Rieger v. London Guarantee & Accident Company of London

• Decision Date: 10 November 1919
• Parties: ALEXANDER RIEGER, Appellant, v. LONDON GUARANTEE & ACCIDENT COMPANY OF LONDON, ENGLAND, Respondent
• Court: Kansas Court of Appeals

215 S.W. 920

202 Mo.App. 184

ALEXANDER RIEGER, Appellant, v. LONDON GUARANTEE & ACCIDENT COMPANY OF LONDON, ENGLAND, Respondent

Court of Appeals of Missouri, Kansas City

November 10, 1919

Appeal from Jackson Circuit Court.--Hon. Willard P. Hall, Judge.

Judgment reversed and cause remanded.

Samuel Epstein and J. C. Rosenberger for appellant.

Battle McCardle for respondent.

OPINION

TRIMBLE, J.

An action upon a policy of Employer's Liability Insurance. At the close of plaintiff's case in chief, the court sustained a demurrer to the evidence and directed a verdict for defendant. The plaintiff has appealed.

In its policy, defendant agreed: (1) That it would indemnify plaintiff against loss from liability for bodily injuries to employees, (to the limit of $ 5000 for one person); (2) that it would pay all cost and expense attendant upon the investigation, adjustment and settlement of claims arising out of such bodily injuries; (3) that if any claim was made on account of such injuries, or if any suit, even if groundless, should be brought against plaintiff to recover damages defendant would thereafter, in the name and on behalf of the plaintiff, but at its own cost and expense, either defend such claim or suit or settle the same as it might deem advisable; and (4) that it would pay all costs taxed against the plaintiff in legal proceedings which by its policy defendant was bound to defend.

The petition pleaded said policy and the above agreements and then set up that on June 20, 1916, while said policy was in force (it being from February 23, to August 23, 1916), Louise Miller, a young lady employee in plaintiff's wholesale and retail business in the building known as No. 1525-1527 Genesee street, Kansas City, Missouri, was injured by falling into a pit which had been recently dug in the floor of the shipping room in the basement of defendant's building preparatory to the installation therein of an elevator; that claim was made by her for damages on the ground that her injuries were caused by negligence in leaving the pit open ungarded and insufficiently lighted; that notice of the accident and claim were promptly given the defendant herein and the latter took charge of the investigation and defense thereof; that afterward, on October 27, 1916, Miss Miller brought suit for $ 20,000 based on the negligence charged as above stated, asserting that her injuries were serious and permanent; that plaintiff herein immediately forwarded to defendant the petition and summons in said suit, and the defendant, through its own attorneys, took charge of the defense in the name of the plaintiff and continued in charge thereof until the said suit came regularly on for trial on the 14th of May, 1917, when the defendant in breach of its contract, denied it had issued any policy to plaintiff or was bound, by the policy it had issued, to defend said suit for plaintiff, or to settle same or to pay any adverse judgment, and refused to further defend said suit or to compromise or pay anything for compromise of same, or pay in whole or in part any adverse judgment which might be rendered therein against the plaintiff herein, and denied all liability to indemnify the plaintiff under said policy on account of such claim or suit, and abandoned the further defense thereof; that at the time of such abandonment and breach, the suit of Miss Miller was being called for trial by the court in which it was pending, the attorney for Miss Miller being present and demanding an immediate trial; that by reason of the conduct of defendant and the said breach of the contract of indemnity, plaintiff was obliged to, and did take over the defense of said Miller suit at his own cost and expense through his own attorneys employed for that purpose, who succeeded in getting a postponement of the trial of the said suit until May 23, 1917, to and on which date it was peremptorily set for trial by the court; that on the 22nd day of May, 1917, the plaintiff, after diligent investigation and inquiry, believing in good faith that the Miller suit could not be successfully defended, and compelled by the fear that a trial would result in a judgment against him in a much larger amount, and upon the advice of his counsel and in the exercise of reasonable prudence, compromised and settled it by paying Miss Miller $ 4900 in cash and the costs of suit. For this and other items of expense incurred in investigating, defending and adjusting said claim, the present suit is brought on the policy of Employer's Liability Insurance as aforesaid.

