Fordham Hoisting Equipment Co. v. Metropolitan Cas. Ins. Co. of N.Y.
| Decision Date | 19 June 1957 |
| Citation | 6 Misc.2d 521,163 N.Y.S.2d 898 |
| Parties | FORDHAM HOISTING EQUIPMENT CO., Inc., Plaintiff, v. The METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK, Defendant. |
| Court | New York City Court |
Jerome Schutzer, New York City, for plaintiff. Samuel Weisman, New York City, of counsel.
Martin A. Crean, New York City, for defendant. Robert J. Sykes, New York City, of counsel. BAER, Justice.
After trial before the Court without a jury, decision was reserved. Formal findings of fact and conclusions of law were waived.
The defendant insurance carrier refused to defend the insured plaintiff. They hired counsel who successfully defended them. Plaintiff now brings this action to recover reasonable counsel fees.
The policy of insurance, in evidence, contains the usual liability coverage. It provides that insured must give notice 'as soon as practicable', upon occurrence of an accident. The company agrees to pay 'all sums which the insured shall become obligated to pay,' by reason of the hazards set forth in the policy and to 'defend _____ any suit against the Insured _____, even if such suit is groundless, false or fraudulent.'
The accident occurred on January 4, 1952. The Summons and Complaint was served on October 28, 1952. The insured forwarded the Summons and Complaint to their agent who in turn forwarded them to the company. This was the first notice of accident received by defendant. On December 2, 1952, they returned the Summons and Complaint to their insured, refusing to defend, and the insured hired counsel.
After defendant received the Summons and Complaint, they sent an investigator to ascertain the facts. On November 17, 1952, the investigator McLaughlin, interviewed the president of the insured and wrote out a statement which was signed by said president. In the statement, insured's president stated that he was apprised of the accident on January 5, 1952 but did not report the incident to the company because of assurance by the lessee of the equipment that insured were not involved. The insured's equipment was hired and used on a construction job by a lessee who operated and controlled the equipment. An accident resulting in death was the forerunner of the suit against the insured. At trial, the complaint was dismissed against the insured, but settled for a substantial sum by the other defendants.
The insured's president vigorously denied knowledge of the accident until the Summons and Complaint were served upon him. He steadfastly insisted that he signed the statement upon the insistence of the defendant's investigator and his own insurance broker. That he told them that the statement was untrue but they induced him to sign because he had to cooperate with his own insurance company which was going to defend him.
The questions here involved are whether the insured plaintiff gave notice as soon as practicable? Whether the defendant insurer was justified in treating these circumstances as a breach of contract warranting refusal to defend insured's suits? In turn, the answer to these questions depend upon the statement (Defendant's Exhibit A) and insured's explanation thereof. These are questions of fact. The president of the insured was an impressive witness. I believe that he signed the statement under direction and against the best interests of the insured. He thought it best to sign as advised though he 'knew' it was untrue and without understanding the legal implications. His action should not be condoned but in view of the lack of good faith on the part of defendant's investigator in obtaining such statement, the insured should not be penalized. McLaughlin's testimony had no probative value. While he tried to be frank, his testimony was based on conjecture and assumption. He did not remember but assumed what he must have done because that was his usual practice.
The statement is not a deed or sworn instrument expressive of a jural act (Pimpinello v. Swift & Co., 253 N.Y. 159, 170 N.E. 530). It is a signed statement obtained by the insurer from its insured and like any admission, it may be explained and repudiated (Wachtel v. Equitable Life Assurance Society, 266 N.Y. 345, 351, 194 N.E. 850, 851; Rudolph v. John Hancock Mutual Life Insurance Co., 251 N.Y. 208, 214, 167 N.E. 223, 225; Keats v. Moss, Mun.Ct., 161 N.Y.S.2d 353, 357).
As trier of the facts the Court accepts the insured's version of the method by which the statement was obtained. It follows therefore that the insured was not apprised of an accident involving their equipment until they received the Summons and Complaint. They had no representative on the job at the time of the accident or while work was progressing. They checked their equipment on Saturday of each week when no work was in progress. They neither operated nor controlled the equipment. There was no independent proof offered that insured knew or should have known of the accident earlier. Compare Hermance v. Globe Indemnity Co., 221 App.Div. 394, 223 N.Y.S. 93.
Under the circumstances, the insured exercised reasonable diligence and could not be expected to know what occurred on the job. Woolverton v. Fidelity & Casualty Co., 190 N.Y. 41, 82 N.E. 745, 16 L.R.A.,N.S., 400.
The Court finds that the insured's first notice of the accident was when the Summons and Complaint was served; that defendant received notice ...
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Narduli v. U.S. Fidelity & Guaranty Co.
...insurer of the substance of his conversation of April, 1956. The case is similar in some respects to Fordham Hoisting Equipment Co. v. Metropolitan Ins. Co., 6 Misc.2d 521, 163 N.Y.S.2d 898, where it was held that since the insured was now apprised of an accident he would not be held to any......