68 Cal. 2d 191 | Cal. | 1968
Graneo Steel, Inc. (Graneo), a California Corporation, brought this proceeding before the Workmen’s Compensation Appeals Board (Board) in order to determine whether it was covered by workmen’s compensation insurance on the date of an industrial injury to one of its employees. The referee determined that Graneo was not so covered and dismissed from the proceeding the alleged insurer, the Hartford Accident and Indemnity Company (Hartford).
Graneo was incorporated on November 1, 1965. On November 23, 1965, Aaron Hillman, Graneo’s vice-president, made arrangements regarding general liability, workmen’s compensation, and other insurance with Ben J. Weiss, a general agent representing Hartford, as well as other insurance companies. Weiss provided oral binders in order to afford immediate coverage, and in January 1966 Hartford issued to Graneo a ‘ ‘ comprehensive general-automobile liability policy” and a workmen’s compensation policy—both policies effective as of November 23, 1965. Apparently these policies
In February 1966 Weiss sent Granco a bill for the premiums due on the above policies, which reflected a premium of $131 for the workmen’s compensation policy.
It does not appear that a copy of this letter was sent to Graneo. However, Weiss wrote to Hillman on the same day and advised him that the workmen’s compensation policy had been returned to Hartford for flat cancellation, and that “If and when, Granco does have employees, kindly advise so that the other coverages can be issued.” Enclosed with this letter were the general liability policy, which had not been previously delivered by Weiss to Graneo, and an invoice for the premium for that policy.
On April 18, 1966, Namon Bobinson, one of Granco’s employees* *
At the hearing Weiss testified that he was not in his office on February 17 when Granberg spoke by telephone with Mrs. Lerche; that the latter had in turn telephoned Weiss at home about general liability coverage for the leased ear;
Mrs. Lerche testified that she had received Granberg’s call on February 17 and had discussed with him the indorsement regarding the leased automobile, but that she had no record or recollection of any request for workmen’s compensation coverage at that time.
As disclosed by the report on decision, the referee determined that Granberg had requested workmen’s compensation insurance in his February 17 telephone call, but that Mrs. Lerche, although authorized to make oral binders on such coverage, had overlooked doing anything about the matter and had then forgotten about it. It was further determined that the February 17 conversation was insufficient to bind Hartford : 1 ‘ Hartford has done nothing to mislead any party and did not make any agreement to accept this insurance. There was no reason why Mr. Weiss could not have placed it with any of a number of other compensation insurance carriers except that having placed it with Hartford once, he probably would have placed it with them again. This is not sufficient to bind Hartford.” The referee formally found that Robinson was employed by Graneo at the time of his industrial injury on April 18, 1966; and that on said date Graneo was uninsured as to workmen’s compensation
It is of course clear that the scope of this court's review of orders and decisions of Workmen’s Compensation Appeals Board does not extend to a redetermination of factual questions decided upon the basis of substantial evidence. (Lab. Code, §§ 5952-5953.) Of the several factual determinations made by the Board herein, only that finding dealing with the content of the billing on the initial workmen’s compensation policy (see fn. 2, ante) is now challenged
“It is now settled law that insurance companies may enter into binding parol contracts to issue new policies, to renew existing policies or to transfer existing insurance from one location to another. ... 1 “The very reason for sustaining such contracts is, that the parties may have the benefit of them during that incipient period when the papers are being perfected and transmitted.’’ ’ ’’ (Lumbermen’s Mut. Ins. Co. v. Slide Rule & Scale Engineering Co. (7th Cir. 1949) 177 F.2d 305, 308; see also Parlier Fruit Co. v. Fireman’s etc. Ins. Co. (1957) 151 Cal.App.2d 6, 19 [311 P.2d 62].) Preliminary contracts of this nature, known as 11 oral binders, ’ ’ may be effected on behalf of an insurer by any agent possessing the authority to bind the company by contracts of insurance generally. (44 C.J.S., Insurance, § 230, p. 957; see generally Annot. (1967) 14 A.L.R.3d 568; see Apparel Mfrs. Supply
As with all contracts of insurance, it is necessary that the identity of the insurer be established if liability is to be predicated upon an alleged oral binder. “Some difficulty on the score of the identity of the insurer exists where, as is often the case, an agent represents more than one insurance company. The element of identity is satisfied where the agent, being authorized to do so, designates the company which is to carry the risk.” (Italics added.) (1 Couch on Insurance (2d ed. 1959) §14:19, p. 597.)
