Seaver v. Massachusetts Bonding & Ins. Co. of Boston

Decision Date04 March 1959
Citation182 N.Y.S.2d 918,7 A.D.2d 310
CourtNew York Supreme Court — Appellate Division
PartiesErnest SEAVER, Plaintiff-Respondent, v. MASSACHUSETTS BONDING & INSURANCE COMPANY OF BOSTON, MASSACHUSETTS, Defendant-Appellant, and Ernest DuPont, Defendant-Respondent.

Frank J. Ryan, Utica (Carl J. Cochi, Utica, of counsel), for appellant.

James P. O'Donnell & Sons, Herkimer (Philip D. O'Donnell, Herkimer, of counsel), for plaintiff-respondent.

Albert L. Lawrence, Herkimer, for defendant-respondent.

Before McCURN, P. J., and WILLIAMS, BASTOW, GOLDMAN, and HALPERN, JJ.

BASTOW, Justice.

The defendant appeals from a judgment granting reformation of an automobile liability insurance policy and awarding monetary relief. In the early hours of April 30, 1955, plaintiff was injured while riding as a passenger in an automobile owned and operated by DuPont, the nonappealing defendant. Plaintiff sued DuPont and following a trial was awarded $3,000 for his personal injuries.

DuPont had been issued a liability policy by defendant, which by a provision therein expired at 12:01 A.M. on April 30, 1955, some two or three hours before the accident. Plaintiff, claiming to be a statutory beneficiary under the policy, brought this action to recover the amount of the unpaid judgment held by him against DuPont. It appearing on the face of the policy that it had expired a few hours prior to the accident, plaintiff sought reformation thereof to the extent of making the period of coverage run from the date of issue of the policy (May 5, 1954) to May 5, 1955, instead of April 30, 1954, to April 30, 1955, as stated in the policy to be the period of coverage.

In view of the decision of the trial court it should be pointed out that the complaint alleges four grounds upon which the plaintiff sought a reformation of the period of coverage. These were that such dates of coverage were inserted (1) in violation of the terms of the agreement made between the insured, DuPont, and the appellant and (2) in violation of the directions given by DuPont to appellant's agent and (3) by mutual mistake on the part of DuPont and appellant or (4) if not by mistake on the part of appellant then the latter with intent to defraud plaintiff and DuPont caused the dates to be inserted in the policy. The trial court made no findings or conclusions upon any of these asserted grounds upon which plaintiff relied. Instead the action was tried and decided as one for a construction of the policy provision as to the period of coverage. Reformation of the policy was granted as incidental relief based upon a finding that a binder was not mailed by the appellant to either DuPont or his agent, one Mahon. Moreover, there is not found in the record any evidence upon which findings could be made to justify reformation upon any of the grounds alleged in the complaint. Inasmuch, however, as reformation has been granted, that determination will be reviewed.

The policy in question was issued under the Assigned Risk Plan. See Insurance Law, § 63. One Mahon, a licensed insurance agent, was the producer of record designated by DuPont. On April 20, 1954, the two acting jointly prepared and executed an application for insurance under the plan. It was mailed by Mahon on the same day together with the required deposit. It appears from the documentary evidence that the application was received by Automobile Assigned Risk Plans in New York on April 21, 1954. Six days later on April 27 the risk was assigned to appellant, which received it the following day--April 28.

For a better understanding of subsequent happenings it will be helpful to refer briefly to certain provisions of the plan. Section 14 thereof provides, among other things, that 'Upon receipt of the notice of designation and the deposit from the Manager (of the Plan), the designated carrier shall, within two working days: (a) Issue a policy or a binder, if all information necessary for the carrier to fix the proper rate is contained in the application form, such policy or binder to become effective 12:01 A.M. on the day following the second working day * * *. The day on which the notice of designation and deposit are received from the Manager shall be deemed the first working day, whatever may be the time of such receipt. * * * The producer of record shall be notified as to the disposition of the assignment in accordance with the foregoing Paragraphs (a)-(c).'

Upon the trial one Groh, a casualty underwriter employed by appellant in its Manhattan office, testified that he personally received the application on April 28, 1954. He placed thereon, as appears on the exhibit, a stamp showing receipt thereof on that day at 10:25 A.M. On the same day he prepared a binder in duplicate. The original was mailed to Mahon, the producer of record, on the same day. The duplicate from the files of appellant was received as an exhibit on the trial. The document shows the name of the insured, DuPont, a description of the automobile insured and other pertinent information including on line 9 that coverage was effective 'from 4/30/54 at 12:01 A.M.' There also appears there on a pencil notation 'mailed 4/28/54.' Groh testified that this was in his handwriting and was placed there when the binder was prepared and the original mailed to the producer of record. On the reverse side of the binder the insuring agreement is printed and in substance provides, among other things, that the company, acknowledges itself bound by the terms of the policy of insurance in current use from the date specified in the binder and the insured accepts the binder under such terms and conditions. There is no dispute that early in May, 1954, the...

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