RTE Corp. v. Maryland Cas. Co.
| Decision Date | 30 November 1976 |
| Docket Number | No. 75--86,75--86 |
| Citation | 247 N.W.2d 171,74 Wis.2d 614 |
| Parties | RTE CORPORATION, Appellant, v. MARYLAND CASUALTY COMPANY, Respondent. |
| Court | Wisconsin Supreme Court |
Kenneth M. Kenney and Wolfe, O'Leary, Kenney & Wolfe, Milwaukee, for respondent.
The principal issue in this case in whether the insured's failure to give any notice of loss to the insurer for more than nine months after the insured's property was damaged released the insurer from liability as a matter of law.
Maryland Casualty Company issued to RTE Corporation an indemnity policy of property damage insurance which for purposes of this appeal both parties agree may be considered to be a cargo insurance policy. The policy contained the following provisions of interest on this appeal:
'. . .
'14. OTHER INSURANCE: Except as to specific insurance as defined in Section 13 of this policy, this policy shall not cover to the extent of any other insurance whether prior or subsequent hereto in date, and by whomsoever effected, directly or indirectly covering the same property, and this Company shall be liable for loss or damage only for the excess value beyond the amount due from such other insurance.
'The Company agrees to advance to the Assured as a loan the amount which would have been collectible under this policy except for the provisions of this Section, such loan to be repayable only to the extent of and at the time of the Assured's collection from such other insurance.
'. . .
On August 22, 1969, RTE shipped five large transformers by common carrier truck. The truck upset on August 24, 1969, and the transformers were damaged. Maryland Casualty's policy was in full force and effect on the date the accident occurred, and there is no dispute that the transformers were insured property or that the damage thereto resulted from an insured peril. RTE was advised of the accident within a short time after it occurred and made claim for the damage against the carrier. Within thirty days after the occurrence RTE was advised by agents of the carrier that the carrier was self-insured up to $10,000, that it had insurance coverage over that sum, and that RTE would be compensated for its loss.
On June 3, 1970, over nine months after the occurrence, RTE sent a letter to Maryland Casualty's agent advising it of the upset (but not supplying any details) and advising it that a claim was being made against the carrier. It is undisputed that this letter was the first notice of any kind received by Maryland Casualty regarding the damage to the transformers. Maryland Casualty made no response to the June 3, 1970 letter.
On April 6, 1971, RTE again wrote Maryland Casualty's agent, this time advising it of the amount of loss, that the claim against the carrier's insurance company had been rejected, and that RTE would have to sue the carrier shortly because the statute of limitation was running. RTE offered control of the litigation against the carrier to Maryland Casualty. No further details of the upset were given and no proof of loss was submitted.
On May 6, 1971, Maryland Casualty wrote RTE disclaiming coverage for the August 24, 1969, incident because RTE had failed to fulfill policy conditions.
RTE sued the carrier and obtained a judgment for the amount of the loss, $14,052.30. RTE then demanded that Maryland Casualty pay RTE's unreimbursed expenses of this litigation, namely $8,382, and on August 29, 1973, RTE submitted to Maryland Casualty a comprehensive proof of loss, detailing the damage to the transformers as well as the amount of the litigation expenses claimed. It is undisputed that this was the first and only proof of loss submitted by RTE. Maryland Casualty refused to pay, and RTE filed the present action demanding reimbursement for expenses of litigation. The case was tried to the court. The trial court entered judgment dismissing the complaint, concluding as a matter of law that RTE had not given timely notice or proof of loss, that the policy made timely notice and filing proof of loss conditions precedent to collection under the policy, and that RTE was thereby precluded from any recovery for damages resulting from the August 24, 1969, accident.
The central issues of this case are the determination of (1) when RTE's contractual duty to give notice to Maryland Casualty arose; and (2) whether RTE gave notice 'promptly' once the duty arose. 1
RTE's argument, based on paragraphs 14 and 15 of the policy quoted above, is that its duty to give notice did not arise until early in June of 1970 when it first obtained information indicating that insurance provided by the carrier would not cover the damage to the transformers. 2 RTE argues that under paragraph 14 the insurer was liable only for the excess value of loss or damage over the amount due from any other insurance and that under paragraph 15 the duty to give prompt notice arises only when 'any loss . . . under this policy' becomes known. The conclusion RTE reaches is that so long as it reasonably believed that it would be paid under insurance provided by the motor carrier no loss under Maryland Casualty's policy was known and no duty of notice existed.
If RTE is correct, it would appear to follow that its letter of June 3, 1970, constituted prompt notice, assuming for purposes of analysis that the letter was sufficient in its content. However, we conclude that RTE's interpretation of the nature of its contractual obligations with respect to notice cannot be sustained.
The rules governing construction and interpretation of insurance policies are those applicable to contracts generally. Home Mut. Ins. Co. v. Insurance Co. of N.A., 20 Wis.2d 48, 51, 121 N.W.2d 275 (1963); French v. Fidelity & Casualty Co. of N.Y., 135 Wis. 259, 265, 115 N.W. 869 (1908). The contract is to be considered as a whole in order to give each of its provisions the meaning intended by the parties. Ketay v. Gorenstein, 261 Wis. 332, 333, 334, 53 N.W.2d 6 (1952); State ex rel. Department of Agriculture and Markets v. Badger Dairy, Inc., 245 Wis. 229, 232, 14 N.W.2d 34 (1944). The construction of a written contract is normally a matter of law for the court, although in a case of ambiguity in a written contract where words or terms are to be construed by extrinsic evidence, then the question is one for the jury. The rule was stated as follows in Thurston v. Burnett & Beaver Dam Farmers' Mut. Fire Ins. Co., 98 Wis. 476, 478, 479, 74 N.W. 131, 132 (1898):
'. . . The case comes clearly within the rule, that where language is plain and unambiguous, the apparent import of the words must govern, and the rule that where there is no uncertainty as to the meaning of the words used in the contract and where such uncertainty exists, but there is no extrinsic evidence or circumstance bearing on the subject to be considered in determining the meaning attributed to them by the parties when the contract was made, the proper interpretation of the words and construction of the contract are solely for the court.'
See also Brieby v. Department of Administration, 55 Wis.2d 16, 18, 197 N.W.2d 737 (1972); Westerman v. Richardson, 43 Wis.2d 587, 591, 168 N.W.2d 851 (1969); Rabinovitz v. Travelers Ins. Co., 11 Wis.2d 545, 549, 105 N.W.2d 807 (1960); Bauman v. Midland Union Ins. Co., 261 Wis. 449, 451, 53 N.W.2d 529 (1952); French v. Fidelity & Casualty Co. of N.Y., supra, 135 Wis. at 269, 115 N.W. 869.
In the case at bar no extrinsic evidence was offered or introduced bearing upon the meaning of the terms of the policy. The meaning of the phrase 'loss under this policy' was therefore a question of law to be determined by the trial court upon a consideration of the contract as a whole, and because it is a question of law, it may be redetermined independently by this court on appeal. Zweck v. D P Way Corp., 70 Wis.2d 426, 435, 436, 234 N.W.2d 921 (1975).
The parameters of an insured's duties under a policy must be determined from the words used therein. In Resseguie v. American Mut. Liability Ins. Co., 51 Wis.2d 92, 97, 98, 186 N.W.2d 236, 240 (1971), this court found it significant that under the policy there to be interpreted notice was required in the event of 'accident, occurrence, or loss.' Under such a clause, the court observed that the insured's duty to give notice 'was not limited to instances where he knew that there might be an...
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