Home Indemnity Co. of New York v. Allen

• Decision Date: 05 July 1951
• Docket Number: No. 10346.,10346.
• Citation: 190 F.2d 490
• Parties: HOME INDEMNITY CO. OF NEW YORK v. ALLEN et al.
• Court: U.S. Court of Appeals — Seventh Circuit

190 F.2d 490 (1951)

HOME INDEMNITY CO. OF NEW YORK v. ALLEN et al.

No. 10346.

United States Court of Appeals Seventh Circuit.

July 5, 1951.

Matthew J. O'Brien, James R. Hanrahan, Richard E. Keogh and George M. O'Brien, all of Chicago, Ill., for appellant.

John M. Moelmann, Oswell G. Treadway, Alfred W. Israelstam, John E. Foster, all of Chicago, Ill., for appellee.

Before KERNER, LINDLEY, and SWAIM, Circuit Judges.

KERNER, Circuit Judge.

In this action plaintiff filed its petition under the Declaratory Judgment Act, 28 U.S.C. § 2201, seeking a declaratory judgment to the effect that it was not liable to defendants on its Owners', Landlords' and Tenants' Public Liability policy of insurance No. OLT-24-175537 for a claim later involved in litigation between Esther Allen and Henry Frank and Frank Silverstein, on the ground that the assured had failed to report the occurrence of the Esther Allen accident as soon as practicable.

Henry Frank and Frank Silverstein will herein be referred to as defendants. The policy was issued to protect assured's tenants in the furnished apartments at 6501-9 Cottage Grove Avenue, Chicago, Illinois, on account of bodily injury sustained by any of the tenants. Among other clauses, the policy provided: "Upon the occurrence of an accident written notice shall be given by or on behalf of the Assured to the Company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the Assured 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."

At the conclusion of all the evidence, plaintiff moved for a directed verdict in its favor on the ground that defendants knew that a woman had been found injured on the premises under such circumstances as would require an ordinarily reasonable and prudent man to report that fact to the company; that they did not report it as soon as practicable, and that thereby it was prejudiced by the delay which had not been excused. The motion was denied, and the cause was submitted to the jury. The jury returned three special verdicts in the form of answers to interrogatories to the effect that the assured had not notified plaintiff of the accident as soon as practicable and that plaintiff had been prejudiced by the delay, but that plaintiff had, by its conduct, waived its policy defense. After verdict, plaintiff requested the trial court to enter judgment in its favor notwithstanding the verdict. The motion was based upon the specific claim that the record was devoid of any evidence of waiver by conduct. This motion was also denied, and the court entered a declaratory judgment that plaintiff is to defend defendants in a certain suit filed by Esther Allen in the Superior Court of Cook County, Illinois, against Henry Frank and Frank Silverstein for personal injuries arising out of the accident described in plaintiff's petition. To reverse this judgment, plaintiff appeals.

The only issue on this appeal is whether the trial court should have sustained plaintiff's motion for a judgment in its favor notwithstanding the verdict of the jury.

Waiver is the intentional relinquishment of a known right or such conduct as warrants an inference of such relinquishment, and the burden of proving the waiver is upon the one claiming it. Ferrero v. National Council of Knights and Ladies of Security, 309 Ill. 476, 141 N.E. 130. In other words, before there can be a waiver of a right there must be full knowledge of the facts by the person against whom the waiver is sought and some act clearly indicating the intention to relinquish the right, Muller v. Equitable Life Assurance Society, 293 Ill.App. 555, 562, 13 N.E.2d 96. And when waiver is asserted against an insurance company to avoid the strict enforcement of conditions contained in its policy, it will be invoked only where the conduct of the company has been such as to induce action in reliance upon it, or where it would operate as a fraud upon the assured if the company were afterwards allowed to disavow its conduct and enforce the conditions. Globe Mutual Life Ins. Co. v. Wolff, 95 U.S. 326, 24 L.Ed. 387, and...