Simons v. Cowan

• Decision Date: 05 May 1944
• Docket Number: No. 33700.,33700.
• Citation: 217 Minn. 317,14 N.W.2d 356
• Parties: SIMONS v. COWAN et al. (IOWA MUT. LIABILITY INS. CO. OF CEDAR RAPIDS, IOWA, Garnishee).
• Court: Minnesota Supreme Court

14 N.W.2d 356

217 Minn. 317

SIMONS v. COWAN et al. (IOWA MUT. LIABILITY INS. CO. OF CEDAR RAPIDS, IOWA, Garnishee).

No. 33700.

Supreme Court of Minnesota.

May 5, 1944.

Rehearing Denied May 25, 1944.

Appeal from District Court, Blue Earth County; Harry A. Johnson, Judge.

Action by Perry Simmons against Boyd L. Cowan and another for injuries growing out of an automobile accident, wherein plaintiff obtained a judgment and subsequently filed a supplemental complaint against the Iowa Mutual Liability Insurance Company of Cedar Rapids, Iowa, liability insurer of the named defendant. From an order denying the garnishee's motion to set aside order striking out garnishee's answer to supplemental complaint and ordering judgment against garnishee and for leave to file a proposed amended answer, the garnishee appeals.

Order affirmed.

William Stradtmann, of Mankato, and Streissguth & Gislason, of New Ulm, for appellant.

Regan & Regan, of Mankato, for respondent.

MAGNEY, Justice.

Plaintiff recovered judgment against defendants for injuries growing out of an automobile accident. The judgment was not paid. Garnishment proceedings were instituted against the Iowa Mutual Liability Insurance Company, defendant Cowan's insurer. By an order of March 16, 1943, plaintiff succeeded in having the garnishee's answer to his supplemental complaint stricken and judgment ordered for him against the garnishee. The latter then moved to vacate and set aside the order of March 16, 1943, and for leave to serve and file a proposed amended answer which it annexed to its motion. Its motion was denied on August 25, 1943, and it appeals from that order. No appeal was taken from the order of March 16, 1943.

The following are certain facts as claimed by plaintiff: He, his brother Earl, the defendant Cowan, and the latter's brother Olen were copartners in the ownership and operation of a gas shovel and conveyor. Plaintiff and his brother Earl each owned his own truck. Defendant Cowan claimed sole ownership to the truck involved in the accident. The profit or loss growing out of the operation of the trucks had no connection with the partnership. Defendant Walters was an employe of the four-member partnership when he was engaged in the work of the partnership. If he drove a truck owned individually by a member of the partnership, he was paid by the owner for the time he drove it. However, for convenience, Walters was paid with partnership checks for all the work he performed. The partnership later was reimbursed by the individual truck owner for payments so made. It was and is contended by the garnishee that Walters was an employe of the partnership only, and that the contract of insurance here involved did not cover such employes. The question was submitted to the jury in the main action. In a special verdict it found that at the time of the accident Walters was not an employe of the partnership.

Plaintiff was injured on July 17, 1941. It is not necessary to detail the facts of the accident. The jury determined that it was caused by the negligence of Walters and returned a verdict against him and Cowan. Judgment was entered on the verdict against Cowan only on April 7, 1942, and on November 27, 1943, it was, by order of court, amended so as to include Walters also as a judgment debtor.

On January 5, 1943, the court granted plaintiff's motion for leave to file a supplemental complaint against Cowan's insurer as garnishee. In its answer the garnishee set out that the insurance policy provided: "The insured shall cooperate with the company and upon the company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits * * *." Also, that "No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the conditions hereof, * * *." It alleged that Walters is a relative of plaintiff, who is a copartner of Cowan. It further alleged that Cowan and Walters failed, refused, and neglected to cooperate with the garnishee in the conduct of the defense, but, on the contrary, wilfully and intentionally gave the garnishee false information in regard to matters involved in the action; that upon the trial, with the intention of assisting the plaintiff and defrauding the garnishee, defendants refused to testify to the true facts of the accident; that Cowan refused and failed to send to the garnishee within the 20-day period summonses and complaints, and other legal papers served upon him by the plaintiff; that he refused to answer letters sent to him by the garnishee and its representatives; that he refused to assist representatives of the garnishee in preparation for trial; that Walters at first told the garnishee he was employed by the partnership and stated facts regarding the happening of the accident which absolved him from liability, but that later he repudiated such statements and testified and related facts admitting liability upon his part in order to allow his relative, plaintiff, to recover; and that Cowan and Walters cooperated with plaintiff and his attorney for the purpose of fixing liability on the garnishee.

Plaintiff moved for an order striking as sham and frivolous the answer to the supplemental complaint. On March 16, 1943, the court struck it as sham and ordered judgment against the garnishee. Thereupon the garnishee moved to vacate and set aside the order of March 16, 1943, and for an order granting leave to serve and file a proposed amended answer to the supplemental complaint. The allegations in the proposed amended answer are substantially the same as those in the answer stricken, and the additional allegations have no bearing on the disposition of the case.

The main action was originally brought against Cowan alone in August, 1941. Issue was joined. It was noticed for trial at the October, 1941, term of court at Mankato. On November 13, plaintiff dismissed and immediately served a new summons and complaint, in which he joined Walters as codefendant. The case was called for trial February 16, 1942.

As has been recited, the accident occurred July 17, 1941. On July 21, Walters was interviewed by a representative of the garnishee. He stated that at the time of the accident he was employed by the partnership and related facts relative to the accident. On or about October 7, 1941, Walters was again interviewed. The garnishee claims that he materially changed his version of the facts relative to his employment and of the accident from that given on July 21. On December 15, 1941, the garnishee, by letter, returned to Walters the summons and complaint which had been served on him, saying "* * * By submitting the complaint to us, evidently you are requesting that you be considered an additional insured under the policy of liability insurance that we have on the Boyd L. Cowan Company, but under the circumstances at this time, we feel unable to grant such a request from you * * *." Walters thereupon employed personal counsel. Freeman & King, attorneys for the garnishee, continued to represent Cowan. They appeared for him throughout the trial and for more than six months after the judgment was entered. About a month after the verdict, a representative of the...