Kurz v. Collins

• Decision Date: 03 March 1959
• Citation: 6 Wis.2d 538,95 N.W.2d 365
• Parties: Caroline A. KURZ, Respondent, v. Emmett Gene COLLINS et al., Defendants, Badger State Casualty Co., Appellant.
• Court: Wisconsin Supreme Court

Page 365

95 N.W.2d 365

6 Wis.2d 538

Caroline A. KURZ, Respondent, v. Emmett Gene COLLINS et al., Defendants Badger State Casualty Co., Appellant.

Supreme Court of Wisconsin.

March 3, 1959.

Wickham, Borgelt, Skogstad & Powell, Milwaukee, Arthur Wickham, Milwaukee, of counsel, for appellant.

Charlton, Yanisch, Binzak & Ritchay, Milwaukee, Richard F. Yanisch, William A. Ritchay, Milwaukee, of counsel, for respondent.

CURRIE, Justice.

The issues on this appeal are as follows:

(1) Was there a failure of co-operation on the part of Collins and Pappas, or either of them, because of having made material false statements, which breached a condition of the policy of insurance as a matter of law so as to entitle the insurance company to a summary judgment?

(2) Did Collins breach the co-operation clause of the policy by failing to verify the answer drafted for him by Badger's attorneys thus voiding the policy?

(3) Did the failure of Pappas to notify the insurance company of the commencement of the suit and to forward to Badger the summons served upon him constitute a material breach of a condition of the policy so as to render Badger not liable to the plaintiff on the policy?

(4) Did the filing of an SR-21 by Badger preclude it from raising as a defense the alleged breach of the conditions relied upon by it on its application for summary judgment?

False Statements as Failure of Co-operation.

The facts hereinafter stated are gathered from the affidavits considered by the trial court on the motion for summary judgment and from the verified answer of Pappas. No affidavits of either Collins or Pappas were filed, but parts of the adverse examinations of Collins and of the Badger's claim manager were incorporated into the affidavits which were filed.

The policy of insurance issued by Badger to Collins provided that the covenants of coverage are 'subject to the * * * conditions * * * of this policy.' One of such conditions reads as follows:

'The insured shall co-operate with the company and, upon the company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits. * * *'

Shortly after the accident on September 11, 1954, Collins admitted to police officers, who investigated the same, that he was driving the car which struck the plaintiff pedestrian. Collins was arrested and charged with having failed to yield the right of way to a pedestrian, and he pleaded guilty to such offense.

On September 23, 1954, Collins gave a written statement to Badger's claims manager which described the accident. Such statement stated, 'On September 11, 1954, at about 5:07 A.M. I struck a woman pedestrian at the intersection of 17th & Kilbourn.' This statement then proceeded to give the details of Collins' operation of his car at the time of the accident. Pappas also furnished Badger with a signed statement on September 23, 1954, in which he stated that he had read Collins' statement and that the same 'is true in all respects.'

Some time in March, 1955, Badger was advised that there was some question as to whether Collins was in fact the driver of the vehicle which struck the plaintiff. Because of this, Badger's claims manager on March 24, 1955, obtained a second written statement signed by Collins in which he stated:

'The accident involving my car and Mrs. Caroline Kurz at 17th & Kilbourn, which occurred in September of 1954, happened while I was driving my car. No one else was operating car at the time.' (Italics supplied.)

On the same day Collins executed a non-waiver agreement wherein it was agreed 'that no action heretofore or hereafter taken by' Badger 'shall be construed as a waiver of the right, if any, of' Badger 'to deny liability * * *.'

A third statement was obtained from Collins on April 4, 1955, reading as follows:

'In previous reports to my insurance company, Badger State Casualty Co., Ltd. Mut., I had indicated that I was driving my car at the time of the accident. These reports are not true, the fact being that I was not operating my car, but was merely a passenger. George Pappas was operating the car.

'I had picked him up at his home that morning and he drove from there until the accident. I was teaching him to drive and he had driven my car on previous occasions, but only when I had been with him. To my knowledge, George had no driver's license, temporary driving permit or other such document issued to him by public authorities which permitted him to operate a car.

'At the time I figured that the best thing to do was to state that I was driving and I was fined, in George's place, for failing to yield the right of way to a pedestrian. I later convinced myself that it would be best to set the record straight by saying that I hadn't been driving at the time.' (Italics supplied.)

