Stone v. Travelers Ins. Co.
| Decision Date | 31 May 1962 |
| Citation | 242 N.Y.S.2d 583,40 Misc.2d 164 |
| Parties | Carl B. STONE, as Administrator of the Estate of Romayne Lois Stone, deceased, et al., Plaintiffs, v. The TRAVELERS INSURANCE COMPANY, the Travelers Indemnity Company, Motor Vehicle Accident Indemnification Corporation and Edward George Sellnow Jr., Defendants. |
| Court | New York Supreme Court |
Sneeringer & Rowley, Albany, for plaintiffs.
Dugan, Casey, Burke & Lyons, Albany, for defendants, The Travelers Ins. Co. and The Travelers Indem. Co.
Brown & Gallagher, Albany, for defendant, Motor Vehicle Accident Indemnification Corp.
ISADORE BOOKSTEIN, Official Referee.
On August 5, 1960, a collision occurred on a public highway in this state between a motor vehicle owned and operated by defendant, Sellnow, and one owned and operated by decedent, Romayne Lois Stone. It is claimed that decedent died as a result of said collision and that plaintiffs Rachel Edwards, Jean Young and Romayne Stone and the infant plaintiff, Sandra Stone, were passengers in the vehicle owned and operated by decedent and that they sustained certain personal injuries as a result of such collision, due to the alleged negligence of defendant, Sellnow. Decedent's administrator instituted an action against defendant, Sellnow, to recover for her wrongful death; the adult passengers brought actions against him for damages for their claimed personal injuries; the infant plaintiff also brought such action, through her guardian ad litem. Plaintiffs, Magnus E. Edwards, Sr. and Howard A. Young, instituted derivative actions against Sellnow, as the husbands of their respective spouses. Plaintiff, Carl B. Stone instituted a derivative action as the parent of the infant, Sandra Stone. In these actions defendant, Sellnow, defaulted and those actions remain in that posture.
All of such plaintiffs instituted this action for a declaratory judgment seeking a declaration as to which of the defendants (other than Sellnow provided insurance coverage of Sellnow on the date of the accident. Defendant, Sellnow, has defaulted in this action, also.
Upon the trial, it was stipulated that defendant, The Travelers Insurance Company, was not involved and that the complaint, as to it, be dismissed upon the merits, without costs.
It appears that some time in December of 1959, Sellnow, consulted one Franklin L. Shultes, an insurance broker, about procuring liability insurance for his then motor vehicle and was advised that, on his record, insurance could be obtained only through the Assigned Risk Plan of the State of New York, hereinafter called 'Plan' (Insurance Law, Sec. 63); that thereupon Shultes filled out an application to the Plan for such insurance and Sellnow paid $75.00 towards the premium; the application was delivered to the Plan by messenger and the Plan assigned the risk to defendant, 'The Travelers Indemnity Company', hereinafter referred to as 'Travelers,' which thereupon issued its policy, with maximum limits of $10,000.00 for one person injured and $20,000.00 for all persons injured in a single accident.
Shultes was not an agent of 'Travelers'. In this situation, he was what is generally known in the insurance business as the 'producer'. He was the agent of defendant, Sellnow, who did not have sufficient money to pay the total premium of $232.56. Shultes paid the premium to 'Travelers' and received the policy, which, at all times, until he surrendered it to 'Travelers', remained in his possession. For the unpaid balance of the premium, Sellnow executed and delivered a note on a form, apparently furnished by The National Commercial Bank and Trust Company, (hereinafter called 'Bank') which note is entitled 'Premium Finance Note', the material portions thereof, in this controversy being as follows:
'THE NATIONAL COMMERCIAL BANK AND TRUST COMPANY
'PREMIUM FINANCE NOTE
'Office Altamount N. Y.
'Date Dec. 31 1959
'FOR VALUE RECEIVED the payor promises to pay to the order of Franklin L. Shultes
'One hundred sixty-eight and 00/100 ..... Dollars ($168.00) at the MAIN OFFICE of THE NATIONAL COMMERCIAL BANK AND TRUST COMPANY, Albany New York, in 8 monthly installments of $18.67 each, commencing on Jan. 30, 1960, with a final installment of $18.64.
'To secure payment of the full amount owing by the payor under this note, the payor hereby assigns to the payee, its successors and assigns, all return or unearned premiums, all dividends, and all losses which are or may become payable to payor under the insurance policies set forth below, (or any policies issued in substitution) which said policies are hereby delivered to the payee.
