Hanover Ins. Co. v. Carroll

• Decision Date: 19 April 1966
• Citation: 50 Cal.Rptr. 704,241 Cal.App.2d 558
• Court: California Court of Appeals
• Parties: HANOVER INSURANCE COMPANY, a corporation, plaintiff and Appellant, v. M. Frank CARROLL and Civil Service Employees Insurance Company, a corporation, Defendants and Respondents. Civ. 22706.

Page 704

50 Cal.Rptr. 704

241 Cal.App.2d 558

HANOVER INSURANCE COMPANY, a corporation, plaintiff and Appellant, v. M. Frank CARROLL and Civil Service Employees Insurance Company, a corporation, Defendants and Respondents.

Civ. 22706.

District Court of Appeal, First District Division 1, California.

April 19, 1966.

Hearing Denied June 17, 1966.

Sedgwick, Detert, Moran & Arnold, George E. Sayre, San Francisco, for appellant.

Sandell, Carter & Hill, Harold D. Sandell, Fresno, for respondents.

SIMS, Justice.

Plaintiff has appealed from an adverse judgment in an action in which it sought a declaration that its policy issued to the corporate defendant did not cover a claim of the individual defendant for damages for personal injuries allegedly suffered as the result of physical contact of a 'hit-and-run' automobile with the automobile of his employer, the policyholder, which the employee was occupying at the time as an additional insured.

At the trial the evidence consisted of certain documents and the testimony of the claimant, the testimony of a claims supervisor of plaintiff, and, by deposition, the testimony of a highway patrol officer to whom the accident was reported and who conducted the only investigation that was made. At the request of the court the facts adduced were summarized in an agreed statement of facts. The findings of fact, which are a part of the judgment, set forth substantially all the matters in question.

They reflect that on May 12, 1962, while the policy, which contains 'uninsured motorist coverage,' was in force, the individual defendant while occupying the policyholder's, his employer's, automobile was involved in an accident, in which there was physical contact between that vehicle and an unidentified vehicle, from which he claims he suffered personal injuries; that on the same day and within 24 hours of the accident he reported it to the California Highway Patrol; that plaintiff was not notified of the accident or that said defendant had sustained injuries therefrom until January 16, 1963; and that on January 28, 1963 the plaintiff denied coverage because of lack of notice. The trial court further found that plaintiff was not prejudiced by the failure of defendant to notify it of the accident within the thirty-day period specified in the insurance policy, and the applicable statutory requirements.

Plaintiff contends on this appeal (1) that no coverage ever arose in this case because compliance with the requirement of the thirty-day notice is a necessary predicate of liability under the 'hit-and-run automobile' provision of the 'uninsured motorist' coverage; and (2) that, in any event, if the failure to give timely notice may be excused where there is no prejudice to the insurer,

the facts herein establish prejudice as a matter of law. The delay in filing a statement under oath does not defeat recovery under the policy unless the insurer is prejudiced thereby

The policy in question reads as follows:

'Insuring Agreements.

'I. Damages for Bodily Injury Caused by Uninsured Automobiles: To pay all sums which the insured or his legal representative shall be legally obligated to recover as damages * * * sustained by the insured, caused by accident and arising out of the ownership, maintenance, or use of such uninsured automobile. * * *

'II. Definitions:

'(a) * * *

'(b) * * *

'(c) Uninsured Automobile. The term 'uninsured automobile' means * * * (3) a hit-and-run automobile as defined; * * *.

'(d) Hit-and-run Automobile. The term 'hit-and-run automobile' means an automobile which causes bodily injury to an insured arising out of physical contract of such automobile with the automobile which the insured is occupying at the time of the accident provided (1) there cannot be ascertained the identity of either the operator or owner of such 'hit-and-run automobile'; (2) the insured or someone on his behalf shall have reported the accident within 24 hours to a police, peace or judicial officer or to the Commissioner of Motor Vehicles, And shall have filed with the company within 30 days thereafter a statement under oath that the insured or his legal representative has a cause or causes of action arising out of such accident. * * * ' (Emphasis added.)

