Factory Mut. Liability Ins. Co. of America v. Kennedy

• Decision Date: 15 July 1971
• Docket Number: No. 19254,19254
• Citation: Factory Mut. Liability Ins. Co. of America v. Kennedy, 256 S.C. 376, 182 S.E.2d 727 (S.C. 1971)
• Parties: FACTORY MUTUAL LIABILITY INSURANCE COMPANY OF AMERICA, Respondent, v. Albert A. KENNEDY et al., Appellants.
• Court: South Carolina Supreme Court

Page 727

182 S.E.2d 727

256 S.C. 376

FACTORY MUTUAL LIABILITY INSURANCE COMPANY OF AMERICA, Respondent, v.Albert A. KENNEDY et al., Appellants.

No. 19254.

Supreme Court of South Carolina.

July 15, 1971.

Turner, Padget, Graham & Laney, Columbia, for appellants.

Nelson, Mullins, Grier & Scarborough, Columbia, for respondent.

LEWIS, Justice.

The question for decision in this appeal is whether an insurer is relieved of liability by the nonprejudicial failure of an insured to give notice of the accident and forward suit papers, as required by the conditions of a 'voluntary' automobile liability insurance policy.

The insured, under an automobile liability policy issued by plaintiff-respondent, was involved in an accident in which Norman G. and Myrnai B. Barkoot allegedly sustained damages.The Barkoots were insured under a liability policy issued to them by Fireman's Fund American Insurance Companies, which provided them with uninsured motorist coverage.After actions were brought by the Barkoots against respondent's insured, respondent instituted this action for declaratory judgment against its insured, the Barkoots, and Fireman's Fund Insurance Companies, of which the latter is appellant.The court was asked to adjudge that respondent owed no duty to its insured to either defend the action brought by the Barkoots or to pay any judgment recovered by them, because of the alleged failure of the insured to comply with policy conditions which required him to give respondent notice of the accident and forward to in the suit papers.

Answers were filed by all of the defendants, except respondent's insured.Under the pleadings, the issues raised were (1) whether respondent's insured failed to give notice and forward suit papers as required by the policy; and, if so, (2) whether respondent was prejudiced thereby.

Respondent contended that the policy provisions in question constituted conditions precedent to recovery and that, upon proof of noncompliance therewith, it was relieved of liability under its policy.The action was defended upon the ground that, in addition to the failure of the insured to give the required notices, the burden was upon respondent, the insurer, to show that it had been substantially prejudiced by such failure.

The Master, to whom the cause was referred, found that the insured had failed to comply with the notice provisions of the policy and that such neglect relieved respondent of liability.The Master further held that under the law in this State, it was unnecessary for respondent to show that it was prejudiced by the neglect of the insured and, therefore, did not decide whether prejudice in fact did exist.These findings were affirmed by the trial judge and judgment entered for respondent, from which this appeal is prosecuted.

The pertinent portions of the policy provisions, with which we are here concerned, are contained in the 'Conditions'section and are as follows:

'When an accident occurs written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable.Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses.

'If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.

'No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.'

In holding that the failure of an insured to give notice and forward suit papers, per se, relieved the insurer of liability, the lower court mainly relied, as does respondent in this appeal, upon the cases of Free v. United Life & Accident Ins. Co., 178 S.C. 317, 182 S.E. 754;Lee v. Metropolitan Life Insurance Co., 180 S.C. 475, 186 S.E. 376;Boyle Road & Bridge Co. v. American...