It is clear that “designation” does not imply a meeting of the minds of the insured, the agent, and the insurer. “When the agent represents several companies and selects certain [or one] of them to be bound by the risk, he is contracting for undisclosed principals. Each of the companies he represents has intrusted him with the agency, and must be held to have given him authority as such agent to select it as the one to bear the risk. Such authority springs inevitably from his authority to make insurance contracts. The insured cannot be permitted to suffer because the agent fails to disclose at the time of making the contract which of several principals he binds.” (Lumbermen’s Mut. Ins. Co. v. Slide Rule & Scale Engineering Co., supra, 177 F.2d 305, 309; see Apparel Mfrs.’ Supply Co. v. National Auto. & Cas. Ins. Co., supra, 189 Cal.App.2d 443, 455; Parlier Fruit Co. v. Fireman’s etc. Ins. Co., supra, 151 Cal.App.2d 6, 24; Guipre v. Kurt Hitke & Co. (1952) 109 Cal.App.2d 7, 14 [240 P.2d 312] ; Sholund v. Detroit Fire & Marine Ins. Co. (1933) 172 Wash. 111 [19 P.2d 395].) It is also clear, however, that if the agent fails to specifically designate an insurer, or if there are no facts from which designation can be inferred, the binder is ineffective. (Cf. K.C. Working Chemical Co. v. Eureka Security etc. Ins. Co. (1947) 82 Cal.App.2d 120, 134-135 [185 P.2d 832] ; Walters v. West American Ins. Co. (1935) 4 Cal.App.2d 581 [41 P.2d 355, 43 P.2d 306].)
In most cases wherein the identity of the insurer is in issue, the agent has undertaken some affirmative act of designation after he has been notified of and has accepted the placement or reinstatement of coverage. (See Lumbermen’s Mut. Ins. Co. v. Slide Rule & Scale Engineering Co., supra, 177 F.2d 305, 307.) However, such an affirmative act is not always
It is clear of course that the facts of the instant case will not admit of such a solution. Weiss could have placed the Graneo risk with any of several insurers represented by him. Further, according to his uncontradicted testimony, he had made no decision at the time of the injury as to which of these insurers he would call upon to bear the Granco risk, and, in fact, he had given the matter no thought subsequent to the cancellation of the initial Hartford policy. There is some indication, on the other hand, that at the time of such cancellation, he formed an intention to place the risk again with Hartford when Graneo obtained employees. In the circumstances we cannot say that the designation of Hartford by Weiss would be a foregone conclusion requiring no affirmative act of designation subsequent to the agent’s oral agreement to place the risk.
It is also clear, however, that in some circumstances the acts of an insurer or its agent prior to an oral agreement will be sufficient to estop the insurer from denying coverage. Although we are aware of no reported decision of a California appellate court discussing specifically what circumstances must exist in order to raise such an estoppel, the case of Hartford Acc. & Indem. Co. v. Industrial Acc. Comm., Everett P. Wingfield et al. (1966) 31 Cal.Comp. Cases 57 (writ of review denied without opinion, March 9, 1966, Court of Appeal, 1st Dist., Div. 1) demonstrates the application of the
We of course appreciate that the Wingfield case involved facts different from those of the case at bench. We are of the view, however, that the principle of estoppel adopted by the referee and the Board in Wingfield was properly applicable in the circumstances of that case, and that that principle is equally applicable to the facts of the case at bench.
Our views in this respect have support in other jurisdictions where principles of estoppel have been applied to similar questions.
In Western Nat. Ins. Co. v. LeClare (9th Cir. 1947) 163 F.2d 337, a decedent had conveyed real property to plaintiffs LeClare. Upon the decedent’s death, however, the property was included among the assets of the decedent’s estate and probate proceedings were necessary in order to determine that it belonged to plaintiffs LeClare and not to the decedent or to the latter’s estate. During the decedent’s lifetime and prior
On appeal from a judgment in favor of the LeClares the defendant insurance company urged that it had not been designated by Raymond as the insurer prior to the fire. In rejecting this contention the court said: “Raymond represented appellant and seven other fire insurance companies. Mr. and Mrs. LeClare knew that he represented appellant, but, so far as the evidence shows, they never knew that he represented any other company. They dealt with him, and he with them, not as the agent of a group of companies, but as the agent of a single company, namely, appellant. The contract, therefore, made appellant the insurer of the house.” (163 F.2d at p. 340.) Although the court did not emphasize that all earlier policies on the property were issued by defendant through Raymond, we do not overlook the possibility that this factor had a significant bearing on the court’s determination.
