Ohio Casualty Insurance Company v. Ross

• Decision Date: 27 September 1963
• Docket Number: Civ. A. No. 13433.
• Parties: The OHIO CASUALTY INSURANCE COMPANY, a body corporate v. Alexander H. ROSS, Defendant and Eva M. Branamen, Defendant and Third-Party Plaintiff, v. UNSATISFIED CLAIM AND JUDGMENT FUND BOARD, Third-Party Defendant.
• Court: U.S. District Court — District of Maryland

222 F. Supp. 292

The OHIO CASUALTY INSURANCE COMPANY, a body corporate v. Alexander H. ROSS, Defendant and Eva M. Branamen, Defendant and Third-Party Plaintiff, v. UNSATISFIED CLAIM AND JUDGMENT FUND BOARD, Third-Party Defendant.

Civ. A. No. 13433.

United States District Court D. Maryland.

September 27, 1963.

W. Hamilton Whiteford, Baltimore, Md., for plaintiff.

Alexander H. Ross, pro se.

John T. Brooks, Baltimore, Md., for defendant Eva M. Branamen.

Gerald William Wittstadt, Asst. Atty. Gen., Baltimore, Md., for third-party defendant.

R. DORSEY WATKINS, District Judge.

This is a suit brought by The Ohio Casualty Insurance Company (Casualty), insurer, against Alexander H. Ross, its insured, and Eva M. Branamen for a declaratory judgment that Ross was not covered by an automobile liability policy issued by plaintiff as regards a collision on October 9, 1960, involving an automobile operated by Ross and an automobile owned and operated by defendant Branamen; that insurer is not obligated to defend any suit against Ross by Mrs. Branamen arising out of said accident; and that insurer is not obligated to pay any judgments which might hereafter be rendered in such a suit against Ross for damages arising from said accident.

Jurisdiction is based upon diversity of citizenship and the requisite amount in controversy. Defendant Branamen filed a third party complaint against the Unsatisfied Claim and Judgment Board on the ground that, in the event of a declaratory judgment of non liability on the part of plaintiff insurer, the Board under the provisions of the Unsatisfied Claim and Judgment Fund Law, Article 66½, sections 150-179, Annotated Code of Public General Laws of Maryland, 1957 Edition, might be required in any suit filed by Mrs. Branamen against Ross to supervise the defense of Ross and to pay, up to the statutory limit, any judgment rendered as a result of such a suit. Leave to implead the Board was granted and the Board answered the third party complaint by admitting all allegations as to its interest in the proceedings.¹

Denial by plaintiff insurer of liability under the policy is predicated on two grounds; first, that in violation of the policy's provisions Ross, fully cognizant of Mrs. Branamen's claim of having sustained personal injuries, failed to notify the plaintiff insurer of the occurrence of the collision as soon as practicable and, secondly, in further violation of the policy's provisions assumed liability for the accident by payment to Mrs. Branamen of the cost of repairing damages caused by the accident to the Branamen car. The pertinent provisions of the policy are found in paragraphs three, five and six of the "conditions" and are as follows:

"3. Notice. In the event of an accident, occurrence or loss, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable. * * * * * * *

"5. Assistance and Cooperation of the Insured—Parts I, III and IV. * * * The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.

"6. Action Against Company— Part I. No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, * * *"

