Hughey v. Aetna Casualty & Surety Co.

30 F.R.D. 508 | D. Del. | 1962

LEAHY, Senior District Judge.

1. Defendant argues that plaintiff’s, failure to perform the condition precedent¹² to defendant’s liability asserted here, discharges defendant from any duty or obligation, under the policy covering the Frank W. Diver, Inc., car agency, to plaintiff who was operating one of the agency’s cars at the time of the accident—i. e., although plaintiff notified his own insurer promptly of the accident, no notice was given defendant insurance company until the first action had been started in the Delaware Superior Court and by that time there had been a lapse of nearly four months. Notice under the policy should have been given “as soon as practicable” and, defendant argues, the notice in the case at bar was obviously unjustifiable.

Delaware law provides compliance with a notice provision in this type of insurance policy is a condition precedent to a defendant insurance company’s liability, Wilmington Amusement Co. v. Pacific Fire Insurance Co., 2 Terry 294, 41 Del. 294, 21 A.2d 194; Vechery v. Hartford Accident & Indemnity Ins. Co., 10 Terry 560, 565, 49 Del. 560, 565, 121 A.2d 681; Nationwide Mutual Insurance Co. v. Mast, (unreported) Delaware Superior Court, per Judge Christie, March 24, 1960; U. S. F. & G. Co. v. Phoenix Assurance Company of New York, (unreported) Delaware Superior Court, per President Judge Terry, January 24, 1962; and such law, under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, applies in the present case. Delaware law further provides a requirement to give notice “as soon as practicable” means within a reasonable time under the circumstances; mere time lapse is not the determining factor.¹³ Wilmington Amusement Co. v. Pacific Fire Ins. Co., supra. Aside from the case just cited, there are no Delaware authorities dealing with the point involved or the special circumstances presented in the case at bar. There is, however, the recent case of Home Indemnity Company v. Ware, D.C.Del., 183 F.Supp. 367, aff’d 3 Cir., 285 F.2d 852, involving a notice-delay of 85 days. Judge LAYTON wrote (183 F.Supp. p. 369): “In determining this question we should examine the facts and circumstances not through the eyes of a trained insurance adjuster, agent, or a lawyer, but from the point of view of [here, plaintiff Hughey], citizen.” ¹⁴

Under the facts and circumstances presented here, plaintiff’s conduct visa-vis defendant insurer was not palpably unreasonable or unreasonable as a matter of law. Plaintiff was driving a borrowed car. First he did not know he was involved in the accident other than, perhaps, as a witness until he was sued. He did not consider that the policy of the lender of the car covered the accident. Nothing indicates he ever saw or read such a policy. When he did report the accident to his own insurance agent, he was not instructed to report the accident to defendant here;¹⁵ and from that time until September 1959 (i. e., institution of the first suit) no one discussed the accident with plaintiff. Moreover, if plaintiff reasonably believed he was not responsible for the accident, then the 117 days delay notice is excusable.¹⁶ Plaintiff’s borrowed car did not come in contact with any of the three cars involved in the accident.¹⁷ The State Police report describes plaintiff as a witness, not a participant to the accident. Apparently the car that passed plaintiff proceeded some distance on Basin Road before it struck the car behind plaintiff and also going east. At least plaintiff did not see or hear the accident occur. It is difficult to conclude plaintiff was unreasonable in believing he was not responsible for the accident. He notified defendant insurance carrier as soon as a claim was made against him. I find, under the particular facts of this case, he gave notice of the accident as soon as was practicable.

2. There is no concern in the instant case with a waiver of a requirement to file a proof of loss either by fire or theft. As an independent ground, plaintiff urges here, however, there was a waiver of notice of the accident. Plaintiff notified defendant of the accident on September 19, 1959. After receiving such notice and a copy of the complaint filed in the state action, defendant then investigated the accident. Statements were taken and witnesses interviewed. But, it was not until January 21, 1960 that defendant disclaimed coverage. On the basis of these facts, a jury could reasonably find defendant waived its right to assert the defense of delayed notice.¹⁸

The paper record is not adequate to reach the issue which may ultimately be reached of whether the delayed notice prejudiced the insurer, or whether plaintiff sustained a position of prejudice in assuming defendant would not disclaim coverage when it investigated the accident and apparently spent a considerable length of time thinking about its liability coverage.

Nothing contained herein is to be considered as a finding of fact nor have any inferences been drawn from anything found in the paper record. Certain statements appearing in the moving papers have been utilized in the light most favorable to plaintiff and against the movant, but only for the purpose of passing on the legal questions raised by the motion for summary judgment.¹⁹ Any utterances about the legal points are related to the disposition of that motion and can hardly be considered as a definitive statement of the law of the case. At trial, plaintiff to sustain his legal position must adduce evidence and meet the required burden of demonstrating the facts upon which the legal rules here announced may be applied.

An order may be submitted denying defendant’s motion for summary judgment and, after pretrial discovery is completed, the case should proceed to jury trial.

12 . The insurance policy covering the vehicle which plaintiff was driving when the accident happened contained the following provisions:—

“7. Notice of Accident—When an accident occurs written notice shall be given by or on behalf of the Insured to the Company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the Insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses.

^ $

“10. Action Against Company—-No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all the terms of this policy, nor until the amount of the Insured’s obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.

* * ❖ -I: i¡:

“Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy. Nothing contained in this policy shall give any person or organization any right to join the Company as a co-defendant in any action against the Insured to determine the Insured’s liability.”

13 . Under the same or somewhat similar circumstances as presented here, it has been held that substantial delays in giving notice to the insurer were excusable. See eases cited in Home Indemnity Company v. Ware, D.C.Del., 183 F.Supp. 367, 369-370, and 285 F.2d 852 et seq.

14 . In affirming the holding of Judge LAY-TON in the Court of Appeals (285 F.2d 852-853), Judge HASTIE wrote:

“We have found no authoritative Delaware ruling * * *. But in the great majority of the cases the courts have construed notice provisions of the type here in suit as requiring no more than that notice be given within a reasonable time in view of all facts and circumstances of the given case [cases cited]. We find no reason to believe that the Delaware courts would hold otherwise.”

15 . Plaintiff’s answers to Interrogatories No. 9(a) and 11; Wiley Aff.; Hughey Aff., ¶ 11.

16 . Vande Leest v. Basten, 241 Wis. 509, 6 N.W.2d 667. See, 18 A.L.R.2d 443, 472.

17 . Plainitff’s Bequest for Admissions, No. 4.

18 . A-l Cleaners & Dyers for Use of Sheldon v. American Mutual Liability Ins. Co., 307 Ill.App. 64, 30 N.E.2d 87; Security Insurance Co. of New Haven v. White, 10 Cir., 236 F.2d 215. See, 16 Appleman, Insurance Law and Practice, §§ 9084, 9088.

19 . Cf. Stern & Co. v. State Loan and Finance Corp., D.C.Del., 205 F.Supp. 702, and Dauphin Corporation v. Sentinel Alarm Corporation et al., D.C.Del., 432 F.Supp. 206, and cases re summary judgment there discussed.