. Nichols, supra, 31 N. J. at 204. The dangerous effects of Zimmerman’s driving while intoxicated, which actually occurred on a two-lane roadway in New Jersey while he was on his way home from the drinking spree in the King Pin Alleys’ cocktail lounge, could easily have been anticipated. Accordingly, regardless of any other relationship of defendant King Pin Alleys to this State, I am convinced that permitting plaintiffs to maintain this suit against this defendant in this court does not offend “traditional notions of fair play and substantial justice.” This holding finds direct support in the Official Draft of Restatement, Conflict of Laws, 2d. Cf. Roche v. Floral Rental Corp. et al., 95 N. J. Super. 555 (App. Div. 1967), aff’d o. b. 51 N. J. 26 (1968).

1 Restatement, Conflict of Laws 2d (1971), § 50 at 178-179, states:

Foreign Corporations — Causing Effects in State by Act Done Elsewhere
A state has power to exercise judicial jurisdiction over a foreign corporation which causes effects in the state by an act done elsewhere with respect to any cause of action arising from these effects unless the nature of these effects and of the corporation’s relationship to the state makes the exercise of such jurisdiction unreasonable.

This rule is the same as that applicable to individuals as stated in § 37 Ibid, at 156. In the discussion of the rationale of the rule, following § 37, it is pointed out that “A state has a natural interest in the effects of an act within its territory even though the act itself was done elsewhere.” Specifically in regard to situations in which “the act, although not done with the intention of causing effects in the state, could reasonably have been expected to do so,” the discussion points out, among other things, that

* * * Another factor of significance is the nature and quality of the effects which occur in the state. The state may exercise judicial jurisdiction over the defendant if the effects which could have been anticipated and which actually occurred are of a sort highly dangerous to persons or things. This is so even though the defendant has no other relationship to the state, [at 158]

See also, Comment, “Conflict of Laws — Tavern Owner Liability-Extraterritorial Effects,” 14 Rutgers L. Rev. 618 (1960).

An order denying the motion will be entered.

      Following the filing of an answer and the notice of motion to dismiss on behalf of the defendant King Pin Alleys it appears, from a return of service filed in the action, that another summons, addressed to King Pin Alley c/o Louis Pasternak, V. P. at his residence in Pair Lawn, New Jersey, together with an additional copy of the amended complaint, was hand-delivered to this officer of the corporation at the Bergen County Sheriff’s office.


author: Yaccarino, J. C. C.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. FLORENCE M. WETMORE, DEFENDANT-APPELLANT.
    Monmouth County Court Law Division
    Decided October 12, 1972.

      Mr. Thomas F. Shebell attorney for defendant.

      Mr. Jack Frost, Deputy Attorney General, for the State (Mr. George F. Kugler, Jr., Attorney General of New Jersey, attorney).
   Yaccarino, J. C. C.

Defendant appeals from a conviction in the municipal court for permitting an intoxicated person to operate her motor vehicle in violation of N. J. S. A. 39:4-50(a). The appeal was heard de novo on the record. The facts may be summarized as follows:

On the day in question defendant had met John Thomas. They were accompanied by a mutual friend named Clare Lewis. The trio drove from Monmouth County to Perth Amboy where they picked up the children of Clare Lewis. They then returned to Monmouth County and stopped at the Pine Tree Tavern for a short time. They subsequently proceeded to the Wild West Tavern and remained there approximately 45 minutes. Upon departing from the Wild West Tavern Thomas operated defendant’s vehicle on Route 9 in Howell Township. At this time the vehicle struck a vehide operated by Mrs. Jean Treat. Trooper Langen was dispatched to the scene to investigate. Upon arriving at the scene Trooper Langen placed Thomas under arrest for drunken driving.

Trooper Joseph Lucas conducted a breathalyzer test on Thomas indicating readings of .18 and .17, respectively. There was no testimony by the trooper as to the physical appearance or condition of Thomas. Mrs. Treat testified that she was injured as a result of the accident and offered no testimony as to the condition of the operator, Thomas. Thomas testified that he had been drinking all through the day. Defendant testified that she had been with the operator and their friend, Clare Lewis, earlier in the day; that they went to Perth Amboy and picked up Clare Lewis’s children, and returned to Monmouth County; that on the trip up to Perth Amboy Thomas operated her vehicle; that they returned to Monmouth County and went to the Pine Tree Tavern where they stayed for a very short time; that they left the Pine Tree Tavern and went to the Wild West Tavern, located on Route 9 in Howell Township. She was unable to testify as to what Thomas had had to drink but that he appeared to be fine and did not appear to be intoxicated. Their mutual friend, Clare Lewis, said she joined Mrs. Wetmore at approximately 3 p.m. that day when they picked her up at her house; that the accident happened at about 6 p.m.; that all during that three-hour time prior to the accident she observed nothing wrong with Thomas, and offered that had it been her vehicle she would have permitted him to drive it. She testified that had she sensed anything wrong with the operator’s condition she would not have permitted her children to ride in the car.

