Connor v. State Farm Mut. Auto. Ins. Co., 694

• Citation: 143 S.E.2d 98,265 N.C. 188
• Decision Date: 23 July 1965
• Docket Number: No. 694,694
• Court: North Carolina Supreme Court
• Parties: Jess R. CONNOR v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

Page 98

143 S.E.2d 98

265 N.C. 188

Jess R. CONNOR v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

No. 694.

Supreme Court of North Carolina.

July 23, 1965.

Holt, McNairy & Harris, Greensboro, for defendant appellant.

Hoyle, Boone, Dees & Johnson, J. B. Winecoff, Greensboro, for plaintiff appellee.

RODMAN, Justice.

The contract on which plaintiff relies was issued in Virginia to a resident of that state. The rights and obligations of insured and insurer are fixed by the laws of Virginia. Roomy v. Allstate Insurance Co., 256 N.C. 318, 123 S.E.2d 817.

The Assigned Risk policy was issued to Auton, as permitted by § 38.1-264 of the Code of Virginia. The policy provisions quoted above may be incorporated in Assigned Risk policies issued in Virginia and will there be enforced as those provisions are interpreted by the courts of that state. Virginia Farm Bureau Mutual Insurance Co. v. Saccio, 204 Va. 769, 133 S.E.2d 268.

We do not understand plaintiff in the present action challenges the validity of the quoted policy provisions. He bases his right to recover on an asserted waiver of those provisions, or an estoppel against defendant to rely on the policy provisions.

There is conflict in the evidence with respect to the date insured notified defendant of the collision with the Connor car. Defendant's evidence fixes the date as September 26, 1962; plaintiff's evidence tends to show notice was given earlier than the date claimed by defendant.

Shortly after defendant was notified of the accident, Auton and Moore agreed in writing that defendant might 'investigate, negotiate, settle, deny or defend any claim arising out of an accident,' and such action 'shall not waive any of the rights' of insured or insurer under the contract of insurance. Thereafter, State Farm employed counsel to represent Auton and Moore. This was not a waiver of any prior failure to comply with obligations imposed on insured by the policy.

When State Farm undertook the defense of Connor's action for damages, it owed its insured the duty to act diligently and in good faith. Alford v. Textile Insurance Co., 248 N.C. 224, 103 S.E.2d 8, 70 A.L.R.2d 408; Wynnewood Lumber Co. v. Travelers Insurance Co., 173 N.C. 269, 91 S.E. 946; Home Indemnity Co. v. Snowden, 223 Ark. 64, 264 S.W.2d 642; State Automobile Mut. Ins. Co. v. York, 4 Cir., 104 F.2d 730; 29A Am.Jur., Insurance § 1464. If it failed in the performance of that duty, insured's failure to give notice of the accident became immaterial.

By express policy language, the insured is required to cooperate, attend hearings and trials and give evidence. He has a duty equal to that of the insurer to act diligently and in good faith. Hence when an insured fails, without justification, to attend the trial of his case in accordance with his promise, the insurer has the right to assert noncompliance with the cooperation provision of the policy.

We do not understand that appellee challenges the fact that Auton was duty bound to assist in the defense of the Connor case; or that it was Auton's duty, if he could, to be present when the case was tried in Greensboro. Plaintiff's position is that Auton was unavoidably detained and prevented from participating in the trial of Connor's action for damages.

Having judicially admitted by his pleadings that Auton did not attend the trial, the burden rested on plaintiff in this action to establish reasonable justification for Auton's absence, and the conduct of counsel employed by State Farm, estopping it from asserting Auton's failure to cooperate. He contends State Farm should have secured a continuance when requested by Auton or, failing to secure a continuance, it should have sought leave to withdraw.

The evidence relating to Auton's nonattendance and his reason for not attending is subject to more than one inference. Testifying as a witness for plaintiff in the present action, he said:

'I then got a letter from State Farm, telling me they were defending the case under a reservation of rights. They told me the names of the attorneys and told me I had a duty to cooperate with those attorneys. I received a letter ten days to two weeks prior to April 10, 1963, telling me the case had been set for trial on that date. Afterward, I told Mr. Martin I would be able to go down there and would go. * * * Neither Miss Moore nor I attended the trial on April 10, 1963. * * * I wrote to my attorneys in North Carolina that I would be there for trial. I told them Catherine Moore, my main witness, was in Goochland. This was the 3rd or 4th of April.'

Explaining his failure to attend the trial, he testified his car was stolen on the 6th or 7th of April. The thief was apprehended and charged with larceny. The larceny case was set for trial in Roanoke on April 10. Auton was subpoenaed as a witness in the larceny case. He notified insurer's representative that, because required to be in Virginia on April 10, he would not be able to go to Greensboro on that date. He further testified: 'I told Mr. Martin [insurer's agent] three days before the trial in Greensboro to get it postponed and that Miss Moore, whom I wanted as a witness, was in Women's Prison at Goochland.'

Martin, on the other hand, testified he made several trips to Auton's home on April 9 to be assured...