Huppert v. Wolford

• Decision Date: 07 November 1966
• Docket Number: No. 9871,9871
• Citation: 420 P.2d 11,91 Idaho 249
• Parties: Gerald HUPPERT and Norma Huppert, husband and wife, and Raymond Vloedman, Plaintiffs-Respondents, v. J. T. WOLFORD, d/b/a Wolford Agency, Defendant, and Western Casualty & Surety Company, Inc., Defendant-Appellant.
• Court: Idaho Supreme Court

Page 11

420 P.2d 11

91 Idaho 249

Gerald HUPPERT and Norma Huppert, husband and wife, and Raymond Vloedman, Plaintiffs-Respondents, v. J. T. WOLFORD, d/b/a Wolford Agency, Defendant, and Western Casualty & Surety Company, Inc., Defendant-Appellant.

No. 9871.

Supreme Court of Idaho.

Nov. 7, 1966.

Ware, Stellmon & O'Connell, Lewiston, for appellant.

Paul C. Keeton and D. K. Worden, Lewiston, for respondents.

SPEAR, Justice.

This is an action for a declaratory judgment in which the plaintiff sought a determination and adjudication by the trial court of the validity of a policy of insurance allegedly issued by defendant Wolford, together with a determination that appellant Western Casualty & Surety Company, sometimes hereinafter referred to as 'Western,' was obligated under the policy to expend money in defense of respondent Vloedman in the personal injury and property damage action brought by respondents Huppert against Vloedman resulting from a July 30, 1961 accident, and requesting the award of $500.00 or such other sum as the court would deem reasonable for attorney's fees necessarily incurred by Vloedman in the defense of the Huppert-Vloedman action. From a judgment declaring Vloedman had in full force and effect a contract of insurance with Western covering Vloedman's 1955 GMC diesel motor truck at the time of the accident on July 30, 1961, with limits of liability of $50,000 for each person and $100,000 for each occurrence as to bodily injury liability and $10,000 for each occurrence as to property damage liability and further ordering Vloedman was entitled to $500.00 attorney's fees in Idaho County case No. 6597 (Huppert v. Vloedman), Western has appealed, claiming it had not insured Vloedman's truck and had incurred no liability in relation thereto as a result of the actions and representations of its agent, Wolford.

On July 11, 1961, Vloedman entered into an agreement with Clarence McReynolds to haul logs for McReynolds. Vloedman, as a condition precedent to such hauling, was required by McReynolds to have public liability insurance. McReynolds had for some time past procured his insurance through the defendant, Wolford, and some logging trucks owned by McReynolds were covered with public liability insurance issued by Western procured through Wolford. Wolford was engaged in the general insurance business with an office in Grangeville, Idaho since 1945 and was an independent agent for several major insurance companies, including Western, soliciting, selling, writing and delivering health, life, casualty, accident and fire insurance. As agent for Western Wolford took applications for insurance, countersigned policies, delivered policies, collected and remitted premiums, made out accident reports and transmitted claims to the appropriate offices.

Vloedman did not know Wolford but was accompanied by McReynolds on July 11, 1961, to Wolford's office for the purpose of obtaining the necessary insurance on the logging truck. There is considerable conflict in the record with regard to the conversation had between the parties at their meeting at Wolford's office and with regard to the understanding reached between Vloedman and Wolford as agent for Western. Wolford filled out an application form with provision for a 15-day binder on which he filled in the name of Western Casualty & Surety Co., and which subsequently was signed both by Vloedman and Wolford. Vloedman was given a copy of the 'application.' The coverage contemplated, as set forth in the application form, provided liability limits of $50,000 for each person and $100,000 for each occurrence as to bodily injury liability and $10,000 for each occurrence as to property damage liability. Vloedman testified there was never any discussion concerning temporary insurance but he informed Wolford that he wanted liability coverage 'as of today,' and that Wolford replied, 'You are covered as of now,' and 'I will deliver the policy.' Wolford accepted a $50.00 down payment on the premium for one year and extended credit for the balance which was to be paid upon the delivery of the policy. Vloedman maintains Wolford did not advise him of any limitation upon his authority as agent and representative for Western to provide the coverage which was sought and which Vloedman believed he had obtained. It is admitted by Vloedman that he did not fully read the application signed by him nor notice the provision for a 15-day binder printed below the heading but explained he saw no need to examine the form for it was his understanding that insurance for his truck had been obtained.