There was no testimony from any witness that Thomas appeared to be either intoxicated or under the influence of alcoholic beverages. The testimony as to his condition offered by the State consisted of the two breathalyzer readings and any inference that could be drawn from the trooper’s statement that when he arrived at the scene he arrested Thomas for drunken driving.

Defendant contends that the results of the operator’s breathalyzer test are inadmissable against her and further contends that the State must show that she knew or should have known of the operator’s condition at the time she permitted him to operate her vehicle.

The State contends that the operator’s breathalyzer readings and his condition are binding upon the owner and that the statute does not require it to prove that defendant knew or should have known of operator’s condition.

The court will first consider the issue of knowledge.

Where an offense, as in this case, is malum prohibitum the Legislature may render an act criminal without the requirement of guilty knowledge or criminal intent. Morss v. Forbes, 24 N. J. 341 (1957); State v. DeMeo, 20 N. J. 1 (1955), and State v. Kinsley, 103 N. J. Super. 190 (Cty. Ct. 1968), aff’d 105 N. J. Super. 347 (App. Div. 1969).

However, the term “guilty knowledge” is not to be confused with the term “knowingly.” In criminal law the term “knowingly” has no fixed or precise meaning. It depends on the character of the offense involved. See 22 C. J. S. Criminal Law § 31 at 111,

When used in a prohibitory statute “knowingly” imports something more than carelessness or lack of inquiry. In such statutes, it has been held to mean merely a knowledge of the existence of the facts constituting the crime or a knowledge of the essential facts and not to require knowledge of the unlawfulness of the act or omission. [22 C. J. S. Criminal Law § 31 (3) at 111; emphasis added]

The weight of authority appears to require that before an owner or possessor can be found guilty of permitting an intoxicated person to operate his vehicle it must first be shown that the owner or possessor knew of the driver’s condition. 7 Am. Jur. 2d § 261, page 813 and 61A. C. J. S. Motor Vehicles § 625 (1), page 342, But see State v. Carlston, 40 N. J. Super. 559 (Cty. Ct. 1950).

It should be noted that the requirement of knowledge by the owner of the operator’s condition as a prerequisite for establishing a motor vehicle violation comports exactly with the test established by the law of this state regarding liability for civil damages.

In Mead v. Wiley Methodist Episcopal Church, 4 N. J. 200 (1950) plaintiff brought suit against the owner for the recovery of damages for wrongful death. Liability was predicated on the theory that the owner had placed the vehicle in the hands of an incompetent operator.

Relevant to this case is the following statement:

The owner of an automobile may be liable for injury from the operation of that car placed in the hands of one he knows or ought reasonably to know is incompetent to operate it so that the owner ought reasonably to anticipate that in its operation injury will be done to others. Mead supra at p. 206.

The absence of the word “knowingly” from the statute does not indicate a legislative intent to forego it as an element. There are criminal statutes which make no mention of the term knowingly while others do. Yet our courts have read such statutes as if the word “knowingly” were included. See N. J. S. A. 2A:139-1, Receiving Stolen Property.

It is therefore concluded that N. J. S. A. 39:4-50(a) requires the State to prove that defendant knew or should have known that the operator was under the influence of alcoholic or intoxicating beverages at the time the permission was granted.

The last issue deals with admissibility of the driver’s breathalyzer readings in the trial of the owner or possessor.

There is no question that statutory presumption created by virtue of the reading is admissible in the prosecution of the operator. There exists a rational connection between his blood alcohol content and its effect upon him. The same, however, cannot be said of operator’s test readings as proof against the owner.

Due process of law does not permit the State to convict a defendant through the use of an immaterial presumption. There exists no rational basis to apply the presumption raised against the operator over against the owner.

