McNeal v. Manchester Ins. & Indem. Co.

• Decision Date: 06 July 1976
• Docket Number: No. 37140,37140
• Parties: Jim McNEAL, Plaintiff-Respondent, v. MANCHESTER INSURANCE & INDEMNITY COMPANY, Defendant-Appellant. . Louis District, Division Three
• Court: Missouri Court of Appeals

Page 113

540 S.W.2d 113

Jim McNEAL, Plaintiff-Respondent, v. MANCHESTER INSURANCE & INDEMNITY COMPANY, Defendant-Appellant.

No. 37140.

Missouri Court of Appeals, St. Louis District, Division Three.

July 6, 1976.

Motion for Rehearing or Transfer Denied Aug. 18, 1976.

Mark I. Bronson, Goldenhersh & Newman, St. Louis, for defendant-appellant.

Howard, Edwards & Singer, Raymond Howard, Jr., St. Louis, for plaintiff-respondent.

SIMEONE, Presiding Judge.

This is an appeal by defendant-appellant, Manchester Insurance & Indemnity Company (Manchester), from a judgment of the circuit court of the City of St. Louis awarding the plaintiff-respondent, Jim McNeal, $1,500.00 in his equitable garnishment action against Manchester. §§ 379.195, 379.200, RSMo 1969. Manchester raises several points urging reversal. For reasons hereinafter stated, we affirm.

The events leading to this litigation began as a result of an automobile collision on October 11, 1968, between plaintiff-McNeal and Mr. Lee Atkinson at the intersection of Page and Montclair avenues in the City of St. Louis. McNeal was insured by State Farm Insurance Co., and Atkinson was insured by Manchester. On October 23, 1968, Mr. McNeal's attorney forwarded a lien letter to Mr. Atkinson, and on November 29, 1968, he also forwarded a lien letter to Manchester. On January 16, 1969, McNeal filed suit against Atkinson in the magistrate court of the City of St. Louis seeking damages for personal injuries in the sum of $1,500.00. Default judgment was rendered against Atkinson for that amount on November 4, 1969.

On October 28, 1970, McNeal's insurance company, State Farm, as subrogee, filed its action against Atkinson in the amount of $163.91 for property damage to McNeal's automobile. Summons was served in this suit upon Atkinson which was forwarded to, or at least received by, Manchester. This claim was apparently settled.

More than thirty days having elapsed since the rendition of the default judgment in favor of McNeal for personal injuries against Atkinson, and after informing Manchester of the default judgment on November 19, 1969, Mr. McNeal filed his petition in the City of St. Louis for equitable garnishment against Atkinson's carrier, Manchester Insurance. §§ 379.195, 379.200. McNeal prayed judgment in the amount of the default judgment together with costs.

Prior to trial, Manchester moved to dismiss on the ground of lack of venue, since its principal place of business was St. Louis County and it had no place of business, or any employees, in the City. The motion was overruled, pleadings were filed, and the cause proceeded to trial. Trial was held in March, 1975.

The principal dispute at the trial was whether Atkinson received any summons in the personal injury action filed by McNeal and whether Atkinson complied with certain conditions of the insurance contract by forwarding the summons to Manchester. The testimony is often confusing and contradictory, and there was no clear-cut testimony by any witness whether Atkinson received any summons or forwarded it to Manchester or whether Manchester, in fact, did not receive it. Only three witnesses testified--Atkinson and two employees of Manchester.

On direct and cross-examination, Mr. Atkinson denied receiving any summons and denied that a sheriff brought a summons, but testified that his insurance company got in touch with him after he reported the accident, and he mailed forms to it. The thrust of his testimony on direct was that he did not remember receiving a summons but he sent quite a few papers to the company. ¹ Mr. Atkinson definitely remembered appearing in court 'one time' because the insurance company lawyers 'represented me,' but this was explained that 'Mr. McNeal's insurance company was suing my insurance company.' He 'imagine(d) it (the suit) was the same year of the accident. . . .' In his relations with Manchester, he dealt with an insurance adjuster--a Mr. Crump. When asked if he cooperated with Manchester, his answer was positive--'I sure did.' He recalled speaking with Mr. Crump on the phone '(a)bout receiving papers' and 'reported everything to him,' and recalled Mr. Crump taking a statement of him over the telephone. He was not aware that any default judgment had been taken against him. Mr. Atkinson, in questioning by the court near the end of the hearing, testified that he lived at 1325 Semple Avenue and that his sister Lois lived downstairs in a two-family flat. An examination of the magistrate file showed that a summons was left at his usual place of abode by leaving a summons with Lois on August 29, 1969. Mr. Atkinson stated, 'If it was received I sent it to the insurance company.' But '(i)t's been so long ago I don't recall any of it.' He insisted that '. . . everything I got I sent to the company, what it was pertaining to I don't remember'.

