Home Indemnity Company v. Ware

• Decision Date: 03 May 1960
• Docket Number: Civ. A. No. 2120.
• Citation: 183 F. Supp. 367
• Parties: HOME INDEMNITY COMPANY, a corporation of the State of New York, Plaintiff, v. Harry T. WARE et al., Defendants.
• Court: U.S. District Court — District of Delaware

183 F. Supp. 367

HOME INDEMNITY COMPANY, a corporation of the State of New York, Plaintiff, v. Harry T. WARE et al., Defendants.

Civ. A. No. 2120.

United States District Court D. Delaware.

May 3, 1960.

F. Alton Tybout, of Prickett & Prickett, Wilmington, Del., for plaintiff.

William F. Taylor and H. James Conaway, Jr., of Morford, Young & Conaway, Wilmington, Del., for defendants.

LAYTON, District Judge.

Frederick White is the son of H. Newton White, Esquire, a Wilmington attorney, and Thelma White Ware, who had divorced Mr. White and married Harry T. Ware. In July, 1958, Fred was living with his mother and stepfather at the latter's home. At the time of these happenings, Fred had been 16 years old for only two weeks. His stepfather had recently refused to permit him to obtain a driver's license. On the night of July 15, 1958, Fred, having no operator's license, stole the car of a neighbor and became involved in a collision in which his two companions, the Cesarini boys, were injured. Cesarini, Sr., was insured with Home and Reliance. He notified Home in order to take advantage of the "medical payment" feature of the policy. Home made these payments promptly and closed its file in ignorance of the fact that Ware was also insured by it. Ware, also by coincidence insured by Home, did not then notify Home of the accident. Reliance was much slower in making payments under the "medical payment" clause of its policy. It was in October, while Reliance was still investigating the accident, that its agent, in talking to Mrs. Ware, suggested that the Wares might be covered by their Home policy. Mr. Ware, who had never imagined that his policy might cover Fred, then inquired of his agent, found that Fred was covered and promptly notified Home. Home subsequently disclaimed liability under Condition 3 of the policy which provided for notice of an accident "as soon as practicable".

Fred White has now been sued in the Superior Court of this State. In order to ascertain whether it must defend, Home has filed an action for a declaratory judgment in this Court advancing, among other reasons, Ware's failure to give notice within the provisions of Condition 3 of the policy.

An examination of a number of decisions dealing with the notice provisions in insurance policies reveals that a requirement to give notice as soon as practicable means within a reasonable time under the circumstances. London Guarantee & Accident Co. v. Shafer, D.C.Ohio, 35 F.Supp. 647; Miller v. Zurich General Accident & Liability Ins. Co., 36 N.J.Super. 288, 115 A.2d 597; Wilmington Amusement Co. v. Pacific Fire Ins. Co., 2 Terry, Del., 294, 21 A.2d 194;¹ American Employers Insurance Company v. Sterling, 101 N.H. 434, 146 A.2d 265; Appleman, Insurance Law and Practice, Vol. 8, Sec. 4734. Mere time lapse is not the determining factor. Miller v. Zurich General Accident and Liability Ins. Co., supra.

Was the delay of 85 days on Mr. Ware's part in notifying Home of this accident such as to justify the Company in denying liability thereunder? In determining this question we should examine the facts and circumstances not through the eyes of a trained insurance adjuster, agent, or a lawyer but from the point of view of Harry T. Ware, citizen.

Home insists that, in these circumstances, any reasonable man would have either examined the policy² which he had in his own possession or asked his agent for advice. A portion of this argument is not without merit. Some people undoubtedly would have called their agent. However, to contend that Mr. Ware should have personally examined and construed the rather complicated provisions of this policy against the unusual circumstances of this case and made his own determination as to coverage goes too far.

Mr. Ware testified that he did not notify Home for the simple reason that it never occurred to him. The fact is it never occurred to Mr. White, Fred's father and a lawyer, who was on friendly terms with his former wife's new husband. Now the fact that these two did not think of possible coverage is not determinative of the case. But that Mr. White, a lawyer and extremely interested in his son's welfare, did not think of it is not without significance. Moreover, now that these facts have been called to Home's attention, it is significant that it has rewritten the policy so that it would not again be liable under similar circumstances. We are thus permitted the inference that it had never even occurred to the Company itself that the terms of its policy were so broad as to include such uncommon facts.

I accept without hesitation Mr. Ware's testimony that it just never occurred to him that his stepson might be covered. And why would it? The boy had no license. The car was not the family car but the car of a neighbor. On top of that, it was stolen. The mind of the average man would, I believe, reject the thought that the unlicensed stealer of a car involved in a collision could possibly hope to be protected by insurance. Add to this the fact that no suit against Fred was pending through the 85 day period (nor had suit been...