Royal-Globe Ins. Co. v. Craven, ROYAL-GLOBE

• Decision Date: 14 January 1992
• Docket Number: ROYAL-GLOBE
• Citation: 585 N.E.2d 315,411 Mass. 629
• Parties: INSURANCE COMPANY v. Theresa M. CRAVEN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 315

585 N.E.2d 315

411 Mass. 629

ROYAL-GLOBE INSURANCE COMPANY v. Theresa M. CRAVEN.

Supreme Judicial Court of Massachusetts Suffolk.

Argued Nov. 4, 1991.

Decided Jan. 14, 1992.

David D. Dowd, Boston, for plaintiff.

Nicholas A. Felici, Boston (Ira D. Feinberg, with him), for defendant.

Walter A. Costello, Jr., Salem, Frank C. Corso & Anthony Tarricone, Boston, for Massachusetts Academy of Trial Attorneys, amicus curiae, submitted a brief.

Stephen M.A. Woodworth, South Easton, for Kemper National Ins. Co. & others, amici curiae, submitted a brief.

Before LIACOS, C.J., and WILKINS, ABRAMS, NOLAN and LYNCH, JJ.

ABRAMS, Justice.

At issue is the liability under an uninsured motorist policy of Royal-Globe Insurance Company (Royal-Globe) to its insured, Theresa M. Craven (Craven), for personal injuries suffered by Craven in a hit and run accident. Royal-Globe sought a declaratory judgment that it was not liable to Craven because Craven's notice to Royal-Globe was not timely. Further, Royal-Globe asked for a declaration that the applicable statute of limitations was three years pursuant to G.L. c. 260, § 2A (1990 ed.), and hence the complaint, which was filed more than three years after the accident, was barred by the statute of limitations. On cross-motions for summary judgment, the Superior Court judge entered a summary judgment for Craven, denied Royal-Globe's motion for summary judgment, and ordered that the matter proceed to arbitration. ¹ Royal-Globe appealed. We transferred the appeal to this court on our own motion. We reverse and order that a judgment be entered declaring that Royal-Globe is not liable to Craven because Craven's notice to Royal-Globe was not timely. We also express our views on the appropriate statute of limitations. See Wellesley College v. Attorney Gen., 313 Mass. 722, 731, 49 N.E.2d 220 (1943).

The facts are as follows. In the early morning of September 19, 1979, Craven was injured in a hit and run automobile accident. According to Craven, an unidentified motor vehicle forced her automobile off the road and into a wall barrier. Craven was taken by ambulance to a hospital, where she was treated for a number of serious injuries. She remained in intensive care for several days and was released from the hospital twenty-three days after the accident.

Craven gave Royal-Globe formal notice of her claim on January 23, 1980. Royal-Globe denied her claim for recovery under her uninsured motorist policy on April 6, 1981. ² On December 12, 1984, Craven filed a demand for arbitration of her uninsured motorist claim. On March 11, 1985, Royal-Globe filed a complaint in Superior Court seeking a declaration that it had no obligation to submit to arbitration as it was not liable under the policy. ³

1. Timely notice. Royal-Globe asks us to reverse the summary judgment for Craven on the ground that Craven did not comply with her contractual obligation to give timely notice of her claim. ⁴ Craven asserts that whether her notice to Royal-Globe was sufficiently prompt in the circumstances is a question of fact. Craven further maintains that therefore this court may only reverse if the allowance of summary judgment constitutes an abuse of discretion or clearly is erroneous.

"The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law." Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120, 571 N.E.2d 357 (1991), citing Mass.R.Civ.P. 56(c), 365 Mass. 824 (1974). What constitutes timely notice under the insurance policy is a matter of contract interpretation and is therefore "a matter of law for the court." Monadnock Display Fireworks, Inc. v. Andover, 388 Mass. 153, 157, 445 N.E.2d 1053 (1983), citing Great Atl. & Pac. Tea Co. v. Yanofsky, 380 Mass. 326, 334, 403 N.E.2d 370 (1980); Sands v. Arruda, 359 Mass. 591, 595, 270 N.E.2d 826 (1971); Tri-City Concrete Co., v. A.L.A. Constr. Co., 343 Mass. 425, 427, 179 N.E.2d 319 (1962). The judge correctly determined that, in these circumstances, the policy required prompt notice. Because the facts here are undisputed, whether Craven's notice was prompt also is a question of law. Powell v. Fireman's Fund Ins. Co., 26 Mass.App.Ct. 508, 513, 529 N.E.2d 1228 (1988), quoting Segal v. Aetna Casualty & Sur. Co., 337 Mass. 185, 188, 148 N.E.2d 659 (1958) ("What is a reasonable time is a question of fact, but where the basic facts are undisputed it becomes a question of law"). We turn to the language of the policy.

