Maryland Cas. Co. v. American Lumber & Wrecking Co., Inc.
| Decision Date | 02 December 1938 |
| Docket Number | 31747. |
| Citation | 282 N.W. 806,204 Minn. 43 |
| Parties | MARYLAND CASUALTY CO. v. AMERICAN LUMBER & WRECKING CO., Inc. |
| Court | Minnesota Supreme Court |
Petition for Reargument Denied Jan. 5, 1939.
Appeal from District Court, Hennepin County; E. A. Montgomery Judge.
Suit by the Maryland Casualty Company against the American Lumber & Wrecking Company, Inc., to recover reimbursement under the provisions of a rider on a workmen's compensation and employers' liability policy issued by plaintiff to defendant. From an order denying defendant's alternative motion for amended findings or for new trial, defendant appeals.
Order affirmed.
Syllabus by the Court .
1. The law is well settled that where the legislature has prescribed a statutory form of policy any provision to the contrary in such a policy contract is ineffective. But if there is no statute governing the form or content of the policy, the parties to it are free to incorporate such provisions and conditions as they desire, subject only to such restrictions of law as are other parties to a voluntary contract.
2. The object of workmen's compensation insurance is to protect the employee from hazards incident to his occupation. To make effective this purpose L.1929, c. 237, § 2 (3 Mason Minn.St.1938 Supp. § 3634-2), provides that in circumstances there specified a designated insurer shall ‘ issue a policy containing the usual and customary provisions found in such policies.’ Upon facts here appearing and stated in opinion, held that the statute mentioned applies only as to the insured employee, not to a separate and distinct agreement between the insured employer and insurer for as to them they are left free to contract as to ultimate liability between themselves.
3. As to whether a designated insurer may require an employer to reimburse it for payments made to injured employees covered by the policy, this court expresses no opinion as that question is not properly here for decision, it affirmatively appearing that the parties to the present controversy knowingly and deliberately entered into the contract of indemnity presently involved.
Leonard, Street & Deinard, of Minneapolis, for appellant.
J. F. Boyles, of Minneapolis (Lewis M. Himmelman, of Pipestone, of counsel), for respondent.
Defendant appeals from an order denying its alternative motion for amended findings or new trial.
Plaintiff is engaged in the business of writing insurance under the Workmen's Compensation Act, Mason's Minn.St.1927, § 4261 et seq. and is a member of the Minnesota compensation rating bureau which was organized pursuant to L.1921, c. 85, 1 Mason Minn.St.1927, §§ 3622 and 3634. Defendant is engaged in the business of wrecking buildings and other structures and as such is subject to the provisions of our Compensation Act. This includes the duty of carrying workmen's compensation insurance. Prior to October 21, 1933, it had applied to three different members of the rating bureau for compensation insurance coverage. All were rejected. Pursuant to the provisions of L.1929, c. 237, 3 Mason Minn.St.1938 Supp., §§ 3634-1 and 3634-2, it thereupon made application to the bureau and the rating committee thereof for an assignment of the risk sought to be covered. The bureau having examined defendant's application for coverage determined that it was a good faith risk and as such entitled to coverage. It fixed the initial premium for a policy under the act. Defendant paid the initial premium to the bureau, which thereupon designated plaintiff as a member thereof to issue a policy to defendant. Pursuant to the requirement so made the policy here involved was issued. It is labeled ‘ Standard Workmen's Compensation and Employers' Liability Policy.’ There was attached to the policy an endorsement or rider which provided as follows:
‘ In consideration of the issuance of the policy to which this endorsement is attached and any provisions or conditions of the policy to the contrary notwithstanding, it is hereby agreed that this policy does not and shall not cover wrecking or demolition of any building or structure or part thereof or any operation incidental thereto or connected therewith at the location of such work unless the policy is extended, at the request of the Assured, by endorsement stating the acceptance of liability thereon, together with estimated pay roll for such specific work; and the policy shall cover only such operations at such specific location and from the date of such endorsement.
‘ It is also agreed that the Company shall at all times be permitted to make inspections of any location submitted for coverage under the policy.
‘ Should the Company be required by law to make any payment or payments under the terms of this policy as a result of injuries and/or death of any employee engaged in such operations at locations not specifically stated in the policy contract or endorsements attached thereto, it is agreed that this endorsement shall constitute a specific and separate agreement between the Company and the Assured, under which the Assured will immediately reimburse the Company in full for any such expenditure. * * *.'
The policy with the mentioned rider was duly filed by plaintiff with the bureau and by it approved. Similar riders or endorsements had been used by other companies. As a matter of fact plaintiff had over a period of some two years next prior thereto issued compensation policies to defendant containing the same type of endorsement. The liabilities created by virtue of this policy were not pooled with the associated companies, nor was the premium prorated amongst them. It was issued under the voluntary plan after plaintiff had been designated as the company required to issue it.
On August 5, 1934, while the policy and the rider mentioned were in full force and effect, defendant undertook the wrecking of a structure at Island Station in St. Paul. On August 9 and during the progress of this work two of its employes suffered accidental injuries which under the Compensation Act gave them the right to receive hospitalization, medical services, and compensation. Plaintiff duly paid these items, in all amounting to $873.62. It demanded reimbursement from defendant because defendant had failed and neglected to comply with the provisions of the rider which provided for giving plaintiff notice of the location of the work, its size, extent and its estimated pay roll. Plaintiff was not informed of this job until August 13. As such plaintiff collected no premium on the pay roll involved in this particular work between August 5 and August 14.
As will be seen, the question hinges upon the validity of the rider. The court was of opinion that the rider was a valid engagement voluntarily and knowingly entered into by the parties thereto, and directed entry of judgment for the mentioned amount with interest from the time the final payment had been made by it to the injured workmen.
1. Defendant's principal contention is that the reimbursement rider violated L.1929, c. 237, § 2 (3 Mason ...
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