The owner was not given the opportunity to be present during the test administered to the driver and observe its administration. Neither was she afforded the opportunity to have the operator refuse to take the test, a right given to the driver by statute. See N. J. S. A. 39:4-50.2. Basically, the application of the presumption over against owner would deny her the opportunity to repel the presumption and thereby deny to her the due process of law. See Manley v. Georgia, 279 U. S. 1, 49 S. Ct. 215, 73 L. Ed. 575 (1929).

Accordingly, it is the judgment of this court that the breathalyzer readings resulting from a test administered to the driver may not be used as presumptive evidence against the owner. Absent these testing results the record is barren of any evidence to prove that the operator was under the influence of alcoholic or intoxicating beverages as alleged.

Therefore defendant is found not guilty and any fine or costs paid by her shall be returned forthwith and her operator’s privileges are reinstated.


author: Collins, J. C. C.

text:
    LILLIAN H. YEOMANS, PLAINTIFF, v. ALL STATE INSURANCE COMPANY, A FOREIGN CORPORATION DULY AUTHORIZED TO DO BUSINESS IN NEW JERSEY, DEFENDANT.
    Morris County Court Law Division
    Decided October 27, 1972.

      Mr. Newton H. Porter, Jr. for plaintiff.

      Mr. Daniel Gilady for defendant. (Messrs. Shenier, Gilady & Harwood, attorneys).
   Collins, J. C. C.

On July 20, 1968 plaintiff Lillian H. Yeomans was the driver of an automobile owned by her husband which collided with a vehicle driven by one Virgin. Arline Klinkenberg, a passenger in the Virgin vehicle, was injured in this accident and subsequentley recovered a judgment of $77,000 against the plaintiff herein.

Plaintiff’s husband was the holder of an automobile insurance policy issued by defendant All State Insurance Company. This policy provided for a maximum bodily injury benefit of $25,000 per person. Included in this policy was a standard provision that “All State will defend any law suit, even if groundless, false or fraudulent, against any insured for such damages which are payable under the terms of this policy, but may make such settlement of any claim or suit as it deems expedient.”

Plaintiff seeks judgment for the difference between the $25,000 paid by All State at the time of the Klinkenberg judgment and the full sum there awarded, plus costs.

When the action against the Yeomans was brought in Superior Court, Passaic County, All State was faced with an unusual situation as Ms. Klinkenberg also brought suit against another of its insureds, said Virgin. This second assured’s coverage had a maximum limit of $100,000. Because of the possibility of a large recovery All State chose not to use their own “house counsel,” but instead retained “independent” attorneys for each of their insureds, Mr. Amedeo O. Jacovino for Yeomans and Mr. John J. O’Donnell for Virgin.

All State appears to have conducted a thorough examination of the possibilities of recovery by Ms. Klinkenberg, as a result of which it reserved the full $25,000 of the Yeomans policy to meet what it expected to be a liability of at least that amount. In addition, an “excess letter” was sent to, and received by, the Yeomans informing them that there was a danger of a recovery in excess of the amount of their coverage and a right on their part to retain their own counsel. While the Yeomans had already retained an attorney, Mr. Barry N. Chase, to represent them in a proceeding under the motor vehicle act relevant to this accident, they chose not to use him, or any other attorney, aside from Mr. Jacovino, at the Klinkenberg trial.

Prom the evidence it appears that, aside from the excess letter, there was no information given to the Yeomans with regard to the following:

1. The danger of a verdict substantially in excess of their coverage;

2. The progress of settlement negotiations, if any;

3. The possibility of their contributing to a settlement beyond the $25,000 limit, or

4. The seriousness of Ms. Klinkenberg’s injuries, at least not until after the trial was already under way.

5. It does not appear the Yeomans were ever informed that Mr. Virgin was also an insured of All State.

Testimony by Mr. Robert J. Passero, the attorney for Ms. Klinkenberg, indicated that the first settlement conference occurred on the first day the case was to go to trial, October 26, and that the first time the full amount of the Yeomans policy was offered was on October 27. He indicated that Mr. Richard Liva and Mr. Neil Berardi, All State representatives, had had some prior conversations with him, but that at no time prior to the start of the trial was there a firm offer of $25,000. Prom the testimony presented it is apparent that Mr. Passero remained adamant in his demand for $100,000 and that in his consideration of the possibilities of settlement he viewed the policies held by Yeomans and Virgin as a single source for recovery.

