Allstate Ins. Co. v. Morrison

• Decision Date: 08 April 1970
• Docket Number: No. 2,No. 968A154,968A154,2
• Citation: 146 Ind.App. 497,256 N.E.2d 918
• Parties: ALLSTATE INSURANCE COMPANY, Appellant, v. Robert J. MORRISON, Audrey L. Bailey, Appellees
• Court: Indiana Appellate Court

Page 918

256 N.E.2d 918

146 Ind.App. 497

ALLSTATE INSURANCE COMPANY, Appellant, v. Robert J. MORRISON, Audrey L. Bailey, Appellees.

No. 968A154.

Appellate Court of Indiana, Division No. 2.

April 8, 1970.

Rehearing Denied May 6, 1970.

Donald L. Tunnell, Yarling, Winter, Tunnell & Lamb, Indianapolis, for appellant.

Marshall E. Williams, Indianapolis, for appellee, Robert J. Morrison, Dulberger, Heeter, Johnson & Salb, Indianapolis, for appellee, Audrey L. Bailey.

SHARP, Judge.

On September 6, 1967, Appellee Robert J. Morrison filed a complaint charging negligence for personal injury and property damage designating Audrey L. Bailey as defendant, which complaint purported to result from an automobile collision between said Robert J. Morrison and Audrey L. Bailey on April 1, 1967. Answer in denial was filed by Audrey L. Bailey and the case was tried by the court without the intervention of a jury, which trial resulted in a judgment for Robert J. Morrison in the sum of $25,000.00 and which judgment was entered on November 28, 1967. On February 6, 1968 Appellee Robert J. Morrison filed a petition in garnishment in which Appellant Allstate Insurance Company was designated as garnishee defendant, which petition in garnishment alleged as follows:

'1. That on the 28th day of November, 1965, this plaintiff recovered in this Court a judgment against the judgment defendant in the sum of Twenty Five Thousand Dollars ($25,000) and costs.

2. That thereafter this plaintiff caused an execution to issue thereon to the Sheriff of Marion County, Indiana, same being the County wherein the judgment defendant then resided and does still reside; that said execution has been rendered unsatisfied, and that said judgment is still due and unpaid.

3. That said garnishee defendant issued a policy of insurance which the plaintiff contends covered the judgment defendant for the accident out of which and from which plaintiff obtained his judgment for Twenty Five Thousand Dollars ($25,000); that the garnishee defendant refuses to honor said policy or pay the judgment to plaintiff contending that there was no coverage for the accident involved; that from the information and facts in plaintiff's possession garnishee defendant did have coverage for the accident in question and is obligated to pay plaintiff's judgment.'

On February 6, 1968 the trial court entered the following order to appear and answer interrogatories:

'Comes now the plaintiff in the above entitled action, who having filed a duly verified petition in garnishment, praying the Court for an order requiring the judgment defendant to appear in person and answer as to any property, assets, profits or income which she might have subject to execution and interrogatories directed to the garnishee defendant, having been filed in said action, and the Court having been requested to order said garnishee defendant to answer said interrogatories under oath concerning any assets, income or profits due or to become due to the judgment defendant or obligation due judgment defendant from the garnishee defendant, which said petition is in words and figures as follows to-wit:

(H.I.)

And the Court, being duly advised in the premises, now orders the defendant Audrey L. Bailey to be and to appear in this Court in person at 9:00 o'clock a.m., on the 11 day of April, 1968, to answer as to any property, assets, income or profits which she might have subject to execution; and it is further ordered that the Sheriff of Marion County, Indiana, serve this order and make due return thereof.

It is further ordered by the Court that the garnishee defendant Allstate Insurance Company shall answer under oath the interrogatories concerning the assets, income or profits due or to become due to the judgment defendant or obligation due judgment defendant from the garnishee defendant, which said interrogatories are attached hereto and made a part of this order, and which said interrogatories shall be returned to this Court by registered mail or in person before the hearing date on said petition as hereinabove set forth.'

Personal service of said order and interrogatories was made on Appellant Allstate Insurance Company. For the binding effect of such personal service on the garnishee defendant Allstate see Ettinger v. Robbins, 223 Ind. 168, 59 N.E.2d 118 (1944). Appellant Allstate Insurance Company filed its answers to interrogatories in said cause on April 11, 1968. On April 23, 1968 the trial court entered the following judgment:

'Comes now the plaintiff by counsel and the judgment defendant in person and by counsel and the garnishee defendant by answer to interrogatories under oath and the plaintiff having filed his petition in garnishment and the Court having issued an order thereon, which petition and order are in the words and figures as follows; to-wit:

(H.I.)

