Ehlers v. Colonial Penn Ins. Co.

Decision Date30 November 1977
Docket NumberNo. 75-669,75-669
Citation81 Wis.2d 64,259 N.W.2d 718
PartiesMabel EHLERS, Appellant, v. COLONIAL PENN INSURANCE COMPANY, a Foreign Corporation, Respondent.
CourtWisconsin Supreme Court

This is an appeal from a judgment dismissing the complaint of the plaintiff-appellant, Mabel Ehlers.

Mabel Ehlers was struck by an automobile driven by Charles W. Runge on February 26, 1973, as she was crossing a street at an intersection in South Milwaukee. The plaintiff suffered serious injuries as a result of this accident and was hospitalized for a period of 53 days.

While the plaintiff was hospitalized, it was determined that Runge, the driver of the automobile, was not insured. On March 17, 1974, the plaintiff sent written notice of injury to American Maturity Insurance Company which had issued an automobile insurance policy to the plaintiff's brother, Irving Ehlers. This notice was returned by the defendant, Colonial Penn Insurance Company on or about March 12, 1974, with a request for further information. (American Maturity Insurance Company changed its name to Colonial Penn Insurance Company sometime prior to the date of the accident.) The plaintiff sent the defendant the requested information on March 12, and was informed on March 22, 1974, by the defendant that it was disclaiming coverage.

The defendant disallowed the plaintiff's claim under the uninsured motorist provision on the grounds that the notice of accident was not timely. A trial to the court on the issue of coverage was held, after which the trial court found that the defendant had not been informed of the plaintiff's accident as soon as practicable, and that as a result, the defendant had been prejudiced. The trial court therefore ordered judgment dismissing the plaintiff's action.

Additional facts will be stated in the opinion.

Stephen R. Miller, Milwaukee, for appellant.

Kluwin, Dunphy, Hankin & McNulty, and Eric J. Van Vugt (argued), Milwaukee, for respondent.

HANLEY, Justice.

The following issues are presented on appeal:

1. Did the plaintiff give notice of the accident as soon as practical?

2. Did the plaintiff rebut the presumption of prejudice which results from untimely notice?

3. Did the defendant's disclaimer of liability relieve the plaintiff of the requirement to submit proofs of loss?

Notice of Accident

The parties do not dispute the fact that the defendant was not notified of the accident which caused the plaintiff's injuries until March 7, 1974 a lapse of almost twelve and one-half months after the accident. What the parties do dispute, however, is whether the plaintiff notified the defendant as soon as practical.

Under the provisions of the original insurance policy notice of accident was required to be given "as soon as practicable."

This court recognizes that accident notification requirements complying with sec. 204.34(3), Stats., (1973) (repealed by L. 1975, c. 375, § 13, and substantially re-enacted as sec. 632.34(4), Stats., (1975)) establish a condition precedent to the insurer's liability on the policy. Allen v. Ross, 38 Wis.2d 209, 213-14, 156 N.W.2d 434 (1968). The purpose of these provisions is to encourage prompt notification to insurers of an accident so as to permit them to investigate the circumstances of the occurrence, contact known witnesses while they are still available and before their recollection of the event is forgotten or distorted, and find unknown witnesses to the occurrence. Resseguie v. American Mutual Liability Insurance Co., 51 Wis.2d 92, 100, 186 N.W.2d 236 (1971).

The plaintiff contends that as a matter of law she notified the defendant of the accident as soon as practicable. However, this determination is essentially one of fact which is to be based not merely on the passage of time but upon all the facts and circumstances of the particular case. RTE Corp. v. Maryland Casualty Corp., 74 Wis.2d 614, 627-28, 247 N.W.2d 171 (1976). Therefore, when a party appeals a determination of this nature, this court has traditionally applied two rules: (1) that the weight to be given testimony and the credibility of the witnesses is for the trier of facts, in this instance the trial court; and (2) the findings of the trier of fact must be sustained unless they are against the great weight and clear preponderance of the evidence. Resseguie v. American Mutual Liability Insurance Co., supra,51 Wis.2d at 105, 186 N.W.2d 236.