In Employers Cas. Co. v. Winslow (Tex.Civ.App. 1962) 356 S.W.2d 160 (application for writ of error refused), the elements of prior dealing and transactional continuity were given specific consideration. There plaintiff Winslow, who was in the process of constructing an ore mill, contacted one Davis, an insurance agent apparently representing several companies, for the purpose of obtaining various policies of insurance covering the mill and activities therein. The defendant company, through Davis, issued to Winslow a comprehensive liability policy and a separate automobile policy. On November 29, 1958, the defendant company issued a 30-day binder for fire insurance coverage, which binder was twice renewed for 30-day periods. No policies of fire insurance were issued on these binders, and no premiums were paid, although conversations were had between Winslow and Davis as to the premium that would apply if such policies were issued.
On September 14, 1959, the ore mill was destroyed by fire. Defendant company denied liability and sent to Winslow a company check for $500 with the message: “ ‘We hand you herewith check for $500.00 which was conditionally left with our cashier on or about August 7, 1959.’ ” (356 S.W.2d at p. 164. ) Winslow’s cancelled check, which was admitted into evidence, showed that while it bore the indorsement of the defendant company
On appeal from a judgment for plaintiff Winslow, the defendant company contended that the parties to the contract had not been established because the agent had undertaken no affirmative act of designation subsequent to being notified that fire insurance was to begin again. The court rejected this con
As emphasized above, we realize that the LeClare and Wins-low cases, as well as the Board’s Wingfield decision, arose in factual contexts which differ in some respects from one another, as well as from that of the case at bar. We further recognize that in each of those cases the trier of fact determined that designation had occurred, whereas in the instant case the trier of fact has determined that designation had not occurred, prior to the accident. However, as we have already explained, we have accepted the relevant facts as determined by the Board. The question now confronting us is whether under those facts we are impelled as a matter of law to the conclusion that Hartford is estopped from claiming that it was not Graneo’s designated insurer and from denying coverage.
“Generally speaking, four elements must be present in order to apply the doctrine of equitable estoppel: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.” (Driscoll v. City of Los Angeles (1967) 67 Cal.2d 297, 305 [61 Cal.Rptr. 661, 431 P.2d 245] ; see Cigarette Concessions Inc. v. City of Los Angeles (1960) 53 Cal. 2d 865, 869-870 [3 Cal.Rptr. 675, 350 P.2d 715] ; Safway Steel Products, Inc. v. Lefever (1953) 117 Cal.App.2d 489, 491 [256
It is notable that in the instant case, as in LeClare, Wins-low and Wingfield, the insurer whose designation was in question had prior to loss engaged in dealings with the insured relative to the subject risk or one closely related thereto.
Much is sought to be made of the fact that Weiss was under no obligation to place the coverage with Hartford rather than with one of the several other insurers which he represented, and of the additional fact that Graneo had left to Weiss’ discretion the determination of which insurers were to bear its various insurance risks. These factors are not determinative of the problem now confronting us. Under the circumstances of the instant case, Graneo, relying upon the conduct and statements of Weiss, was entitled to assume, in the absence of any
The order dismissing Hartford Accident and Indemnity Company as a party to the proceeding is annulled and the cause is remanded to the Workmen’s Compensation Appeals
Traynor, C. J., McComb, J., Peters, J., Tobriner, J., Mosk, J., and Burke, J., concurred.
Ben J. Weiss, doing business as Ben J. Weiss Insurance Agency, was also named as a defendent in the matter but was dismissed as a party on the ground that his liability, if any, was not that of an insurer.
