Leytem v. Fireman's Fund Indem. Co.

• Decision Date: 12 November 1957
• Docket Number: No. 49255,49255
• Citation: Leytem v. Fireman's Fund Indem. Co., 85 N.W.2d 921, 249 Iowa 524 (Iowa 1957)
• Parties: Arnold J. LEYTEM, d/b/a Leytem Trucking Company, Plaintiff-Appellee, v. FIREMAN'S FUND INDEMNITY COMPANY, Defendant-Appellant.
• Court: Iowa Supreme Court

Page 921

85 N.W.2d 921

249 Iowa 524

Arnold J. LEYTEM, d/b/a Leytem Trucking Company, Plaintiff-Appellee, v. FIREMAN'S FUND INDEMNITY COMPANY, Defendant-Appellant.

No. 49255.

Supreme Court of Iowa.

Nov. 12, 1957.

Clewell, Cooney & Fuerste, Dubuque, for appellant.

F. H. Becker, Dubuque, for appellee.

HAYS, Chief Justice.

Action for a declaratory judgment as to plaintiff's status under a certain indemnity insurance policy issued by the defendant. Among other things, under this policy defendant agreed to (1) indemnify plaintiff against loss imposed by law for damages due to an accident; (2) defend in plaintiff's name and on his behalf any suit against plaintiff alleging such injury; (3) retained the right to investigate, negotiate and settle any claims against plaintiff. Also contained in the policy were the following provisions: (a) 'When an accident occurs written notice shall be given * * * as soon as practicable * * *.' (b) 'No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy * * *.'

There is no substantial dispute as to the facts. Plaintiff, an operator of trucks and heavy equipment, carried liability coverage, under the above mentioned policy, for accidents in connection with said equipment. On October 1, 1954, a crane, owned by plaintiff and operated by his employee, was engaged in unloading heavy pipes from a railway car, for the Key City Gas Co., of Dubuque, Iowa. All men engaged in this work, except the crane operator, were Gas Company employees. While so engaged, an employee named John Lehman caught his hand between the end of a pipe and the side of the car, sustaining the injuries complained of. Lehman was wearing gloves and while after the injury there was some blood showing on the glove, the injury did not appear to be too serious. He was immediately taken to a medical clinic by an employee of the gas company. Later that day the operator of the crane told plaintiff that one of the company men 'got his hand hurt.' It is not contended by plaintiff that he at this time gave notice, either oral or written, to the defendant Company, or its authorized agent. Plaintiff heard nothing further about the accident until in September, 1955, when he was questioned by an attorney representing the insurance carrier of the gas company. Plaintiff attempted to contract the local agent for defendant Company, but did not succeed until in November, 1955. Early in 1956 as action for damages was commenced against plaintiff by John Lehman and the Royal Indemnity of Liverpool. In February, 1956, whether before or after the damage action was commenced is not clear, the defendant notified plaintiff by letter that the delay in the giving of notice of the accident 'has so prejudiced the further handling of this case and constitutes such a breach of contract that we hereby notify you that we have no liability under the policy and hereby return the matter to you for it no longer falls to us for attention.'

By this action, plaintiff asks the Court to declare him to be entitled to the benefits of the insurance policy which was in effect on October 1, 1954. The trial Court so held and defendant appeals.

I. Appellant asserts the Court erred in holding that the failure to give notice of the accident for more than a year thereafter was excused. The policy provides, 'when an accident occurs written notice shall be given to the company * * * as soon as practicable' (Italics ours). This provision, 'as soon as practicable,' has been before this Court and other courts many times. Its accepted meaning is 'within a reasonable time in the light of the circumstances,' and what constitutes a reasonable time is a fact question for the jury. 45 C.J.S. Insurance §§ 982(4-a), 1054 and 46 C.J.S. Insurance § 1375; Lyon v. Railway Passenger Assurance Co., 46 Iowa 631; Nelson v. National Accident Soc., 212 Iowa 989, 237 N.W. 341; Gifford v. New Amsterdam Cas. Co., 216 Iowa 23, 248 N.W. 235. Appellant does not seriously question this attributed meaning but states that a delay of over a year is as a matter of law, unreasonable; that without a showing of more than a period of delay, coupled with the provision of the contract that 'No action shall lie * * * unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, * * *' (Italics ours), it was entitled to a decree relieving it of responsibility and liability under the contract.

The trial Court based its decree upon three propositions: (1) Lack of prejudice; (2) Reasonable mistake; (3) Trivial occurrence. We will consider these in reverse order.

(1) Trivial occurrence. 45 C.J.S. Insurance § 1056(a) states that, generally, delay is excusable in the case of an accident which is trivial and results in no apparent harm, or which furnishes no ground for insured, acting as a reasonable and prudent man, to believe at the time that a claim for damages will arise or that the injury is one insured against. See also, 29 Am.Jur., Insurance, Section 1115; Annotation 18 A.L.R.2d 474; Glade v. General Mut. Ins. Ass'n, 216 Iowa 622, 629, 246 N.W. 794. In Phoenix Indem. Co. v. Anderson's Groves, Inc., 5 Cir., 1949, 176 F.2d 246, it is said that a provision in a policy requiring notice of an accident as soon as practicable does not mean that every trivial accident that occurs should be reported but only an accident that an ordinarily prudent individual acting reasonably would consider, under all the circumstances, as consequential and which could afford the basis of a claim, and that this is so even though it may later prove to be a serious injury. We think under the above stated rules, a fact finding body might well find the accident to come...