Arton v. Liberty Mut. Ins. Co.

• Decision Date: 11 May 1972
• Court: Connecticut Supreme Court
• Parties: Wilfred L. ARTON et al. v. LIBERTY MUTUAL INSURANCE COMPANY.

Page 284

302 A.2d 284

163 Conn. 127

Wilfred L. ARTON et al. v. LIBERTY MUTUAL INSURANCE COMPANY.

Supreme Court of Connecticut.

May 11, 1972.

Charles S. Tarpinian, Willimantic, with whom were Gerald F. Olmsted and, on the brief, Henry Kucharski, Willimantic, for appellant (named plaintiff).

William W. Sprague, Hartford, with whom was Robert D. McGann, Hartford, for appellee (defendant).

Before HOUSE, C.J., and RYAN, SHAPIRO, LOISELLE and MacDONALD, JJ.

SHAPIRO, Associate Justice.

The plaintiff Wilfred L. Arton has appealed from a judgment rendered against him in an action submitted to the trial court on a stipulated statement of facts. These facts, combined with unattacked conclusions of the trial court, disclose that effective November 2, 1965, a policy of insurance had been issued in Connecticut by the defendant which, subject to its terms, conditions, limitations and exclusions, insured Brenda St. Pierre against liability for loss or damage on account of the bodily injury or property damage of any person for which she might be legally obligated. ¹ This policy was in full force and effect when, on or about December 11, 1965, St. Pierre and the named plaintiff, operators of automobiles, were involved in an accident which resulted in personal injuries and property damage to the named plaintiff.

St. Pierre did not notify the defendant in writing of the time, place and circumstances of the accident, the names and addresses of the injured and available witnesses. She disappeared.

The defendant first received a letter concerning the accident in question on or about June 1, 1966, from Richard Calkins, adjuster for the Nationwide General Insurance Company, subrogee to the property damage claim of the plaintiff Arton. The receipt of this letter was the first actual knowledge which Liberty Mutual had that the accident had occurred. The defendant made efforts to locate St. Pierre without success. When a representative of the defendant attempted to locate St. Pierre at her former place of employment, i.e., St. Francis Hospital in Hartford, Connecticut, the defendant was informed that she had left her employment and was leaving the country. On August 3, 1966, Robert Lyonnais, an employee of the defendant, checked with the motor vehicle department of the state of Connecticut and was informed that St. Pierre's license had expired in January, 1966, and was not renewed. There were no cars registered in her name for that year. Under the mailing dates indicated below the defendant sent letters addressed to St. Pierre at the addresses indicated and the letters were returned marked 'moved left no address' or other notification indicating that the letters were not delivered: June 16, 1966-Walnut Trail, Coventry, Conn.; August 4, 1966 (certified mail return receipt requested)-963 Capitol Avenue, Hartford, Conn.; August 4, 1966 (certified mail return receipt requested)-Walnut Trail, Coventry, Conn.; August 9, 1966-768 Huntington Avenue, Boston, Massachusetts; August 9, 1966-78 Garden Street, Hartford, Conn.; October 20, 1966 (registered mail)-78 Garden Street, Hartford, Conn.; October 20, 1966 (registered mail)-963 Capitol Avenue, Hartford, Conn.; October 20, 1966 (registered mail)-Walnut Trail, Coventry, Conn.; October 20, 1966 (registered mail)-St. Francis Hospital, Hartford, Conn.; and October 20, 1966 (registered mail)-768 Huntington Avenue, Boston, Massachusetts. The address of St. Pierre shown in the policy was 963 Capitol Avenue, Hartford, Connecticut, and she never notified the company of any change of address.

On October 18 and 19, 1966, the defendant sent out letters to St. Pierre and to the plaintiff's attorney stating that the defendant was denying indemnity and that it would refuse to defend any action brought under the terms of the policy due to a breach by St. Pierre of the notice and cooperation clauses of the policy. This was the first notice to the plaintiff of the defendant's intent to disclaim such coverage.

