Alexander v. General Ins. Co. of America, 6967-RJ.

• Decision Date: 11 February 1938
• Docket Number: No. 6967-RJ.,6967-RJ.
• Citation: 22 F. Supp. 157
• Parties: ALEXANDER v. GENERAL INS. CO. OF AMERICA.
• Court: U.S. District Court — Southern District of California

22 F. Supp. 157

ALEXANDER v. GENERAL INS. CO. OF AMERICA.

No. 6967-RJ.

District Court, S. D. California, Central Division.

February 11, 1938.

COPYRIGHT MATERIAL OMITTED

Schell & Delamer, Gerald F. H. Delamer, and John S. Bolton, all of Los Angeles, Cal., for plaintiff.

Hindman & Davis, of Los Angeles, Cal., for defendant.

JENNEY, District Judge (after stating the facts and summarizing the arguments as above, renders the following opinion).

In order for the plaintiff to recover, he must show that the terms of the insurance policy in question were subsequently modified, that the breach of condition was waived, or that some conduct on the part of the defendant or its authorized agents so misled the plaintiff to his detriment as to give rise to an estoppel.

The only agent of the defendant with whom plaintiff dealt before the loss was the witness Beere (representing Beere & Purves, Inc.) who had sold plaintiff the policy, and who had, on April 10, 1934, discussed with plaintiff the contemplated removal of the furniture from the designated premises. If any modification of the contract, or waiver, or estoppel is to be predicated on the acts of any agent of the defendant company, it must be based on the conduct of Beere as such agent.

The first question presented, therefore, is as to the scope of authority of the agent Beere. It is well settled in California cases that, to bind the principal by oral modification or waiver of conditions in a policy, containing, as here, the usual clause requiring all changes in terms to be indorsed in writing upon the policy itself, the agent must have the power of a general agent (Hargett v. Gulf Ins. Co., 12 Cal. App.2d 449, 55 P.2d 1258, and cases therein cited), or the authority of a special agent and adjuster (Arnold v. American Ins. Co., 148 Cal. 660, 84 P. 182, 25 L.R.A.,N. S., 6), or be at least a policy-writing representative with powers of a general agent. Mackintosh v. Agricultural Fire Ins. Co., 150 Cal. 440, 89 P. 102, 119 Am.St.Rep. 234.

The evidence shows that Beere signed this policy as issuing agent; that, although he did not investigate or adjust losses, he did solicit, sell, sign as issuing agent, and deliver policies for the defendant, and collected premiums thereon. The "Notice of Company Appointment," filed by the defendant with the insurance commissioner of the state of California, designating Beere & Purves, Inc., as its agent within California, did not in any way define the scope of such agency.

The plaintiff had had numerous previous dealings with Beere regarding insurance, both in the defendant company and in other companies. There was, however, insufficient evidence to establish a custom from those past dealings whereby the agent exercised, or apparently exercised, such powers on behalf of the defendant company as would indicate a general or the requisite special agency. There was no testimony laying a foundation for the doctrine of apparent authority.

On this state of the record, the court finds that sufficient facts have not been established to prove that Beere had power to waive conditions in, or to change the terms of, defendant's policies. The powers which it was proved he did possess are not such as to raise the inference that he had such broad authority.

However, assuming for the moment that an adequate scope of authority has been established, the question still remains whether or not he exercised it. Viewing the matter in that light most favorable to the plaintiff, the evidence shows that at no time during the conversation between the plaintiff and the agent did Beere say that he would change the terms of the policy or comply with plaintiff's request. According to the undisputed evidence, Beere did not say that he would alter the policy to cover the furniture in the new location. Even in plaintiff's own testimony, there is nothing to show that Beere committed himself or the defendant in any way, or that he assented by word or act when he was asked to keep the furniture covered in the new location, or in both the new and the old locations. His silence cannot be construed to be an expression of intention to modify the terms of the policy. No new oral contract can be created without more substantial evidence of assent. Steil v. Sun Ins. Office, 171 Cal. 795, 155 P. 72. Such silence, coupled with the fact that future conversations about this and other insurance were contemplated, could not reasonably be construed to be anything but a reservation of decision on the part of the agent.

Likewise, there must be something more, at least an oral or written expression of agreement, as in Columbia Ins. Co. v. King, 5 Cir., 30 F.2d 887, to constitute a waiver, to say nothing of an estoppel.

The law is well settled that to bind the defendant by an estoppel there must have been conduct on the part of the defendant or its agent which led plaintiff erroneously to believe that a condition in the policy would not be relied upon by the issuing company — all to the plaintiff's detriment.

The facts out of which an estoppel arises must be such that a reasonable man, under the circumstances, would have interpreted the statements or conduct of the defendant or its agent to mean that certain conditions would not be relied upon. Goorberg v. Western Assur. Co., 150 Cal. 510, 89 P. 130, 10 L.R.A.,N.S., 876, 119 Am.St. Rep. 246, 11 Ann.Cas. 801.

Plaintiff's case, then, in so far as estoppel through conduct of an agent is concerned, hinges upon his ability to show that Beere's conduct would have misled a reasonable man, and did so mislead the plaintiff to his detriment. Since Beere was silent at a time when he would reasonably be required to speak, the court holds that no waiver or estoppel can be founded on this agent's conduct.

This conclusion is re-enforced by the authority of the federal cases holding that the insured, under a policy requiring waivers to be indorsed thereon, is put on notice as to the limitations on the agent's authority. Decisions tend to indicate that the courts may ultimately hold that such notice is not conclusive. However, this line of authority bears strongly on the questions of the actual scope of the agent's authority, the reasonableness of plaintiff's reliance, and the manner in which the actual exercise of the agent's authority is to be attested. Sun Ins. Office v. Scott, 284 U.S. 177, 52 S.Ct. 72, 76 L.Ed. 229; Eddy v. National Indemnity Co., 9 Cir., 78 F.2d 545; Northwestern Nat. Ins. Co. v. McFarlane, 9 Cir., 50 F.2d 539; ...