State Farm Mut. Auto. Ins. Co. v. Burgess
| Decision Date | 28 June 1985 |
| Citation | 474 So.2d 634 |
| Parties | STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. v. Norman P. BURGESS. 83-790. |
| Court | Alabama Supreme Court |
Joel W. Ramsey of Ramsey & Baxley, Dothan, for appellant.
Stephen T. Etheredge of Johnson, Huskey, Hornsby & Etheredge, Dothan, for appellee.
This is an appeal by State Farm Mutual Automobile Insurance Company (State Farm) of a summary judgment entered against it in a suit filed by Norman Burgess to collect uninsured motorist benefits. We reverse the judgment of the trial court.
On August 8, 1979, Burgess, while driving a semi-trailer truck, was involved in a collision in Tennessee with another truck. Burgess sustained serious physical injuries in the accident. In June 1980, Burgess filed suit against the owner and the driver of the other vehicle involved in the collision. This suit was tried in September 1983 and resulted in a jury verdict of $250,000.00 in Burgess's favor.
While the litigation with the owner and driver of the other truck was still pending, Burgess became aware of the possibility that these defendants were not insured. Burgess then notified his insurance company, State Farm, of the accident by filing an "Automobile Claim Report" with the company, dated August 31, 1981. Burgess had two vehicles insured with State Farm, both of which had uninsured motorist coverage.
Burgess's policy form read in part as follows:
POLICY CONDITIONS
(The Policy Conditions Apply to All Coverages Unless Otherwise Noted)
1. Notice. In the event of an accident or loss, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, and the names and addresses of injured persons and available witnesses, shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable.... [Emphasis in original.]
....
If, before the company makes payment of loss under coverage U, the insured or his legal representative shall institute any legal action for bodily injury against any person or organization legally responsible for the use of a motor vehicle involved in the accident, a copy of the summons and complaint or other process served in connection with such legal action shall be forwarded immediately to the company by the insured or his legal representative. [Emphasis in original.]
2. Action Against Company. No action shall lie against the company:
(a) Unless as a condition precedent thereto there shall have been full compliance with all terms of this policy.
The policy provisions relevant here are the requirements that Burgess notify State Farm of the accident in writing as soon as practicable thereafter, and additionally, that Burgess send to State Farm a copy of the summons and complaint filed against the owner and driver of the other truck immediately upon filing suit. Burgess did not notify State Farm of the accident until August 1981, over two years after it occurred. Burgess never sent State Farm a copy of the summons and complaint filed in his personal injury action.
Based on failure to comply with the notice provisions of the policy, and failure to send a copy of the summons and complaint, State Farm denied Burgess's request for uninsured motorist benefits. Burgess filed suit to recover those benefits in August 1983. The trial court granted summary judgment in favor of Burgess based on the pleadings, affidavits, deposition, and exhibits. The court held that there was no genuine issue of material fact, and that Burgess was entitled to judgment as a matter of law.
The issue here is whether, under the undisputed facts of this case, Burgess is entitled to collect uninsured motorist benefits in spite of alleged non-compliance with policy notice provisions and failure to forward suit papers.
We first address Burgess's failure to notify State Farm of the accident until over two years after it occurred, although his policy required notice "as soon as practicable." This Court has construed the phrase "as soon as practicable" to mean "within a reasonable time" in view of all the facts and circumstances of the case. Southern Guaranty Insurance Co. v. Thomas, 334 So.2d 879 (Ala.1976). The Court discussed reasonableness in this way:
[U]nder Alabama law there are only two factors to be considered in determining the reasonableness of a delay in giving notice to an insurer: the length of the delay and the reasons for the delay. The insured has argued that another factor should be considered, viz., the absence of prejudice to the insurer from the delay. But, under our cases, whether the insurer was prejudiced by the delay is immaterial to a determination of the reasonableness of the delay where the giving of reasonably timely notice is expressly made a condition precedent to any action against the insurer, as in this case.
334 So.2d at 883. Therefore, under existing Alabama case law, the reasonableness of Burgess's delay would be measured only by the reasons for the delay and the length thereof. The adoption of a rule requiring the insurer to show prejudice as a factor in determining reasonableness was rejected not only in Thomas, supra, but more recently in Pharr v. Continental Casualty Company, 429 So.2d 1018 (Ala.1983).
Under our cases then, Burgess should recover if he showed reasonable grounds for his delay in notifying State Farm. Nowhere does Burgess expressly state his reasons for delay. Implicit in statements in both his complaint and affidavit, however, is the inference that he did not realize the defendants in his personal injury lawsuit were uninsured until "some time" after he filed his law suit.
Although this case involves uninsured motorist benefits, the following excerpt regarding liability coverage is insightful:
It is generally recognized that the insured may be excused for a delay or failure to give the required notice to the insurer where it appears that, acting as a reasonably prudent person, he believed that he was not liable for the accident. Thus where the insured has no reasonable grounds for believing that any act or omission by it,...
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