Boyer v. American Casualty Company
| Decision Date | 22 May 1964 |
| Docket Number | Docket 28618.,No. 423,423 |
| Citation | 332 F.2d 708 |
| Parties | Bertha Carpenter BOYER, Plaintiff-Appellee, v. AMERICAN CASUALTY COMPANY, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Second Circuit |
Latham & Eastman, Burlington, Vt., for plaintiff-appellee.
A. Pearley Feen, Burlington, Vt., for defendant-appellant.
Before LUMBARD, Chief Judge, MOORE and SMITH, Circuit Judges.
This is an appeal from a declaratory judgment entered in the United States District Court for the District of Vermont, Ernest W. Gibson, District Judge, decreeing that an insurance policy issued by the defendant carrier covered the plaintiff for any liability arising from a falling ladder accident. The defendant had issued two insurance policies, a comprehensive automobile liability and a contractor's general liability, to the plaintiff, the owner of a trucking business. On July 2, 1960 the plaintiff's employees were moving some equipment from plaintiff's truck to the top floor of a building when, in a room to which the equipment was being delivered, a ladder, allegedly about ten feet from the plaintiff's nearest employee, fell, injuring one Jack Larry. Larry's lawyer promptly sent plaintiff a letter, informing her of the accident, and requesting that she turn the letter over to her insurer. Though she received several other notices from attorneys that the injured Larry was making a claim against her, she failed to notify the defendant until suit was actually filed, more than two years after the accident.
The policies required the insured to give written notice to the insurer of any accident "as soon as practicable."1 The insurer, when finally notified of the old claim and the pending suit, assumed that it was being asked to defend on the contractor's liability policy, and it informed the plaintiff by letter of July 17, 1962 that it was proceeding to investigate, reserving its rights not to defend on the contractor's policy because of the long delay in notification. On July 19, 1962 the defendant secured from the plaintiff a non waiver agreement on "a policy of insurance" issued to the plaintiff by the defendant,2 whereupon the defendant entered an appearance.
Judge Gibson found that the non waiver agreement applied only to the contractor's liability policy and not to the automobile liability policy. This finding was predicated on the singular reference in the non waiver agreement and the fact that the letter of July 17 referred only to the contractor's liability policy. He then proceeded to interpret the terms of the automobile liability policy to cover the falling ladder claim in the complaint. Finally, Judge Gibson concluded that the insurer had waived its rights to prompt notice by entering an appearance and continuing to investigate the accident. Assuming that this is a diversity action and that the court properly has jurisdiction, as alleged in the complaint, the governing law is Vermont's.
Under Vermont law, "the duty of the insurance carrier to defend a claim is measured by the allegations upon which the claim is stated." Commercial Insurance Co. of New Jersey v. Papandrea, 121 Vt. 386, 159 A.2d 333, 335 (1960); American Fidelity Co. v. Deerfield Valley Grain Co., 43 F.Supp. 841, 844 (D.C.Vt.1942). However, whether loading and unloading in a motor vehicle liability policy extends under Vermont law to delivery at a place somewhat remote from the vehicle is a question we find it unnecessary to reach.
Vermont law is quite clear that the plaintiff's notice was untimely, breaching Condition 9 of the policy, Houran, Adm. v. Preferred Accident Insurance Co. of New York, 109 Vt. 273, 195 A. 253 (1937). We know of no exception in Vermont law for accidents about which an insured is specifically notified and requested to turn over to his insurer. The insurer has contracted to defend against groundless suits and is entitled to notice of a claim, be it good or bad. If the insured takes the position that it need not notify his insurer because the suit is so obviously frivolous in spite of the notice provision, he takes the risk of having to defend it himself unless the insurer waives the notice provision.
We come therefore to the question of...
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