Seawheels v. Bankers & Shippers Ins. Co. of N.Y., s. 70150

• Decision Date: 03 July 1985
• Docket Number: 70151,Nos. 70150,s. 70150
• Parties: SEAWHEELS, INC., et al. v. BANKERS & SHIPPERS INSURANCE COMPANY OF NEW YORK. YOUNG v. BANKERS & SHIPPERS INSURANCE COMPANY OF NEW YORK.
• Court: Georgia Court of Appeals

Page 650

333 S.E.2d 650

175 Ga.App. 528

SEAWHEELS, INC., et al. v. BANKERS & SHIPPERS INSURANCE COMPANY OF NEW YORK.

YOUNG v. BANKERS & SHIPPERS INSURANCE COMPANY OF NEW YORK.

Nos. 70150, 70151.

Court of Appeals of Georgia.

July 3, 1985.

Rehearing Denied July 17, 1985.

Certiorari Denied Sept. 3, 1985.

Charles W. Brannon, Jr., Savannah, for appellants in No. 70150.

M. McNeill Holloway III, Thomson, for appellant in No. 70151.

R. Peter Catlin, III, Brunswick, Thomas J. Jr., Mahoney, Jr., Charles W. Brannon, Jr., Savannah, Albert Fendig, Jr., Brunswick, John G. Kennedy, Savannah, Terry L. Readdick, Brunswick, for appellees.

McMURRAY, Presiding Judge.

Declaratory judgment. Little Walter Young died from injuries which he sustained in an August 15, 1978, motor vehicle collision which occurred in Brunswick, Georgia. Thereafter, on October 12, 1979, Ola Mae Young, the mother of Little Walter Young, brought a wrongful death action against James L. Quick, Seawheels, Inc., Peter S. Weeks and C.B.C. Leasing Corporation (C.B.C.). In her complaint, Ola Mae Young alleged that the death of her son was proximately caused by the negligent conduct of Quick, a servant of Seawheels, Inc., and Weeks, a servant of C.B.C. Judgment was demanded against all of the defendants for the wrongful death of Little Walter Young. Service of process was made upon Weeks and C.B.C., non-resident defendants, by serving the Secretary of State.

C.B.C. was a motor common carrier. On December 8, 1977, Bankers and Shippers Insurance Company of New York (Bankers and Shippers) issued a policy of indemnity insurance to C.B.C. in lieu of a motor common carrier security bond. (See in this connection former Code Ann. § 68-612 (now OCGA § 46-7-12, effective November 1, 1982)). The policy was in force at the time (1978) of the motor vehicle collision which resulted in the death of Little Walter Young. In pertinent part under the section captioned "CONDITIONS," the policy reads as follows:

"4. Insured's Duties in the Event of Occurrence, Claim or Suit: (a) In the event of an occurrence, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable. (b) If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative. (c) The insured shall cooperate with the company and, upon the company's request, assist in making settlements, in the conduct of suits and in enforcing any right of contribution or indemnity against any person or organization who may be liable to the insured because of injury or damage with respect to which insurance is afforded under this policy; and the insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for first aid to others at the time of accident.

"5. Action Against Company: No action shall lie against the company unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company."

Bankers and Shippers received notice of the collision on August 25, 1978. (Several days later, the insurer received an incomplete loss report from Dixie Insurance Agency, C.B.C.'s agent.) Thereafter, Bankers and Shippers began to investigate the circumstances of the occurrence. An adjuster in Savannah, Georgia was assigned to the case. He examined the scene of the collision, obtained photographs and police reports, looked for witnesses, and spoke with at least one independent witness. Bankers and Shippers' efforts to contact C.B.C. were hampered by the fact that the Miami, Florida address which C.B.C. originally provided was no longer correct. Ultimately, Bankers and Shippers determined that C.B.C. had moved its offices to Farmingdale, New York.

Thereafter, several meetings took place between Bankers and Shippers' adjuster and Mario Curatolla, a C.B.C. representative. C.B.C. was successful in arranging a meeting between the adjuster and Harry Sterns, a passenger in the truck driven by Weeks at the time of the collision. Bankers and Shippers obtained a signed statement from Sterns concerning the collision. Bankers and Shippers was unable to contact Peter S. Weeks. C.B.C. gave the insurer the address of Weeks' parents, but they refused to inform the insurer of Weeks' whereabouts.

On December 3, 1979, Bankers and Shippers received a service copy of the lawsuit filed by Ola Mae Young. The papers had been forwarded to the insurer by C.B.C. The lawsuit was already in default when the insurer received the copy of the complaint. Bankers and Shippers immediately retained counsel to defend C.B.C. and Weeks in the wrongful death action. Through that counsel, C.B.C. and Weeks successfully moved the court to open the default. Thereupon, defensive pleadings were filed on behalf of defendants C.B.C. and Weeks.

On January 10, 1980, Bankers and Shippers brought this declaratory judgment action, naming Ola Mae Young, James L. Quick, Seawheels, Inc., Peter S. Weeks and C.B.C. as defendants. In its lawsuit, Bankers and Shippers alleged that C.B.C. and Weeks failed to cooperate in the defense of the wrongful death action and to immediately forward the summons and complaint to Bankers and Shippers. Accordingly, the insurer sought a declaration that it is not obligated to defend C.B.C. or Weeks or to respond to a money judgment obtained against C.B.C. or Weeks.

The case was tried by the court sitting without a jury. Upon the conclusion of the trial, the court determined that C.B.C. and Weeks failed to comply with the notice...