CIE Service Corp. v. Smith

• Decision Date: 14 September 1984
• Docket Number: No. 83-470,83-470
• Citation: CIE Service Corp. v. Smith, 460 So.2d 1244 (Ala. 1984)
• Parties: CIE SERVICE CORPORATION v. Donna SMITH.
• Court: Alabama Supreme Court

Page 1244

460 So.2d 1244

CIE SERVICE CORPORATION v. Donna SMITH.

No. 83-470.

Supreme Court of Alabama.

Sept. 14, 1984.

Rehearing Denied Dec. 21, 1984.

Alton R. Brown, Jr. and Michael S. McGlothren of Brown, Hudgens, Richardson, Whitfield & Gillion, Mobile, for appellant.

C. MacLeod Fuller and Thomas M. Taul III, Mobile, for appellee.

PER CURIAM.

The sole issue in this case is whether a security service, an insured, gave timely notice to its insurer concerning a rape which occurred on premises the security service was guarding.

The facts were not disputed. On October 25, 1980, between the hours of 12:30 a.m. and 2:00 a.m., Donna Smith was assaulted and raped in her apartment in Mobile, Alabama. At that time, Night and Day Security, Inc. (Night and Day), was under contract to provide guard service for the apartment complex where Smith's apartment was located. CIE Service Corporation was the insurance carrier providing liability insurance coverage for Night and Day.

At the time of the attack, the Night and Day security guard on duty was in his car near Smith's apartment. He heard a scream, but did not investigate. The Mobile police department was called to the scene following the attack, and it handled the criminal investigation. The guard was present when the police made their investigation. Night and Day did not notify CIE of the incident at that time.

Almost a year later, on October 13, 1981, Smith filed suit against Night and Day and the owner of the apartment complex. The summons and the complaint were served on Night and Day on December 31, 1981, and, on January 6, 1982, Night and Day notified CIE of the suit. This was the first notice CIE had of the incident. Between January 6, 1982, and January 20, 1982, CIE investigated the matter, and, on January 20, 1982, CIE informed Night and Day that it was denying coverage, specifically setting forth as the basis for the denial Night and Day's failure to comply with the notice provisions of the policy.

On February 7, 1982, Smith made application to the clerk for the entry of a default judgment, and a default judgment was subsequently entered. On February 15, 1982, CIE cancelled the entire policy of insurance with Night and Day. Night and Day filed a motion to set aside the default judgment. Its motion was denied on September 17, 1982, at which time damages were assessed at $50,000 plus costs.

Smith then filed this garnishment action against CIE to recover the amount of the judgment. CIE answered the garnishment as "not indebted," and a hearing was held on November 21, 1983, at which time the trial court entered the following order: "Judgment by Court for the Plaintiff and against the Garnishee for the sum of $50,000.00 and Costs."

CIE filed a motion for a new trial. That motion was denied on December 19, 1983. On January 20, 1984, the garnishee filed notice of appeal. On February 6, 1984, after the notice of appeal was filed, the trial court entered a written order and findings of fact in the case.

A thorough reading of the evidence and argument produced at the hearing below convinces us that the trial court held for the plaintiff Smith because it believed that Night and Day had complied with a provision of the policy which required that the summons and complaint be forwarded immediately to the insurer. ¹ CIE does not claim that its insured failed to comply with this provision, but CIE does contend that Night and Day failed to comply with the following provision of the insurance policy:

"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 insured 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."

An "occurrence" is defined by the policy as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured."

Proper notice is a prerequisite to coverage under the policy and this Court has previously addressed the sufficiency of notice, the issue here, where it was stated in the policy as being a condition precedent to coverage under the policy. In Pan American Fire & Cas. Co. v. DeKalb-Cherokee Counties Gas District, 289 Ala. 206, 266 So.2d 763 (1972), we held:

"A requirement in a policy for prompt or immediate notice, or that notice must be given, 'immediately,' 'at once,' 'forthwith,' 'as soon as practicable,' or 'as soon as possible,' generally means that the notice must be given within a reasonable time under the circumstances of the case. The exact phraseology used apparently makes very little, or any, difference, and it is well settled that none of these expressions require an instantaneous notice, but rather call for notice to be given within reasonable dispatch and within reasonable time in view of all the facts and circumstances of each particular case. In determining the reasonableness of a delay in giving the required notice, the facts and circumstances of each particular case must be considered." (Emphasis added.)

289 Ala. at 214, 266 So.2d at 771. See also, United States Fidelity and Guaranty Co. v. Bonitz Insulation Co., 424 So.2d 569 (Ala.1982); Pinson Truck Equipment Co. v. Gulf American Fire and Casualty Co., 388 So.2d 955 (Ala.1980).

In making this determination, the only factors to be taken into consideration are the length of the delay and the reasons therefor. United States Fidelity, supra, at 572. The question whether the delay is reasonable is a question of fact. The issue before us, therefore, is whether, under these uncontroverted facts, Night and Day complied with the provision of the policy, when its first notice to CIE of the incident was given over a year after it occurred, but within a few days after suit was filed.

It is clear that Night and Day was aware of the assault and rape of Smith and did not notify CIE of the occurrence until it was served with the complaint filed by Smith. Night and Day claimed that it did not notify CIE of the occurrence because of its belief that the occurrence would not give rise to a claim against it. In view of all the facts and circumstances of this case, we hold that Night and Day's delay in giving notice was reasonable. Even though Night and Day had been employed to provide security at the apartment complex and the assault and rape occurred there, the crucial question is whether Night and Day's delay in giving notice of the assault and rape was excusable.

In Pan American Fire & Cas. Co. v. DeKalb-Cherokee Counties Gas Dist., 289 Ala. 206, 266 So.2d 763 (1972), this Court held that "delay [in giving notice] is excusable in the case of an accident [occurrence] ... which furnishes no ground for insured, acting as a reasonable and prudent man, to believe at the time that a claim for damages will arise or that the injury is one insured against." 289 Ala. at 214, 266 So.2d at 771, quoting 45 C.J.S. Insurance § 1056. This Court has held that...