Pacific Indem. Co. v. Berge

• Citation: 205 Kan. 755,473 P.2d 48
• Decision Date: 17 July 1970
• Docket Number: No. 45778,45778
• Parties: PACIFIC INDEMNITY COMPANY and Aviation Insurance Manager, Inc., Appellants, v. Paul Vanden BERGE, Appellee.
• Court: United States State Supreme Court of Kansas

Page 48

473 P.2d 48

205 Kan. 755

PACIFIC INDEMNITY COMPANY and Aviation Insurance Manager, Inc., Appellants, v. Paul Vanden BERGE, Appellee.

No. 45778.

Supreme Court of Kansas.

July 17, 1970.

Syllabus by the Court

1. Under the express provisions of K.S.A. 60-240(c), a trial court need not entertain a motion for a continuance based on the absence of a material witness or on the want of any material document, thing or other evidence unless such motion is supported by an affidavit in compliance with the provisions of the statute.

2. A report of an aircraft crash investigation which contains statements of hearsay character and conclusions on the part of the officer or agent preparing the report, is not admissible as substantive evidence.

3. Where an insurer seeks to avoid liability under its policy on the ground that the circumstances fall within an exception set out in the policy, the burden is on the insurer to establish the facts which bring the case within the specified exception. (Following Southards v. Central Plains Ins. Co., 201 Kan. 499, 441 P.2d 808.)

4. When an insurer bases its refusal to pay upon specific grounds it cannot thereafter defend on any other or additional grounds of nonliability not referred to in such refusal to pay and of which it then had knowledge.

5. When it does not affirmatively appear that a question raised on appeal was presented to and determined by the trial court, this court does not consider it on review.

F. C. McMaster, of Smith, Stinson, McMaster, Lasswell & Smith, Wichita, argued the cause, and Gerald D. Lasswell, Wichita, and F. D. Covell, of Cox, Anderson & Covell, Mission, were with him on the briefs for appellants.

Harry E. Robbins, Jr., of Gamelson, Hiebsch, Robbins & Tinker, Wichita argued the cause and was on the brief for appellee.

KAUL, Justice:

Plaintiffs-appellants issued a policy of 'Aircraft Hull and Liability' insurance on an aircraft which defendant-appellee had purchased from Yingling Aircraft, Inc., on April 8, 1965. In order to finance the purchase of the aircraft, defendant gave Yingling a conditional sales contract and promissory note.

The policy of insurance, together with a breach of warranty endorsement for the protection of Yingling, was purchased by defendant from Don Flower Associates, Inc., an agent of plaintiffs.

On June 21, 1965, the aircraft crashed and was destroyed, except for salvage in the amount of $1,100.00.

Defendant failed to make a payment due Yingling on August 15, 1965, following which Yingling made demand on plaintiffs for the balance due on the conditional sales contract and promissory note. Thereafter plaintiffs paid Yingling $7,085.40, the balance due and received from Yingling an assignment of the promissory note. Plaintiffs also took possession of the damaged aircraft and salvaged it for $1,100.00.

Thereafter, on March 10, 1967, plaintiffs, as assignees of the promissory note, filed this action thereon against defendant for the balance due, which they had paid to Yingling. Plaintiffs also claimed interest and delinquency charges on the future installments, as provided for by the terms of the note.

Defendant answered alleging that plaintiffs were obligated to pay Yingling under the policy of insurance and that the payment made was in full satisfaction of defendant's obligation to Yingling and, therefore, Yingling held no rights against defendant which could be assigned by plaintiffs.

Defendant also filed a counterclaim against plaintiffs in which he alleged that his aircraft had been destroyed; that it was insured by plaintiffs for its value for the benefit of Yingling and defendant as their interests might appear. Defendant further alleged that he had demanded that plaintiffs pay his indebtedness to Yingling and the balance of the value of the aircraft to him, but that plaintiffs had without reason refused to do so.

The policy of insurance, together with all endorsements, was incorporated by reference in defendant's counterclaim. Defendant prayed that plaintiffs take nothing by their cause of action and that he have judgment on his counterclaim against plaintiffs in the amount of $10,000.00.

In their answer to defendant's counterclaim, plaintiffs admitted the aircraft was insured, but alleged that it was not insured against the loss (in this case) under any one of the exclusions of the policy.

Following plaintiffs' answer to defendant's counterclaim, defendant submitted interrogatories to plaintiffs, which were filed on September 27, 1967. Defendant served additional interrogatories upon plaintiffs on October 12, 1967. On December 4, 1967, the case was placed upon the nonjury trial docket by the administrative judge of the district court.

