Insurance Co. of North America v. Sperry & Hutchison Co., 53483

CourtUnited States State Supreme Court of Iowa
Writing for the CourtGARFIELD
Citation168 N.W.2d 753
PartiesINSURANCE COMPANY OF NORTH AMERICA, Appellant, v. SPERRY & HUTCHISON COMPANY, Appellee.
Docket NumberNo. 53483,53483
Decision Date10 June 1969

Page 753

168 N.W.2d 753
INSURANCE COMPANY OF NORTH AMERICA, Appellant,
v.
SPERRY & HUTCHISON COMPANY, Appellee.
No. 53483.
Supreme Court of Iowa.
June 10, 1969.

Page 754

Swift & Swift, and Cosson, Christianson, Hohnbaum & George, Des Moines, for appellant.

Jones, Hoffmann & Davison, Des Moines, for appellee.

GARFIELD, Chief Justice.

This is an interlocutory appeal by plaintiff granted by us under Rule 332, Rules of Civil Procedure, from an order under Rule 236 R.C.P. setting aside a default judgment in plaintiff's favor. There is little, if any, dispute in the record facts pertinent to the appeal.

On August 13, 1968 plaintiff, Insurance Company of North America, filed its petition at law in the district court at Ottumwa against Sperry & Hutchison Company, herein called S & H, to recover $89,843.50 as subrogee of Baker Music & Appliance and the owner of the building in which it was located in Ottumwa, both referred to here as Baker, alleging defendant's employees negligently caused a fire in an adjoining building occupied by S & H which damaged the Baker store, building and business in the amount alleged; that claim for such amount was made by Baker against plaintiff and paid by it under its policy of insurance issued to Baker.

On August 21, 1968, original notice of the action with copy of the petition attached was served on S & H by delivering a true copy thereof to Harlan Thoma in Des Moines, assistant vice president of Prentice Hall Corporation System, Inc., process agents of S & H. The original notice with sworn proof of service was filed in the district court at Ottumwa on September 12, 1968. The notice required defendant to appear before such court within 20 days after service thereof.

Also on September 12 plaintiff's attorneys appeared before the district court at Ottumwa, defendant's default was entered for failure to appear or plead as required by law, plaintiff's proof was submitted to the court which found it was entitled to judgment as prayed and it was accordingly entered.

On September 23 S & H filed its motion pursuant to Rule 236 R.C.P. to set aside the judgment entry on the ground its appearance and defense were not timely presented by reason of mistake, inadvertence, excusable neglect and unavoidable casualty in that the original notice was temporarily misrouted through the regular channels of large business operation as evidenced by attached affidavit of Robert L. Martin and that defendant has a valid defense to plaintiff's alleged cause of action. The affidavit of one of defendant's attorneys bearing on the matter of defense was also incorporated in the motion by reference.

Mr. Martin's affidavit stated he is loss-claim manager for the Des Moines division of Home Insurance Company, herein called Home; he first became aware of the litigation in question on September 17; subsequent investigation revealed the default judgment entered on September 12; later investigation disclosed that through mistake and inadvertence of self-insured individuals basis insurance coverage in a carrier other than his employer, to-wit Aetna

Page 755

Casualty & Surety Co., and only a policy of 'Excess Liability Coverage' having been issued by Home, the matter was not promptly forwarded for appropriate appearance; the cause has now been referred to defendant's present attorneys in Des Moines for such further proceedings as the court permits.

The affidavit of one of defendant's attorneys attached to its motion to set aside the judgment stated he first learned on September 17 of the default judgment in Ottumwa and two days later obtained copies of the pleadings and judgment entry in the case; affiant's firm has been retained by Home, excess liability carrier for S & H; the firm has been provided with sufficient facts and information to evaluate plaintiff's claim; affiant firmly believes a valid defense exists to it; the affidavit is made in good faith and solely for the purpose of protecting the interests of S & H and to accord it opportunity to present such defense and pursue its day in court.

Plaintiff's resistance to defendant's motion above summarized denied much of the motion and attached affidavits, denied sufficiency of the matters therein stated as grounds specified in Rule 236 for setting aside the default and alleged the attorney's affidavit did not support a claim there was a defense to plaintiff's petition. Plaintiff asked that Robert L. Martin appear for cross-examination under R.C.P. 116 and section 622.90 Code 1966.

At the hearing on the motion to set aside the default Mr. Martin stated on cross-examination by plaintiff's counsel that his first knowledge of the litigation came from a phone call from one of his superiors in Home's New York office; before then he had never been called by S & H; affiant's superior advised him the lawsuit was in the superior's hands, had been routed through the Aetna company on the presumption that most other locations it is the primary base of our 'umbrella' coverage which normally includes the portion of claims in excess of $100,000; affiant had no conversation with Aetna but got this information as hearsay from Home's office; affiant did not feel there was any mistake on the part of Home; he did not know if Aetna made a mistake; he knows nothing about the insurance department of S & H or its manager nor as to whether they made a mistake; after he learned of the litigation affiant made no investigation through S & H and does not know what it did; he had some knowledge of where the delay occurred and why there was some confusion but couldn't put his finger on a specific thing the company did.

