Culqui v. Carrera, UNN-L-4132-13 (N.J. Sup.Ct. April 28, 2015)

A New Jersey Court dismissed a Third-party action against a foreign insurer for claims arising out of a motor vehicle accident in New Jersey. The insurer demonstrated that it did not have such “minimum contacts” with the State as to subject itself to the Court’s jurisdiction.

The foreign insurer had issued a policy to the defendant vehicle owner, based upon his representation in his application that he lived in Virginia. However, when the vehicle owner was sued for personal injuries allegedly resulting from an auto accident, this information proved false. The foreign insurer voided the policy ab initio and denied the claim. The New Jersey Court nonetheless permitted the plaintiff to serve the owner with a copy of the Complaint via substituted service on the foreign insurer. The foreign insurer’s motion to vacate the Order permitting substituted service, and to dismiss the Complaint, was granted, but the Court then allowed the injured plaintiff to serve an Amended Complaint upon its own Uninsured Motorist (UM) insurer, for UM benefits. The UM insurer in turn served a Third-party Complaint, seeking to recover from the foreign insurer. It contended that, under New Jersey law, a carrier cannot retroactively void a policy after an insured becomes liable, but can only reduce the policy to the minimum limits prescribed by law.

Abrams Gorelick’s client had validly rescinded the policy, based upon the uncontroverted evidence that the vehicle owner did not, and had never, resided at the Virginia location indicated in his application. The Court agreed that under those circumstances, there had never been a contractual commitment to cover the owner for accidents in New Jersey, and the insurer did not have minimal contacts with the forum to support the exercise of the Court’s jurisdiction.

Abrams Gorelick Associates Dennis Monaco and Jay Gunsher represented the foreign insurer.

For assistance with auto claims in New Jersey Courts, contact Glenn A. Jacobson.