Barbeau v. Koljanen

• Decision Date: 01 February 1938
• Citation: 12 N.E.2d 839,299 Mass. 329
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: JOSEPH E. BARBEAU v. ELMER KOLJANEN & another.

299 Mass. 329

12 N.E.2d 839

JOSEPH E. BARBEAU v. ELMER KOLJANEN & another.

Supreme Judicial Court of Massachusetts, Hampshire.

February 1, 1938

January 4, 1938.

Present: RUGG, C.

J., DONAHUE, QUA DOLAN, & COX, JJ.

Insurance Disclaimer of liability, Waiver, Motor vehicle liability. Estoppel. Waiver.

An insurer under a noncompulsory motor vehicle liability policy was estopped to disclaim liability when, with knowledge of a breach of a condition of the policy entitling it to disclaim liability and without having obtained a nonwaiver agreement, it persisted in the control and conduct of the trial of an action against the insured until after a verdict against him.

BILL IN EQUITY filed in the Superior Court on August 21, 1935. The case was heard by Dillon, J.

The case was submitted on briefs.

I. R. Shaw & D.

V. Constantine, for The Employers' Liability Assurance Corporation, Limited.

D. H. Keedy &amp J.

T. Storrs, for the plaintiff.

DOLAN, J. This is a suit in equity to reach and apply the obligation of the defendant insurer under a policy of liability insurance. See G. L. (Ter. Ed.) c. 214, Section 3 (10), and c. 175, Section 113. The trial judge filed a statement of findings and rulings and an order for decree in favor of the plaintiff and denied three of the defendant corporation's requests for rulings. The defendant corporation, hereinafter called the corporation, excepted as follows: "Now come the defendants and except to the opinions, rulings, directions of the court." Exceptions taken in such broad terms cannot be sustained, but as the parties have treated the case as if it were properly before us, and the result will be the same, we deal with it on that basis.

The facts found by the judge, as well as other facts which it appears that he could have found, are substantially as follows: The corporation issued to the defendant

Koljanen a combination Massachusetts motor vehicle policy, including within its terms a so called "extra territorial" coverage providing that the corporation would defend Koljanen against claims resulting from accidents occurring elsewhere than on the ways of this Commonwealth. A special condition contained in the policy was that there should not be coverage when the motor vehicle of the assured was being "Used for renting or livery or carrying of passengers for a consideration." On October 14, 1933, and during the term of the policy, the plaintiff was a passenger in Koljanen's automobile which was being operated on a public way in the State of Vermont. An accident ensued, the vehicle overturned and the plaintiff was injured. On October 17 Koljanen gave a written statement to the corporation to the effect that the plaintiff did not hire the automobile and that he (Koljanen) paid for the oil and gasoline on the trip, which had been undertaken to bring home the plaintiff's son who was in a camp at Westburg, Vermont. The plaintiff brought an action of tort in the Superior Court against Koljanen to recover compensation for the injuries. The corporation appeared therein by counsel to represent Koljanen. The declaration in the action alleged ordinary negligence. The corporation submitted interrogatories to the plaintiff, among them the following: "Did you pay to the defendant a consideration for riding in his automobile described in the declaration?" The plaintiff on November 14, 1934, answered "Yes." The law action was tried in March, 1935, and while the trial was in progress the plaintiff offered to settle for $600. The offer, without being communicated to the defendant Koljanen, was rejected by the corporation. The jury found for the plaintiff in the sum of $1,506 damages and $36.05 costs.

Following the verdict, on March 5, 1935, the corporation wrote Koljanen that, as it appeared that at the time of the accident his automobile was being used for hire in violation of the terms of the policy, it would not satisfy the judgment. In the suit before us there was evidence which would require findings that the plaintiff paid for the oil and gasoline and food on the trip and that the plaintiff's wife subsequently gave Koljanen $20 for his "time lost from . . . [his] job and everything." The judge found specifically...