Colson v. Lloyd's of London

• Decision Date: 02 December 1968
• Docket Number: No. 25030,25030
• Citation: 435 S.W.2d 42
• Court: Missouri Court of Appeals
• Parties: Arnold COLSON, Plaintiff-Respondent, v. LLOYD'S OF LONDON, Garnishee-Appellant.

Page 42

435 S.W.2d 42

Arnold COLSON, Plaintiff-Respondent, v. LLOYD'S OF LONDON, Garnishee-Appellant.

No. 25030.

Kansas City Court of Appeals, Missouri.

Dec. 2, 1968.

H. H. McNabb, Jr., Belisle, McNabb & Kyser, Butler, for garnishee-appellant.

E. J. Murphy, Butler, for plaintiff-respondent.

JAMES W. BROADDUS, Special Commissioner.

On May 13, 1964, a petition was filed by plaintiff, Arnold Colson, in the Circuit Court of Bates County against Paul Wuthrich and Western Surety Company for damages growing out of an alleged false arrest of plaintiff by defendant Wuthrich, and against Western Surety Company on the official bond of the Sheriff of Bates County, Missouri, Wuthrich being a deputy sheriff.

The petition contained a prayer for both actual and punitive damages. Writs of summons were issued and duly served. Thereafter Carl Gum, of the firm of Thayer & Gum, entered this appearance as the personal attorney for Paul Wuthrich, defendant.

An answer generally denying all the allegations of plaintiff's petition, was filed on August 20, 1964, signed by the firm of Thayer & Gum as attorneys for defendant, Paul Wuthrich, and by the firm of Belisle, McNabb & Kyser, attorneys for defendants.

The case was ultimately set for trial on January 7, 1965. Prior to entering into trial plaintiff dismissed without prejudice as to Western Surety Company. On trial date H. H. McNabb, Jr., appeared as attorney for the remaining defendants and no one from the firm of Thayer & Gum appeared for or on behalf of defendant Wuthrich personally. Wuthrich himself was not present. On such date McNabb as attorney for Lloyd's of London, liability insurer of defendant Wuthrich, filed application for continuance for the reason, among others, that neither defendant nor his personal counsel were present, which application was overruled by the Court.

Thereafter McNabb asked leave to withdraw from the case on behalf of the defendant insurer, which application was overruled by the Court. Whereupon counsel announced that the insurer denied coverage under the policy for non-cooperation of the defendant Wuthrich.

Defendant's attorney continued in the courtroom, but did not participate further in the trial of the case. Plaintiff waived a jury and submitted his evidence to the Court and the Court thereafter rendered judgment for plaintiff for $5,000 actual damages and $2,500 punitive damages, plus costs. Thereafter garnishment was issued under an execution; interrogatories were propounded, and in its answers to interrogatories garnishee-appellant admitted having issued a certificate of insurance listing Paul Wuthrich as an insured, but denied liability under the insurance contract for the reason that the insured failed to 'give all information and assistance' as required by the policy, in that defendant failed and refused to sign his deposition in the cause; employed personal counsel, and that defendant and such personal counsel failed and refused to appear on the date of the trial; that such failure of defendant to appear prejudiced this garnishee in defense of the claim.

Plaintiff thereafter filed denial of garnishee's answer denying that garnishee's answer denying that garnihee's answer constituted a defense to the garnishment. The matter was set for trial, and on October 20, 1967, evidence adduced to the Honorable W. O. Jackson. Judge Jackson deferred ruling on the matter and died without ever having made a ruling.

Thereafter, on January 4, 1968, before Honorable Kelso Journey, evidence was again submitted.

It is admitted that Plaintiff's Exhibit 3, a policy of insurance entitled 'False Arrest Insurance' was in full force and effect at the time of the false arrest. The insuring clause in Exhibit 3 provides as follows:

'* * * This insurance covers the assured against loss by reason of liability imposed by law upon the assured by reason of any false arrest, assault and battery (as herein defined), false imprisonment or malicious prosecution which may be committed or alleged to have been committed during the currency period of this certificate: * * *'

The policy excludes acts committed prior to the inception date of the insurance; claims for libel or slander or the existence of a 'kangaroo court' or claims for invasion of property rights.