The answer, as it existed up until plaintiff closed his case, contained (1) a general denial, (2) a plea that the accident to Miss Miller did not occur "through the prosecution by the plaintiff of any business operation described or embraced" in the policy issued to plaintiff, (3) a denial of prompt notice of the claim or of the suit of Miss Miller. When plaintiff's case was closed, defendant, over plaintiff's objection, amended its answer by inserting the allegation that "defendant avers that any wages paid by plaintiff to Louise Miller under her employment in the performance of her duties in the employ of Alexander Rieger, were not included in the amount upon which premium for such policy was paid by plaintiff, as required by the provisions of the policy, which was issued as stated in defendant's answer herein." A further amendment was also added, under the same circumstances, which alleged that if any moneys were paid out by plaintiff in compromise of the Miller suit or for expense, such payments were voluntary, were not authorized by defendant, and were without defendant's written consent, which at no time was given.

Plaintiff, in his reply, set up an estoppel against defendant and charged that immediately after the happening of the accident to Miss Miller the defendant by its adjuster and attorneys took charge of the case, made an investigation of the premises of plaintiff, and inquired fully into the circumstances of the accident, into the status of Miss Miller, her duties, wages, and relationship to the business operations prosecuted by plaintiff at Numbers 1525-1527 Genesee street, and all the surrounding circumstances, and with full knowledge of such matters, continued in charge of such investigation and defense without raising any question of its duty under said policy to protect and indemnify plaintiff, and without intimating to or informing the plaintiff that it had any intention of refusing to indemnify plaintiff; that upon the filing of the Miller suit, the defendant took full charge of the defense of said suit and continued in full charge thereof until May 14, 1917, but that on May 9, 1917, defendant for the first time denied its liability under said policy, and, for the first time, raised any question of its liability to the plaintiff or of its duty to indemnify him, and thereafter on May 14, 1917, at the very hour the Miller suit was being called for trial, refused to further conduct said defense, that at no time prior to May 9, 1917, did defendant advise plaintiff that it was claiming to have any alleged defense to any action which might be brought on the policy, nor did it claim that Miss Miller, or said accident and injuries, were not covered by said policy, but on the contrary at all times advised and assured plaintiff that it would fully protect and indemnify plaintiff against said accident, injuries, claim and suit, or any judgment which might be rendered thereon, and that by said conduct defendant had deceived and misled plaintiff to his great prejudice, and was, therefore, estopped to deny that the policy covered the said employee, accident or claim.

In sustaining the demurrer, the trial court did not put upon the record any reason for so doing, but it is manifest from the contest waged in the briefs that defendant's main contention is that the policy did not cover an employee of the kind or class to which Miss Miller belonged, but that it covered only those engaged in doing carpentry, masonry and other work plaintiff was having done in putting on a third story to the building and in installing an elevator therein. Plaintiff introduced evidence tending to show that due and prompt notice was given defendant, so that no claim can be made that want of notice furnished any foundation for the sustaining of the demurrer; nor do we understand that any contention of that character is now relied upon. It is of course elementary that, in considering the propriety of the demurrer, we must accept as true all the evidence which is legally admissible and has been properly offered by plaintiff in support of his claim. So the fact that defendant now claims it did not receive any notice of the accident prior to July 24, 1916, is wholly without force or effect in deciding the question now before us.

At the time in controversy, and for many years before that, the plaintiff, Alexander Rieger, was engaged in a wholesale and retail business under the firm name of J. Rieger & Company, which was simply a trade name, he being the sole proprietor of the business. He was also the owner of the building located and having the street numbers as above set out. Plaintiff's business occupied the entire building, which, although having several street numbers, was merely one building with archways through the partitions so as to make the building one complete whole. He had a large number of employees consisting of clerical force, shipping clerks, porters, etc., which varied in number from twenty-five to one hundred and twenty-five persons according to the dullness or activity of the trade.

Shortly before the issuance of the policy sued on, plaintiff decided for the better operation of his business, to add a third story to the building; to construct...