International Service Ins. Co. v. Ross

• Decision Date: 05 August 1969
• Docket Number: No. 22438,22438
• Citation: 457 P.2d 917,169 Colo. 451
• Parties: INTERNATIONAL SERVICE INSURANCE COMPANY, Plaintiff in Error, v. Earl G. ROSS, Defendant in Error. . In Department
• Court: Colorado Supreme Court

Page 917

457 P.2d 917

169 Colo. 451

INTERNATIONAL SERVICE INSURANCE COMPANY, Plaintiff in Error, v. Earl G. ROSS, Defendant in Error.

No. 22438.

Supreme Court of Colorado In Department.

Aug. 5, 1969.

Rector & Kane, Jerry Alan Donley, Colorado Springs, for plaintiff in error.

Bellinger, Faricy & Tursi, Pueblo, for defendant in error.

McWILLIAMS, Chief Justice.

This writ of error is directed to a summary judgment for $5,000 entered by the trial court in favor of one Earl G. Ross against the International Service Insurance Company, a stock insurance company with home offices in Fort Worth, Texas. Earl G. Ross will hereinafter be referred to as Ross, and the International Service Insurance Company will be referred to as the Company. The judgment here sought to be reversed was entered in an action brought by Ross against the Company to enforce a so-called common law arbitration award. The background of the present controversy is a very tangled one, and a rather lengthy recitation thereof is deemed essential to an understanding of the matter.

On April 23, 1963 Ross was riding as a passenger in a vehicle owned and being then operated by one James C. Berger. On that particular occasion the Berger driven vehicle collided in an intersection in Colorado Springs with another vehicle. The driver of the other vehicle involved in this collision was one Jerry Rowell Walker. As a result of this collision Ross thereafter brought suit against Walker in the District Court of Pueblo County for the damages allegedly sustained by him in the aforesaid accident and in this proceeding a default judgment was subsequently on November 6, 1963 against Walker in the amount of $12,500.

Apparently Walker was an uninsured motorist. As of the date of the accident, however, the Company did have in effect a certain policy of insurance theretofore issued by it to Berger, the driver of the vehicle in which Ross was riding as a passenger when the above described accident occurred. It is this policy of insurance which forms the basis for the present controversy and accordingly reference thereto will be made at this juncture. The following then are the several provisions in the policy issued Berger by the Company which have possible bearing on the present dispute, although these various policy provisions are not here set forth in the precise order in which they appear in the policy:

'II. Definitions:

(a) Insured: The unqualified word 'insured' means:

* * * * * *

(2) any person while occupying an insured automobile;

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'In consideration of the payment of the premium for this endorsement, the Company agrees with the named insured, subject to the limits of liability, exclusions, conditions and other terms of this endorsement and to the applicable terms of the policy.'

'1. Damages for Bodily Injury Caused by Uninsured Automobiles: To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury,' sustained by the insured, caused by an accident and arising out of the ownership, maintenance or use of such uninsured automobile; provided, for the purposes of this endorsement, determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the company or, if they fail to agree, by arbitration.' (Emphasis added.)

* * * * * *

'6. Arbitration. If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this endorsement, then upon written demand of either the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this endorsement.'

* * * * * *

'This endorsement does not apply:

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'(b) to bodily injury to an insured, or care or loss of services recoverable by an insured, with respect to which such insured, his legal representative or any person entitled to payment under this endorsement shall, without written consent of the company, make any settlement with or prosecute to judgment any action against any person or organization who may be legally liable therefor.'

'2. Proof of Claim; Medical Reports: As soon as practicable, the insured or other person making claim shall give to the company written proof of claim, under oath if required, including full particulars of the nature and extent of the injuries, treatment, and other details entering into the determination of the amount payable hereunder. The insured and every other person making claim hereunder shall submit to examination under oath by any person named by the company, and subscribe the same, as often as may reasonably be required. Proof of claim shall be made upon forms furnished by the company unless the company shall have failed to furnish such forms within 15 days after receiving notice of claim.'

'The injured shall submit to physical examination by physicians selected by the company when and as often as the company may reasonably require and he, or in the event of his incapacity his legal representative, or in the event of his death his legal representative or person or persons entitled to sue therefor, shall upon each request from the company execute authorization to enable the company to obtain medical reports and copies of records.

'3. Notice of Legal Action: If before the company makes payment of loss hereunder, the insured or his legal representative shall institute any legal action for bodily injury against any person or organization legally responsible for the use of an automobile involved in the accident, a copy of the summons and complaint or other process served in connection with such legal action shall be forwarded immediately to the company by the insured or his legal representative.'

* * * * * *

'5. Other Insurance: With respect to bodily injury to an insured while occupying an automobile not owned by a named insured under this endorsement, the insurance hereunder shall apply only as excess insurance over any other similar insurance available to such occupant, and this insurance shall then apply only in the amount by which the applicable limit of liability of this endorsement exceeds the sum of the applicable limits of liability of all such other insurance.

'With respect to bodily injury to an insured while occupying or through being struck by an uninsured automobile, if such insured is a named insured under other similar insurance available to him, then the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable under this endorsement for a greater proportion of the applicable limit of liability of this endorsement than such limit bears to the sum of the applicable limits of liability of this insurance and such other insurance.

'Subject to the foregoing paragraphs, if the insured has other similar insurance available to him against a loss covered by this endorsement, the company shall not be liable under this endorsement for a greater proportion of such loss than the applicable limit of liability hereunder bears to the total applicable limits of liability of all valid and collectible insurance against such loss.'

On or about July 9, 1964 Ross filed with the Commercial Arbitration Tribunal of the American Arbitration Association a Demand for Arbitration and caused a copy of such demand to be served on the party with whom he sought arbitration, namely the Company. In response to such demand the Company filed with the American Arbitration Association an answer. In its answer the Company set up four so-called defenses, all of which were said to be asserted 'without waiving any rights available to the respondent (the Company) to refuse to recognize the right to arbitrate.' As its first defense the Company alleged that Ross was not entitled to arbitration because of the exclusion clause set forth above. As a second defense, the Company alleged that Ross had failed to comply with the provisions in the policy regarding proof of claim and medical reports, also set out above. In its third defense the Company made reference to the provisions in its policy concerning 'Other Insurance,' and alleged that Ross had insurance with a St. Paul Insurance company covering his loss and asked that said company be made a party to the arbitration. And for its fourth and last defense the Company flatly asserted that 'The American Arbitration Association has no jurisdiction of this cause.'

In reply to the Company's answer to his demand for arbitration, Ross filed a reply wherein he asked that each of the Company's four defenses be 'stricken or dismissed' because none stated a defense to his demand.

In his reply Ross affirmatively alleged that he had in fact furnished written proof of claim to the Company and that he had at all times been willing to comply with the proof of claim and medical examination provisions of the Company's policy of insurance. As concerns so-called 'other insurance' Ross admitted that he had uninsured motorist coverage on his own automobile with the St. Paul Mercury Insurance Company, but stated that the policy provided for excess coverage only.

In relation to his action against Walker,...