Paragraph 9 provides that the assured shall use due diligence to do and concur in doing all things reasonably practicable to avoid the happening of any peril insured against. Under paragraph 6, it is provided '* * * and insured shall give all information and assistance as the underwriters may reasonably require.'

As stated, there were two garnishment hearings held. In both hearings, the testimony of attorney McNabb was the sole testimony introduced on behalf of the garnishee.

In the first hearing McNabb testified that he wrote to Attorney Gum, who was representing Wuthrich personally, on October 14, and notified him of the trial setting; that he had three or four other contacts with Gum who assured McNabb that defendant would be at the trial. He recalled a personal telephone conversation with Wuthrich and another with his wife near Thanksgiving of 1964, at which time he advised him of the trial and emphasized the importance of the defendant's appearance.

At the second hearing McNabb repeated his testimony concerning the letter dated October 14 addressed to Gum but at this hearing denied that he had had any contact with the defendant Wuthrich in person, by telephone or by letter from October to January. He stated he did not give notice to Wuthrich that his presence was required at the trial set for January 7, 1965, other than the notice mailed to Gum; that there was no specific agreement between McNabb and Gum that Gum was to be responsible for having the defendant appear on the day of trial. McNabb made no attempt to locate Wuthrich although he knew what his address was in Harrisonville. He stated that he thought he had written to defendant Wuthrich but could not find a copy of any such letter and, therfore, assumed that he did not write although he intended to do so.

At the second hearing, the testimony of Attorney Carl Gum was introduced on behalf of the plaintiff. Gum testified that he was hired as personal attorney for defendant; that he came to Butler and talked with McNabb who informed him that McNabb was representing both insurance companies in defense of the case; that there was never an agreement that, gum was to be responsible for producing the defendant at the time of the trial; that McMabb did all the work in preparing the defense although an associate of Gum's, Miss Charlotte Thayer, did attend the depositions. Gum testified that the only notice he received of the trial setting, that he could remember, was a telephone call from McNabb the evening before the trial at which time McNabb asked if Gum was going to be present. Gum then informed McNabb that he was not going to be there and requested McNabb to request leave of court to allow Gum to withdraw as attorney of record. He believed that McNabb did ask where Wuthrich was, and Gum told him the last he had heard Wuthrich was in California; that Gum could find no letter from McNabb in his file advising of a trial date although it could have been misfiled; that shortly after the depositions were taken in August, Gum made a demand upon Wuthrich for payment of an attorney fee which Wuthrich had failed to pay; and Gum had advised McNabb at that time that he was going to get out of the case unless his fee was paid. Gum specifically differed with McNabb concerning the contents of the telephone call on the eve of the trial; Gum through McNabb was the one who told him that defendant had gone to California.

Thereafter, on January 22, 1968, the court entered its findings in favor of plaintiff and against the garnishee in the amount of $7500 plus interest at 6% per annum from January 7, 1965, or a total of $8867.50. Garnishee filed a motion for new trial, which was overruled and this appeal followed.

Although Lloyd's of London was never designated as a party during the entire lawsuit and their name did not appear of record on the insurance policy, it was recognized by all parties to the lawsuit that they were, in fact, the underwriters for the certificate of insurance in question under the master policy issued to the National Sheriff's Association. Therefore, in the interest of clarity and simplicity, by agreement of all parties, the style of the case was designated by the Court to be Arnold Colson, plaintiff vs. Paul Wuthrich, defendant, Lloyd's of London, Garnishee.

Appellant-Garnishee contends that the court erred in finding that it 'had failed to prove lack of cooperation by the assured, so as to avoid liability under the insurance policy in evidence.'

It should be kept in mind that the insurer has the burden, in a garnishment action by a judgment creditor of an insured to prove that the insured's actions constituted a failure to cooperate. Meyers v. Smith, Mo., 375 S.W.2d 9; State Farm Mutual Auto Ins. Co. v. Mid-Continent Casualty Co., Mo.App., 378 S.W.2d 232.

Appellant cites the case of Taff v. Hardwick and Empire Fire & Marine, Mo.App., 419 S.W.2d 482. In that case this court announced that the law in Missouri requires cooperation between the assured ant the company. At page 485 of that decision the following appears:

'* * * And not...