Dixie Auto Ins. Co. v. Goudy

• Decision Date: 05 October 1964
• Docket Number: No. 5-3310,5-3310
• Citation: 382 S.W.2d 380,238 Ark. 432
• Parties: DIXIE AUTO INS. CO., Appellant, v. W. G. GOUDY, Appellee.
• Court: Arkansas Supreme Court

Page 380

382 S.W.2d 380

238 Ark. 432

DIXIE AUTO INS. CO., Appellant, v. W. G. GOUDY, Appellee.

No. 5-3310.

Supreme Court of Arkansas.

Oct. 5, 1964.

Levine & Williams, Pine Bluff, for appellant.

Carlton Currie, Pine Bluff, for appellee.

WARD, Justice.

This appeal calls for an interpretation of certain language in a liability insurance policy. An outline of the pertinent facts involved is set out below.

On December 16, 1960 the Dixie Auto Insurance Co. (appellant herein) issued its policy to W. G. Goudy (appellee herein) covering a specifically described 1956 Ford passenger automobile. [A copy of the policy was put in evidence and certain pertinent parts are set out in the briefs to which reference will be made.] On August 15, 1961 appellee bought a 1949 model Ford car. On the same day appellee, while driving this car, had a collision with a car belonging to a Mr. Robert P. Fratesi, resulting in injuries to appellee and Mrs. Fratesi and in damage to Mr. Fratesi's car. Mr. and Mrs. Fratesi filed suit against appellee, and on February 16, 1962 they recovered a default judgment for $5,880.

On September 27, 1962 appellee filed suit against appellant setting out many of the above stated facts and particularly the Fratesi judgment, and prayed for judgment in the amount of $5,880 together with statutory penalty and attorney's fee. Appellant filed an answer, raising the points and issues hereafter discussed.

By consent of the parties the cause was tried before the circuit judge sitting as a jury. The trial resulted in a judgment in favor of appellee as prayed for. This appeal follows.

After a careful study of the record, the briefs, and the points relief on by each party, we find that certain issues relied on by appellant for a reversal are properly raised and they will be discussed in the following sequence.

One. Was the 1949 Ford covered by the policy? The trial court held it was, and we agree. Both parties rely on the wording found in § 4 of Paragraph IV of the policy which in material part reads as follows:

'(4) Newly Acquired Automobile--an automobile ownership of which is acquired by the named insured or his spouse if a resident of the same household if (i) it replaces an automobile owned by either and covered by this policy, or the company insures all automobiles owned by the named insured and such spouse on the date of its delivery, and (ii) the named insured or such spouse notifies the company within thirty days following such delivery date; but such notice is not required under coverage A, B and division i of coverage C if the newly acquired automobile replaces an owned automobile covered by this policy.' (Emphasis added.)

Appellant relies on the italics in above quotation. It is contended, and we agree, that the 1949 car was not used to replace the 1956 car. However, we think other language makes this contention immaterial. Following the italicized language we find: 'or the company insures all automobiles owned by the named insured * * *.' (Emphasis added.) It is, however, appellant's argument that the latter language applies only when the insured owns a fleet of cars and not when he owns just one car. We agree this argument sounds reasonable but it is not sustained by the authorities. The case of Horace Mann Mutual Casualty Company v. Howard K. Bell et. al., 134 F.Supp. 307 (W.D.Ark.1955) is very much in point, and sustains appellee herein. There appellant had issued its policy to cover (only) Bell's 1950 Plymouth--being the only car he owned at that time. Later Bell bought a pickup truck which was involved in a collision. The pertinent terms of the policy (set out in the opinion) were like those in this case. In stating the issue the opinion says:

'The evidence in the instant case clearly establishes that the pickup truck purchased by the defendant Bell did not replace the Plymouth automobile described in the policy. * * * Thus the crucial question is whether the plaintiff insured 'all automobiles owned by the named insured' at the delivery date.'

In holding the pickup truck was covered, the court quoted with approval the following from Dunmire Motor Co. v. Oregon Mutual Fire Ins. Co., 166 Or. 690, 114 P.2d 1005:

"It is our opinion that, taking the automatic coverage provision in its entirety it was intended to apply to any other automobile acquired by the assured who owned one or more automobiles, provided that all the automobiles, whether one or more, then owned by him were insured by the defendant corporation."

No decision of our Court in point has been called to our attention, nor do we know of any.

Two. Appellant says the judgment of the trial court should be reversed because appellee gave no notice to appellant of the accident as required by the terms of the policy. As stated previously, this case was tried before the court, and, therefore, all findings of fact must be sustained if supported by substantial evidence. It is not denied here that appellee testified he gave notice of the accident involving the 1949 car on the day after it occurred. It is also not disputed that later the matter was turned over to an adjuster who made a detailed report to appellant. It is, however, argued by appellant that the report showed appellee was only interested in being repaid for medical expenses incurred by him as a result of the accident, but we find abundant evidence in the record to sustain a finding that appellant knew of, and investigated, the accident with Fratesi.

Three. We cannot agree with appellant that the case must be reversed because Fratesi secured a default judgment against appellee. We agree with appellant that ordinarily a jury must be impaneled to assess damages in a case like this. [See Naperskie v. Trevillion, 202 Ark. 638, 151 S.W.2d 992.] However in our opinion appellant waived any right it might have had at any time to refuse payment because of the default judgment by denying all liability as further hereafter explained and discussed.

Four. It is now strenuously contended by appellant that it is not liable to appellee in any amount because appellee failed to give notice of the Fratesi suit as required by the terms of the policy. In support of its contention, appellant quotes portions of the policy as follows:

'Notice of Claim or Suit--Coverages A and B. If claim is made or suit is brought against the insured, the insured shall immediately forward to the...