On December 14, 1967, plaintiffs having failed to answer interrogatories served upon them, defendant filed a motion asking for an order compelling plaintiffs to complete discovery by answering the interrogatories. Plaintiffs filed their answer to the interrogatories last mentioned on December 29, 1967. The case was then set for trial on February 23, 1968. Apparently, the trial was postponed at the request of plaintiffs' counsel and a pretrial conference was had, at the conclusion of which the case was reset for trial on April 5, 1968. Plaintiffs' attorneys requested a continuance which was overruled and the case was tried to the court.

At the conclusion of the trial, the court found that the destruction of the aircraft did not fall within policy exclusions, as claimed by plaintiffs; that the aircraft was covered by the policy; and that at the time of its destruction the value of the aircraft was $8,000. The court found that plaintiffs were entitled to judgment on the promissory note, and that defendant was entitled to judgment on his counterclaim. The court then offset plaintiffs' judgment on the promissory note, against defendant's judgment on his counterclaim, and calculated the sums as follows:

'9. The defendant is entitled to receive credit for the rebated unearned interest in the sum of $1,183.35.

'10. Plaintiffs are entitled to judgment in the sum of $5,986.40, and defendant is entitled to judgment in the sum of $8,000.00.

'11. Judgment of the defendant in the sum of $8,000.00 should be offset by plaintiffs' judgment in the sum of $5,985.40.

'12. Judgment should be entered in favor of the defendant and against the plaintiffs in the sum of $2,014.60, together with interest thereon at the rate of six percent (6%) per annum from the date this Journal Entry is filed.'

Plaintiffs' motion for a new trial was overruled and they perfected this appeal.

The principal grounds for reversal urged by plaintiffs concern alleged abuse of discretion by the trial court in denying plaintiffs' request for a continuance and various rulings excluding evidence which are claimed to be erroneous.

Plaintiffs first assert the trial court abused its discretion in denying them a continuance of the trial set for April 5, 1968, on the grounds that plaintiffs were unable to obtain material evidence prior to the trial.

In their brief on appeal, plaintiffs' counsel recite a chronology of events which they claim show that substantial justice was denied by the trial court's action.

They claim that plaintiffs' counsel, at the time of filing the action, was misled by correspondence with the trial court. This series of events is described in their brief as follows:

'Plaintiffs' counsel, shortly after filing the instant action, wrote a letter to the Clerk of the Court of Sedgwick County requesting certain information regarding trial dates; this request was answered by the Honorable William C. Kandt, Judge of Division No. 1, which letter advised counsel that trial would normally commence some two or three months after a pre-trial conference. Counsel then, in reliance upon such letter and the rules of the 18th Judicial District which were sent him, concluded, rightly or wrongly, that he would be notified of a pre-trial setting and that the questions presented by Defendant's answer (which he did not think pertinent to the Plaintiffs' cause of action) would be determined as a matter of law, whether they would be allowed as a defense to Plaintiffs' action. Counsel then concluded that he would, after pre-trial, have two months minimum time within which to obtain and marshal evidence on behalf of the Plaintiffs. The rules relating to the 18th Judicial District were changed on July 1st, 1967, and all cases in the Sedgwick County District Court became subject to central assignment. Without any notice to Plaintiffs' counsel of the change of the rules, the case was set for trial on February 23, 1968 by the assignment judge for the 18th Judicial District. Approximately one week's notice of the trial was given to Plaintiffs' counsel by Defendant's counsel. However, the court, at the time of the appearance by Plaintiffs' counsel on February 23, 1968, evidently recognizing the impossibility of the situation of the short notice of trial, held a pre-trial conference; the conclusion of the pre-trial conference resulted in an order directing the case for trial of April 5, 1968, approximately six weeks later. * * *'

We first observe that we see no possibility of prejudice stemming from the change in local rules of the district court on July 1, 1967, more than seven months prior to the first trial setting on February 23, 1968.

Plaintiffs' counsel claim that after the pretrial conference, a diligent effort was made to obtain necessary evidence but that they were unsuccessful even though an interval of six weeks elapsed between the pretrial conference on February 23 and the trial on April 5.

Plaintiffs' counsel further state that on April 4, at 11 p. m., Mr. Covell called Mr. Frank McMaster, a member of the Wichita Bar, and engaged him as co-counsel for plaintiffs.

Mr. McMaster states that prior to 9 a. m., the morning of April 5, by telephone he requested from both the assigned trial judge and the...