159 N.Y.S. 401 | N.Y. App. Div. | 1916
Lead Opinion
The complaint contains two causes of action. In the first it is alleged that the defendant issued to the plaintiff a policy of automobile insurance indemnifying him to the extent of $5,000 against loss by reason of an accident resulting in injuries or death to any one person. The policy provided, among other things, that if an accident occurred, and action was brought against the assured to enforce a claim on account thereof, he would forward to the defendant the summons or other process served, and it would at its own cost and expense, and subject to the limitations contained in clause “K” of the policy, defend or, at its option, settle such action in the name and on behalf of the assured; that clause “K” provided: * * the Assured shall not voluntarily assume any liability, nor shall the Assured without the written consent of the Company previously given, incur any expense, or settle any claim, except at his own cost, or interfere in any negotiation for settlement, or in any legal proceeding; ” that during the life of the policy an accident occurred which resulted in the death of one Cimino; that his administratrix subsequently brought an action to recover the damages alleged to have been sustained by reason thereof; that the assured duly notified the defendant of the commencement of such action and delivered to it the summons and complaint; that it, thereupon, undertook to defend the action for the plaintiff under the terms and conditions of the policy; that after issue was joined, at the request of the defendant, the assured procured the services of - an attorney to be associated with the attorney of the insurance
In the second cause of action substantially the same facts are set forth, and in addition thereto it is alleged that after the entry of the judgment referred to the insurance company advised this plaintiff that reversible errors of law had been committed upon the trial of the action; that the verdict was against the evidence, and it would, therefore, appeal from said judgment on behalf of the plaintiff; and from time to time thereafter assured the plaintiff that such appeal had been taken in his behalf; that there were reversible errors of law and the verdict was against the evidence; that relying upon these statements the plaintiff took no further steps with reference to an appeal; that after the time to appeal had expired the plaintiff ascertained that the insurance company, without his knowledge or consent; had neglected to take an appeal; that thereafter, to prevent the issuance of an execution upon the judgment, the assured paid $7,826.58—having previously demanded that the insurance company pay the whole judgment, which it refused to do; that by reason of the insurance company’s having failed to take and prosecute the appeal plaintiff was damaged to the extent of the amount paid, viz., $7,826.58, for which judgment was demanded, with interest.
The insurance company demurred to each cause of action on the ground that facts were not stated sufficient to constitute a cause of action. After the demurrer was interposed both parties moved for judgment on the pleadings. The plaintiff’s motion was granted, the insurance company’s denied, and it appeals.
I am of the opinion that the facts alleged in the second cause of action, which were admitted by the demurrer, clearly state a liability on the part of the defendant. After the recovery of the judgment the insurance company notified this plaintiff that reversible errors had been committed; that the verdict was against the evidence, and it would appeal from the judgment; it subsequently stated to him that it had appealed, and by reason of that fact he permitted the time within which an appeal might have been taken by himself to expire. This, cou
The facts here pleaded bring the case within the rule laid down in Rosenbloom v. Maryland Casualty Co. (153 App. Div. 23); Brassil v. Maryland Casualty Co. (147 id. 815; affd., 210 N. Y. 235), and Attleboro Manufacturing Co. v. Frankfort Marine Accident & Plate Glass Ins. Co. (171 Fed. Rep. 495). The insurer, having elected and undertaken to defend the action brought against the assured, had no right when it saw fit to do so to abandon the defense" It was obligated to take into consideration the interest which the insurer had, and especially so after judgment had been rendered which subjected him to a large liability. Having told him it would appeal from the judgment, there was an obligation resting upon it to do so or else to have notified him before the time to appeal had expired that it would not take such appeal. It would be unreasonable to hold that the assured could be lulled into security by the assurance that an appeal would be taken, and thereby be deprived of the right to himself appeal, without liability attaching.
As to the first cause of action, I am of the opinion that it does not state facts sufficient to predicate liability. The most that can be said of the facts stated is that the insurance company would not permit this plaintiff to settle the action brought against him, or permit him to compromise any liability to which he might be subjected in that action, over and above the amount stipulated in the policy. This is precisely what he agreed in the policy issued to him he would not do. The policy is the contract between the parties. "It definitely fixes their rights and obligations. The plaintiff expressly agreed that he would not, without the written consent of the insurance company, settle any claim or interfere in any legal proceeding. The fact that the proposed payment or settlement by him would not have increased the insurance company’s liability is beside the question. It would have been a violation of his agreement and it was for the insurance company to say whether or not it "would permit him to do as he wished. Having deliberately entered into the contract, he had to abide by its terms.
Dowling, J., concurred. •
Concurrence Opinion
I concur in the result arrived at by Mr. Justice McLaughlin, but as to the first cause of action, I place my concurrence upon the fact that plaintiff did not pay the $3,750 which the injured person offered to accept. I do not understand that clause “K” of the contract would have stood in the way of such a payment. It does not absolutely forbid the insured to incur expenses or settle a claim without the written consent of the company, but merely provides that he may not so incur or settle “ except at Ms own cost.” In other words, if he did incur expense or pay a sum in partial settlement without the consent of the company, he could not recover the amount from the insurer. But if such payment would not increase the company’s liability, or enhance its difficulties in defending the action, it would not amount to a breach of the contract.
Clarke, P. J., and Laughlin, J., concurred.
Order, so far as it grants plaintiff’s judgment on first cause of action, reversed, and defendant’s motion for judgment granted, with leave to plaintiff to serve amended complaint; so far as it grants plaintiff judgment on second cause of action affirmed, with leave to defendant to withdraw demurrer and to answer. Order to be settled on notice. ■