Since 1959 (Stats.1959, ch. 817, § 1, p. 2835) this state has required that every policy of bodily injury liability insurance covering liability arising out of the ownership, maintenance or use of any motor vehicle shall contain, unless waived in the manner provided by statute, provisions relating to coverage for damages caused by the operation of an uninsured motor vehicle including therein a vehicle of which the owner or operator thereof is unknown. 'The uninsured motorist coverage imposed by Insurance Code § 11580.2 is California's response to the problem of the financially irresponsible motorist. (Comment, 48 Cal.L.R. 516.) By requiring all policies to contain uninsured motorist coverage (or an express waiver) the Legislature attempted to broaden the protection of innocent drivers against negligent and financially irresponsible motorists. (Report of Traffic Accident Consequences Subcommittee, Assembly Journal Appendix, Reg. Session, 1959, Vol. 3, pp. 14--15.)' (Inter-Insurance Exch. of Auto. Club of Southern Cal. v. Lopez (1965) 238 A.C.A. 516, 518, 47 Cal.Rptr. 834, 835; and in addition to sources cited see: Mission Ins. Co. v. Brown (1965) 63 A.C. 532, 534, 47 Cal.Rptr. 363, 407 P.2d 275; Travelers Indem. Co. v. Kowalski (1965) 233 Cal.App.2d 607, 609, 43 Cal.Rptr. 843; Taylor v. Preferred Risk Mut. Ins. Co. (1964) 225 Cal.App.2d 80, 82, 37 Cal.Rptr. 63; Hendricks v. Meritplan Ins. Co. (1962) 205 Cal.App.2d 133, 136, 22 Cal.Rptr. 682; Chadwick and Poche, California's Uninsured Motorist Statute: Scope and Problems (1961) 13 Hastings L.J. 194; Aguilar and Aguilar, Uninsured Motorist Coverage (1961) 36 State Bar J. 205.) As enacted there was no qualification or definition of a so-called 'hit-and-run' vehicle, but in 1961 the statute was revised to read in part as follows: 'a. Required Policy Provisions or Endorsement. No policy of bodily injury liability insurance * * * shall be issued or delivered in this state to the owner or operator of a motor vehicle * * * unless the policy contains * * * a provision * * * insuring the insured, * * * or his legal representative for all sums within such limits which he * * * shall be legally entitled to recover as damages for bodily injury * * * from the owner or operator of an uninsured motor vehicle. * * *

'b. Definitions.--As used in (a) above * * * The term 'uninsured motor vehicle' means a motor vehicle with respect to the ownership, maintenance or use of which there is no bodily injury liability insurance or bond applicable at the time of the accident, or there is such applicable insurance or bond but the company writing the same denies coverage thereunder, or a motor vehicle used without the permission of the owner thereof if there is no bodily injury liability insurance or bond applicable at the time of the accident with respect to the owner or operator thereof, or the owner or operator thereof be unknown, provided that, with respect to 'uninsured motor vehicle' whose owner or operator is unknown: 1. The bodily injury has arisen out of physical contact of such automobile with the insured or with an automobile which the insured is occupying, 2. The insured or someone in his behalf shall have reported the accident within 24 hours to the police department of the city where the accident occurred or, if the accident occurred in unincorporated territory then either to the sheriff of the county where the accident occurred or the local headquarters of the California Highway Patrol, And have filed with the insurer within 30 days thereafter a statement under oath that the insured or his legal representative has * * * a cause of action arising out of such accident for damages against a person or persons whose identity is unascertainable and set forth facts in support thereof.' (Emphasis added.) (Insurance Code § 11580.2, as revised Stats.1961, ch. 1189, § 2, p. 2921.) The effect of these amendments has been commented on as follows: 'The original law in 1959 did not specify any requirement for physical contact between vehicles. (Stats.1959, ch. 817, § 1.) The law was amended in 1961, however, to impose three limitations on the coverage against a hit-and-run automobile: there must have been physical contact with the unknown vehicle, the accident must have been reported to the police within 24 hours, and a claim must have been filed with the insurer within 30 days. (Stats.1961, ch. 1189, § 2.) These amendments, as the trial court noted, were designed to curb fraud, collusion, and other abuses arising from claims that phantom cars had caused accidents which, in fact, had resulted solely from the carelessness of the insured. For example, a driver who fell asleep and hit a telephone pole might claim he had swerved off the road to avoid being hit by an unidentified vehicle. The provision requiring physical contact with the unknown vehicle was added to the statute in order to eliminate such fictitious claims. (Chadwick, California's Uninsured Motorist Statute, 13 Hast.L.J. 194, 197--198.)' (Inter-Insurance Exch. of Auto. Club of Southern Cal. v. Lopez, supra, 238 A.C.A. 516, 518, 47 Cal.Rptr. 834, 835.) Physical contact and the report to the highway patrol are established, so inquiry here is limited to the single question of whether the passage of 30 days before a statement under oath is filed with the insurer will preclude consideration of the claim.

In Lopez the court held, 'that where an unknown vehicle has struck a second vehicle and caused it to strike the insured vehicle, there is physical contact between the unknown vehicle and the insured vehicle within the meaning of the uninsured motorist endorsement.' (238 A.C.A. at p. 521, 47 Cal.Rptr. at p. 837.) In arriving at this conclusion the...