Date of Policy Policy Number Insurance Company Premium Term
------------------------------------------------------------------
12/17/59 QMV7942039 Travelers 232.56 1 yr
Amount of
Premium(s) $232.56
Down
Payment $ 72.56
Balance $160.00
Service
Charge 8.00
Amount
of Note $168.00
'(1) In the event of default in the payment of any installment of this note, the unpaid balance thereof shall become immediately due and payable, and payor agrees that such default shall be construed as and shall be notice to cancel said policies of insurance and the payee or payee's assignees may deliver said policies to the insurance company issuing same for cancellation and receive any and all return premiums thereon and receipt therefor in the name of the payor.
'(2) The payor does hereby irrevocably appoint the payee, or in the event this note is held by The National Commercial Bank and Trust Company, Albany, N. Y., said Bank, his attorney-in-fact to effect cancellation of said policies, as well as to collect any moneys payable for any reason under said policies, to give receipt, release and acquittance therefor, and to do every other thing necessary in connection therewith, with full power of substitution, hereby ratifying and confirming all such attorney-in-fact, or its substitute may lawfully do hereunder.'
The last two paragraphs above do not contain the numerals (1) and (2) in the original note. They are inserted herein for convenience by way of reference.
Shultes discounted the note with 'Bank', by a full recourse endorsement and guarantee of payment, and received the proceeds of such discount which, together with the $75.00 deposit paid by Sellnow, furnished the funds to pay to 'Travelers' its premium in full.
'Travelers' in compliance with the Financial Security provision of the Motor Vehicle Law, issued the form FS-1, which certifies to the insurance being in effect under the policy issued by it, and which form was filed with the Motor Vehicle Department, as required by law. (Former Section 93-b, now Section 312, Vehicle and Traffic Law)
The decedent had a liability policy on her own motor vehicle issued by Allstate Insurance Company which contained an uninsured motorisths indorsement as provided for in Section 167, paragraph 2-a, of the Insurance Law, which brings in the defendant, Motor Vehicle Accident Indemnification Corporation, hereinafter referred to as 'MVAIC', as the insurer, to indemnify these plaintiffs, if at the time of the accident, Sellnow was an uninsured motorist and was legally liable for the damages caused in the collision which occurred. (Article 17-A of the Insurance Law). The statutory limits of its liability is the same as the statutory and contractual limits of 'Travelers', to wit, $10,000.00 for one person, and $20,000.00 for all persons injured in a single accident.
So far as plaintiffs are concerned, it is of no moment, whether 'Travelers' or 'MVAIC' is the insurer.
The claim of 'Travelers' is that Sellnow, on the date of the collision, was an uninsured motorist, by reason of its having duly terminated its policy, before the date of the collision. If that be so, then 'MVAIC' is the insurer in the situation and not 'Travelers' . 'MVAIC' has refused to negotiate or arbitrate, on the contention that the policy of 'Travelers' was in force and that, hence, 'Travelers' is the one required to defend Sellnow and is the one liable, within its policy limits, for any recoveries against Sellnow in the negligence actions against him.
In that situation, plaintiffs instituted this action for a declaratory judgment which would declare which of the two defendants, 'Travelers' or 'MVAIC afforded coverage on the date of the collision, i. e., on August 5, 1960.
Defendant 'Travelers' moved to dismiss the complaint on the ground that the controversy was not the proper subject of an action for a declaratory judgment.
If the declaratory judgment sought were denied, plaintiffs would have to obtain judgments in their negligence action and then sue 'Travelers' under subsection one, paragraph b and subsection 7 of Section 167 of the Insurance Law; if 'Travelers' succeeded in that action by reason of its policy not being in force, a determination which would not be binding upon 'MVAIC', plaintiffs would then have to proceed against the latter, in which event, it is possible that there could be an inconsistent result, in a determination that 'Travelers' policy was in force, and that, hence, 'MVAIC' had no liability, a determination not binding on 'Travelers'. Thus, there can be envisaged a multiplicity of suits and the possibility that plaintiffs would have no insurance protection, when it cannot be doubted that they have the benefit of coverage of either 'Travelers' or 'MVAIC'.
Accordingly, the motion of 'Travelers' to dismiss the complaint is denied, with an appropriate exception noted for 'Travelers'. Cf. Post v. Metropolitan Casualty Ins. Co., 227 A.D. 156, aff'd 254 N.Y. 541, 173 N.E. 857.
We come then to the merits and the ultimate...
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