Cotton v. Travaline

• Decision Date: 17 June 1981
• Parties: Walter B. COTTON, Plaintiff, v. Frank TRAVALINE, Substituted Administrator for the Estate of Frank E. Vittori, and Michael J. Piarulli, Defendants. and Frank TRAVALINE, Substituted Administrator for the Estate of Frank E. Vittori and Michael J. Piarulli, Third-Party Plaintiffs-Respondents, v. GENERAL ACCIDENT GROUP, Third-Party Defendant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 362

179 N.J.Super. 362

432 A.2d 122

Walter B. COTTON, Plaintiff, v. Frank TRAVALINE, Substituted Administrator for the Estate of

Frank E. Vittori, and Michael J. Piarulli, Defendants.

and

Frank TRAVALINE, Substituted Administrator for the Estate of Frank E. Vittori and Michael J. Piarulli, Third-Party Plaintiffs-Respondents, v. GENERAL ACCIDENT GROUP, Third-Party Defendant-Appellant.

Superior Court of New Jersey, Appellate Division.

Argued May 19, 1981.

Decided June 17, 1981.

J. Robert McGroarty, Deptford, for third-party defendant-appellant.

Clifford Long, Midford, for third-party plaintiffs-respondents (Charles H. Nugent, Camden, attorney).

Before Judges FRITZ, POLOW and JOELSON.

The opinion of the court was delivered by

POLOW, J. A. D.

In this appeal third-party defendant General Accident Group (GAG) attacks two interlocutory summary judgment orders. After entry of those orders, which resolved all issues except damages, the carrier, GAG, paid $60,000 to settle plaintiff Cotton's legal malpractice claim against the insured law firm, Piarulli and Vittori. Neither in its perplexing brief nor in oral argument on this appeal does GAG question the validity of the settlement. Plaintiff Cotton, who received the proceeds, has not participated in the appellate process. ¹ Appellant apparently seeks a determination that the two interlocutory summary judgment orders adjudicating coverage under the malpractice policy and adjudicating malpractice liability as a matter of law were erroneously granted by the trial court. We are satisfied that no relief of any kind is available to appellant in light of its absolute and unconditional settlement of the original malpractice claim. The settlement effectively forecloses adjudication of the amount of damages recoverable, if any, in the underlying tort claim. Furthermore, the complete absence of any demand by appellant for affirmative relief of any kind in the pleadings, the pretrial documents or any supplements or amendments thereto leaves nothing else to be adjudicated following the settlement of plaintiff's claim "with prejudice."

In June 1965, plaintiff Cotton had sustained personal injuries as the result of an automobile accident. He retained Frank E. Vittori, a member of the law firm of Piarulli and Vittori, to pursue his claim for damages. Although suit was instituted, apparently within a reasonably short time thereafter, it was dismissed for technical reasons in March 1966 but refiled again before expiration of the statute of limitations. The confused and incomplete record on appeal contains little specific information or documentation with regard to the dates of filing or reasons for that original dismissal. However, it is clear that the new action was not prosecuted properly, there were several motions to dismiss for failure to answer interrogatories and the second suit was finally dismissed for that reason on December 9, 1970. No further action has ever been taken, in that suit. ²

After Vittori's death on December 12, 1971 his law partner, defendant Piarulli, immediately notified his insurance agent that "there are several matters which could very well result in claims being made against us under our professional liability policy." He requested that the insurance company, GAG, be notified in order that a meeting could be arranged. Thereafter, under date of April 27, 1972, about four months after Vittori's death, Piarulli wrote directly to GAG listing approximately ten case names and file numbers, including plaintiff's, which represented "potential malpractice suits." GAG concedes that a member of its group, the Camden Fire Insurance Association, issued a lawyer's professional liability policy to Piarulli and Vittori which provided malpractice coverage for a three-year period, between February 5, 1969 and February 5, 1972. In an affidavit submitted to the trial court, claims adjuster Don Phifer asserts that there were discussions regarding many of those matters during an extended period of time. Apparently some of the claims were duly investigated and adjusted by the insurance company. However, Phifer suggests that since the cotton accident had occurred on June 18, 1965, his malpractice claim was not within the time during which GAG provided insurance coverage and, presumably, it was therefore not investigated.

In a letter dated October 28, 1976, GAG acknowledged a communication from Piarulli concerning the Cotton malpractice claim "of major proportion." In GAG's response it attempts to distinguish between notification of "a potential claim" which "might arise in this case," as reported in Piarulli's April 27, 1972 letter, and "an actual claim," thereby suggesting that the April 1972 letter does not constitute "notice" in accordance with policy provisions. Hence, serious prejudice was claimed as a result of "late" notice of claim in that the company could not then develop information as to what, if any, insurance may have existed with respect to the loss in question. GAG further maintained therein that if the defendant in Cotton's automobile accident suit had been uninsured and judgment proof, "there may have been no malpractice whatsoever ... and even if there was malpractice ... the claimant would have suffered no loss."

Cotton then instituted his malpractice suit against Piarulli, the surviving partner, and Vittori's estate. Although the documents in appellant's appendix contain no dates, (contrary to R. 2:6-1(b)), the complaint was apparently filed in or about December 1976. Here again, the record contains no specific information as to whether or how the complaint was submitted to GAG, but it is obvious that the insurer was aware of it and refused to defend. Answers were filed by both defendants. In June and July 1977, both defendants, by way of third-party complaints, asserted claims against GAG as third-party defendant for a declaration of insurance coverage for the Cotton malpractice claim and for attorney's fees and costs. GAG answered in both cases, setting up by way of affirmative defense the allegation that both third-party plaintiffs "breached the terms of any policy ... issued ...." Although GAG now seeks to recover the $60,000 it paid in settlement, there was nothing in the pleadings before the court then, nor is there now, asserting a counterclaim by GAG for money damages, indemnification reimbursement or any other affirmative relief.

Upon applications by the Vittori estate and Piarulli, summary judgment was granted adjudicating existence of insurance coverage for the Cotton claim under the professional liability policy in question. The trial judge found as a matter of law that the negligent acts alleged by Cotton occurred during the period of policy coverage and that there was no genuine factual issue regarding compliance by the assureds with notice requirements and other policy coverage preconditions.

Appellant argues that the summary judgment adjudicating coverage was erroneously and improvidently granted because, at the time, there were pending motions before the court by the Vittori estate and Piarulli to vacate the 1970 dismissal of Cotton's automobile accident suit. Those motions had been made in the malpractice action in November 1977, to vacate a dismissal in the entirely separate and distinct suit involving the underlying 1965 accident claim for damages for personal injuries. The Defendant in that suit was not a party to the malpractice action and had no notice of the application to vacate the dismissal entered in 1970. The argument that the judge should have ruled on those motions is frivolous. The judge lacked jurisdiction to deal with a matter not before him and in which there was no such application pending, to say nothing of the lack of notice to the other party involved. But, since there is no technical, formal disposition of those motions we deem it appropriate to exercise our original jurisdiction, R. 2:10-5, to resolve this issue. We deny the motions to vacate the 1970 dismissal and to reinstate the underlying automobile accident case. The delay of seven years between the dismissal and the motions to vacate it mandates a denial of the motions in any event.

Although we are fully satisfied, for reasons stated hereinafter, that the propriety of the summary judgment with regard to coverage was rendered absolutely moot by GAG's voluntary settlement, nevertheless we have reviewed the record before the trial judge and his determination based thereon. ...