The uninsured motorist policy in effect at the time of the accident requires notice to both the police and the insurer "[w]ithin [twenty-four] hours ... if [the insured has] ... been involved in a hit and run accident." The judge concluded, however, that Craven "was in the intensive care unit during the first twenty-four hours [after the accident]" and could not be expected to notify the police and her insurance company within twenty-four hours. The judge ruled that Craven therefore was excused from the twenty-four hour notice requirement.

Royal-Globe maintains that the judge's ruling on excuse was error because someone hired an attorney to represent Craven the morning of the accident. If Craven or someone acting on her behalf was able within twenty-four hours to engage a lawyer to represent her, Royal-Globe argues, it was error for the judge to conclude that Craven was excused from the twenty-four hour notice requirement. ⁵ It is undisputed that Craven remained in intensive care for several days after the accident. The judge determined that to expect Craven to give notice while she was in intensive care would be "unreasonable." There was no error in that determination.

Royal-Globe next maintains that even if twenty-four hour notice was excused because of disability, the requirement should be reimposed once the disability is removed. Under this interpretation of the policy, disability tolls the running of the twenty-four hour period but does not dispense with it. The judge concluded that in the event that twenty-four hour notice is excused initially by disability, as was the case here, the policy requires prompt notice but not necessarily twenty-four hour notice. We agree. The language of the policy puts a time pressure on the insured to notify the company immediately after the disability is removed.

Royal-Globe contends that based on the undisputed facts in this record, Craven's notification, given more than four months after the accident and more than three months after her release from the hospital, was not prompt. We agree. Royal-Globe argues, and Craven does not dispute, that Craven was released from the hospital twenty-three days after the accident and that she stopped using medication one week after leaving the hospital. While at home, Craven was able to leave her home to visit doctors and dine out with her family. While she was at home, Craven also communicated with her office. Craven returned to work roughly three months after the accident; she did not give notice to Royal-Globe for another month. On this record, we cannot tell precisely when Craven's disability was removed, but it is clear that she did not notify Royal-Globe immediately thereafter. ⁶

The burden of proving that she gave her notice promptly was on Craven. Segal v. Aetna Casualty & Sur. Co., 337 Mass. 185, 187, 148 N.E.2d 659 (1958), citing, inter alia, Nichols v. Continental Ins. Co., 265 Mass. 509, 511, 164 N.E. 442 (1929). Regardless of when her disability is determined to have disappeared, Craven's notice to Royal-Globe was not "performed readily or immediately[; nor was it] given without delay or hesitation." Webster's Third New Int'l Dictionary 1816 (1961). Giving "prompt" its fair meaning, Craven did not notify Royal-Globe promptly as a matter of law. ⁷

Craven contends that Royal-Globe is estopped from raising her failure of notice as a basis to deny liability. Craven maintains that from the time she notified Royal-Globe of her claim, the company investigated the claim, communicated with her counsel about the status of the claim, and even informed her counsel of the possibility that liability might be denied because of a failure of proof--all without ever reserving the right to deny the claim based on late notice. The absence of such a reservation of rights, Craven argues, estops the company from denying liability because of her late notice. ⁸

"In order to work an estoppel it must appear that one has been induced by the conduct of another to do something different from what otherwise would have been done and which has resulted to his harm...." DiMarzo v. American Mut. Ins. Co., 389 Mass. 85, 112, 449 N.E.2d 1189 (1983), quoting Lunt v. Aetna Life Ins. Co., 261 Mass. 469, 471, 159 N.E. 461 (1928). As we have previously noted, "where the denial of liability takes place after the expiration of the period for ... [giving prompt notice], it cannot be said that the insured has been induced to forego steps to prevent a default under the policy, for the default has already occurred. Consequently, there is no basis for an estoppel." Milton Ice Co., Inc. v. Travelers Indem. Co., 320 Mass. 719, 722, 71 N.E.2d 232 (1947), citing Salonen v. Paanenen, 320 Mass. 568, 573, 71 N.E.2d 227 (1947). See Powell v. Fireman's Fund Ins. Co., supra at 512, 529 N.E.2d 1228.

Moreover, "[t]he mere statement of one ground for denying liability without explanatory words or circumstances does not warrant the inference of an intention to relinquish other defences." Sheehan v. Commercial Travelers' Mut. Accident Ass'n., 283 Mass. 543, 552, 186 N.E. 627 (1933). See New England Structures, Inc. v. Loranger, 354 Mass. 62, 66, 234 N.E.2d 888 (1968) ("While of course one cannot fail in good faith in presenting his reasons as to his conduct touching a controversy, he is not prevented from relying upon...