Of particular importance is a conversation testified to by Mr. Passero, in which Mr. Jacovino stated to him that All State was in somewhat of a delicate position as they wanted the verdict to go against Yeomans and not against Virgin.

Plaintiff has, in effect, contended that All State, in its handling of the defense in the Klinkenberg action, failed to adhere to that standard of “good faith” which an insurer must observe when dealing with its insureds. Bowers v. Camden Fire Ins. Ass’n, 51 N. J. 62, 71—72 (1968); Kaudern v. Allstate Ins. Co., 277 F. Supp. 83, 88-89 (D. N. J. 1967).

The duty which is placed upon an insurer when it undertakes to represent the interests of an insured in the defense of a negligence action may often be a hard one. Circumstances may be such that its own interests would indicate to it a course of action ultimately harmful to the insured. Thus an insurer faced with a situation where a recovery is likely to be had in excess of its insured’s policy limits might still refuse to make an offer of settlement for the full amount of that policy, as it might still have a chance of winning the case and thus preserving its funds, while at worst it would lose only slightly more than if a settlement in full were made earlier. Thus, where settlement offers are involved, our highest court has set out a clear standard for insurers to follow:

When it is probable that an adverse verdict will exceed the policy limit, the propriety of an insurer’s refusal to accept a settlement offer which is within the coverage requires a resolution of conflicting interests. In our judgment, in view of the duty of the insurer to act in good faith, the resolution can lead to but one fair result: both interests can be served justly only if the insurer treats any settlement offer as if it had full coverage for whatever verdict might bo recovered, regardless of policy limits, and makes its decision to settle or to go to trial on that basis. [Bowers v. Camden Fire Ins. Ass’n, supra, 51 N. J., pp. 71-72.]

See also, Radio Taxi Service, Inc. v. Lincoln Mutual Ins. Co., 31 N. J. 299 (1960).

* * * the purpose of liability insurance is to protect the assured from liability within the limits of an insurance contract, and an insurer cannot frustrate that policy by a selfish decision as to settlement which would expose an insured to a judgment beyond the purchased protection. [Deblon v. Beaton, 103 N. J. Super. 345, 351-352 (Law Div. 1968).]

Unfortunately for plaintiff it appears from the evidence presented that All State did, albeit at a very late stage, allocate funds for, and offer in settlement, the full amount of the Yeomans’ coverage. Thus, strictly speaking, defendant did eliminate one indication that it may have acted in bad faith towards its insured. However,

* * * where the claim exceeds policy limits there is always present a possible conflict of interest between the insurer-agent and the insured-principal, and the insurer’s conduct is therefore “subject to closer scrutiny than that of the ordinary agent.” [Coppage v. Firemen’s Fund Ins. Co., 379 F. 2d 621 (6 Cir. 1967)]

Factors other than whether a settlement offer in the full amount of the policy has been made could be determinative of the question as to whether or not the insurer has acted in good faith. There is “a duty of fair and full disclosure between insured and his insurer,” and where, as here, the insurer undertook to represent its insured, its duties included

apprising the client of settlement opportunities within a reasonable time after they were presented; it entailed the duty to warn the client of difficulties which the litigation posed for him wherever such difficulties were not included within the contract of indemnity; it included the duty to advise the client of the outcome of the litigation and of any particular procedures which might lessen its financial impact upon him; and it included the conduct of settlement negotiations in good faith to the interests of the insured wherever those interests might be divergent from the interests of the insurance company. [Ging v. American Liberty Ins. Co., 423 F. 2d 115, 120-121 (5 Cir. 1970)]

The Second Federal Circuit Court of Appeals, in 1969, had occasion to pass upon a situation, in the light of New York Law, where some of the factors now present before this court were involved:

