Norfolk & Dedham Mut. Fire Ins. Co. v. Cumbaa, 47646

• Decision Date: 15 February 1973
• Docket Number: No. 2,No. 47646,47646,2
• Citation: 128 Ga.App. 196,196 S.E.2d 167
• Parties: NORFOLK & DEDHAM MUTUAL FIRE INSURANCE COMPANY v. Frank CUMBAA
• Court: Georgia Court of Appeals

Page 167

196 S.E.2d 167

128 Ga.App. 196

NORFOLK & DEDHAM MUTUAL FIRE INSURANCE COMPANY v. Frank CUMBAA.

No. 47646.

Court of Appeals of Georgia, Division No. 2.

Feb. 15, 1973.

Lee & Hitchcock, William S. Lee, Albany, for appellant.

D. C. Campbell, Jr., Thad Gibson, Albany, for appellee.

Syllabus Opinion by the Court

PANNELL, Judge.

On October 2, 1966, the defendant-appellant issued a homeowner's policy to Frank H. Cumbaa for a period of three years. The policy contained coverage for personal liability injury. The plaintiff-appellee, Charles Cumbaa, is the minor son of Frank Cumbaa and was an additional insured under the terms of the insurance policy. On November 11, 1967, one Katrina Jones was physically injured at a Halloween party attended by a group of young people, as the result of being tackled by the plaintiff and one Ed Loosier, and was hospitalized. When plaintiff was sued by Miss Jones' father, the defendant who had previously refused to pay under the insurance policy, did not provide legal counsel for the plaintiff. The plaintiff employed counsel to defend the action. A verdict and judgment was rendered against Ed Loosier and the plaintiff. In the instant case, judgment was obtained against the defendant-appellant for one-half of the verdict rendered against Ed Loosier ($831.62) and the plaintiff-appellee, the sum of $800 representing the value of legal services obtained by plaintiff in defending the action, court reporting expenses in the sum of $73 and 25% of the principal sum, plus attorney fees in the sum of $1,200 based on allegations of bad faith on the part of the defendant in refusing to defend the action against Ed Loosier and the plaintiff. The defendant appeals, alleging that the court erred in denying the defendant's motion for judgment notwithstanding the verdict, in denying the defendant's motion for new trial, in denying defendant's motion for directed verdict made at the close of the case, in denying defendant's motion for a directed verdict as to a penalty and attorney fees based on bad faith, in charging plaintiff's request to charge (1) concerning the plaintiff's contention that the defendant waived the written notice requirement under certain circumstances, (2) because of repetition and in charging plaintiff's request number 1, and (3) inasmuch as it states that the language 'as soon as practical' depends upon the facts and circumstances of the case in the viewpoint of the ordinary insurance policy holder; and in not setting the degree of diligence required in determining whether or not the excuse offered for delay in giving notice was proper under the nature or circumstances of the case. Held:

This case presents two critical issues for determination. (1) Is the insured strictly bound by the provisions of the liability insurance policy requiring written notice of an occurrence as soon as practicable when such requirements are made a condition precedent to an action against the insurance company? And, (2) under the circumstances, did the action of defendant in denying liability to the plaintiff under the insurance policy and refusing to defend the civil case brought against the plaintiff constitute sufficient bad faith to justify a penalty and attorney's fees under Code § 56-1206?

1. It is well settled in this state that 'Clauses in insurance policies which prohibit waivers, unless endorsed thereon, refer only to the provisions which enter into the contract of insurance, and do not affect conditions which are to be performed after loss, such as furnishing proofs of loss and giving notice. . . . (a) These may be expressly waived, or waived by conduct inconsistent with an intention to enforce a strict compliance with the condition, by which the insured is led to believe that the insurer does not intend to require such compliance.' Corporation of the Royal Exchange Assurance of London v. Franklin, for use, etc., 158 Ga. 644(3), 124 S.E. 172; New York Underwriters Ins. Co. v. Noles, 101 Ga.App. 922, 115 S.E.2d 474; Assurance Co. of America v. Bell, 108 Ga.App. 766, 769, 134 S.E.2d 540. In the Noles case, the court said 'Where the effect of such contractual provision works as a forfeiture of the policy benefit upon the insured, the court will strictly construe the provision against the insurance company and small circumstances will be sufficient to show a waiver by the company. Aetna Ins. Co. of Hartford v. Mosely, 47 Ga.App. 25, 169 S.E. 695, 699. See 49 A.L.R.2d 89. As discussed by Judge Guerry in the Mosely case, supra, the damages and not the formal proof is the essence of the contract. 'The courts infer waivers of such nonessential parts by conduct (by the insurance...