Rock Transport Properties Corporation v. The Hartford Fire Insurance CompanyRock Transport Properties Corporation v. The Hartford Fire Insurance Company
Daniel A. Sullivan, New York City (Bigham Englar Jones & Houston, and Alexander Peltz, New York City on the brief), for aрpellant.
Before CLARK, Associate Justice,* and LUMBARD, Chief Judge, and KAUFMAN, Circuit Judge.
CLARK, Justice, Retired:
This appeal tests the validity of a judgment entered against Hartford Fire Insurance Company on two insurance policies issued by it on April 1, 1965, for a one-year period. The judgment awarded damages and interests covering the “constructive total loss” of eleven scows and the partial loss of a twelfth one owned by the Rock Transport Properties Corporation and chartered by the New York Trap Rock Corporation, thе insured.
New York Trap Rock Corporation was the bareboat charterer and operator of the scows in moving rip rap1 from its quarry on the Hudson River to Port Jefferson on the north shore of Long Island. The damage was done to the scows as the rip rap was removed from them by cranes at Port Jefferson. The cranes were equipped with digger buckets weighing from 4 to 8 tons each which would pick up the rip rap from the scows and transfer it to trucks. In this operation the buckets would sometimes be dropped on the decks of the scows and would often hit the scows\’ cargo boxes. At times rip rap weighing from 8 to 14 tons would inadvertently fall from the buckets onto the decks. The resulting damage was not occasioned by a single such accident ocсurring at a specific time but was rather an accumulation of accidents the consequences of which could not be foreseen. However, the insured had, beginning on May 26, 1965, reported a number of the accidents to Johnson and Higgins, the broker designated by both parties to maintain records of lossеs, damages and expenses, who in turn had reported them to Hartford. By January 1966 the number of notices of serious damage numbered some sixteen. Surveys of the damage were begun in January2 and completed prior to April 1, 1966, at all of which both the insured and Hartford were represented. Hartford initially disclaimed liability on the ground that the damage was attributable to ordinary wear and tear. However in its amended answer filed May 8, 1968, it also interposed the defensе of untimeliness of notice. At trial the jury found against Hartford on the insurance coverage. It also found that the cost of necessary repairs to restore the scows to sound condition exceeded their insured value, that their salvage value was $247,500 and that the loss to the partially damaged scоw was $9278.00. The court then proceeded to answer the three relevant legal questions agreed upon by the parties: (1) Did the insured forfeit the right to recovery on the policies by failing to give timely notice of the accidents? (2) Did the insured forfeit the right to claim a constructive total loss by failing to abаndon or at least tender abandonment of the scows? And (3) What rate of return was applicable to the pre-verdict, pre-judgment and post-judgment intеrest? The distinguished trial judge answered the first two questions in the negative and allowed interest at the same rate allowed by New York law upon a loan or fоrbearance of any money, goods or things in action.
In addition we wish to point out that the insured in a series of notices advised Hartford of specific accidents beginning as early as May 24, 1965. Meetings were held in June and July, 1965, with the brokers at which the recurring accident claims were discussed. While Hartford had no one present from its offiсes the brokers were the joint representatives for claim purposes. While Hartford took no action on any of these meetings or noticеs on the ground that none of them individually exceeded $5000.00 in damage, it is admitted that 212 claim letters were filed with it by the insured. These indicate themselves that the losses were heavy and serious. Indeed Hartford conducted surveys on every scow on which damage was reported. At the request of the insured Hartford met with it on January 26, 1966, to discuss the claims. Hartford disclaimed liability after this meeting on the ground of no coverage despite the fact that its right to attend the surveys depended entirely on the continued coverage of the policies and notice of claims thereunder. At no time was there any question raised аs to the timeliness of the notices of loss until the amended answer was filed in May, 1968. In a long line of decisions such a course of action raises questions of estoppel and waiver. See Brink v. Hanover Fire Ins. Co., 80 N.Y. 108, 113 (1880); Dobson v. Hartford Fire Ins. Co., 86 App.Div. 115, 83 N.Y.S. 456 (4th Dept. 1903), aff\‘d, 179 N.Y. 557 (1904); American Merchant Marine Ins. Co. v. Margaret M. Ford Corp., 269 F. 768 (2 Cir. 1920), and Della-Posta v. New Yоrk Casualty Co., 276 App.Div. 770, 771, 92 N.Y.S.2d 523 (2d Dept. 1949). Also see Couch on Insurance 2d, § 26: 305. Having accepted, with the insured\‘s cooperation, the surveys and other benefits of the notice provision of the policies, Hartford is estopped to deny the insured\‘s compliance with that provision.
Likewise, Hartford specifically disclaimed liability under the policies on the sole ground that the damage to the scows resulted from inevitable wear and tear consequent upon the carriage of rip rap. By electing to so disclaim on the merits Hartford waived the notice requirement of the policy. See John Alt Furniture Cо. v. Maryland Casualty Co., 88 F.2d 36, 39 (8 Cir. 1937); Hartford Fire Ins. Co. v. Daniels, 201 F.2d 787, 789 (9 Cir. 1953); Nationwide Life Ins. Co. v. Shands, 355 F.2d 103 (5 Cir. 1966); Appell v. Liberty Mutual Ins. Co., 22 A.D.2d 906, 255 N.Y.S.2d 545 (2d Dept. 1964), aff\‘d, 17 N.Y.2d 519, 267 N.Y.S.2d 516 (1966).
We have nothing to add to the discussion of the other points in the District Court\‘s opinion and the judgment is affirmed.