Commercial Contractors Corp. v. American Ins. Co.

Decision Date07 July 1964
Citation202 A.2d 498,152 Conn. 31
CourtConnecticut Supreme Court

James R. Greenfield, New Haven, for appellant (plaintiff Petrizzo in each case); with him were Albert R. Moquet, New Haven, and, on the brief, Francis J. Moran, New Haven, for appellant (plaintiff Northeast Coastal, Inc., in each case).

Morris W. Mendlesohn, New Haven, with whom, on the brief, was Charles Henchel, New Haven, for appellant (named plaintiff in each case).

William P. Aspell, Hartford, for appellee (defendant in the first case).

Robert L. Trowbridge, Hartford, with whom were James T. Healey, Hartford, and, on the brief, David M. Shea, Hartford, for appellee (defendant in the second case).

Before KING, C. J., MURPHY, ALCORN and COMLEY, JJ., and HOUSE, Acting justice.

KING, Chief Justice.


Each of these two cases, although separate from the other, grows out of an injury sustained by Thomas J. Petrizzo and will be considered in a single opinion. Petrizzo was employed by Northeast Coastal, Inc., a trucking company, hereinafter referred to as Northeast, as a driver of a tractor-trailer owned by it. Northeast had a contract with Commercial Contractors Corporation, hereinafter referred to as Commercial, to haul scrap steel from Bridgeport to a yard in Wilmington, Delaware, owned by a third company. On October 3, 1956, Petrizzo delivered an empty tractor-trailer owned by Northeast to a location in Bridgeport where Commercial was demolishing buildings. Commercial loaded scrap steel on the trailer, and Petrizzo drove it to the Delaware yard, arriving there the next day. As he was removing stakes from the side of the trailer, the load of steel shifted, and he was struck and injured by falling steel.

Petrizzo, in another action instituted in Connecticut on August 30, 1957, sued Commercial for damages, claiming that Commercial's employees were negligent in loading the trailer in Bridgeport. Over four years later, on March 16, 1962, a jury found the issues for Petrizzo and awarded him damages. From the judgment entered therein an appeal is still pending.


For convenience, we shall first consider the action against the American Insurance Company, hereinafter referred to as American, instituted by Commercial, in August, 1962, and in which Petrizzo and Northeast intervened as parties plaintiff. A declaratory judgment was sought declaring, inter alia, that American was responsible, under and within the limits of a liability insurance policy issued by it to Northeast, for payment of the judgment recovered by Petrizzo against Commercial, together with the cost of the defense of that action and of the appeal being prosecuted by Commercial from the judgment which Petrizzo had recovered. Coverage was claimed on behalf of Commercial as an additional, unnamed insured under the policy which American had issued to Northeast as a named insured. American, in its first special defense, claimed that the notice requirements of the insurance policy had not been fulfilled and that consequently it was not liable under the policy. The court sustained the special defense, and the plaintiffs have appealed.

The policy in question had been issued by American to Northeast and was admittedly in effect at the time of the accident. Under the terms of the policy, Commercial was an additional, although unnamed, insured while using the tractor-trailer with Northeast's permission. The loading of the trailer by Commercial was a permissive use within the meaning of the policy. By the terms of the policy, American had agreed to pay on behalf of an insured all sums which the latter became legally obligated to pay as damages because of bodily injury caused by accident and arising out of the use of the tractor-trailer. Condition 1 of the policy required that written notice of an accident be given to American or any of its authorized agents 'as soon as practicable'. The notice was required to be adequate to identify the insured, and to give particulars as to the time, place and circumstances of the accident and the names and addresses of the injured and of available witnesses. Condition 2 required that if a claim was made or suit brought against the insured, it was immediately to forward to American every demand, notice, summons or other process received by the insured or its representative. Condition 7 made compliance with conditions 1 and 2 a condition precedent to recovery on the policy.

