General Acc. Fire & Life Assur. Corp. v. Martino

• Citation: 12 Misc.2d 935,175 N.Y.S.2d 894
• Parties: GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORPORATION Ltd. v. Francesco MARTINO, Anna Priolo and Leo Priolo.
• Decision Date: 08 May 1958
• Court: United States State Supreme Court (New York)

Page 894

175 N.Y.S.2d 894

12 Misc.2d 935

GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORPORATION Ltd. v. Francesco MARTINO, Anna Priolo and Leo Priolo.

Supreme Court, Special Term, Kings County, Part I.

May 8, 1958.

Multer, Nova & Seymour, New York City, by Herbert D. Feinberg, New York City, for plaintiff.

Francesco Martino, pro se.

Tavolacci & Dematteo, Brooklyn, Norman Bard, Brooklyn, of counsel, for defendants Priolo.

McDONALD, Justice.

Motion pursuant to Rule 106, Subdivision 4 of the Rules of Civil Practice, for a dismissal of the complaint on the ground that the same fails to state facts sufficient to constitute a cause of action, denied.

(A) This is an action brought pursuant to Section 473 of the Civil Practice Act, for a judgment declaring that the defendant, Francesco Martino, has violated Section 3 of the conditions of a certain insurance contract issued by the plaintiff to the defendant Martino, in that the defendant Martino has failed to give the plaintiff notice of an alleged accident in which he was involved;

(B) That Coverage 'A' of the policy issued by the plaintiff does not cover the claims of the defendants, Anna Priolo and Leo Priolo against said Martino.

(C) That defendants Francesco Martino, Anna Priolo and Leo Priolo, be permanently enjoined from bringing any action against the plaintiff based upon or arising out of the aforesaid accident and upon the plaintiff's policy of insurance;

(D) That plaintiff have such other and further relief and declarations of the rights and legal limitations of the parties to this action as to the court may seem just and proper.

A determination of the motion requires a construction of Art. 6-A of the Vehicle and Traffic Law, known as the Motor Vehicle Financial Security Act and particularly Sections 93-a and 93-b thereof.

As far as it can be determined by the attorneys for the respective parties and as far as the court is able to ascertain, the matter is one of first impression.

The facts so far as they are material are as follows:

On or about January 30, 1957, plaintiff-insurance company, at the request of the defendant Martino issued to him its automobile combination family policy number ACF 32-835-04, effective for a period of one year commencing January 30, 1957 and expiring January 31, 1958. The limits of liability in the said policy were $10,000 for each person, $20,000 for each occurrence. The policy contained the following condition:

'Conditions

'3. Notice

'In the event of an accident, occurrence or loss, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable. In the event of theft the insured shall also promptly notify the police. If claim is made or suit is brought against the insured, the shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.'

The requirements of the Motor Vehicle Financial Security Act (Article 6-A Motor Vehicle Law) apply to all motor vehicles registered for the years commencing on and after January 1, 1957 and this policy was issued in contemplation of said Act and to permit the defendant Martino to comply therewith.

That on or about February 13, 1957, the defendant Martino, was involved in an automobile accident in which it is alleged that Anna Priolo was injured as a result of the alleged negligence of the defendant Martino. Leo Priolo is the husband of Anna Priolo. The complaint further alleges that although the defendant Martino had knowledge of the accident at the time it occurred,--February 13th, he failed to give any notice thereof to the plaintiff-insurer or any of its agents until on or about the 20th of March 1957, which delay the plaintiff alleges was unreasonable. Plaintiff-insurer therefore disclaimed liability under said policy, said disclaimer being based upon a violation by the defendant Martino to comply with the condition with respect to notice set forth supra. Both Anna and Leo Priolo make claims of damages against defendant Martino arising out of said accident.

For the purposes of this motion the averments complained of in the complaint are considered to be true although the legal conclusion that the delay on the part of the defendant was unreasonable is not binding upon the court. Neither of the parties to the action, however raise any factual question with respect to the unreasonableness of the delay in giving notice.