The facts are not in dispute.² As the policy period ran from June 25, 1960 to June 25, 1961, the policy was in full force and effect when the accident herein involved occurred on October 9, 1960 in Pikesville, Maryland. At the scene of the accident the defendants exchanged the usual, pertinent information such as names, addresses and registration numbers and exhibited their respective operator's licenses. Ross, however, did not disclose the name of his insurance company. He assumed full responsibility for the necessary repairs to Mrs. Branamen's car, the repairs were completed within a matter of a day after the accident, and Ross paid the bill. Several days later Mrs. Branamen experienced difficulty with her back and notified Ross that she had suffered personal injuries due to the accident. In that conversation, and a subsequent one, Ross appeared "cooperative" although Mrs. Branamen could not recall that Ross specifically advised her to send bills for her expenses to him. In November of 1960 notice was given by Mrs. Branamen to the Unsatisfied Claim and Judgment Fund Board that claim would be made upon the fund. The Board designated American Motorists Insurance Company to investigate the accident. On December 22, 1960 plaintiff insurer received at its Towson claim department a letter from American Motorists Insurance Company (American) stating that American was investigating an accident which occurred on October 9, 1960 at Old Court Road and Walker Avenue, Baltimore, Maryland, that Ross had advised American that he was an insured of plaintiff, and that certain information regarding Ross's policy would be appreciated. Plaintiff replied to this letter by saying that it had no record of an accident on October 9, 1960. The same day a letter from counsel for Mrs. Branamen was received by plaintiff insurer indicating a desire to discuss possible settlement of claims of Mrs. Branamen arising out of the accident on October 9, 1960, "in which your insured, Alexander Haywood Ross, 1737 Broadway, Baltimore 13, Maryland was also involved." Plaintiff checked its files and due to a difference in home addresses between its named insured and the Ross referred to in counsel's letter noted in the margin of the letter—"not same case", "not our assured." Five days later, on December 27, 1960, Ross finally reported the accident to the plaintiff insurance company and on the same date executed, together with plaintiff insurer, a non-waiver agreement following which the plaintiff first began an investigation of the accident. On February 2, 1961 plaintiff wrote to Ross disclaiming liability under the policy because of breach of contract on the part of Ross in failing to report the accident promptly, assuming liability by payment to Branamen and continued delayed notice to plaintiff insurer after Ross had knowledge that personal injury was being claimed. The instant suit for a declaratory judgment of non liability under the policy followed.

As jurisdiction is based upon diversity of citizenship, the law of Maryland is controlling (Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188). In approaching the conflict the laws problem often present in contract of insurance cases, the Court of Appeals of Maryland has stated the Maryland conflict of laws rule to be that an "insurer's liability under an automobile liability policy is generally to be determined in accordance with the law of the place where the contract was entered into, Cohen v. Pennsylvania Casualty Co., 183 Md. 340, 38 A.2d 86, and not of some other jurisdiction." (Galford v. Nicholas, 1961, 224 Md. 275, 281, 167 A.2d 783, 786). "In accordance with general principles relating to contracts where the parties are in different jurisdictions, a contract of insurance is deemed to be executed at the place where the last act is done which is necessary to complete the transaction and bind both parties." (29 Am.Jur., Insurance, section 21). "Although generally the contract will be deemed to have been made at the home office of the insurer if the first premium accompanies the application, where the policy provides that it shall not be valid until it is countersigned by an officer or agent of the company, the place of countersigning is held to be the place of the making of the contract." (29 Am.Jur., Insurance, section 22; emphasis supplied). In the instant case the last sentence of the policy, page 4, under "conditions", reads:

"IN WITNESS WHEREOF, THE OHIO CASUALTY INSURANCE COMPANY has caused this policy to be signed by its Secretary and its President, but the same shall not be valid or effective until countersigned on the Declarations page by a duly authorized agent of the company."

On the bottom of the Declarations page appears:

                          -------------------------------------------------------------
                          |  Date and Place   |  Renewal of  | Countersigned by       |
                          |  of Issue         |  Policy No.  | (Authorized Agent)     |
                          |                   |              |                        |
                          |  June 25, 1960    | FA 317 68 10 | Ford-Griffin Insurance |
                          |  Towson, Maryland |  4/7/60 elt  | Agency, Inc.3     |
                          -------------------------------------------------------------
                                                                       (McHale)
                

Clearly this contract was "executed" or "made" in the State of Maryland. As the lex loci contractus governs the construction and effect of the insurance policy in suit,...