Thereafter, on April 13, 1955, Badger obtained a second signed statement from Pappas in which he stated as follows:

'Sometime in September, 1954, I gave a statement to the Badger State Casualty Co., Ltd. Mut., in which I said that I was a passenger in the car driven by Robert Collins on September 11, 1954, when it was involved in an accident with a pedestrian at the intersection of 17th & Kilbourn.

'The statement I gave that day is true and correct. I was not driving Robert Collins car on September 11, 1954, when the accident occurred. I only drove his car once and that was down at the lakefront when he was giving me a lesson. I do not have a driver's license.' (Italics supplied.)

Collins later on December 5, 1955, testified upon his adverse examination by the plaintiff as follows: When Collins and Pappas left the home of the latter on the morning of the accident, Collins drove the car. Later, but prior to the accident, Collins stopped the vehicle and Pappas took the wheel and drove. When Collins observed that the automobile, as operated by Pappas, was about to strike the plaintiff, Collins grabbed the wheel and turned the car sharply to the left and at the same time 'reached for the brake' and applied the brake.

No adverse examination was then taken of Pappas because he was not then a party to the action. However, Pappas later under date of April 11, 1957, verified his answer to the amended complaint, which was drafted and filed by his separate counsel, the firm of Murphy, Shapiro & Gorsky. Such answer in one paragraph 'admits that the automobile operated by this defendant [Pappas] collided with the person of the plaintiff.' In another paragraph of the answer it is alleged that at the time of the accident Pappas was behind the wheel, but that immediately prior to the collision Collins grabbed the wheel and applied his foot to the brakes. Because of this it is further alleged that the car was then not under the control of Pappas but was under the control of Collins.

From the foregoing statement of facts it conclusively appears that both Collins and Pappas gave false statements to Badger as to the fact of who was operating the car at the time of the accident. The plaintiff's brief attempts to rationalize the discrepancies in the various conflicting statements on the ground that an ambiguous situation existed as to which of the two really was operating the car at the time it struck the plaintiff. This is because Pappas was seated behind the wheel and had been driving the car, but an instant before the impact Collins grabbed the wheel and put his foot on the brakes. However, such rationalization does not explain away certain specific false statements.

At the time Collins gave his March 24, 1955 statement Badger had information that Collins had not been driving, and for this reason asked for a further statement from Collins. In this further statement Collins said the accident happened 'while I was driving my car. No one else was operating my car at the time.' The italicized sentence is clearly irreconcilable with the possibility that Pappas was seated behind the wheel as the driver.

Likewise Pappas' statement on April 13, 1955, that he was not driving Collins' car on September 11, 1954, and had only driven such car once and that was down at the lakefront, cannot be harmonized with his verified answer in which he admits that he did operate this car on September 11, 1954 and was behind the wheel at the time of the accident.

This court has held that co-operation on the part of an insured, under a policy condition reading as does the one here before us, requires 'a fair, frank, and truthful disclosure of information.' Hoffman v. Labutzke, 1940, 233 Wis. 365, 374, 289 N.W. 652, 656, and Buckner v. General Casualty Co., 1932, 207 Wis. 303, 309, 241 N.W. 342. We further adopt the statement made in Ocean Accident & Guarantee Corp. v. Lucas, 6 Car., 1934, 74 F.2d 115, 117, 98 A.L.R. 1461, that, in order for failure of co-operation to be grounded upon variance in statements made by the insured, such variance 'must be not only material, but conscious.' Such latter case further holds that in order for a false statement to be made consciously it must be a 'deliberate and wilful falsification.'

The question of whether there has been a breach of a co-operation clause of an insurance policy because of the insured having given a false statement or testimony presents a mixed question of fact and law. The issue of whether such alleged false statement or testimony was consciously or deliberately made or given is a question of fact ordinarily to be determined by a jury. On the other hand, whether the same is material is a question of law to be resolved by the court and not a jury. However, sometimes the facts are so clear that the false statement or testimony was consciously or deliberately made that there is no issue to submit to a jury. We consider this to be such a case. Therefore, there remains for determination only the factor of materiality.

When it is stated that a false statement or testimony must be material in...