Shea v. United States Fidelity Co.

• Decision Date: 01 March 1923
• Citation: 98 Conn. 447,120 A. 286
• Parties: SHEA ET AL. v. UNITED STATES FIDELITY CO.
• Court: Connecticut Supreme Court

120 A. 286

98 Conn. 447

SHEA ET AL. v. UNITED STATES FIDELITY CO.

Supreme Court of Errors of Con necticut.

March 1, 1923

Appeal from Superior Court, Litchfield County; George E. Hinman Judge.

Action by Jeremiah T. Shea and others against the United States Fidelity Company, to recover the amount claimed to be due upon a policy of insurance issued by the defendant to the plaintiff Bogolwitz, brought to the superior court in Litchfield county, where a demurrer to the defendant's special defense was sustained, Hinman, J.; and the defendant refusing to plead over, judgment was rendered for the plaintiffs to recover $3,078.61, and appeal by the defendant. Error and judgment set aside.

Where an insurance policy, covering liability incurred by insured for damages as the result of an accident by reason of ownership and maintenance of an automobile, provided that no action should be brought against insurer, unless for a loss after final judgment had been rendered in a suit against insured for a loss that insured had actually sustained by insured's payment in money, insurer also having the authority to defend any suit brought against insured, and it appeared that the insurer defended a suit against insured who became a bankrupt, plaintiff in the suit could not recover from insurer under the policy, in the absence of a judgment against insured.

A Storrs Campbell, of Hartford, for appellant.

Thomas J. Wall, of Torrington, for appellees.

CURTIS, J.

The complaint alleges, in substance, that on July 24, 1917, the plaintiff Shea was struck and injured by an automobile owned and operated by the plaintiff Bogolwitz; that in November 1917, Shea brought an action against Bogolwitz for negligently causing the injury; that in June, 1919, he recovered a judgment therein for $2,500; that at the time of said injury Bogolwitz carried a policy of insurance with the defendant company, whereby the defendant agreed to indemnify Bogolwitz against liability imposed by law upon him for damages to any person, for injuries suffered as a result of an accident by reason of his ownership and maintenance of such automobile; that immediately after the injury the defendant took entire charge of the investigations and negotiations in behalf of Bogolwitz in the claim for damages made by Shea against him, and when suit was begun solely conducted the defense at its own cost to the time judgment was entered; that during the time the action was pending Bogolwitz was adjudicated a bankrupt by the United States District Court for the District of Connecticut and surrendered all his property to that court.

The defendant in its answer denied that, in the policy of insurance, which it had issued to Bogolwitz, it had agreed to indemnify him against liability imposed by law for damages arising from the ownership and maintenance of the automobile in question; and in a special defense denied liability under the policy because of its terms, which it set forth in full and alleged as follows:

" Condition G of said policy provides that ‘ No action shall be brought against the company under or by reason of this policy, unless it shall be brought by the assured for a loss defined herein after final judgment has been rendered in a suit described herein and within two years from the date of such judgment, to wit, for a loss that the assured has actually sustained by assured's payment in money.’ The plaintiff has not sustained or paid the judgment referred to in his complaint, all of which is made, by condition G, a condition precedent to any obligation on the part of the defendant to pay to the plaintiff Bogolwitz the amount of the judgment procured as alleged. As to the plaintiff, Jeremiah T. Shea, the defendant says that he was not a party to the policy hereinafter set forth, and it has made no agreement to pay the amount of the judgment obtained by him against Harry Bogolwitz."

The plaintiffs demurred to the special defense, on the ground, in substance, that the plaintiffs by the allegations of the complaint, not inconsistent with the terms and conditions of the policy set forth, have a legal or equitable right to recover the amount of Shea's judgment from the defendant because (a) the defendant took sole charge of the defense of Shea's action against Bogolwitz; (b) under such facts the policy indemnified Bogolwitz against liability for the injury to Shea; (c) Bogolwitz was duly adjudicated a bankrupt during the pendency of the Shea suit against him.

Under the terms of the policy the defendant agreed:

(1) To indemnify the assured against loss from the liability imposed by law upon the assured for damages, on account of bodily injuries or death suffered by any person as a result of an accident occurring while the policy is in force by reason of the ownership, maintenance, or use of the automobile described therein.

(2) To defend in the name and on the behalf of the assured any suit brought against the assured to enforce a claim, whether groundless or not, for damages on account of bodily injuries or death suffered, or alleged to have been suffered by the persons described in the preceding paragraph and under the circumstances therein described, and as the result of an accident occurring while this policy is in force, subject to the following conditions among others:

A. The company reserves the right to settle any claim or suit. Whenever requested by the company, the assured shall aid in securing information, evidence, and the attendance of witnesses; in effecting settlement; and in prosecuting appeals. The assured shall at all times render to the company all co-operation and assistance within his power.

C. The assured shall not voluntarily...