City of West Haven v. U.S. Fidelity & Guaranty Co.

• Decision Date: 14 March 1978
• Citation: 174 Conn. 392,389 A.2d 741
• Court: Connecticut Supreme Court
• Parties: CITY OF WEST HAVEN v. UNITED STATES FIDELITY AND GUARANTY COMPANY.

Page 741

389 A.2d 741

174 Conn. 392

CITY OF WEST HAVEN v. UNITED STATES FIDELITY AND GUARANTY COMPANY.

Supreme Court of Connecticut.

Argued Nov. 1, 1977.

Decided March 14, 1978.

Henry W. O'Brien, Hamden, for the appellant (defendant).

Charles H. Fischer, Jr., Asst. Corp. Counsel, West Haven, with whom, on the brief, was Robert E. Reilly, Corp. Counsel, Madison, for the appellee (plaintiff).

Before HOUSE, C. J., and LOISELLE, BOGDANSKI, LONGO and SPEZIALE, JJ.

SPEZIALE, Associate Justice.

The defendant, United States Fidelity & Guaranty Company (hereinafter USF&G), has appealed from a judgment holding it liable to the city of West Haven in the amount of $20,000. The city claimed the sum as indemnification for payments made to satisfy a judgment against it by Fred Annunziata, who was injured on city property while the city was insured under a liability insurance policy issued by the defendant. The defendant disclaimed liability on the ground that the city had failed to comply with certain conditions precedent set forth in the policy. On appeal, USF&G contends that these conditions were not met and that the trial court therefore erred in finding it liable to the plaintiff.

The underlying facts are not in dispute. The plaintiff, the city of West Haven, was insured under a liability policy issued by USF&G from July 1, 1965, to July 1, 1966. Paragraph 13 of the policy provided that no action would lie against the insurer unless, as a condition precedent, the insured fully complied with the terms of the policy, nor until the insured's obligation became finally determined either by judgment after actual trial or by written agreement of the insured, the claimant and the insurer. Paragraph 10 of the policy required that when an accident occurred, the insured would notify USF&G "as soon as practicable"; and paragraph 11 required the insured to forward "immediately" every demand, notice, summons or other process received, in the event that any claim was made or suit brought against it.

On May 10, 1966, Fred Annunziata, an employee of United Illuminating Company, was injured in a pumping station owned by the plaintiff. In July, 1966, Jack Norton, superintendent of sewers for the city, became aware of the accident when two of his men reported that photographers were in the pumping station. Norton called United Illuminating and ascertained that Annunziata was an employee of that company. After this conversation, Norton took no further action regarding the accident.

On May 8, 1967, a writ, summons and complaint brought by Annunziata against the city was filed with the city clerk. At that time the city was insured under a liability policy issued by Travelers Insurance Company. The writ, summons and complaint was forwarded to Travelers by letter dated June 23, 1967; but Travelers, by letter dated June 30, 1967, informed the city's corporation counsel that its insurance coverage had not commenced until July 1, 1967, and suggested that the matter be referred to the city's previous insurance carrier. The appropriate papers were sent to USF&G on September 8, 1967. In October, 1967, USF&G notified the city that the Annunziata suit had been referred to its attorneys under strict reservation of rights, and in January, 1968, it advised the city that it would offer defense only and would not satisfy any ultimate judgment entered against the city. On April 20, 1971, a judgment was entered by stipulation in favor of Annunziata; the city was represented by counsel provided by USF&G, who was present when the judgment was rendered. The judgment was paid by the city on July 1, 1971.

The defendant contends on appeal that the city is not entitled to recover under the policy because it failed to comply with the conditions relating to notice of accident and notice of claim, and because the stipulated judgment did not satisfy the requirement of paragraph 13 that no action would lie against the company unless or until "the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company."

The claim that the city failed to give notice of the accident "as soon as practicable" requires consideration of the question of whether Norton was an agent of the city authorized to receive notice of an accident, and whether his knowledge can therefore be imputed to the city. " 'It is the general rule, settled by an unbroken current of authority, that notice to or knowledge of an agent, while acting within the scope of his authority and in reference to a matter over which his authority extends, is notice to or knowledge of the principal.' 2 Mechem on Agency (2d Ed.) § 1803." Lane v. United Electric Light & Water Co., 88 Conn. 670, 674, 92 A. 430, 431 (1914); Reardon v. Mutual Life Ins. Co., 138 Conn. 510, 516, 86 A.2d 570 (1952). This assumes, however, that the agent is acting within the scope of his authority. If Norton were an agent of the city for the purpose of acquiring knowledge of accidents, with a concomitant duty to report such accidents to his principal, then his notice of the accident would clearly have been notice to the city. 3 Am.Jur.2d, Agency, § 273. The burden of proving the scope of such agency was on USF&G, the party claiming that Norton's knowledge was imputed to the city. Id., § 348. Where the evidence is conflicting or where there are several reasonable inferences which can be drawn, the nature and extent of an agent's authority is a question of fact for the trier of facts. Id., § 360. In this case, the court, as the trier of facts, found that Norton was not an agent of the city authorized to receive or transmit notice of an accident. This conclusion must be permitted to stand because Norton's position as superintendent of sewers and the general duties inherent in that position do not form an adequate basis for holding as a matter of law that he was an agent for the purpose of receiving and communicating notice of accidents of this sort; see Derby v. Connecticut Light & Power Co., 167 Conn. 136, 141-42, 355 A.2d 244 (1974); Wade v. Bridgeport, 109 Conn. 100, 109, 145 A. 644 (1929); and because there is no evidence presented either in...