We recognize that, in the usual case, to establish bad faith by the insurer, an insured should demonstrate that the claim could have been settled within the policy limits, or, if only a settlement in excess of the coverage could have been achieved, that the insured was willing and able to provide the excess amount. But we believe that under New York law, where an insured reasonably relies upon its insurer to conduct settlement negotiations, and such insurer neither attempts to secure a modification of the initial settlement demand nor communicates that demand to its insured, the jury may find that the insurer did not act in good faith.
Where an insurer receives an offer of settlement in excess of the coverage of its policy it acts in bad faith if it fails to make any attempt to engage the insured plaintiff’s counsel in discussions seeking a reduction in the initial settlement demand and if it fails to inform its insured of the opportunity to settle. The initial demand of plaintiff’s counsel often will be as far removed from the actual figure acceptable in settlement as the ad damnum in the complaint is removed from the initial settlement demand, especially in a personal injury action. It is a matter of common knowledge that it is a rare case where exploration of the possibilities of settlement, beyond the mere receipt of the plaintiff’s demand, will not result in some substantial reduction of the amount.
* * * * * * * *
To require the insured to establish his willingness to contribute toward a settlement presupposes a settlement figure toward which contribution may be made. The personal injury plaintiff’s initial demand is not the settlement figure against which proof of an insured’s willingness to contribute should be measured. Had the insurer attempted to fulfill its responsibility by preliminary negotiations of the initial demand figure, the resultant settlement might well have been within the policy limits or, at worst, within the ability of the insured to make sufficient contribution to effect a settlement. Any doubt which admittedly exists in speculating on these possibilities should be resolved in favor of the insured unless the insurer, by some affirmative evidence, demonstrates that not only was there no realistic possibility of settlement within the policy limits, but also that the insured would not have contributed to whatever settlement figure could have been obtained. [Young v. American Cas. Co. of Reading, Penn., 416 F. 2d 906, 910-911, cert. dis., 396 U. S. 997, 90 S. Ct. 580, 24 L. Ed. 2d 490 (1969)]

In order to fulfill its duty towards the insured the insurer must he careful to respect his right to informed participation in file settlement negotiations. Lysick v. Walcom, 258 Cal. App. 2d 136, 65 Cal. Rptr. 406 (1968); Brown v. Guarantee Ins. Co., 155 Cal. App. 2d 679, 319 P. 2d 69, 66 A. L. R. 2d 1202 (11. Ct. App. 1957); Kaudern v. Allstate Ins. Co., supra, 277 F. Supp. at 88-89. However, a failure of the insurer to communicate an offer of settlement to the insured “standing alone without other elements of bad faith or a conflict of interests being present does not justify a finding of bad faith and the imposition of liability npon the insurer.” Hodges v. Standard Accident Ins. Co., 198 Cal. App. 2d 564, 578, 18 Cal. Rptr. 17, 26 (D. Ct. App. 1961).

In the instant case there appears to this court to have been more than a simple failure to inform the Yeomans of the progress, or lack, of any settlement negotiations. There was apparently no real effort made by defendant, until the trial was already under way, to even begin such negotiations, although there was some indication of a “feeling out” by All State as to plaintiff’s possible expectations. Further, All State failed to disclose to the Yeomans that the co-defendant, Virgin, was another of its insureds and that his policy was far larger than that held by the Yeomans. It appears from the evidence presented that the Yeomans were informed of their right to contribute towards a settlement only on the eve of the trial, giving them little, if any, opportunity to muster whatever resources might have been available to them to “throw into the pot.” Given the concern, revealed in the current proceedings, which All State had in avoiding any finding of liability as to Virgin, the failure to give timely notice to Yeomans of the possibility of contribution, to inform them of the character of Virgin’s insurance policy, and to indicate to them with proper emphasis the serious danger they were in of being subjected to a judgment in excess of their insurance coverage as a result of injuries sustained by Ms. Klinkenberg, the severity of which they were not fully aware until the trial began, becomes evidential of a circumstance in which bad faith, as opposed to simple negligence, or poor judgment, is controlling. Further, even were the above listed factors viewed as being evidential only a certain negligence on All State’s part, “Although negligence alone is insufficient to render the insurer liable, serious and recurrent negligence may be indicative of bad faith.” Brown v. United States Fidelity and Guaranty Co., 314 F. 2d 675, 679 (2 Cir. 1963).

Of foremost concern to this court, in attempting to gauge the conduct of defendant as it affected its insureds, is the question of whether All State could possibly have acted towards the Yeomans in some other manner than it did, especially as to the general conduct of its insureds’ defense, in order to safeguard the interests of the insureds while protecting itself as well as possible. The facts of this case appear to be very special. The company, due to the very different, indeed conflicting, positions of the co-defendants, both of whom were its insureds, was faced with a situation where, because the attorney for Ms. Klinkenberg viewed both defendants as a common source for recovery, and because its own investigations indicate to the company that were the case to go to trial the Yeomans would almost certainly be held liable while a verdict against Virgin would be very unlikely, it would be impossible for an attorney retained by All State, owing his first loyalty to that company, to properly represent and protect the Yeomans. This view is confirmed when one considers the statement made by Mr. Jacovino to Ms. Klinkenberg’s attorney on the day of the trial wherein he said All State was in somewhat of a delicate position as they wanted the verdict to go against Yeomans and not against Virgin.

