Plaintiff, the managing association for a high-rise condominium building, obtained monetary judgments by default against two companies involved in construction and inspection of the condominium building. Alleging the companies were insured under insurance policies issued by defendant, plaintiff filed a declaratory judgment complaint seeking coverage. Plaintiff appeals the Law Division order that dismissed its declaratory judgment complaint and required it to arbitrate its claim for insurance coverage.
The court reversed the order. Under the direct action statute, N.J.S.A. 17:28-2, plaintiff can sue defendant directly for coverage under the insurance policies when there is evidence the insureds are bankrupt or insolvent. However, plaintiff did not assent to the arbitration clause in the policy and therefore, it is not required to arbitrate its claims. The court reinstated the declaratory judgment complaint and remanded for further proceedings.