The substance of the arguments of the defendants in support of their motion is as follows: The policy issued by the plaintiff to the defendant Martino having been issued pursuant to a compulsory insurance law--Motor Vehicle Financial Security Act--is an absolute policy and the violation by the insured of the condition contained in said policy is ineffective to absolve the insurer of its obligations under the policy. In support of such argument the defendants contend that Section 93-a, subdivision 4 of the Vehicle and Traffic Law, specifically requires that policies issued in conformity therewith be absolute policies. They further contend that even if the Legislature did not so mandate, that the public policy of the State, as evidenced by various legislative enactments requires that the Financial Security Act be so construed.

On the other hand the plaintiff contends that not only does Section 93-a of the Vehicle and Traffic Law not require a policy of absolute liability but that it authorized the Superintendent of Insurance to exclude such provision of absolute liability from the policy and that in view of the positive exclusion in the Statute itself, we may not look to the general intent and purpose of the legislative enactment. There can be no doubt of the conditions which prompted the enactment of Article 6-A of the Vehicle and Traffic Law or the purpose intended to be accomplished thereby, for the same are set forth in Section 93 of said Act as follows:

'(1). This article shall be known and may be cited as the 'Motor Vehicle Financial Security Act.'

'(2). Declaration of purpose. The legislature is concerned over the rising toll of motor vehicle accidents and the suffering and loss thereby inflicted. The legislature determines that it is a matter of grave concern that motorists shall be financially able to respond in damages for their negligence acts, so that innocent victims of motor vehicle accidents may be recompensed for the injury and financial loss inflicted upon them. The legislature finds and declares that the public interest can best be served in satisfying the insurance requirements of this article by private enterprise operating in a competitive market to provide proof of financial security through the methods prescribed herein.

'Nothing in this article shall be construed to effect any change in the application of article eight of the insurance law to automobile liability insurance rate-making or to effect the development of various methods of doing or operating an automobile liability insurance business.'

For a full understanding of the problem presented it is necessary to consider the previous legislation in this State dealing with more or less the same subject. In 1929, the Legislature enacted what was known as the Motor Vehicle Safety Responsibility Act, same constituting Sections 94, 94-a to 94-nn of the Vehicle and Traffic Law. Said Sections with some amendments and revisions have remained in force since that date and are still in force. Under such Act persons who had proven themselves financially irresponsible by failure to make recompense for injuries caused by their negligence in the operation of a motor vehicle, were deprived of their privilege to operate motor vehicles or to register the same in this State unless they made adequate provision to compensate those whom they had already injured and to provide security against the possibility of future injury to others. The terms of the liability of the insurer under such policy were set forth in Section 94-q, subdivision (i)(1) as follows:

'The liability of any company under a motor vehicle liability policy shall become absolute whenever loss or damage covered by said policy occurs, and the satisfaction by the insured of a final judgment for such loss or damage shall not be a condition precedent to the right or duty of the carrier to make payment on account of such loss or damage. No such policy shall be cancelled or annulled as respects any loss or damage by any agreement between the carrier and the insured after the said insured has become responsible for such loss or damage, and any such cancellation or annulment shall be void. * * *.'

There have been many adjudications construing the enactment and determining the liability of policies issued thereunder and there seems to be no difference of opinion between the attorneys for the respective parties on this point. The policies of insurance issued in compliance with the Motor Vehicle Safety Responsibility Act are absolute in form and a defense that the insured has failed to comply with the conditions set forth in the policy is unavailable to the insurer.

It is quite clear that while policies issued in compliance with Section 94-q of the Vehicle and Traffic Law are absolute the same is not true with respect to all liability policies. Cohen v. Metropolitan Casualty Insurance Company of New York, 233 App.Div. 340, 252 N.Y.S. 841; American Lumbermens Mutual Casualty Co. of Illinois v. Trask, 238 App.Div. 668, 266 N.Y.S. 1; Hartford Accident & Indemnity Company v. Breen, 2 A.D.2d 271, 153 N.Y.S.2d 732. In each of the foregoing cases the absolute liability of the insurance carrier was based upon the Statute itself and not as the result of any general legislative intent or public...