Tillman v. Great American Indemnity Co. of New York

• Decision Date: 27 October 1953
• Docket Number: No. 10881.,10881.
• Citation: 207 F.2d 588
• Parties: TILLMAN v. GREAT AMERICAN INDEMNITY CO. OF NEW YORK et al.
• Court: U.S. Court of Appeals — Seventh Circuit

207 F.2d 588 (1953)

TILLMAN v. GREAT AMERICAN INDEMNITY CO. OF NEW YORK et al.

No. 10881.

United States Court of Appeals Seventh Circuit.

October 27, 1953.

Fred W. Genrich, Jr., Herbert Terwilliger, Wausau, Wis., for appellant.

John F. O'Melia, Donald C. O'Melia, A. J. O'Melia, Rhinelander, Wis., O'Melia & Kaye, Rhinelander, Wis., of counsel, for Tillman.

Leonard F. Schmitt, Merrill, Wis., Schmitt & Gullickson, Merrill, Wis., of counsel, for Koch.

Before DUFFY, LINDLEY and SWAIM, Circuit Judges.

DUFFY, Circuit Judge.

Plaintiff brought this action to recover damages for injuries she received on June 14, 1949, while riding as a guest in an automobile owned and driven by the interpleaded defendant, Albin Koch. Under Wisconsin law plaintiff could and did bring the action against the insurance company without joining the driver of the automobile as a party defendant. Secs. 85.93 and 260.11, Wis. Stats.; Elliott v. Indemnity Insurance Co. of North America, 201 Wis. 445, 230 N.W. 87.

On June 13, 1949, plaintiff and Koch drove from Minocqua to Madison, Wisconsin, where Koch had a physical checkup at the Wisconsin General Hospital. Plaintiff and Koch had made many automobile trips together on previous occasions. On June 14, plaintiff and Koch were driving northerly on U. S. Highway 51 on their return journey to Minocqua. Plaintiff drove the automobile from Madison to Endeavor, Wisconsin; Koch then took the wheel and the plaintiff sat beside him in the front seat. As Koch pulled away from the curb at Endeavor, plaintiff told him not to drive fast as it was then raining. On Highway 51 between Westfield and Coloma there is a curve in the road. When plaintiff and Koch reached that point plaintiff was reading a newspaper. Suddenly she felt an "awful burst of speed." The automobile left the highway on the curve, and tipped over, causing severe personal injuries to plaintiff. Before reaching the curve Koch had been driving at 35 to 40 miles per hour.

On his return to Minocqua after the accident, Koch notified insurance agent Lee Jossart of the accident. On June 16 Jossart presented a statement which Koch signed. In answer to a question as to how the accident happened appeared the following: "I was traveling on U. S. #51 making a right hand turn and ran into about 6" of water on the roadway which splashed up on the windshield obscuring vision and lost control causing car to overturn." On June 20, 1949, Attorney J. A. Kruschke of Rhinelander, Wisconsin, who frequently makes investigations of automobile accidents, received notice from the insurance company of the accident involving Koch's car. Within the next day or two he attempted to interview Koch but was unsuccessful in locating him. About the middle of July Kruschke contacted Koch, but due to the latter's condition on that occasion he could not then obtain a statement from him. He finally took a statement on August 2, 1949, which contained the following: "It was raining very hard and as a truck passed me going in the opposite direction, and it splashed my windshield, and then I also hit a big puddle of water which splashed up on my windshield. As a result of this, I could not see where I was going; and I missed a sudden turn to the left and went straight off the highway. At the time I was going about 40 miles per hour. My windshield wipers were going but the sudden heavy water was too much * * *. I don't know of anything that I could have done to avoid the accident. It just seemed as though all of a sudden I was off the road. I had done no drinking."

Plaintiff was confined to a hospital at Stevens Point for several months. On June 20, 1949, Attorney Nason of that city, upon behalf of the insurance company interviewed plaintiff at the hospital. She signed a written statement which contained the following: "Some distance north of Coloma, I do not know just where, I saw another car approaching us from the north. As this car got quite close to us it went through a pool of water on this highway and threw a large quantity of water onto our windshield. The water was muddy and completely obscured the vision on both sides of the windshield."

During November, 1951, plaintiff was examined adversely before the trial, and when asked why the accident occurred she told a story that differed greatly from the statement she had previously given to Attorney Nason. Plaintiff's explanation of her first statement was that Koch had come to see her in the hospital several days after the accident and told her that the attorney for the insurance company had said they should say that an approaching truck had splashed water on the windshield of Koch's car.

