Goergen v. Manufacturers Cas. Ins. Co.

• Decision Date: 20 June 1933
• Court: Connecticut Supreme Court
• Parties: GOERGEN v. MANUFACTURERS CASUALTY INS. CO.

166 A. 757

117 Conn. 89

GOERGEN v. MANUFACTURERS CASUALTY INS. CO.

Supreme Court of Errors of Connecticut.

June 20, 1933

Appeal from Court of Common Pleas, New Haven County; Walter M Pickett, Judge.

Action by Joseph B. Goergen against the Manufacturers Casualty Insurance Company to recover under the terms of a liability insurance policy, brought to the Court of Common Pleas and tried to the court. Judgment for the plaintiff, and appeal by the defendant.

No error.

Liability insurer sued on judgment against insured waived insured's failure to co-operate as provided in policy by not being present at trial, where insurer who conducted insured's defense made no formal application for continuance, and conducted defense until end of trial. Gen.St.1930, § 4231.

George E. Beers and William L. Beers, both of New Haven, for appellant.

William J. Carrig, of New Haven, for appellee.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

HINMAN, Judge.

The plaintiff brought an action against a Mrs. Tucker for damages for injuries suffered by alleged negligence in the operation of an automobile owned by her, liability for which was covered by a policy issued by the present defendant. Subsequently Paul R. Cashman, who was driving the car at the time of the accident, was cited in as a defendant and the action was withdrawn as against Mrs. Tucker. Cashman as the operator of the car was an additional insured under the terms of the policy and the present defendant ultimately caused appearance in his behalf to be entered by counsel who undertook the defense and continued in control and management of it until the case terminated in verdict and judgment for the plaintiff.

The plaintiff, after execution against Cashman was returned unsatisfied, then brought the present action, under section 4231 of the General Statutes, to recover the amount of the judgment from the defendant insurer.

The defendant, in addition to other matters not of present moment, alleged in its answer that Cashman failed to co-operate in the defense of the original action by attending and giving evidence on the trial. The plaintiff replied that by entering into and continuing in the trial until judgment the defendant waived any right to disclaim liability under the policy because of lack of co-operation. The policy contained a condition (C) that " the assured, when requested by the Company, shall aid in effecting settlements, securing evidence, the attendance of witnesses and in prosecuting appeals." This condition was binding upon Cashman as an additional assured. During the court week ending June 17, 1932, the case against Cashman was on assignment for trial and he was in daily attendance until Friday afternoon when the case was excused until the next Tuesday to follow a case specially assigned for that day. Cashman was requested by counsel to be in court Tuesday morning and he promised to do so. At the opening of court on Tuesday the case was called for trial but Cashman failed to appear. Defendant's attorney informally so stated to the court and to plaintiff's counsel and that he was an important witness, had been in attendance, and had promised to appear, and that counsel could not understand why he was absent, and suggested a continuance. Plaintiff's counsel objected and the court directed that the trial proceed. Defendant's counsel did not then or later attempt to withdraw from the case, declare a breach of the policy, disclaim liability, or reserve the defendant's rights under the policy. At the midmorning recess efforts were made by telephone to locate Cashman but without success. The counsel provided by this defendant, without moving for a continuance, remained in the case, when the plaintiff rested early in the afternoon produced and examined a witness, filed requests to charge, and argued the case to the jury. The same afternoon a verdict was rendered for the plaintiff for $700 damages.

It afterward developed, the court finds, that Cashman had no intention of absenting himself from the trial but having been in New York over the week-end returned to New Haven early Tuesday morning and went to his home and to sleep, believing that because of the Yale Commencement exercises on that day and the special assignment of the case preceding his own his appearance in court would not be necessary before the following day. He appeared in court on Wednesday morning expecting to testify but then found that the case had been concluded the previous afternoon.

The day following the trial the counsel wrote the present defendant describing what had occurred and advising it to disclaim liability under the policy and it refused to pay the judgment but, the finding states, so far as appears the first formal disclaimer was by the answer filed in the present case.

Upon the facts found, the trial court held that while Cashman was not guilty of had faith and did not willfully refuse to attend and testify or intend to abandon the defense of the cause, his conduct constituted a failure to co-operate amounting to breach of condition C of the policy, but concluded, further, that counsel should have declared a breach and disclaimer of liability and either withdrawn from the case or reserved defendant's rights under the policy before proceeding with the trial or upon the breach, and that by his failure to do so the defendant waived whatever breach Cashman may have committed and is estopped to assert it against the plaintiff after his interest in the proceeds of the policy had attached by reason of the verdict and judgment. The validity of this latter conclusion is determinative of the appeal. The plaintiff's rights against the defendant are by subrogation to those of Cashman as an insured and are no different or more advantageous as to the consequences of his breach but, equally, the plaintiff stands in Cashman's shoes as to any waiver or estoppel which would preserve availability of the latter's rights notwithstanding such breach. Rochon v. Preferred Accident Ins. Co., 114 Conn. 313, 315, 158 A. 815; Guerin v. Indemnity Ins. Co., 107 Conn. 649, 142 A. 268, 269; Daly v. Employers' Liability Assurance Corp., 209 Mass. 1, 168 N.E. 111, 72 A.L.R. 1436; note, 72 A.L.R. page 1506, and cases cited.

It is generally recognized that waiver of an assured's breach of the co-operation clause, or estoppel to take advantage of it, may arise from the insurer's undertaking and continuing with the defense of an action against him with knowledge of the facts constituting the breach. Differences in result in the many cases are attributable to variations in the facts and circumstances involved and the application of the general...