And the matter being set down for hearing, as set out in the order on April 11, 1968, and after hearing testimony from the judgment defendant and her spouse James C. Bailey, and after having examined the answer to interrogatories filed with the Court by the garnishee defendant through its agent, Richard Yarling, who was also present during said proceedings although he did not enter an appearance, and after hearing argument of counsel and being duly advised in the premises, the Court finds that plaintiff's petition in garnishment should be granted; that the insurance policy issued by the garnishee defendant to James C. Bailey covering the accident in which the plaintiff recovered judgment against Audrey L. Bailey, wife of James C. Bailey, was in full force and effect at the time of the accident.

IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED by this Court that the plaintiff recover of and from the garnishee defendant, Allstate Insurance Company, the sum of Twenty Five Thousand Dollars ($25,000) plus interest at the rate of six per cent (6%) from November 28, 1967, and costs of this action.'

At the beginning of the hearing held in this cause on April 11, 1968, the following colloquy occurred:

'MR. DULBERGER: Your Honor, I would like the record to show that Mr. Yarling is present, and is counsel for Allstate.

MR. YARLING: If you please, Your Honor, I am not appearing as counsel. I have not filed an appearance in the case.

THE COURT: Let the record show Mr. Yarling is not appearing as counsel for Allstate.'

On May 10, 1968, the Appellant Allstate Insurance Company as garnishee defendant filed its motion for a new trial which stated:

'1. The decision of the Court in issuing a final order in garnishment under date of April 23, 1968 against this garnishee defendant is not sustained by sufficient evidence.

2. The decision of the Court in issuing a final order in garnishment under date of April 23, 1968 against this garnishee defendant is contrary to law.'

Said motion for new trial was overruled by the trial court on June 28, 1968 and such ruling is the sole assignment of error here.

The Appellant Allstate Insurance Company answered interrogatories under oath. Such answers were introduced into evidence at the garnishment hearing. In general these answers show that Allstate issued an automobile liability insurance policy to the husband of the Appellee Audrey L. Bailey, James C. Bailey, which provided for liability coverage for the operation of a certain 1966 Chevrolet Sedan automobile when operated by either James C. Bailey or Audrey L. Bailey. The policy provided for the payment of premiums in installments. The initial premium of $35.00 was paid on October 26, 1966 and the second installment of $39.00 was paid in December 1966, the third premium installment of $54.50 was due January 27, 1967 and was receipted by Allstate on April 1, 1967 at 1:00 o'clock P.M. Allstate claims that said policy was cancelled by the mailing of notice of cancellation by first class United States mail, postage prepaid, on February 22, 1967, addressed to James C. Bailey and his loss-payee. Allstate was notified of the Morrison-Bailey accident and made an investigation. Allstate was advised of the filing of the Morrison v. Bailey lawsuit by letter on September 11, 1967, which included a copy of the complaint, but elected not to defend the case. Allstate was also advised of the judgment entered on November 28, 1967, but refused to pay the same, contending that the policy in question was not in effect on April 1, 1967, at the time of the collision because it had been cancelled for non-payment of premium. The accident in question occurred at 9:13 o'clock A.M. on April 1, 1967 and Allstate asserts it did not receive the premium which reinstated the policy until 1:00 o'clock P.M. on April 1, 1967. Allstate attached to its answers to interrogatories a computer printout sheet showing a list of names and addresses, including the name and address of James C. Bailey together with the policy number and the notation '10--27'.

The cancellation clause of the policy in question is as follows:

'Allstate may cancel this policy by mailing, to the insured named on the Supplement Page at his address shown in this policy, written notice stating when not less than ten days thereafter such cancellation shall be effective. The mailing of notice shall be sufficient proof of notice and the effective date and hour of cancellation stated in the notice shall become the end of the policy period.'

Appellee Bailey's husband testified that he never received any notice of cancellation from Allstate concerning this policy in question before April 1, 1967. (It is also undisputed that on April 19, 1967, the casualty supervisor for Allstate mailed a disclaimer letter to Appellee Bailey and there is no dispute that such was received by Appellee Bailey. However, the mailing and receipt of the April 19, 1967 disclaimer letter is not in any way an issue in this case.)

The only contention made in Appellant Allstate's motion for a new trial is that the final order in garnishment is not sustained by sufficient...