In the report on decision the referee found that the bill ‘ ‘ indicated ’ ’ that the workmen’s compensation policy had been issued by Hartford. At oral argument counsel for the Board pointed out that the record does not expressly show that the identity of the insurer was shown on the bill. Our examination of the reporter’s transcript and exhibits has convinced us that the Board is correct in this regard, although we observe that Hartford’s answer to Graneo’s petition for hearing in this court states that “Mr. Hillman received a billing for workmen’s compensation insurance covering Granco Steel, Inc. for a policy issued by Hartford Accident & Indemnity Company ....’’ In any event we have concluded, as will appear below, that the state of Graneo’s knowledge as to the specific identity of the insurer on its workmen’s compensation risk is not a factor crucial to the result herein.
Hillman testified before the referee that his agreement with Weiss was that the latter should “hold the policy in abeyance, and when we started our own bookkeeping system, and paid our own payroll out of Graneo, that I ivas to notify him of this fact, and he would put the policy back into effect. ’ ’
At oral argument we were advised that a policy or binder which is “cancelled flat’’ is cancelled without payment of a premium for the period of effective coverage.
According to Granberg’s testimony, Bobinson was one of the employees whose names were given to Mrs. Lerche on February 17 for workmen’s compensation coverage.
The indorsement covering the leased automobile was issued by Hartford on May 19, 1966—effective from February 17, 1966.
It appears that neither Granberg nor Hillman at any time requested that Weiss place any Granco coverages with a particular company; they left the matter of choosing insurers entirely to him.
The referee set forth this conclusion under the heading f 1 Findings of Pact.” However, as we shall point out below, the determination of whether Graneo was insured at the time of the Robinson accident necessarily involves questions of both fact and law.
Thus, it is not urged that we reexamine the referee’s underlying determinations that Mrs. Lerche (1) had authority to enter into oral binders on Weiss’ behalf, and (2) was notified by Granberg on February 17 that workmen’s compensation coverage was to begin immediately.
The Board’s characterization of its ultimate finding as a "finding of fact’’ (see fn. 8) of course cannot insulate that finding from review insofar as it involves determinations of law. We take judicial notice that it is not the practice of the Board to draw a scrupulous distinction between factual findings and legal conclusions. (See Workmen’s Compensation Practice (Cont.Ed.Bar 1963) §§ 10.1-10.2, p. 306.)
The indorsement was as follows: “For deposit only. Texas Employers’ Insurance Association, Employers Casualty Company [defendant], Employers National Insurance Company.” Although the opinion does not specifically indicate the reason for this kind of indorsement, it is conceivable that the agent indorsed for deposit cheeks made out to any one of the companies he represented by means of a single stamp bearing the name of all of his principals and segregated the monies by depositing in the account of the proper principal.
We note that the Winslow court attached little significance to the fact that the insured was apparently ignorant as to the specific identity of the carrier which the agent had previously designated and which had actually issued the earlier policies. The important consideration in Winslow, as in the instant case, was that the insured, justifiably relying upon the representations of the insurer and its agent, concluded that certain acts undertaken by him were sufficient to recommence coverage by that company (whatever its specific identity) which had previously insured the risk in question.
As pointed out above, Hartford was also Graneo’s general liability-carrier.
Hillman testified that, although Graneo gave no specific direction that the insurer on the former policy was to be bound again upon notification to Weiss, “we assumed it would have been the same company.’’
These factors highlight the distinction between the instant case and K. C. Working Chemical Co. v. Eureka-Security etc. Ins. Co., supra, 82 Cal.App.2d 120. There the broker of the insured sought to place the latter’s fire risk through an agency which represented several fire insurance companies. The agency had had no prior dealings with the insured, had never handled insurance relative to the risk sought to be covered, gave no assurances at the time of application or thereafter that a binder had been effected, undertook no acts indicating that a specific insurer was to be bound on the risk, and engaged in no activities leading to the placement of the risk. It was properly held that no binder was effected. (82 Cal.App.2d at pp. 134-135.)
We have excluded from our consideration herein the facts that subsequent to the accident Weiss sent an employee to the scene with a Hartford claim form to be filled out, and that shortly thereafter Weiss purported to enter into an oral binder on Hartford’s behalf with Graneo. Acts undertaken subsequent to the occurrence of the loss cannot in themselves effect a designation (1 Oouch on Insurance, supra, § 14:19, p. 597), and such acts are equally incapable of inducing the kind of reliance necessary to equitable estoppel.
We have also rejected as entirely devoid of m°rit and as contrary to the record the contention made at oral argument by counsel for Hartford that Weiss was not its agent but was at all times either an agent or broker acting for Granco.