Marvel Heat Corp. v. Travelers Indem. Co.
| Decision Date | 27 April 1950 |
| Citation | 92 N.E.2d 233,325 Mass. 682 |
| Parties | MARVEL HEAT CORPORATION v. TRAVELERS INDEMNITY CO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Argued March 9 1950.
D. Gorfinkle Boston, for plaintiff.
R. W. Cornell Boston, for defendant.
Before QUA, C. J and LUMMUS, RONAN, WILKINS and COUNIHAN, JJ.
In this action for breach of a contract of insurance contained in a 'manufacturers' and contractors' liability policy,' there was a finding for the defendant, the Appellate Division dismissed a report, and the plaintiff appealed.
The plaintiff was engaged in the business of installing heating plants, doing general heating work, and selling fuel oil. On September 23 1946, the plaintiff and one Weinstein, a customer, entered into a written contract entitled 'contract for purchase of an oil burner,' by which the plaintiff undertook to install an oil burner at 95 Shurtleff Street, Chelsea, and to 'reseal furnace.' In November, 1946, the plaintiff installed the burner, resealed the furnace, and received payment. In May, 1947, the customer suffered soot and smoke damage in the amount of $400 due to an alleged defect in the resealing of the furnace. The plaintiff notified the defendant of the customer's claim, but after investigation, the defendant, on or about June 27, 1947, 'wrote the plaintiff disclaiming liability on the policy and refused to pay the loss.' Following the disclaimer, and plaintiff engaged counsel, and on July 17, 1947, settled the customer's claim for $450, procuring general releases, and paid its own counsel $50.
For the purposes of this case only, we assume that the plaintiff was liable to its customer under the contract between them, and that the policy sued upon was broad enough to cover damage of the kind suffered by the customer due to the resealing. The questions of evidence raised by the plaintiff and many of its requests thereby become of no consequence.
The defendant's answer originally contained ten paragraphs, including a general denial, certain specific denials, and various affirmative defences under the provisions of the policy, one being: 'And further answering the defendant says that if it ever issued the policy of insurance referred to in the plaintiff's declaration, the plaintiff is barred by that part of section 11 of the policy which reads as follows: 'No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all of the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant, and the company.'' Before trial the defendant waived two paragraphs of its answer which are quoted in a footnote. [1] The plaintiff contends that this waiver went to the extent, among other things, of renouncing any contention that there was need for the plaintiff to establish compliance 'with any or all of the terms and conditions of the policy which may have been considered as a condition precedent to the plaintiff's invoking the defendant's liability thereunder.' We are of opinion, however, that the defendant did not relinquish the right to rely upon the other paragraphs of its answer, including that relating to 'section 11,' which appears in the policy as part of paragraph 11 under 'Conditions.'
The plaintiff further contends that it was excused from compliance with condition 11, because the defendant disclaimed liability and refused to pay the loss. There was no evidence that at the time of the defendant's statements--or at any other time for that matter--the customer had brought an action against the plaintiff. What this defendant wrote at a time when there was no case for it to defend did not amount to a waiver of condition 11. [2] The refusal to assume liability at such a time was not a breach of any term of the policy. We do not interpret the defendant's action as a denial of liability in any event, or as the equivalent of a refusal to defend an action. Its action did not confer upon the plaintiff any right to make such settlement as it might choose and to charge the cost to the defendant. Thacher v. Aetna Accident & Liability Co., 8 Cir., 287 F. 484, 488-489, 28 A.L.R. 1280; Kesinger v. Commercial Standard Ins. Co., 101 Colo. 109, 70 P.2d 776. See Texas Short Line Railway v. Waymire, Tex.Civ.App., 89 S.W. 452, 453-454; Koontz v. General Casualty Co., 162 Wash. 77, 297 P. 1081. See also Street Coal Co., Inc., v. Frankfort General Ins. Co., 237 N.Y. 60, 67, 142 N.E. 352. Cases are distinguishable where the insurer refused to defend an action. See, for example, St. Louis Dressed Beef &...
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