Kirk v. Home Indemnity Company

• Decision Date: 06 August 1970
• Docket Number: No. 17995.,17995.
• Citation: 431 F.2d 554
• Parties: Jeral KIRK, Plaintiff-Garnishor-Appellant, v. The HOME INDEMNITY COMPANY, a Corporation, Defendant-Garnishee-Appellee, v. Jerome BRZOZOWSKI, Defendant-Debtor-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

431 F.2d 554 (1970)

Jeral KIRK, Plaintiff-Garnishor-Appellant, v. The HOME INDEMNITY COMPANY, a Corporation, Defendant-Garnishee-Appellee, v. Jerome BRZOZOWSKI, Defendant-Debtor-Appellee.

No. 17995.

United States Court of Appeals, Seventh Circuit.

August 6, 1970.

Rolland Stimson, Narusis & Stimson, Chicago, Ill. for plaintiff-garnishor-appellant; Ellis B. Rosenzweig, Chicago, Ill., of counsel.

Donald M. Haskell, George A. Beck, McKenna, Storer, Rowe, White & Haskell, Chicago, Ill., for defendant-garnishee-appellee.

Before KILEY, CUMMINGS and PELL, Circuit Judges.

PELL, Circuit Judge.

On August 16, 1963, at 4 A.M., automobiles driven by the plaintiff Kirk, an Indiana citizen, and Reverend Jerome Brzozowski, an Illinois citizen, collided on the Calumet Expressway in Cook County, Illinois. On November 1, 1963, Kirk filed a personal injury action against Brzozowski in the district court for the Northern District of Illinois. The defendant, Home Indemnity Company, a New York corporation, which was Brzozowski's liability insurer retained a Chicago law firm to defend the suit.

On March 9, 1965, six days before the scheduled trial of the Kirk personal injury suit, Brzozowski appeared at the offices of the Chicago lawyers and gave a statement which contradicted in a substantial manner factual information that he previously had furnished to the company and which he had given in a deposition taken on behalf of Kirk. On March 11, 1965, Home Indemnity by telegram, followed by a letter, advised Brzozowski that it had instructed its attorneys to withdraw from the suit and that coverage was being disclaimed because of the insured's breach of the cooperation clause of the policy.

On March 12, 1965, the attorneys for Home Indemnity filed a motion to withdraw as attorneys for Brzozowski but the motion was denied on the same day because of the trial setting of March 15, 1965.

The Chicago attorneys remained in the lawsuit, their motion for withdrawal having been denied, and on their advice Brzozowski secreted himself and did not appear at the trial. Verdict was rendered in the trial against Brzozowski in the amount of $25,000, on which judgment was entered.

Home Indemnity paid the Chicago attorneys for their legal fees and disbursements to March 12, 1965. On the record before us no further fees have been paid to the attorneys although billings were sent to both Home Indemnity and Brzozowski.

The suit from which the present appeal was taken was filed in the Circuit Court of Cook County and later removed to the federal district court for the Northern District of Illinois. Kirk sought by garnishment to recover from Home Indemnity the sum of $25,000 plus interest, pursuant to the Illinois statute pertaining to the subject.

Home Indemnity defended on the ground of the breach of the cooperation provisions in its policy covering Brzozowski, the pertinent portion of which reads as follows:

"Assistance and Cooperation of the Insured — Parts I and III: The insured shall cooperate with the company and, upon the company\'s request, assist in making settlements, in the conduct of suits and in enforcing any right of contribution or indemnity against any person or organization who may be liable to the insured because of bodily injury, property damage or loss with respect to which insurance is afforded under this policy; and the insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.

"In the event of an accident, occurrence or loss, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable. * * *"

In addition to its answer setting up the lack of cooperation defense, Home Indemnity filed a motion for a summary judgment based upon the same theory. Pursuant to court order, the entire file of Home Indemnity was produced for Kirk. Various depositions and exhibits were filed in support of the summary judgment motion. Kirk did not file any affidavits or other matters which raised a factual dispute. The motion for summary judgment was granted and this appeal challenges the correctness thereof.

