Pinkerton v. United Services Auto. Ass'n

• Decision Date: 07 October 1958
• Parties: William PINKERTON, Respondent, v. UNITED SERVICES AUTOMOBILE ASS'N, a foreign corporation, Appellant.
• Court: Wisconsin Supreme Court

Page 256

92 N.W.2d 256

5 Wis.2d 54

William PINKERTON, Respondent, v. UNITED SERVICES AUTOMOBILE ASS'N, a foreign corporation, Appellant.

Supreme Court of Wisconsin.

Oct. 7, 1958.

The order appealed from denied defendant's motion for summary judgment dismissing the complaint.

The facts are stated in the opinion.

Herrick & Sigl, Eau Claire, for appellant.

Riley & Wahl, Eau Claire, for respondent.

BROWN, Justice.

Plaintiff sues for damages which he alleges he sustained on September 1, 1957, because of the negligence of an automobile driver whom the defendant had insured against liability for such negligence. Defendant admits insurance coverage but shows by affidavit that its insurance policy contains a clause providing that action shall not lie against the company until the amount of the insured's obligation to pay shall have been finally determined by judgment against the insured after actual trial. This is commonly known as a 'no action clause' and is a provision legally acceptable in the states where the policy was written and delivered though it is not permitted in automobile liability insurance policies written in the State of Wisconsin. Sec. 260.11(1), Stats. Plaintiff's action is against the insurance company alone and the company contends that the no action clause makes the suit premature and entitled it to have the action dismissed.

Defendant is a foreign corporation not licensed to do business in Wisconsin.

In a series of cases, and particularly in Perlick v. Country Mut. Casualty Co., 1957, 274 Wis. 558, 80 N.W.2d 921, we held that an insurer who had filed with the Wisconsin Department of Motor Vehicles an SR-21 and an agreement in writing that its policy should be deemed to conform to the laws of this state had waived the 'no action' policy defense.

Defendant relies on sec. 344.15(5), Stats., which was enacted and became effective in July, 1957, after the Perlick decision. It reads:

'Nothing in this chapter shall be construed to impose any obligation not otherwise assumed by the insurance company or surety company in its automobile liability policy or bond except that if no correction is made in the report within 30 days after it is mailed to the insurance company or surety company, the company, except in case of fraud, whenever such fraud may occur, is estopped from using as a defense to its liability the insured's failure to give permission to the operator or a violation of the purposes of use specified in the automobile liability policy or bond or the use of the vehicle beyond agreed geographical limits.'

The accident with which we are concerned took place September 1, 1957. Defendant cites a scholarly article by Walter M. Bjork, of Madison, entitled 'The New SR-21 Look in Wisconsin', published in the February, 1958, issue of the Wisconsin Bar Bulletin. The author's conclusions quoted in the defendant's brief are:

"It is obvious from the above-quoted section that the insurance company by its correction and filing of the SR-21 may be estopped from using as a defense either lack of permission, violation of use, or use beyond geographical limits. These appear to be the only defenses which an insurance company may lose under the new SR-21 law. Therefore, the results in at least Perlick, and Henethorn [Henthorn v. M. G. C. Corp., 1 Wis.2d 180, 83 N.W.2d 759] have been reversed by the enactment of the above-quoted statute."

With all respect to counsel and the learned author we cannot entirely agree in their conclusions respecting the effect of sec. 344.15(5), Stats., at least to the extent to which defendant now wishes to carry them.

The statutes pertaining to security for the payment of damages for past accidents if revocation of driving privileges is to be avoided are secs. 344.12 to 344.22, Stats. They are known as the Safety Reponsibility Law, (sec. 344.22), and they do not require an insurer who is concerned only with protecting its assured in a past accident to agree that the insurance policy be interpreted to conform to the...