Brogdon v. Am. Auto. Ins. Co.

• Decision Date: 05 September 1939
• Docket Number: No. 3.,3.
• Citation: 290 Mich. 130,287 N.W. 406
• Parties: BROGDON v. AMERICAN AUTOMOBILE INS. CO. et al.
• Court: Michigan Supreme Court

290 Mich. 130

287 N.W. 406

BROGDON

v.AMERICAN AUTOMOBILE INS. CO. et al.

No. 3.

Supreme Court of Michigan.

Sept. 5, 1939.

Garnishment proceeding by Julia Brogdon against the American Automobile Insurance Company, a corporation of St. Louis, Missouri, garnishee, and William C. Kral, principal defendant. From an adverse judgment, plaintiff appeals, and, her death being suggested, Elliott Brogdon, administrator, was substituted as party plaintiff.

Affirmed.

Appeal from Circuit Court, Wayne County; Homer Ferguson, Judge.

Argued before the Entire Bench.

Roxborough & Taliaferro, of Detroit (Robert J. Evans, of Detroit, of counsel), for appellant.

Maurice Miller, of Detroit, for appellee garnishee.

BUSHNELL, Justice.

While standing in a safety zone at the intersection of Stanford and McGraw avenues in the City of Detroit, waiting to board a street car about 7:00 o'clock a. m., on December 22, 1934, plaintiff was struck by an automobile and seriously injured. Suit was brought against defendant Kral, who denied that he was the operator of the vehicle at the time and place claimed. Kral carried liability insurance with defendant company and denied emphatically to them that he had anything to do with the accident. The insurance company caused an appearance to be entered for the defendant and made an investigation of the facts. At the trial of the negligence action, and just before the noon recess, the insurance company's attorney was informed by an employe of the company that, during a conversation with Kral in another room, he had admitted that he was the driver of the car that struck plaintiff. The attorney then took his informant and Kral to his office, where Kral's statement was taken before a court stenographer. A disclaimer of liability was prepared and given to Kral and, when the court reconvened at 2:00 p. m., counsel for defendant informed the trial judge in the absence of the jury that he had entered upon the defense of the case under the impression that Kral was not involved in the accident. A full disclosure was made to the court and counsel's request for permission to withdraw from further participation in the case was granted. The court then explained to Kral how he might proceed with the trial of the case either with or without another attorney. The jury returned to the court room and the withdrawal of defendant's attorney was explained, but the reason for the withdrawal was not given. The case proceeded and, after the jury had rendered a verdict for $1,062 against defendant Kral, the court informed the jury of the reasons for the attorney's withdrawal.

After entry of judgment on the verdict, garnishment action was then commenced by plaintiff against the insurance company, who filed a motion to quash, which was denied. A trial of the statutory issue was had and special questions were answered by the jury. A judgment non obstante veredicto was entered in favor of the defendant and against the plaintiff of no cause of action, the court filing a written opinion. A motion for new trial was made and denied and plaintiff appeals. Subsequent to the appeal, plaintiff's attorney filed suggestion of the death of plaintiff and Elliott Brogdon, administrator, was substituted as party plaintiff.

Decision turns on whether or not there way any waiver by the insurance company of the following provisions of its policy:

‘I. Notice of Accident, Claim, or Suit. The Assured shall give to the Company or any of its authorized agents: (1) immediate written notice of any accident covered hereunder, irrespective of whether any injury or damage is apparent at the time, with the fullest information then obtainable; (2) prompt notice of every claim and shall forward thereto every summons and other process in suits as soon as served upon the Assured. Notice of such accident given by or on behalf of the Assured to any authorized agent of the Company, with particulars sufficient to identify the Assured, shall be deemed to be notice to the Company. Failure to give such notice of any accident shall not invalidate any claim if it shall be shown written notice was given as soon as was reasonably possible.

‘J. Settlement of Claims and Cooperation of Assured. The Assured shall not voluntarily assume any liability or interfere in any negotiation for settlement or in any legal proceeding or incur any expense or settle any claim, except at Assured's own cost, without the written consent of the Company. The Company reserves the right to settle or defend, as the Company may elect, any such claim or suit brought against the Assured. The Assured shall in no manner aid or abet the claimant, but, whenever requested by the Company, the Assured shall aid in effecting settlement, in securing information, evidence, and the attendance of witnesses, and in prosecuting appeals and shall at all times render all possible cooperation and assistance.’

‘U. Misrepresentation and Fraud. This entire policy shall be void if the Assured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or in case of any fraud, attempted fraud, or false swearing by the Assured touching any matter relating to this insurance or the subject thereof, whether before or after a loss or accident.’

Plaintiff argues that the insurer is estopped to disclaim liability because 22 months elapsed between the report of the accident and the disclaimer. An examination of the record shows that the insurer was diligent in its investigation of the facts, and Kral's false statement prevented earlier knowledge of liability. Plaintiff says his conduct did not void the policy and absolve the insurer from liability, and that the judgment entered, notwithstanding the jury's answers to special questions, was erroneous. We adopt and approve the following from the trial court's opinion:

‘First, we must start upon the premise that the plaintiff stands in the same position as the defendant would stand who is suing the American Automobile Insurance...