The lack of cooperation under the insurance policy was based on the assertion that Brzozowski had given substantially contradictory statements. The gist of the matter was that his statements had been substantially consistent from a time shortly after the accident on August 16, 1963 until March 9, 1965, six days before the trial, at which time Brzozowski appeared at the offices of the Chicago attorneys retained by Home Indemnity and said that he wanted to make a statement, that the statement he had originally made and had repeated at various times subsequently thereto was inaccurate and untrue and that the testimony he had given under oath on his deposition was also inaccurate and untrue. Conferences followed immediately between the attorneys and Home Indemnity and following these conferences the action of notification of lack of coverage as previously noted herein was given to Brzozowski.

Brzozowski's statements, which were inconsistent with the statement given to the attorneys on March 9, 1965, assumed five forms which were as follows:

1. Brzozowski prepared, signed and submitted an accident report dated September 6, 1963 to Home Indemnity (September Report).

2. Later in September 1963, Brzozowski wrote two letters to Kirk's insurance company making a claim for his own losses (September Letters).

3. On October 3, 1963, Brzozowski gave a signed statement to a representative of Home Indemnity (October Statement).

4. On December 17, 1963, Brzozowski's deposition was taken by attorneys for Kirk (Deposition).

5. In January 1964, the deposition of a police officer was taken on behalf of Kirk and transcripts of this deposition and Kirk's deposition were sent by the attorneys appearing for Brzozowski to him. He read them and prepared three typewritten sheets in response (January response).

The areas of contradiction were also five in number and involved the following categories:

1. Consumption of alcoholic beverages.

2. Brzozowski's condition at the time of the accident.

3. His activities prior to the accident.

4. Speed.

5. Other facts of the accident itself.

With regard to consumption of alcoholic beverages, Brzozowski made the statements hereinafter set out.

October Statement: "I had not been drinking any alcoholic beverages prior to this accident."

Deposition:

Q. "Had you consumed any alcohol during the twelve hours immediately preceding the accident?"

A. "No, I hadn\'t, outside of the alter Mass wine. That was in the morning of the 15th."

January Response: "He says * * * he `could smell a faint odor of alcohol' * * * if he smelled anything, it was `F and F Cough Lozenges', because that's what I had in my mouth at the time. I had a slight throat cold that day. He did not smell alcohol."

"As to his saying that I had a few drinks, he's fabricating. I denied having had any drink * * * he sort of jokingly asked if I wanted to take a drunkenmeter test and I said: What for? You know I'm not drunk, so cut it out! so he dropped the subject." "He says my eyes were `blood shot'. They may have been tired and perhaps a bit red, because I had my windows opened * * * so that the wind blew directly in my face. But they were not blood shot from any drinking * * * and that's what he's trying to imply."

March 1965 Statement: "I had Scotch * * * Scotch and water * * * without ice * * * my best knowledge — oh, I imagine around 9, 10, maybe more. I don't know, in there somewhere * * * Started drinking around 4 o'clock * * * stopped drinking about 10 o'clock shortly before he went to sleep."

With regard to his physical and mental condition at the time of the accident, Brzozowski stated in his deposition that he was keeping a sharp lookout just prior to the accident and that he was alert. In his January response Brzozowski stated that he did not seem dazed and that when a deponent had said his speech was slurring he was not correct because he carried on a normal conversation and there was no slurring of his speech. He further stated that there was nothing unusual in the manner in which he moved.

In his March 1965 statement, however, Brzozowski admitted that before 10 o'clock when he went to sleep he felt lightheaded and that in his opinion the Scotch was affecting him. When he woke up about 2 o'clock he noticed that from the Scotch he was drowsy and while he did not think it affected his eyes, it might have. Following the accident he had fuzziness which might very well have been from the previous drinking.

With regard to his activities prior to the accident, Brzozowski in his October statement indicated that he had been in Terre Haute, Indiana and was bound home at the time of the accident. The court takes notice of the fact that Terre Haute, Indiana is approximately 186 miles from Chicago. In his deposition Brzozowski testified that he was returning home from a pleasure trip of eight or nine hours duration to Terre Haute and had just driven down there and back for recreation and did not stop to visit any friend. In his March, 1965, statement, Brzozowski indicated that prior to the accident he had been in his summer home at Lowell, Indiana alone with a female friend having left Chicago shortly after lunch. The court takes notice that Lowell, Indiana is approximately 48 miles from Chicago.

With regard to the speed at which he was driving at the time of the...