Potomac Insurance Company v. Stanley

• Decision Date: 04 August 1960
• Docket Number: No. 12907.,12907.
• Citation: 281 F.2d 775
• Parties: POTOMAC INSURANCE COMPANY, Plaintiff-Appellee, v. N. James STANLEY, George Carnine, Roland Martin, d/b/a Martin's Garage and Body Shop, Michigan Mutual Liability Co., Defendants, George Carnine, Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

281 F.2d 775 (1960)

POTOMAC INSURANCE COMPANY, Plaintiff-Appellee, v. N. James STANLEY, George Carnine, Roland Martin, d/b/a Martin's Garage and Body Shop, Michigan Mutual Liability Co., Defendants George Carnine, Appellant.

No. 12907.

United States Court of Appeals Seventh Circuit.

August 4, 1960.

COPYRIGHT MATERIAL OMITTED

Judson F. Haggerty, John F. McCann, Jr., Haggerty & Haggerty, Indianapolis, Ind. (Jay B. Haggerty, Indianapolis, Ind., of counsel), for appellant.

John R. Hiner, William M. Osborn, Indianapolis, Ind. (Bingham Summers & Spilman, Indianapolis, Ind., of counsel), for appellee.

Before SCHNACKENBERG and KNOCH, Circuit Judges, and MERCER, District Judge.

MERCER, District Judge.

Plaintiff, Potomac Insurance Company, filed its suit in the district court for a declaratory judgment that it was not liable to any of the defendants upon its policy of liability insurance issued to the defendant, N. James Stanley.

Plaintiff, through its insurance agent at Indianapolis, Indiana, issued its policy of automobile liability insurance to Stanley, an Indianapolis resident, effective February 19, 1957. Among other provisions, that policy contained a standard clause requiring the cooperation of the insured in the defense of any claim or suit which might lead to plaintiff's liability upon the policy,¹ which was expressly made a condition precedent to any action against plaintiff upon the policy.²

On March 19, 1957, Stanley, while driving the insured automobile, collided with the rear of a vehicle driven by appellant. Appellant sustained personal injuries as a result of that collision, and, ultimately, commenced a suit against Stanley in an Indiana court for damages. Stanley failed to appear and attend the trial of such case in the state court on July 7, 1958, and on October 9, 1958, respective dates upon which the cause was set for trial.

In its complaint for declaratory judgment, plaintiff alleged the above facts which are, although denied by appellant's answer to the complaint, now conceded by both parties to be correct. Appellant answered the complaint, denying, generally, all allegations thereof. Plaintiff then filed its motion for summary judgment, which was supported by the affidavits of plaintiff's attorney, William M. Osborn, plaintiff's Indiana Claims Manager, Frank D. Cooper, and Robert Hittle, Indianapolis Claims Supervisor for Retail Credit Company, Inc., which affidavits detail the efforts of plaintiff and its attorneys to secure the cooperation of Stanley in preparing a defense to the Carnine suit and to obtain his presence at the trial thereof. The motion was also supported by the deposition of Stanley, in which he stated that he had had knowledge of the pendency of the Carnine suit, of plaintiff's efforts and desires to confer with him and of the place and date when the case was set for trial; but that he had, notwithstanding that knowledge, failed and refused to correspond with plaintiff or its attorneys, to keep plaintiff advised of his changes of address or to cooperate in any way with plaintiff in the defense of that suit.

In opposition to the motion for summary judgment, appellant filed an affidavit of Judson F. Haggerty, one of his attorneys, which stated, inter alia, the factual circumstances of the collision designed to show Stanley's fault therein, and that the affiant had located Stanley through information disclosed to him by appellant, Carnine.

Summary judgment was entered declaring that plaintiff was not liable to any of the defendants on its policy of insurance, and appellant, Carnine, took this appeal.

In the appendix to his brief, appellant omitted the offidavits of Osborn, Cooper and Hittle, and included only brief excerpts from the deposition of Stanley and excerpts from the affidavit of Haggerty. On April 11, 1960, plaintiff filed its motion to dismiss the appeal, predicated upon the ground that the appellant had failed to include in his appendix all of the pleadings and evidentiary matters upon which the trial court relied in entering summary judgment, in violation of the provisions of Rule 16(b) of this Court, 28 U.S.C.A. On April 20, 1960, we entered an order directing that the motion to dismiss be taken under advisement with the appeal on its merits.

In pertinent part, Rule 16(b) provides: "If appellant or petitioner raises a question of the sufficiency of the evidence to support a finding, ruling, order, verdict or judgment, he shall include in the appendix all evidence pertinent thereto."

