Lilly v. Ohio Casualty Insurance Company, Civ. A. No. 2670.
Decision Date | 05 October 1964 |
Docket Number | Civ. A. No. 2670. |
Citation | 234 F. Supp. 53 |
Parties | Earl D. LILLY, Plaintiff, v. The OHIO CASUALTY INSURANCE COMPANY, a corporation of the State of Ohio, Defendant. |
Court | U.S. District Court — District of Delaware |
Joseph A. Rosenthal, of Cohen, Morris & Rosenthal, Wilmington, Del., for plaintiff.
Albert L. Simon, Wilmington, Del., for defendant.
In this action plaintiff, Earl D. Lilly, seeks a declaratory judgment that his automobile liability insurance policy issued by defendant, The Ohio Casualty Insurance Company (Ohio), is in full force and effect and that, pursuant to the terms of that policy, Ohio must investigate an accident involving Lilly and Joseph A. Mangini and defend a suit brought in the Superior Court for New Castle County by Mangini arising from the accident.
Defendant disclaims any duty or liability on its part or any policy coverage with respect to the accident. This disclaimer is based on defendant's assertion that Lilly failed to give due and timely notice of the accident as required in the policy. Defendant further alleges that Lilly's failure to give notice was wilful.
The insurance contract between Lilly and Ohio provides:1
A hearing was held in this case on April 6 and 8, 1964. It was stipulated that the parties would file briefs after the trial. The last brief, plaintiff's reply brief, was filed June 22, 1964.
The trial record is rife with evasive responses, contradictory testimony, evidence of faulty memories, and implications of unethical conduct. Fortunately, in their briefs, the parties have been able to achieve some agreement as to the facts.
Plaintiff says that analysis of the opposing statements of facts reveals only one basic factual dispute — "whether or not Lilly knew or had reason to believe that Mangini would assert a claim for personal injuries allegedly sustained in the accident in question."2 Plaintiff maintains that Lilly did not know of any personal injuries until contacted by Mangini's lawyer some six weeks after the accident.
This fact is of pivotal significance because the reasonableness of the time within which Lilly notified Ohio in compliance with the policy requirements is measured from the time that Lilly became aware of Mangini's injury or claim of injury.
Of course, the facts bearing on this one question cannot be considered in vacuo. It is necessary to rehearse much of what was elicited at trial in order to reach a conclusion.
On May 22, 1961 Ohio issued Family Automobile Policy FA 3779823 to Lilly.3 Only a few days later, on May 26, Lilly's brakes failed as he was driving south on Van Buren Street in Wilmington. Lilly's car, a 1954 Oldsmobile, struck Mangini's car, a 1950 Chevrolet, in the rear. The force of the collision drove the Chevrolet into a third vehicle operated by William H. Benson.4 It appeared that none of the occupants of the vehicles was injured. Mangini told the police who investigated the accident that he was all right.5 There was, however, extensive property damage. Mangini's car suffered damage amounting to $294.50.6 Lilly's car had to be towed from the scene of the accident.7
For seven weeks Lilly did not report the accident to Ohio or its agents.8 He did report the accident to the broker who had placed his insurance with Ohio, but he instructed the broker not to report the accident to Ohio.9 Lilly explains that he thought that he could take care of the repairs himself, and he did not want to lose the insurance he had so recently obtained.10 He further maintains that he was not aware of any claim of personal injuries to Mangini until he heard from Mangini's attorney on July 6 or 7.11
Mangini testified that he felt a snap in his back at the moment of impact.12 Several hours after the accident he began to feel pain. That evening he went to the doctor and the doctor taped his lower back.13
Mangini saw Lilly at a hearing in Municipal Court on the Monday following the accident. His back was still taped and he felt pain.14 He spoke to Lilly at that time, but he does not remember whether he told Lilly that his back hurt.15 Lilly maintains that Mangini did not mention his injuries.16 However, Daniel Ferry, who interviewed Mangini before trial at the behest of Ohio's counsel, testified that Mangini claimed he told Lilly of his back injury at the Municipal Court hearing and in subsequent telephone conversations.17 Mangini did not remember talking to Ferry about his back, although this interview relative to the suit between Lilly and Ohio, a controversy in which Mangini had more than a passing interest, took place only four days before the trial.18 Mangini did remember speaking to Lilly on the telephone several times after the accident. He did not remember, however, whether he had mentioned his injured back in any of these conversations.19 Rinaldo Spitelle, Lilly's brother-in-law, with whom Lilly was living at the time of the accident, testified that he spoke with Mangini about two weeks after the accident and that Mangini said, 20
On July 6 or 7, Lilly received a letter from Oliver Suddard, Mangini's attorney, advising Lilly that Suddard represented Mangini in his claim for personal injuries arising out of the May 26 accident.21 Lilly still did not want Ohio to know about the accident.22
On July 13, Lilly received a letter from the Motor Vehicle Department of Delaware requesting that he file an SR-21 form relating to financial responsibility.23 At that point, Spitelle called Smith and Werner, agents for defendant, and reported the accident of May 26. The next day Lilly called Smith and Werner and requested that they file the required SR-21 form.24 Thus, defendant finally received notice of the accident some seven weeks after it occurred.
On August 10, 1961 Ohio informed Lilly that it would not file the requested form and that it disclaimed coverage of the May 26 accident under Lilly's policy because of his failure to give notice in compliance with the terms of the policy.25 Lilly brought this action against Ohio on May 10, 1963.
The insurance contract between Lilly and Ohio requires that notice of an accident be given "as soon as practicable." By its own terms, then, the policy calls for notice as soon as notice may reasonably be given under the circumstances. Home Indemnity Company v. Ware, 183 F.Supp. 367 (Del.1960) aff'd. 285 F.2d 852; Hughey v. Aetna Casualty & Surety Company, 30 F.R.D. 508 (Del.1962).26 The reason for a provision requiring notice is to afford the insurance company an adequate opportunity to investigate, to prevent fraud and imposition on it, and to provide the company a chance to ascertain its rights and liabilities. Wilmington Amusement Co. v. Pacific Fire Ins. Co., 41 Del. 294; 21 A.2d 194 (Del.Super.1941). It is well settled in Delaware that such provisions are a condition precedent to an insurer's obligation under an insurance policy. Hughey v. Aetna Casualty & Surety Company, supra, citing Wilmington Amusement Co. v. Pacific Fire Ins. Co., supra.
Lilly argues that the "reasonableness" of his notice to Ohio should be measured from July 6 or 7, a matter of one week. He maintains that he did not know of Mangini's claim of injury until he received the letter from Mangini's attorney, Suddard. Because he did not know of injuries to Mangini before July 6 or 7 and because Mangini told him at the scene of the accident that he was not harmed, Lilly claims that giving notice prior to receipt of Suddard's letter was excused by the trivial injury rule.
Briefly stated, the trivial injury doctrine announces that an insured is not under obligation to report every trivial mishap where there is no reasonable ground for believing at the time that bodily injury had occurred or would follow. See Anno. 18 A.L.R.2d 443, 475. This rule holds true although the occurrence may later prove to give rise to serious injury. Lennon v. American Farmers Mutual Insurance Company, 208 Md. 424, 118 A.2d 500 (Ct.App.Md.1955). Phoenix Indemnity Co. v. Anderson's Groves, Inc., 176 F.2d 246 (5 Cir. 1949); Burbank v. National Casualty Co., 43 Cal. App.2d 773, 111 P.2d 740 (1941).
Whether or not an injury is trivial is determined by applying the standard of the reasonable man:
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