In action instituted against St. Pierre by Arton by writ dated November 18, 1966, the plaintiff Arton, on or about September 15, 1967, recovered a default judgment against St. Pierre in the amount of $20,000 and his costs. Although the attorney for the plaintiff Arton mailed to the defendant a copy of the writ, summons and complaint on or about November 30, 1966, the defendant did not cause an appearance to be entered for St. Pierre and did not defend the actions brought by the plaintiff against St. Pierre. The judgment has not been paid although more than thirty days have elapsed since the entry of said judgment. The plaintiff is subrogated under § 38-175 of the General Statutes to all rights that St. Pierre has against the defendant Liberty Mutual Insurance Company. ²

Consistent with these facts, the trial court concluded that under the conditions of the policy, St. Pierre had a duty when the accident occurred to give written notice to the defendant or any of its authorized agents as soon as could reasonably be expected under the circumstances, and to render to the defendant cooperation and assistance; that St. Pierre failed to comply with the condition of the policy requiring her to give written notice of the accident; that St. Pierre substantially and materially failed to comply with the condition that required her to assist and to cooperate with the defendant; that the defendant made diligent search for St. Pierre, but that her conduct made it impossible for the defendant to get in touch with her in the face of an impending trial; that the defendant is not barred by either waive or estoppel from asserting these material and substantial breaches of the policy's notice and cooperation conditions as grounds for absolving it from liability; that defendant's duty to defend was dependent on St. Pierre's compliance with the notice and cooperation clauses of the policy; that St. Pierre lost any right she may have had to enforce a claim against the defendant based on a judgment against her arising out of the accident because of her failure to give notice and because of her disappearance and failure to assist and cooperate with the defendant; and that thus the plaintiff is not entitled to recover of the defendant on any of the causes of action set forth in the complaint.

The plaintiff's assignment of error which requires discussion is directed to the overruling of his claims of law related to both the notice and cooperation clauses. The obligation of the assured to give information of the accident to the defendant in her written notice under Condition Number 1 is an independent requirement, separate from the duty to cooperate with and assist the insurer under Condition Number 12. See note, 98 A.L.R. 1465, 1427. 'The purpose of the requirement that the assured in his notice give the insurer information as to the accident is to afford the latter a reasonable opportunity for an investigation of the facts rather than to give it full information upon the basis of which it might proceed to a disposition of the case.' Rochon v. Preferred Accident Ins. Co., 118 Conn. 190, 197, 171 A. 429, 432. The cooperation clause, as is evident from the terms of the paragraph as a whole and from the context of the sentence referring to cooperation, applies to conduct of the assured in connection with proceedings subsequent to the notice, looking to a final determination of the insurer's liability.

We shall confine our discussion to those claimed errors surrounding the violation of the cooperation clause, for the view that we take of those claims is dispositive of this appeal.

The trial court overruled the plaintiff's claim of law that the breach of the cooperation clause was not a material and not a substantial breach of that condition. While in the absence of estoppel, waiver or other excuse occperation by the assured in accordance with the provision of the policy is a condition the breach of which puts an end to the insurer's obligation (Curran v. Connecticut Indemnity Co., 127 Conn. 692, 695, 20 A.2d 87; Guerin v. Indemnity Ins. Co., 107 Conn. 649, 654, 142 A. 268; Metropolitan Casualty Ins. Co. v. Colthurst, 36 F.2d 559, 561 (9th Cir.); United States Fidelity & Guaranty Co. v. Wyer, 60 F.2d 856, 858 (10th Cir.); Bruggemen v. Maryland Casualty Co., 73 F.2d 587, 588 (3d Cir.); Coleman v. New Amsterdam Casualty Co., 247 N.Y. 271, 276, 160 N.E. 367; Marley v. Bankers' Indemnity Ins. Co., 53 R.I. 289, 292, 166 A. 350), the condition of cooperation with an insurer is not broken by a failure of the insured in an immaterial or unsubstantial matter. Rochon v. Preferred Accident Ins. Co., supra, 118 Conn. 198, 171 A. 429; notes, 72 A.L.R. 1446, 1455; 98 A.L.R. 1465, 1469. 'In determining whether a condition to co-operate has been broken, we are dealing with contract rights, and if there has been a breach, prejudice need not appear. Coleman v. New Amsterdam Casualty Co., . . . (247 N.Y. 271, 276, 160 N.E. 367). The reason why immaterial and unsubstantial failures of an assured do not constitute a breach is because they are not included within the fair interdment of the requirement that the assured co-operate, and lack of prejudice to the insurer from such failure is a test which usually determines that a failure is of that nature.' Curran v. Connecticut Indemnity Co., supra, 127 Conn. 696, 20 A.2d 89.

The purpose of the cooperation provision is 'to protect the interests of the insurer.' Rochon v. Preferred Accident Ins. Co., supra. If insurers could not contract for fair treatment and helpful cooperation from the insured, they would at the very least, be severely handicapped in determining how and whether to contest the claim, and might, in addition, be particularly susceptible to possible collusion between the participants in the accident. Rochon v. Preferred Accident Ins. Co., 114 Conn. 313, 316, 158 A. 815; notes, 139 A.L.R. 771, 773; 98 A.L.R. 1465, 1467. This is particularly true where the insured is the only...