After plaintiff's adverse examination, Attorney Terwilliger, representing the insurance company, asked Koch to come to his office, which he did, and on November 13, 1951, Koch signed an affidavit which included the following statement: "That affiant states positively that there was no car that splashed water on his windshield, and his windshield was at no time obscured before the accident; that the reason why he ran off the road was that by mistake he put his foot on the accelerator rather than on the brake as he approached this curve; and that this was the sole cause of the accident; that affiant states that at no time just before the accident had he met another car; * * *."

On December 1, 1951, the attorneys for the insurance company interpleaded Koch, and as a cross-complaint against him alleged that he had violated a condition of the insurance policy requiring him to cooperate with the company, and asked for judgment that the insurance policy had been breached by Koch, and that it had no duty to defend any action against Koch, or indemnify him if plaintiff prevailed in any action against him. Thereafter Koch employed an attorney to represent him in the action.

At the trial Koch testified that he had told both the insurance agent, Jossart, and Attorney Kruschke that the reason for the accident was his mistake in putting his foot on the accelerator rather than on the brake, and that the resulting sudden burst of speed caused the car to leave the road.

The cause was submitted to a jury upon a special verdict. The jury found that Koch was negligent in respect to the speed and his control of his automobile, but was not negligent as to lookout; that such negligence was the result of Koch's failure to exercise his best judgment and skill to avoid the accident; and that such negligence was a cause of plaintiff's injuries and damages occasioned thereby. Damages were assessed at $25,000. In addition, the jury answered, "No," to this question: "Did the assured, Albin Koch, fail to cooperate with the Great American Indemnity Company of New York in connection with the claim or action brought against it by the plaintiff?" In proceedings after verdict, the court ordered that Koch recover from the insurance company the sum of $1,750 attorney fees, and disbursements of $106.13.

On this appeal the insurance company asserts (1) there is no credible evidence to sustain the jury finding that Koch did not fail to cooperate, (2) that there was no breach of duty by Koch toward plaintiff, (3) that the trial court erred in refusing the request of the insurance company that there be included in the special verdict an inquiry whether plaintiff had assumed the risk, and (4) that in any event the insurance company is not liable for attorney fees to Albin Koch.

The insurance policy issued to Koch contained a standard automobile policy condition requiring cooperation by the assured.¹ Under Wisconsin law a failure by the assured to cooperate would be a breach of the conditions of the policy which would void the policy. Hunt v. Dollar, 224 Wis. 48, 271 N.W. 405; Jenkinson v. New York Casualty Co., 241 Wis. 328, 6 N.W.2d 192. "Cooperation does mean that there shall be a fair, frank, and truthful disclosure of information reasonably demanded by the insurer for the purpose of enabling it to determine whether or not there is a genuine defense." Buckner v. General Casualty Co., 207 Wis. 303, 309, 241 N. W. 342, 344.

Failure to cooperate is usually found in cases were liability is claimed by one member of the family against another member of that family, and where the ultimate loss would be borne by the insured. The Wisconsin courts regard the condition requiring cooperation to be a reasonable and valid provision. In the Buckner case, supra, the court said, 207 Wis. at page 310, 241 N. W. at page 344: "It is quite apparent that, if an insurer is to prepare an adequate defense in cases of contested liability, or make a just settlement, it must have from the insured a complete and truthful statement of the facts made in a spirit of co-operation and helpfulness by the insured who is, in many cases at least, the only source of information available to the insurer."

On the face of the statements originally given by Koch and the plaintiff, there would appear to be no basis for a claim of negligence against the driver of the automobile. However, the fact that the false statements may be favorable to the position of the insurance company does not prevent such statements from amounting in law to a failure to cooperate. Hunt v. Dollar, 224 Wis. 48, 53, 271 N.W. 405; Hoffman v. Labutzke, 233 Wis. 365, 374, 289 N. W. 652. However, what constitutes a lack of cooperation is usually a question for the jury. Heimbecher v. Johnson, 258 Wis. 200, 206, 45 N.W.2d 610.

In the case at bar Koch testified on the trial that in his original statement to Agent Jossart, and in his later statement to Attorney Kruschke, he definitely told each of them that the car speeded up on the curve because by mistake he pressed on the accelerator pedal...