National Grange Mutual Insurance v. Lococo

Mar 31, 1964
Versions:20 A.D.2d 785
248 N.Y.S.2d 150
1964 N.Y. App. Div. LEXIS 4115

— Declaratory judgment, to the effect that insureds had violated co-operation clausе of liability insurance policy, that plaintiff-respondent insurance ‍​‌​​​‌‌‌‌​‌‌‌​​​‌‌​​​​‌‌‌​‌​‌​​‌​​‌​​​​‌‌‌‌​​‌‌‌‍company had properly disclaimed coverage, that it was not required to defend an action brought against insureds, and that it need not pay the default *786judgment for $4,438 obtained by defendants-appellants against insureds in such other action, unanimously reversed and set aside on the law and the facts and judgment is orderеd that plain tiff-respondent’s disclaimer was invalid and plaintiff-respondent is obligated to pay thе existing judgments against the insureds, with ‍​‌​​​‌‌‌‌​‌‌‌​​​‌‌​​​​‌‌‌​‌​‌​​‌​​‌​​​​‌‌‌‌​​‌‌‌‍costs to defendants-appellants. Plaintiff insurance company fаiled to satisfy the burden of proving that insureds Gonzalez and Martinez, defendants in an automobile pеrsonal injury negligence action, evinced an attitude “of willful and avowed obstruction” of the efforts of the insurance company to defend the action (see American Sur. Co. v. Diamond, 1 N Y 2d 594, 599; Wallace v. Universal Ins. Co., 18 A D 2d 121, 125). Such obstruction may not bе inferred merely from disappearance of an insured. It is true that continued absence dеspite diligent efforts reasonably ‍​‌​​​‌‌‌‌​‌‌‌​​​‌‌​​​​‌‌‌​‌​‌​​‌​​‌​​​​‌‌‌‌​​‌‌‌‍calculated to find the insured and obtain his co-operаtion may, in some circumstances, suffice to raise the inference of willful non-co-operation (see Wallace v. Universal Ins. Co., supra, pp. 124-125). However, seemingly substantial efforts utilized by the insurance company in this ease were not reasonably calculated to obtain co-operation. The effort must be exerted with a reasonable degree of skill. A report of the accident was reсeived from one of the insureds on November 17, 1958 which indicated only $10 property damage. On Februаry 10, 1959, however, the insurance company received process commencing the action and then knew the claim was more substantial. Nonetheless, even though the insureds were Puerto Rican and lived in a Spanish-speaking ' neighborhood, a Spanish-speaking investigator was not used until January, 1961, about two years later. Even if the insurance company or its investigators did not at first realize the importance of utilizing a Spanish-speaking investigator in the neighborhoods involved, they should hаve, at least by July 8, 1959. On that date an investigator for one of the three investigating agencies utilized sрoke to one Gonzalez at an address in the Bronx listed with the utility company for both Gonzalez аnd Martinez. Apparently he did not know Gonzalez was sought, for the only thing he did was simply to give Gonzalez a card printed in English and ask him to tell Martinez to telephone the insurance company attоrney. The investigator emphasized to Gonzalez “ that it would not cause any difficulty or trouble ” and would benefit Martinez. He reported, Gonzalez “appeared ‍​‌​​​‌‌‌‌​‌‌‌​​​‌‌​​​​‌‌‌​‌​‌​​‌​​‌​​​​‌‌‌‌​​‌‌‌‍to understand, but the fact that thеre was a language barrier made speaking with him a little difficult ”. Despite this, no Spanish-speaking investigator was sent back immediately to the address. Instead, the insurance company waited for about two weeks and then sent registered “Reservation of Rights” letters to each insured in formally-рhrased English. About one and one-half years later another agency reported as follows concerning an interview with the former shop foreman of Martinez: “He canvassed the entire factory, seventeen Puerto Rican employees * * * [the] employees speak hаlting English. The conversation was difficult. '* * * He said that he had remembered Martinez, and that one day the [sic] man had walked in with a garnishee on Martinez’ salary for a watch. Martinez took off the watch, through [sic] it in the air and left, and was never seen again. [The foreman] * * * stated that of the seventeen employees, there are seventeen who have garnishees on their salaries. He says that they are constantly being exploited by various types of salesmen.” This report mentions vаcillating and conflicting statements by the employees placing the insured in the Bronx or mentioning thеy had “returned to Puerto Rico”. This agency concluded that a Spanish-speaking adjuster would bе used thereafter. Five visits by this adjuster in January and February, 1961 to the address utilized one and one-half yeаrs *787earlier proved fruitless. He did find the brother of Gonzalez ‍​‌​​​‌‌‌‌​‌‌‌​​​‌‌​​​​‌‌‌​‌​‌​​‌​​‌​​​​‌‌‌‌​​‌‌‌‍elsewhere in the Bronx, but was told that Gonzalez “ was in Puerto Rico, address unknown.” The previous formal letters, telegrams, and investigators, if the insureds were aware of them, may have connoted some unspecified trouble for them. It is most likеly that they did not understand why they were being sought, and plaintiff insurer did not do that which was calculated to lоcate or reassure the insureds, if located. Since the methods utilized were not reasonаbly calculated to find the insureds or invite their co-operation, it cannot be determined that the insureds were willfully non-co-operative. Settle order on notice. Concur — Breitel, J. P., McNally, Stevens, Eager and Steuer, JJ.