Carter v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 24 December 1957
• Docket Number: No. 25,25
• Parties: Richard W. CARTER and Wayne Carter, Plaintiffs and Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois Corporation, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 105

87 N.W.2d 105

350 Mich. 535

Richard W. CARTER and Wayne Carter, Plaintiffs and Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois

Corporation, Defendant and Appellee.

No. 25.

Supreme Court of Michigan.

Dec. 24, 1957.

Gregg, Glassen, Parr & Rhead, Lansing, for appellants.

Jennings, Fraser, Parsons & Trebilcock, Lansing (Everett R. Trebilcock, Lansing, of counsel), for appellee.

Before the Entire Bench.

CARR, Justice.

Plaintiffs brought this action to recover damages for alleged failure to comply with the provisions of an insurance policy. The pleadings and the proofs in the cause disclose that in December, 1955, plaintiff Wayne Carter held the certificate of title to a certain Buick automobile that had been purchased for the use of his son, the other plaintiff. Under date of December 19, 1955, defendant issued its policy of insurance on said car, both plaintiffs being referred to therein. The following provisions of said contract are material in the instant controversy:

'Coverage G--Deductible Collision. To pay for loss to the automobile caused by collision with another object or upset of the automobile but only for the amount of each such loss in excess of the deductible amount stated in the declarations as applicable hereto.

'Limits of Liability--Settlement Options--Coverages D, E, F and G. The limit of liability for loss to the automobile or part thereof shall not exceed the actual cash value nor what it would then cost to repair or replace the authomobile or part with like kind and quality, less depreciation and deductible amount applicable.

'The company may pay for the loss in money or may repair or replace the automobile or such part thereof as aforesaid, or may return any stolen property with payment for any resultant damage thereto at any time before the loss is paid or the property is so replaced, or may, take all or such part of the automobile at the agreed value but there shall be no abandonment to the company.'

On April 2, 1956, the automobile, while driven by Richard W. Carter, was involved in a collision with another vehicle, the owner of which carried insurance with defendant. As a result plaintiffs' car was damaged, but not to the extent of being incapable of repair. Plaintiffs desired a money settlement but defendant company elected to have the vehicle repaired, as it had the right to do under the above quoted provisions of the policy. An agent of the company took the car to a garage for the purpose of having the necessary work done to restore it to the condition it was in prior to the accident.

In substance, it is the claim of plaintiffs in the instant case that defendant failed to have the car properly repaired, and further failed to cause the work to be completed after having had the unsatisfactory condition of the vehicle called to its attention. It appears from the testimony of plaintiff Wayne Carter that the automobile was delivered to the garage on the 6th or 7th of April following the collision, that on one occasion, the date not being definitely fixed, Richard obtained the car from the garage and brought it home, he being told at the time to bring it back. The purpose of so obtaining it does not appear. Thereafter, apparently in May or June, Richard again went to the garage and obtained the car. Whether he was given authority to do so by defendant, or was assured by employees of the garage that the work had been completed, does not appear. It may be noted in this connection that Richard was not a witness on the trial, although the testimony indicates that he was present in court. Neither does it appear that, as on the previous occasion, he was directed to return the automobile to the garage.

On behalf of plaintiffs it was claimed on the trial that the repairs had not been completed, and that defendant's representative was so notified and was told that the company might come and get the car at any time. Defendant did not comply with the request, or direction, apparently insisting that plaintiffs should return the car to the garage that had been engaged to make the repairs. A request was also made for a list of the injuries, resulting from the collision, that had not been remedied. Plaintiffs caused such a list to be delivered through their attorneys, but there is no proof in the case that all of the alleged defects therein mentioned resulted from the collision. The proofs do not indicate that defendant at any time refused to defray the cost of additional necessary repairs, in accordance with the terms of the policy of insurance. As a result, however, of the unfortunate situation that developed plaintiffs retained possession of the automobile, and additional repairs claimed to be necessary to restore it to the condition that it was in prior to the collision were not made

The instant case started by plaintiffs on September 18, 1956. Plaintiffs alleged in their declaration that at the time of the collision in which their car was damaged it was worth the sum of $2,800, and that after being partially repaired such value did not exceed the sum of $1,800. It was further averred that 'the additional cost of placing said vehicle in a proper state of repair will be not less than $1000.00.' On the trial two witnesses familiar with automobile prices were called by plaintiffs, each witness expressing the opinion that before the accident the car was worth the amount claimed by plaintiffs and that thereafter, based on their examination of it subsequent to its removal the second time from the garage by Richard W. Carter, it was worth $1,800. Each witness indicated that in placing such value on the car he had taken into consideration the fact that it had been involved in an accident. Neither witness testified to the cost of making the additional repairs that plaintiffs contended were necessary in order to comply with the terms of the policy.

Plaintiffs also offered the testimony of a witness who was manager of an automobile rental service, who testified as to the charges made by his company for the rental of automobiles, the amount of the charge being based on a certain sum per week plus 10 cents a mile, the owner furnishing gasoline and insurance coverage. No testimony was introduced as to the length of time reasonably required in order to make the repairs necessitated by the collision.

With the record in the condition indicated, plaintiffs rested, and thereupon counsel for defendant moved for a directed verdict, relying on the absence of proof as to the reasonable cost of completing the repairs to the automobile, and also on the failure to show the length of time reasonably necessary to complete said repairs. In opposing said motion counsel for plaintiffs took the position that the difference in value before the accident and the value at the time of the appraisal by plaintiffs' witnesses was the proper measure of damages. The trial judge disagreed with such contention and directed a verdict. Plaintiffs have appealed from the judgment entered in defendant's favor, claiming that the trial judge was in error in determining that no basis was afforded by the proof on which the jury could properly determine the amount of the damages, assuming that defendant had failed to properly observe its obligations as imposed by the contract of insurance.

Plaintiffs' claim for damages rests on the theory that defendant failed to perform its agreement to repair the automobile in accordance with the terms of the policy. We are not dealing with the liability of a tort-feasor who has by his wrongful act injured the property of another. Rather, the question at issue is asserted liability for failure to properly perform a contractual obligation. In the instant case the policy of insurance indicates the measure of liability that the parties must be presumed to have had in mind in its execution. The liability of defendant for loss to an automobile or part thereof is so limited by the contract that it 'shall not exceed the actual cash value nor what it would then cost to repair or replace the automobile or part with like kind and quality, less...