State Farm Mut. Auto. Ins. Co. v. Cassinelli

• Decision Date: 03 April 1950
• Docket Number: No. 3579,3579
• Citation: 67 Nev. 227,216 P.2d 606
• Parties: , 18 A.L.R.2d 431 STATE FARM MUT. AUTOMOBILE INS. CO. v. CASSINELLI.
• Court: Nevada Supreme Court

Page 606

216 P.2d 606

67 Nev. 227, 18 A.L.R.2d 431

STATE FARM MUT. AUTOMOBILE INS. CO. v. CASSINELLI.

No. 3579.

Supreme Court of Nevada.

April 3, 1950.

James W. Johnson, Jr., of Fallon, Griswold & Vargas, of Reno, and Russell A. Harris, of Sacramento, Cal., for appellant.

Lloyd V. Smith, of Reno, for respondent.

BADT, Justice.

State Farm Mutual Automobile Insurance Company has appealed from a judgment in favor of Pete Cassinelli, Jr., its insured, under an insurance policy indemnifying him against public liability and property damage. It has also appealed from the order denying a new trial. The appeal raises two questions, both of which were decided adversely to appellant by the trial court. The first is that the nature of the loss involved was not covered by the terms of the policy. The second is that the respondent is precluded from recovery by reason of his failure to give certain notices required by the policy.

1) By the terms of the policy the company agreed, in consideration of the payment of the premiums, 'and subject to the * * * conditions and other terms' of the policy:

'Coverage A--Bodily Injury Liability. To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages, including damages for care and loss of services, because of bodily injury, including death at any time resulting therefrom sutained by any person or persons, caused by accident and arising out of the ownership, maintenance or use of the automobile.

'Coverage B--Property Damage Liability. To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of the automobile.'

Also:

'It is further agreed that as respects insurance afforded by this policy under coverages A and B the company shall:

'(a) Defend in his name and behalf any suit against the insured alleging such injury or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company shall have the right to make such investigation, negotiation and settlement of any claim or suit as may be deemed expedient by the company.'

Further:

'Such insurance as is afforded by the policy in Coverages A and B also applies: * * *

'(2) To the named insured, * * * with respect to the operation of any other private passenger automobile by any such insured, or by a private chauffeur or domestic servant in the employ of any such insured, and with respect to the presence of any such insured in any other private passenger automobile, * * *.'

The automobile described in the policy is a 1937 LaSalle sedan owned by the insured.

The first controversy arises out of the meaning of the insurance 'afforded by the policy in coverages A and B * * * to the insured * * * with respect to the presence of any such insured in any other private passenger automobile. * * *'

The insured was riding, not in the insured's LaSalle sedan, but in a Buick car owned by and being driven by his adult son Raymond Cassinelli, when such Buick became involved in a collision with another car, and a result whereof persons riding in such other automobile were injured. Although a further recital of the facts will be required later, it will suffice at this time to say that a judgment was thereafter obtained against respondent by one of such injured third persons, and two other actions commenced against him were compromised and settled. Appellant contends that these items were not covered by its policy. Neither party has submitted to this court, nor has the court found in its own investigation, any decision purporting to interpret or construe a similarly worded coverage.

Appellant's brief, further condensing the wording of the policy to determine its present application, thus recites its terms: 'To pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law for damages caused by accident, and with respect to the presence of any such insured in any other private passenger automobile.'

In order that we may correctly and fairly state appellant's contention that the instant liability was not covered by the policy, we quote from its brief: 'If we are to accept the trial court's decision, the logical conclusion which we must reach is that the respondent must contend that the appellant herein agreed by this policy of insurance to insure him against liability as the result of the negligence of any person with whom he might have any contact, regardless of the fact that neither the automobile which is insured nor the respondent has any direct connection either legally or logically with the proximate cause of the accident * * * and unless this respondent was held liable simply because he was present in that car, then even under the strained interpretation of the trial court there would be no coverage. '

In the course of the oral argument counsel for appellant was requested by the court to explain further his theory of the meaning of the clause insuring respondent against liability 'with respect to the presence of any such insured in any other private passenger automobile,' and replied that such clause 'applies only in those cases wherein the state may impose a liability by law for damages predicated upon the fact, and the fact alone, that the named insured in the policy could be held liable simply because he was present in that car.' Counsel explained at some length the history of legislation in various states and the growing trend to fix liability for all accidents, and in which the indemnity companies sought to keep pace with provisions for a complete coverage, and fix their rates accordingly. Counsel stated further: 'It is not beyond the realm of conception at all that one state, and possibly many states, may have laws imposing a liability upon all persons riding in an automobile, in the event that automobile becomes involved in an accident. * * * We contend that this provision was put into this policy because it was not only an effort to comply with, but to anticipate, the requirements of the various state laws. Some states may enact a law making each person riding in an automobile on its highways responsible for the conduct of the driver of that automobile * * * and if anything happens he is liable for damages because of his presence in that automobile.' In other words appellant insists that the coverage does not apply in a case where liability results because, for example, the insured was directing the operation of the car in which he ws riding as a passenger or because at the time he was engaged in some joint venture with the driver--assuming a proper case for liability under such circumstances.

We are unable to accede to this view. It appears that in the action of Mabel A. Miller against respondent and others, the court found that respondent Pete Cassinelli, Jr., and his son Raymond Cassinelli had been on a business mission to Yerington, Nevada; that on their return therefrom, and at the intersection of Mill Street and Kietzke Lane in Reno, Washoe County, Nevada, Raymond Cassinelli drove through a stop sign and into Mrs. Miller's car, damaging the same and breaking her leg, and that, at the time, Raymond was driving north on Kietzke Lane at a rate of speed of forty-five miles an hour and that Mrs. Miller was driving east on Mill Street at twelve miles an hour. We agree with the trial court that it was precisely this kind of liability against which respondent was insured by the caluse in question.

2) The second point involves the question of whether the insured was precluded from recovery by reason of his failure to give the notices required by the policy.

The clauses relied upon by appellant are are follows:

'4. Notice of Accident-Claim or Suit-Coverages A and B. Upon the occurrence of an accident written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the accident, the names and addresses of the injured and of available witnesses. If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every damand, notice, summons or other process received by him or his representative.

'7. Action against Company-Coverages A and B. No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy. * * *'

The dates and circumstances involved are as follows: The accident above referred to occurred November 23, 1945. Mabel A. Miller, one of the injured persons, filed her complaint against Raymond Cassinelli, and thereafter amended the same to include Pete Cassinelli, Jr., respondent herein, as a party defendant. Such amended complaint was served on Pate Cassinelli, Jr., September 19, 1946. He had in the meantime no knowledge that liability on his part was claimed by Mr. Miller. On January 16, 1947, a little less than four months after he had been served with such amended complaint, Pete Cassinelli, Jr., the respondent herein, notified the appellant insurance company of such service and forwarded copies of the summons and amended complaint. At the time of such notice Mrs. Miller's action against him had been set for trial for February 20, 1947, a period of thirty-five days after the notice. It appeared however that a continuance, if requested, would have been granted, presumably for such period as to give a reasonable opportunity for preparation or further preparation for defense. The only...