Our courts have recognized that rare situations may arise where a carrier will be precluded from solely determining the particular counsel who is to represent one of its insureds. Burd v. Sussex Mutual Ins. Co., 56 N. J. 383, 391 (1970).

* * * the insurer has one primary interest: to give that defense which the policy promised and to perform that promise in accordance with the standards of the local law (prudence or good faith). If its interests are antagonistic to the assured, it has not fulfilled this promise. Its contract, with specified dollar limits, may perhaps put it in a somewhat difficult position. But always it must act with requisite care (good faith or prudence as local law spells out) toward the assured’s interest. It may, of course, properly consider its own interest, but it may never, never forget that of its assured. [Smoot v. State Farm Mutual Automohile Ins. Co., 299 F. 2d 525, 532 (5 Cir. 1962)]

Given the conflict of interest inherent in the special circumstances of the instant case and the duty to act in good faith imposed upon All State by its position, this court feels All State could have taken only one course of action in order to properly meet its obligations. This was to fully inform the Yeomans, well in advance of trial, of the situation creating the conflict of interest for the company and to insist that the Yeomans select their own attorney to represent them. In short, where a conflict of interest as serious as the one here presented arises between an insurer and its insured, “the selection of the attorneys to represent the assureds should be piade by them rather than by the insurance company, which should remain liable for the payment of the reasonable value of the services of whatever attorneys the assureds select.” Prashker v. United States Guarantee Co., 1 N. Y. 2d 584, 593, 154 N. Y. S. 2d 910, 136 N. E. 2d 871, 876 (Ct. App. 1956). Of course, the insured’s selection would be subject to the approval of the company, but such approval should go only to the issue of the competence of the particular attorney retained. As the insureds in this case were clearly not experienced in matters of insurance, the mere sending of an “excess letter” cannot be said to be sufficient to allow the company to assert its good faith. As the company made clear by the evidence which it presented, almost immediately upon the conclusion of its investigation subsequent to the accident it deemed the Yeomans a “lost cause,” and allocated funds to meet the expected liability. Its only further interest was to protect Virgin. In effect, the only interest that might have been adversely affected by an insistence upon truly independent counsel was the Virgin defense. Given All State’s duty to the Yeomans, this was not a proper consideration.

Had the Yeomans been given truly independent legal counsel, well in advance of trial, thejr would have had ample time to. have started to accumulate monies for a settlement contribution. Even more importantly, plaintiff would have been forced to treat the Yeomans as parties fully distinct and independent from Virgin and All State. In such circumstances a settlement protective of the Yeomans’ interest might have been reached. At the least, they would have been guaranteed of a full and adequate representation of their interests, both at and prior to the trial.

In light of the fact that both counsel for defendants were, in effect, representatives of All State, it appears, given the antagonistic position each of the defendants in the Klinkenberg action necessarily occupied vis-a-vis the other, impossible to this court that the Yeomans’ interests could have been properly protected. Here the company had a pecuniary interest in affecting the allocation of liability between these parties and the conduct of their defenses. The very tolerance of such a situation raises doubts as to the good faith of the defendant. See O’Morrow v. Borad, 27 Cal. 2d 794, 167 P. 2d 483 (Cal. Sup. Ct., en banc, 1946).

“Good faith is a broad concept. Whether it was adhered to by the carrier must depend upon the circumstances of the particular case.” Bowers v. Camden Fire Ins. Ass’n., supra, 51 N. J. at 71. “Good faith implies honesty, fair dealing and full revelation.” Davy v. Public National Ins. Co., 181 Cal. App. 2d 387, 396, 5 Cal. Rptr. 488 (D. Ct. App. 1960).

It is the opinion of this court that All State failed to act towards plaintiff “without allowing its own interests to predominate over those of the assured.” Shapiro v. Allstate Ins. Co., 44 F. R. D. 429, 431 (E. D. Pa. 1968). In short, All State failed to act in good faith towards plaintiff, as a result of which failure the injury complained of occurred.

Judgment for plaintiff.