Bituminous Cas. Corp. v. J. B. Forrest & Sons, Inc., 49487

• Decision Date: 25 September 1974
• Docket Number: No. 49487,Nos. 1,3,2,49487,s. 1
• Citation: 209 S.E.2d 6,132 Ga.App. 714
• Parties: BITUMINOUS CASUALTY CORPORATION v. J. B. FORREST & SONS, INC., et al
• Court: Georgia Court of Appeals

Page 6

209 S.E.2d 6

132 Ga.App. 714

BITUMINOUS CASUALTY CORPORATION v. J. B. FORREST & SONS, INC., et al.

No. 49487.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Sept. 25, 1974.

Grogan, Jones & Layfield, Milton Jones, Columbus, for appellant.

L. B. Kent, Columbus, for appellees.

Syllabus Opinion by the Court

EBERHARDT, Presiding Judge.

Bituminous Casualty Corporation issued a policy of liability insurance to J. B. Forrest & Sons, Inc. An alleged employee of Forrest was involved in an accident on February 23, 1973, resulting in injuries to a Mrs. Hazel Smith. An attorney for Mrs. Smith sent a letter to Forrest on June 18, 1973, stating that he represented Mrs. Smith, the date and place of the accident and asking for information concerning the accident. The letter also asked Forrest to turn the matter over to his insurance carrier if he had liability coverage. A day or two later, Forrest communicated with H. D. Groover of Groover-Mitchell Insurance Agency, the agent for Bituminous, discussing the accident for the first time. Groover wrote a letter to Mrs. Smith's attorney, acknowledging his letter, but no further contact was made among the parties until August 21, 1973. On that date Mrs. Smith filed a complaint against Forrest and others and served summons on Forrest. On August 22, 1973, Forrest commenced bankruptcy proceedings and turned Mrs. Smith's complaint over to an attorney who was handling his bankruptcy. This attorney filed a plea for stay on account of bankruptcy on August 28, 1973, and answered the complaint on August 30, 1973.

Neither Bituminous nor its agent Groover was made aware of the lawsuit having been filed against their insured, nor of the defensive pleadings having been filed. On January 11, 1974, the trustee in bankruptcy for Forrest wrote a letter to Groover (received by him on January 12, 1974) notifying him for the first time of the pendency of the lawsuit and attaching copies of the pleadings. The letter and pleadings were forwarded by Groover to a Bituminous claims representative who received them on January 15, 1974, and thus its first notice of the pendency of the suit.

Bituminous filed for declaratory judgment on March 6, 1974 seeking a determination as to its liability to defend under the policy. After hearing testimony and arguments, the trial judge, without a jury, made findings (1) that Bituminous issued a liability insurance policy to Forrest, (2) that Bituminous received notice of the accident, through its agent Groover, and, (3) that Bituminous received summons and suit of Hazel Smith on January 11, 1974.

The trial judge then entered conclusions of law that Bituminous was not entitled to a declaratory judgment and was bound by the insurance policy to defend Forrest and to pay any judgment rendered against Forrest in favor of Smith.

The pertinent portions of the insurance contract issued by Bituminous are:

'4. Insured's Duties in the Event of Occurrence, Claim or Suit: (a) In the event of an occurrence, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable. . . . (b) If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative. (c) The insured shall cooperate with the company . . .

'5. Action Against Company: No action shall lie against the company unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy . . .'

Bituminous contends that the trial court erred in finding that it was required to defend under its insurance contract because of failure of Forrest to comply with paragraphs 4(a), in that he failed to notify the company of the accident; of 4(b), in that he failed to immediately forward the summons to the company; and of 4(c), in that he failed to cooperate with the company. Held:

There are two reasons why we deem a reversal proper.

1. It is to be noted that the accident which precipitated the lawsuit occurred February 23, 1973. No notice, written or oral, of the occurrence was given to the insurer or to its agent until June 19 or 20, 1970-some four months later.

The insured was bound by the contract provisions of the policy to give 'written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances, and the names and addresses of the injured (if any), and of available witnesses,' and this he was required to do 'as soon as practicable.' The purpose of this policy requirement is obvious: to enable the insurer to begin immediately an investigation of the facts and circumstances for determining whether liability might be present and whether a settlement of the claim should be attempted; to get the facts while they were fresh and available in the minds of the parties and such witnesses as might be available; to obtain pictures, diagrams, etc. which might assist in showing how the occurrence happened and the extent of any physical damage done. We all know that these matters have a way of disappearing and simply becoming unavailable with the passage of time, and often witnesses may disappear by moving away, or the status of damaged property may be changed within very short periods of time.