On examination by counsel for Home, Mr. Martin said he had no personal knowledge of what went on in New York; that was mere supposition on his part; he had no dealings with S & H.

Aside from reciting the procedural matters as to filing the petition in Ottumwa, service of original notice on process agents of S & H, entry of default judgment, filing the motion to set it aside, the resistance thereto, and examination of Robert L. Martin,...

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16 practice notes
  • Flexsteel Industries, Inc. v. Morbern Industries Ltd., 57175
    • United States
    • United States State Supreme Court of Iowa
    • March 17, 1976
    ...with the grant of such a motion than with its denial. * * * (citing authority).' Insurance Co. of No. Amer. v. Sperry & Hutchison Co., 168 N.W.2d 753, 756 (Iowa 'A 'good cause' is a sound, effective, and truthful reason. It is something more than an excuse, a plea, apology, extenuation, or ......
  • Rath v. Sholty, 55024
    • United States
    • United States State Supreme Court of Iowa
    • June 29, 1972
    ...40 N.W.2d 20 (1949); Reilley v. Kinkead, 181 Iowa 615, 165 N.W. 80 (1917); But see Insurance Co. of No. Amer. v. Sperry & Hutchison Co., 168 N.W.2d 753 (Iowa 1969); Haynes v. Ruhoff, 261 Iowa 1279, 157 N.W.2d 914 (1968). The same policy shall be followed, within the scope of our permissible......
  • Garrison v. Garrison, 54051
    • United States
    • United States State Supreme Court of Iowa
    • September 2, 1970
    ...entirely collateral to the divorce issue.' (Emphasis supplied). See also Insurance Co. of North America v. Sperry & Hutchison Co., Iowa, 168 N.W.2d 753, 756; Haynes v. Ruhoff, Iowa, 157 N.W.2d 914, 615--916; and Claeys v. Moldenschardt, 260 Iowa 36, 43, 148 N.W.2d Then in Handy v. Handy, 25......
  • Dealers Warehouse Co. v. Wahl and Associates, 2--56163
    • United States
    • United States State Supreme Court of Iowa
    • March 27, 1974
    ...203 N.W.2d 383 (Iowa 1973), In Re Estate of Staab, 192 N.W.2d 804 (Iowa 1971), Insurance Co. of No. Amer. v. Sperry & Hutchison Co., 168 N.W.2d 753 (Iowa 1969), Haynes v. Ruhoff, supra, and Hallett Const. Co. v. Iowa State Highway Com'n, 258 Iowa 520, 139 N.W.2d 421 (1966). In the first thr......
  • Request a trial to view additional results
16 cases
  • Flexsteel Industries, Inc. v. Morbern Industries Ltd., 57175
    • United States
    • United States State Supreme Court of Iowa
    • March 17, 1976
    ...with the grant of such a motion than with its denial. * * * (citing authority).' Insurance Co. of No. Amer. v. Sperry & Hutchison Co., 168 N.W.2d 753, 756 (Iowa 'A 'good cause' is a sound, effective, and truthful reason. It is something more than an excuse, a plea, apology, extenuation, or ......
  • Rath v. Sholty, 55024
    • United States
    • United States State Supreme Court of Iowa
    • June 29, 1972
    ...40 N.W.2d 20 (1949); Reilley v. Kinkead, 181 Iowa 615, 165 N.W. 80 (1917); But see Insurance Co. of No. Amer. v. Sperry & Hutchison Co., 168 N.W.2d 753 (Iowa 1969); Haynes v. Ruhoff, 261 Iowa 1279, 157 N.W.2d 914 (1968). The same policy shall be followed, within the scope of our permissible......
  • Garrison v. Garrison, 54051
    • United States
    • United States State Supreme Court of Iowa
    • September 2, 1970
    ...entirely collateral to the divorce issue.' (Emphasis supplied). See also Insurance Co. of North America v. Sperry & Hutchison Co., Iowa, 168 N.W.2d 753, 756; Haynes v. Ruhoff, Iowa, 157 N.W.2d 914, 615--916; and Claeys v. Moldenschardt, 260 Iowa 36, 43, 148 N.W.2d Then in Handy v. Handy, 25......
  • Dealers Warehouse Co. v. Wahl and Associates, 2--56163
    • United States
    • United States State Supreme Court of Iowa
    • March 27, 1974
    ...203 N.W.2d 383 (Iowa 1973), In Re Estate of Staab, 192 N.W.2d 804 (Iowa 1971), Insurance Co. of No. Amer. v. Sperry & Hutchison Co., 168 N.W.2d 753 (Iowa 1969), Haynes v. Ruhoff, supra, and Hallett Const. Co. v. Iowa State Highway Com'n, 258 Iowa 520, 139 N.W.2d 421 (1966). In the first thr......
  • Request a trial to view additional results

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