On November 16, 1961, over five years after the date of the accident and over four years after the institution of Petrizzo's suit against Commercial, although about four months prior to the trial of that case, the attorney for Commercial wrote to American, stating that American carried liability insurance on Northeast's truck and that he understood that the policy covered the Petrizzo accident. He further advised American of the pendency of the Petrizzo action. The last sentence of the letter read: 'I would appreciate your advising me if you made an investigation of this accident and have any information in your files which may be of assistance to me in the defense of this suit.' American had previously been given prompt notice of Petrizzo's compensation claim against Northeast, which was covered by a workmen's compensation insurance policy also issued by American to Northeast; had made an investigation of Petrizzo's accident; had ascertained that it was compensable; and had made compensation payments to Petrizzo on behalf of his employer, Northeast. Shortly after receipt of the letter from Commercial's attorney, American replied by letter stating that '[i]nasmuch as our Company paid Workmen's Compensation to the injured [Petrizzo] and since we have a lien on the proceeds of any recovery I am afraid we could afford you no help in the defense of this suit.' On July 23, 1962, about four months after the judgment in Petrizzo's suit, Commercial's attorney again wrote American that he had 'reason to believe that your company carried liability insurance on the tractor which was involved in this case [Petrizzo's suit against Commercial] and that your policy afforded coverage.' Thereafter, Commercial and American had no further communications until the commencement of the present declaratory judgment action in August, 1962.

Papers served on Commercial, or copies thereof, in Petrizzo's action against Commercial, were never transmitted to any of the departments, offices or agents of American. Commercial made no diligent effort prior to July 23, 1962, the date of the second letter which Commercial's attorney sent to American, to determine whether there was coverage under Northeast's liability policy for Commercial as an additional unnamed insured.

In December, 1961, American, in the name of Northeast, as its compensation insurer, had intervened in Petrizzo's action against Commercial to recoup compensation payments American had made to Petrizzo. No notice of any claim against American under its liability policy had been given American by or on behalf of Commercial or any other insured, named or unnamed, in that policy, at least prior to the letter of November 16, 1961, a letter which the plaintiffs claim was a sufficient written notice.

The court concluded that Commercial had not complied with condition 1 of the policy requiring written notice 'as soon as practicable', or with condition 2 requiring the immediate forwarding to the company of every demand, notice, summons or other process received.

Northeast is a New York corporation; its liability policy was issued in New York State, and the parties correctly conceded in the trial court that the laws of that state should govern the determination of Commercial's rights under the policy. Clark v. Hartford Accident & Indemnity Co., 148 Conn. 15, 17, 166 A.2d 713; Cain v. American Policyholders' Ins. Co., 120 Conn. 645, 648, 183 A. 403; see also Nobile v. Travelers Indemnity Co., 4 N.Y.2d 536, 542, 176 N.Y.S.2d 585, 152 N.E.2d 33.

Quite apart from any question of its adequacy in content, the letter sent by Commercial's attorney to American on November 16, 1961, was sent over five years after the date of the accident and, without excuse for the delay, would be ineffective to comply with the written notice provision of the policy. Deso v. London & Lancashire Indemnity Co., 3 N.Y.2d 127, 130, 164 N.Y.S.2d 689, 143 N.E.2d 889; Bazar v. Great American Indemnity Co., 306 N.Y. 481, 484, 119 N.E.2d 346. The plaintiffs, as an excuse for the delay, claim that Commercial was an additional, unnamed insured without notice or knowledge of the existence of the liability policy prior to the letter of November 16. Commercial had the burden of going forward with proof of circumstances excusing the delay in giving notice. Rushing v. Commercial Casualty Ins. Co., 251 N.Y. 302, 304, 167 N.E. 450. It was obligated to give notice as soon as it 'was alerted to the contract coverage'. Greaves v. Public Service Mutual Ins. Co., 4 A.D.2d 609, 614, 168 N.Y.S.2d 107, 112 aff'd, 5 N.Y.2d 120, 181 N.Y.S.2d 489, 155 N.E.2d 390. It was further required to exercise due diligence in discovering whether such coverage existed. Lauritano v. American Fidelity Fire Ins. Co., 3 A.D.2d 564, 568, 162 N.Y.S.2d 553, aff'd without opinion, 4 N.Y.2d 1028, 177 N.Y.S.2d 530, 152 N.E.2d 546. There is nothing in the record to require a finding that Commercial exercised due diligence in discovering coverage. In short, there is nothing in the record to excuse the giving of a proper notice long before November 16, 1961, or to explain how the letter of that date, if it could be considered written notice, was given 'as soon as practicable', that is, within a reasonable time under all the circumstances, as required by the terms of the policy. Deso v. London & Lancashire Indemnity Co., supra, 3...

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