In determining that the notice of accident was not as soon as practicable, the trial court stated in its memorandum opinion "In the case at bar the defendant has shown a lapse of time of approximately 12 and a half months before it received any notice of the accident. The excuse that the plaintiff gives for this lapse of time is that she was unable to leave the house for the duration of the year of 1973 and that she was unaware that she was covered under her brother's policy regarding an uninsured motorist provision. However, the plaintiff did retain the services of their family attorney almost immediately after the accident and she has not presented sufficient evidence to explain the reason for the family attorney's failure to investigate the uninsured motorist coverage sooner, or show any justification or excuse whatsoever on his part in the delay in filing the notice of claim. Therefore, the Court finds that notice was not given 'as soon as practicable.' "

Here, the plaintiff testified that within a few days of the accident, she sent her brother to see the family attorney, and between the time of her release from the hospital and the time she personally visited this attorney, she stated she talked to him over the phone about the injuries resulting from the accident. While the plaintiff's brother testified that he first brought the policy to this attorney at the meeting held in late February, 1974, he admitted that he had spoken with this attorney five or six times in 1973 after the accident. He also testified that he had read and understood the terms of the original policy when he first received it in 1969.

Under these facts and circumstances, we think the trial court's determination that the notice of accident was not given as soon as practical is not against the great weight and clear preponderance of the evidence.

Prejudice to the Insurer

By placing the burden of proof upon the person claiming liability, sec. 204.34(3), Stats., has generally been viewed as creating a presumption of prejudice because of untimely notice. Sanderfoot v. Sherry Motors, Inc., 33 Wis.2d 301, 309, 147 N.W.2d 255 (1967). Once the insurer has established that it did not receive notice as soon as possible, the burden shifts to the claimant to prove that the insurer was not prejudiced by an untimely notice. Resseguie v. American Mutual Liability Insurance Co., supra, 51 Wis.2d at 104, 183 N.W.2d 236.

The trial court, when concluding that this presumption of prejudice had not been overcome, stressed the testimony given by the insurer's investigator, Norbert Kurczewski, that one witness to the accident refused to discuss the accident and that another witness could recall facts only vaguely.

Mr. Kurczewski testified that his employer, F. J. Rohde Co., was assigned to investigate the plaintiff's claim on March 21, 1974. One or two days later Kurczewski was assigned to the case. He immediately obtained a copy of the police report and visited the scene of the accident. At this time he intended to canvass the neighborhood for witnesses and to conduct further investigations. He postponed further inquiry into the matter, however, apparently on the recommendation of the defendant's claims examiner.

Mr. Kurczewski resumed his investigation in late May or early June, 1974. He canvassed the neighborhood for additional witnesses without success, and in June he attempted to interview one of two witnesses indicated on the police report, Dennis Flaherty. Flaherty did not make a statement at that time but instead gave Kurczewski a copy of a statement he had given to the plaintiff's investigator, A. V. Jensen. In late June and early July, Kurczewski attempted to interview the second witness indicated on the police report, Ivan Beernink. Kurczewski testified that Beernink was cooperative and suggested that he come and see him personally. Kurczewski did visit Beernink's residence in Cedar Grove to get a statement, but Beernink had to postpone the meeting because of business reasons. Consequently, Kurczewski settled for a recorded telephone statement. At the trial, Kurczewski criticized this statement for, in his opinion, Beernink was only able to vaguely recall the facts of the accident.

While Kurczewski's testimony in certain respects further buttressed the presumption that the defendant had been prejudiced by the untimely notice of accident, the testimony of other witnesses diminished it. The plaintiff's investigator, A. Vernon Jensen, was assigned to investigate the case in early March, 1974. He obtained the police report, checked the scene of the accident, and interviewed and obtained a signed statement from Flaherty on March 26, 1974. Jensen testified that Flaherty's recollection of the incident was quite good and corroborated the facts on the police report. Jensen obtained a signed statement from Berrnink on January 8, 1975. In Jensen's opinion, Beernink "seemed to recall the facts of the accident."

Indeed, the facts of the accident are clear: Mr. Runge, the driver of the vehicle involved in the accident, was westbound on Milwaukee Avenue in the city of South Milwaukee. When he attempted to turn left on 10th Avenue, he struck the plaintiff who was on the crosswalk. The only excuse the driver gave was that the sun was in his eyes. Neither the investigator for the plaintiff nor the investigator for the defendant testified that they had discovered any fact which would indicate that there would be no liability on the part of the insurer. The plaintiff's investigator concluded...

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