Wolford's testimony directly contradicts that of Vloedman. He testified the only reason he even considered this matter was due to the fact that McReynolds had brought Vloedman to his office. He further testified he told Vloedman he did not have authority to write logging truck insurance, that he did not write it and that Vloedman definitely was not covered simply because an application was made. The $50.00 down payment on the premium is admitted. Wolford explained that he had a lot of fire and automobile insurance with other loggers and that he accepted Vloedman's check largely because of the problem of getting premiums from such customers, and also because if a policy is written and then sent back for non-payment, he would be responsible for part of the premium.

This testimony is substantially corroborated by the former Ann Hatley who as secretary for Wolford was witness to the meeting with Vloedman and McReynolds. She and Mr. Wolford were married in April, 1965, prior to the commencement of this litigation. McReynolds could not be reached for trial and his testimony was unavailable.

Wolford sent the application to Western via American Agencies, general agent for Western, located in Salt Lake City, Utah, and that office forwarded a memorandum to Wolford on July 13, 1961, stating that logging risks were on the prohibited list and definitely an accommodation which Western preferred not to write. However additional information was requested as to Vloedman's insurance experience for the three years preceding July 11, 1961 with the proviso that American Agencies would at that time forward the application to Western for approval. On the basis of this tentative rejection, Wolford concluded that such insurance could not be obtained through Western. No notice of rejection or refusal was commmunicated to Vloedman by either Wolford or Western prior to July 30th, the date on which the truck was involved in the accident. Wolford explains that he felt the best thing to do after the rejection was to submit an application to Kolob Corporation, general agent for several other insurance companies, because it took some unusual risks. This he did on July 21, 1961.

When Vloedman visited his office on July 11th, Vloedman's leg was in a cast and Wolford testified since there was no representation that anyone other than the plaintiff was to drive the truck and since it was obvious Vloedman could not drive for some time, he believed he had time to write someone else in an effort to obtain coverage rather than contact Vloedman who lived at Whitebird, Idaho and had no telephone. Wolford additionally stated he had in fact brought this up when Vloedman came to him for insurance, telling Vloedman he would take the application because he would have time to send such an application in and hear about it since Vloedman was presently incapacitated and unable to drive. Vloedman claims however Wolford must have known that someone other than himself would drive the truck because of his incapacity and his expressed purpose to insure the truck immediately.

The application forwarded to Kolob was returned to Wolford the day after the accident accompanied by a note stating they would accept the logging truck insurance if Vloedman would fill out an application and return it to them. The accident, of course, precluded any acceptance such as would cover any liability resulting from the accident. By check dated August 1, 1961, Wolford attempted to refund the $50.00 down payment made by Vioedman and this check bore the following quotation: 'Account 15 day Binder July-11-61 to July 26-61.' The explanation again is that a refund was not earlier made since Wolford had hoped to acquire the requested insurance through Kolob. Wolford mailed the check to Vloedman, in care of McReynolds, in an envelope postmarked August 7, 1961. Wolford cannot account for the delay except to attribute it to an oversight on the part of his office. Vloedman did not accept the refund but took the check to his attorney. Subsequently the check was returned to Wolford. Within three days of the accident, Vloedman testified he went to Wolford to report the accident and that at this time Wolford informed him that he had no insurance coverage. Wolford denies that Vloedman ever came to his office to report the accident but admits he heard about the accident over the radio on July 30th, the accident date, or the following morning.

On or about August 21, 1961 counsel for Vloedman forwarded a demand to Wolford to accept liability for damage done to the truck or any other liability that might arise out of the July 30th accident. This demand Wolford rejected through his attorney by letter dated August 26, 1961, which explained that Vloedman had signed merely an application form subject to acceptance by the company to which it was directed, which form contained only a 15-day binder which terminated prior to the date of the accident. Wolford did not report the accident to Western until after the above demand by counsel for Vloedman. This action for a declaratory judgment followed.

The district court determined that plaintiff Vloedman was insured against liability resulting from the July 30th accident. The court in reaching that conclusion found the defendant Western held out J. T. Wolford, d/b/a Wolford Agency as their general local agent; and that on July 11, 1961...