We agree with plaintiff's contention that all of the evidence upon which the trial court relied in entering judgment is essential to a fair presentation to this court of the issue whether summary judgment was properly entered. We agree with the contention that appellant's appendix is woefully deficient in that regard. And we also agree with plaintiff's contention that the quoted provision of Rule 16(b) is mandatory, and that a party who fails to provide an appendix which is sufficiently complete to present the questions upon which he relies on appeal takes a risk that his appeal will be dismissed. As we indicated in Chicago & E. I. R. Co. v. Southern Ry. Co., 7 Cir., 261 F.2d 394, 400, note 7, the failure to include in the appendix all parts of the record and transcript necessary to fairly present any error alleged would justify this court's refusal to consider such alleged error. To the same effect are National Labor Relations Board v. Knight Morley Corp., 6 Cir., 251 F.2d 753, 760-761, certiorari denied 357 U.S. 927, 78 S.Ct. 1372, 2 L.Ed.2d 1370; Esso Standard Oil Co. v. Secatore's, Inc., 1 Cir., 246 F.2d 17, 22-23, certiorari denied 355 U.S. 834, 78 S.Ct. 54, 2 L.Ed.2d 46; United Electrical, Radio & Machine Workers v. Oliver Corp., 8 Cir., 205 F.2d 376, 389, certiorari denied 344 U.S. 897, 73 S.Ct. 277, 97 L.Ed. 693; Hornin v. Montgomery Ward & Co., 3 Cir., 120 F.2d 500, 504.

The basic question upon the merits of this appeal, namely, whether the trial judge correctly concluded that there was no genuine issue as to any material fact, can be decided by this court only upon a review of all pleadings, affidavits and other evidentiary matter which the trial court had before it when summary judgment was entered. Appellant's appendix is flagrantly and inexcusably incomplete in that respect to a degree which we must sternly condemn.

We are entitled to rely upon the appendices as presented, and, upon principle, dismissal of this appeal should follow, except for the special circumstances that plaintiff has presented a complete appendix in conjunction with its brief. Under the circumstances, the question whether we would resort to the original record for decision of the appeal, cf., Chicago & E. I. R. Co. v. Southern Ry. Co., supra, or whether we would dismiss has become moot. The motion to dismiss is, therefore, denied.

The ultimate issue remaining for decision is the issue whether the court below correctly determined that no genuine issue as to any material fact remained for decision and that plaintiff was entitled to judgment as a matter of law. The substance of that ultimate issue is the legal effect of the facts shown as to Stanley's alleged failure to cooperate in the defense of the Carnine suit. Federal jurisdiction is based upon diversity of citizenship of the parties, and, therefore, Indiana law governs the substantive question. Erie Ry. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188.

We have found no Indiana decision dealing with the question of the effect of the failure of an insured person to cooperate with his insurer in the defense of a claim covered by the policy of insurance, and authorities from other jurisdictions are apparently divided. The Indiana courts have, however, announced basic principles of law which suggest the ultimate decision of the question.

A policy of insurance is a contract, and its interpretation is controlled by the same law as that governing any other contract. Billington v. Prudential Ins. Co., 7 Cir., 254 F.2d 428, 430-431; Burns' Ind.Stats., Anno., § 39-3203(a), (o); Metropolitan Life Ins. Co. v. Alterovitz, 214 Ind. 186, 203, 14 N.E.2d 570, 577, 117 A.L.R. 770. A party who is in default on a contract forfeits his right to enforce the contract for his benefit, Harshman v. Heavilon, 95 Ind. 147; Board of Commissioners of St. Joseph County v. South Bend & M. St. Ry. Co., 118 Ind. 68, 20 N.E. 499; Indianapolis, D. & C. R. Co. v. Holmes, 101 Ind. 348, 351-352, and a third party who asserts a claim upon the contract as a subrogee of one of the contracting parties stands in the same position as the party under whom he claims. Automobile Underwriters v. Camp, 217 Ind. 328, 27 N.E. 2d 370, 28 N.E.2d 68, 128 A.L.R. 1024; Lomont v. State Farm Mut. Auto. Ins. Co., 128 Ind.App. 645, 151 N.E.2d 701. A contract which is without ambiguity will not be rewritten by the courts for the benefit of a third party claimant. Automobile Underwriters v. Camp, supra; Lomont v. State Farm Mut. Auto. Ins. Co., supra.

Upon the question whether breach of the notice provisions of an insurance policy is a defense to a claim upon the policy, the Indiana courts have held that compliance by the insured with such provisions of a policy of insurance is a condition precedent to a claim upon the policy. E.g., Lomont v. State Farm Mut. Auto. Ins. Co., 128 Ind.App. 645, 151 N.E.2d 701, 704; London Guarantee & Accident Ins. Co. v. Siwy, 35 Ind.App. 340, 343-345, 66 N.E. 481. In applying Indiana law to a claimed defense of lack of notice of a loss, we said, "Defendant had agreed to insure such losses only on the condition that it be given reasonable notice and the right to try to protect itself." Muncie Banking Co. v. American Surety Co., 7 Cir., 200 F.2d 115, 119. Cf., Knight & Jillson Co. v. Castle, 172 Ind. 97, 108-112, 87 N.E. 976, 27 L.R.A., N.S., 573.

By analogy to the above decisions, we are convinced that the standard cooperation provisions of plainti...