During the hearing, two employees of Manchester testified--Mr. William C. Blackwell, vice president in charge of claims, and Gerald C. Swinfard, claims supervisor.

Mr. Blackwell was claims supervisor from 1968 to 1970, but he did not personally handle the McNeal claim. He admitted that as a part of the Atkinson file there were present the two lien letters in 1968 from McNeal's attorney and the letter dated November 19, 1969 informing Manchester that a default judgment had been rendered against Atkinson in the amount of $1,500.00. Also as part of the file he admitted receiving a 'memo' from Mr. Swinfard advising that he had received notification of the default judgment and that the memo indicated that after contact with Atkinson, he 'emphatically stated that he had not received anything other than the actual (lien) letter which he originally turned in . . ..' Mr. Blackwell indicated that the company received notice 'regarding the default' in November, 1969. When the notice and Swinfard's memo were received, Mr. Blackwell forwarded the information to the company's attorneys.

A facsimile of the insurance policy with Atkinson was introduced, the duplicate of the original policy having been destroyed. ² The liability policy contained certain standard conditions ³ relating to forwarding suit papers and cooperation of the insured. The policy also contained a provision that no action shall lie unless, 'as a condition precedent thereto,' the insured shall fully comply with all the terms of the policy. Mr. Blackwell admitted that Mr. Atkinson forwarded suit papers in the State Farm action and that a judgment was obtained which was paid by Manchester. He also admitted that to the best of his recollection in 'this particular suit,' the company received the cooperation of Mr. Atkinson. The State Farm action was filed a year after the default judgment was obtained against Atkinson--October, 1970. As far as Mr. Blackwell knew, the only 'notice ever received relative to the suit by Mr. McNeal was the letter' informing the company that default had been entered and which sought satisfaction thereof. Counsel for Manchester sought to question Mr. Blackwell concerning the effect of not receiving a notice of suit and the prejudice to the company in not receiving notice of suit. An objection was sustained, and an offer of proof was made.

On cross-examination he admitted that the company received the State Farm summons and that it received a judgment; that the underwriting file was sought to be obtained, but '(t)he underwriter was unable to find the file'; and that he doubted a summons could be sent to the underwriter department.

A transcript of a telephone statement taken on July 29, 1970 between Mr. Crump and Mr. Atkinson was introduced, in which Mr. Atkinson denied that he or his sister received any 'law suit papers.'

Mr. Swinfard, the claims supervisor who handled the case, testified. Mr. Crump was his supervisor. Mr. Swinfard handled the file until April, 1970, when he left the company, at which time Mr. Crump 'took the file over and handled it.' Swinfard admitted 'participat(ing) in the adjustment of an accident involving Mr. Jim McNeal and . . . Lee Atkinson,' and receiving the letter of November 19, 1969, which was the first time he became aware of any suit by Mr. McNeal. He contacted Atkinson, who told him that the only letter he ever received was the lien letter, and no one in the house had received any papers. He then wrote the memo to Mr. Blackwell. He was not familiar with the State Farm suit because he had already left the company. He didn't see how it was possible that Atkinson could have sent any summons; because he hadn't lost anything before but 'I don't mean something that would be lost that was never found.'

Mr. Atkinson was recalled. He was informed about the magistrate file showing a summons received by his sister, Lois; he was also asked whether he received an 'alias summons special' in the State Farm case. He did not recall receiving anything from State Farm. 'Like I say everything I got I sent to the company, what it was pertaining to I don't remember.'

At the end of the hearing, the court continued the cause for five days in order to locate Mr. Crump. Mr. Crump did not testify, and on April 17, 1975, the court entered its findings of fact, conclusions of law and order. The court found that (1) a policy of insurance was in effect on October 11, 1968, insuring Atkinson against liability, (2) State Farm filed a claim against Atkinson, (3) Atkinson was served in that suit and testified, (4) McNeal filed suit against Atkinson in January, 1969 for personal injuries, that he was served on August 29, 1969, and default judgment was entered on November 4, 1969, in the sum of $1,500 and costs, (5) Atkinson dealt with an investigator (Crump) who was not produced to testify, and part of the defendant's file could not be found, (6) the insured, Atkinson, cooperated with the agent of defendant, (7) the default judgment has become final and defendant has not satisfied the judgment, and (8) the defendant received a lien letter from McNeal's...