While the attorney's letter of June 18, 1973 may have included sufficient data to serve as a notice of the occurrence, it is inescapable that the delay from date of the occurrence on February 23 to the time the letter was delivered to the insurer's agent, about June 20, cannot be held, as a matter of law, to be reasonable promptness in the giving of notice. This is particularly true in view of the fact that during that period the insured did absolutely nothing and made absolutely no effort to give the notice. Nor has he attempted to show anything that prevented his acting promptly.

Even if a factual issue were raised as to whether the notice met the test of 'as soon as practicable' (see Norfolk etc. Inc. Co. v. Cumbaa, 128 Ga.App. 196, 196 S.E.2d 167; Edwards v. Fidelity & Cas. Co. of N.Y., 126 Ga.App. 306, 199 S.E.2d 570), the trial court has made no findings of fact on that issue, and these, if made, should include facts which are sufficient to excuse the insured from sooner acting in giving notice. That could not include his conclusion that he was fee of fault and that there was no liability to the other party. That is the very issue which the company must have reasonable opportunity to investigate with promptness, and which requires a promot notice of the occurrence. If the insured elects to rest on his own conclusion of non-liability and do nothing about the giving of notice, he violates his contractual obligation and waives his right to have the insurer defend against a claim that may be made at some later time.

Nothing in this record indicates that the company has waived its right to have the notice of the occurrence from its insured. It is made a condition precedent to the arising of any liability on the part of the insurer, and that is a substantial right of defense which the insurer is entitled to raise and have adjudicated under the facts in a declaratory judgment action. See and compare: Bailey v. First National Fire Ins. Co., 18 Ga.App. 213(1a), 89 S.E. 80; Metropolitan Life Ins. Co. v. Fields, 53 Ga.App. 76(1), 184 S.E. 752; Employees Assurance Society v. Bush, 105 Ga.App. 190, 123 S.E.2d 908; Continental Ins. Co. v. Anderson, 107 Ga. 541(2), 33 S.E. 887; Stubbs v. State Farm Mutual Auto. Ins. Co., 120 Ga.App. 750(1), 172 S.E.2d 441; Corbin v. Gulf Ins. Co., 125 Ga.App. 281, 284, 187 S.E.2d 312.

Whether the notice, when finally given, was sufficient to meet the policy requirements is a matter for the court, and there is no finding on that matter. Public National Ins. Co. v. Wheat, 100 Ga.App. 695(9), 112 S.E.2d 194.

Without a finding, supported by facts, that the insured did give notice of the occurrence, as required by the policy provisions in Paragraph 4(a), or that it was waived, the conclusion that Bituminous is bound is without foundation and is error.

2. We find error in that the trial court failed to make sufficient findings as to compliance with Paragraph 4(b) of the policy upon which to base a conclusion that the insurer is bound. The trial judge found that Bituminous received the summons on January 11, 1974, but he did not find that such receipt was timely under the policy provisions, nor did he find the existence of justifying facts for excusing the delay in forwarding the suit papers to the insurer. Without so finding, the conclusion that Bituminous is bound is without foundation.

Paragraph 4(b) of the insurance policy requires that the insured '. . . immediately forward to the company every . . . summons.' 'Immediately' has been construed in many cases to mean with reasonable diligence and within a reasonable length of time in view of attending circumstances of each particular case. See, Stonewall Ins. Co. v. Farone, 129 Ga.App. 471, 199 S.E.2d 852; M.F.A. Mutual Ins. Co v. Mullin (D.C.Ark.) 156 F.Supp. 445; Northwestern Mutual Ins. Co. v. Independence Mut. Ins. Co. (Mo.App.) 319 S.W.2d 898. See also cases compiled in Annot., 18 A.L.R.2d 443, § 14 (1951) (Supp. Later Case Service, 1973). Cf. Buchanan v. Huson, 39 Ga.App. 734, 736, 148 S.E. 345. In determining what is reasonable diligence and reasonable time the courts will examine the...