Travelers Indem. Co. v. Cochrane, 32214

• Decision Date: 25 April 1951
• Docket Number: No. 32214,32214
• Citation: 155 Ohio St. 305,98 N.E.2d 840,44 O.O. 302
• Parties: , 44 O.O. 302 TRAVELERS INDEMNITY CO. v. COCHRANE et al.
• Court: Ohio Supreme Court

Page 305

155 Ohio St. 305

98 N.E.2d 840, 44 O.O. 302

TRAVELERS INDEMNITY CO. v. COCHRANE et al.

No. 32214.

Supreme Court of Ohio.

April 25, 1951.

Syllabus by the Court

1. A controversy between an insurer and his insured under an automobile liability insurance policy as to the fact or extent of liability thereunder to persons injured as a result of the operation of the insured automobile or as to the insurer's obligation to defend the insured in an action for damages against him is an actual or justiciable controversy determinable by a declaratory judgment.

2. Declaratory judgment procedure may not be used to determine isolated questions of fact, but the fact that a controversy turns upon questions of fact does not withdraw it from judicial cognizance under declaratory judgment procedure. Legal consequences flow from the existence of facts, and it is the province of the courts to ascertain such facts in order to determine legal consequences.

3. Where a declaratory judgment action involves the determination of an issue of fact, such issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions, and where, in a civil action by the insurer for the cancellation of an insurance policy on the ground that it has been breached by the insured, no money judgment or recovery of specific real or personal property is sought, the issue is properly triable to the court.

4. Where an agent of an insurer obtains a written statement from his insured regarding the facts surrounding an accident involving the automobile operated by the insured and covered by the contract of insurance, which statement is delivered to counsel for the insurer for use in prospective or pending litigation, the document is privileged as a communication between attorney and client; but, where the insured discloses the facts contained in such statement to third persons, including counsel representing interests adverse to the insured, and discloses the same facts through the filing of pleadings in pending litigation and through his own testimony voluntarily submitted in an action between him and the insurer, the privilege as to such statement is destroyed as to such insured.

5. Where an automobile liability insurance policy provides as a condition of its operation that the insured shall give notice to his insurer containing reasonably obtainable information respecting the circumstances of an accident and shall cooperate with the insurer in securing and giving evidence, in obtaining the attendance of witnesses and in the conduct of suits resulting from accidents covered by the policy, and where the insured is involved in an accident in the operation of an automobile so covered and withholds from his insurer and his counsel information pertinent to the insured's defense in an action brought against him for damages on account of his operation of such automobile, misrepresents to his insurer and his counsel material facts pertaining to such defense and cooperates with the plaintiff and his counsel in the prosecution of the action against the insured by giving counsel for the plaintiff in such action, before and during its pendency without prior knowledge or consent of his insurer and against his instructions, a signed and sworn statement of the circumstances of such accident, which statement is favorable to the cause of the plaintiff and contradictory to insured's previous statement to his insurer concerning facts of such accident, he thereby violates the terms and conditions of such policy so far as it affords coverage to him, and his insurer is entitled to have such policy cancelled to the extent of such coverage.

This is an action originating in the Common Pleas Court of Lucas County and brought by The Travelers Indemnity Company, hereinafter referred to as Travelers, against Rene R. Cochrane, Jr., and Ruth Eckerman, hereinafter referred to collectively as defendants, for a declaratory judgment to determine whether certain acts of Cochrane had invalidated, as to him a certain automobile insurance policy issued by Travelers.

The petition alleged that in September 1946 Travelers issued to Minnie I. Freter of Toledo a policy of insurance covering her Plymouth automobile and insuring her and persons operating the automobile with her consent against loss or damage, within certain limits, suffered by any person and caused by accident and arising out of the ownership or use of such automobile; that by the terms of such policy Travelers was obligated to defend the insured and persons covered by such policy against claims and actions for damages resulting from accidents covered by the policy and to pay judgments rendered against persons so covered on account of any such injuries, not exceeding the limits of the policy; that on November 24, 1946, in the city of Toledo, the automobile covered by the policy and operated by Cochrane with the permission of the insured collided with another automobile resulting in injuries to Eckerman who was a passenger in the insured automobile; and that in April 1947 Eckerman instituted an action in the Common Pleas Court of Lucas County against Cochrane and the operator of the other car involved in the collision, claiming that she was riding as a guest passenger in the automobile operated by Cochrane and that he was guilty of wanton misconduct which caused the collision with the other car and injuries to her in the amount of $50,000.

The petition alleged further that Cochrane represented to Travelers that he did not commit any wilful or wanton act in the operation of the automobile and that he was not co-operating with or in collusion with Eckerman in the prosecution of her action, whereupon Travelers undertook to defend him in such action; that the policy in question provided that when an accident covered by the policy occurred the insured or persons covered by the policy should give notice to Travelers with reasonably obtainable information respecting the circumstances of the accident and should cooperate with it in securing and giving evidence, in obtaining the attendance of witnesses, and in the conduct of suits resulting from the accident; and that Cochrane breached certain conditions of the policy in withholding from Travelers and its attorneys information pertinent to the defense of the Eckerman action, in misrepresenting to Travelers and its attorneys material facts pertaining to such defense, in co-operating with Eckerman and her attorney in the prosecution of her suit, in failing to co-operate with Travelers and its attorneys in such defense, and in giving to the attorney for Eckerman, during the pendency of her suit after it had been assigned for trial and without the prior knowledge or consent of Travelers and against its instructions, a signed and sworn statement of the automobile accident, which statement contradicted Cochrane's previous statement to Travelers.

The defendants filed separate answers in each of which there was a denial of any collusion between them in the prosecution or defense of the Eckerman action. Cochrane in his answer admitted the allegations of the petition in the instant case relating to the insurance policy and the fact of the collision, denied that he represented to Travelers that he did not commit any wilful or wanton act, and said that he attempted to advise Travelers' representative that the light at the intersection where the collision occurred was red and that he intended to plead guilty in the police court of running the red light and of reckless driving. Cochrane denied further that he gave the attorney for Eckerman, after the Eckerman action was assigned for trial, a signed and sworn statement concerning the collision, but said that before any claim or legal action was asserted, at the request of Eckerman's attorney, he appeared at the attorney's office and signed a statement of which attorneys for Travelers had full knowledge.

Under date of November 27, 1946, Cochrane made a written signed statement to a representative of Travelers in which he said, among other things, that on November 23, 1946, he was operating the car and Eckerman was riding in it; that at a Toledo street intersection he had a collision with another car; that Eckerman did not make any complaint about his driving on this occasion or at any other time; that he had had her mother and other relatives riding; and that they did not criticize his driving.

On March 29, 1947, Cochrane went to the office of Travelers' attorneys where a stenographic statement was takes in which he said, among other things, that Eckerman did not blame him for the accident; that if her attorney should contact him he would refer him to Travelers' attorneys; that when he was coming up to the intersection he thought the light was green but Eckerman said it was red; that he thought he had the right of way; that he did not feel he was driving recklessly; that as he proceeded into the intersection he felt confident that any car on East Broadway would stop and yield him the right of way; that he had no idea that there was going to be an accident and that that was the last thing he had in mind; that he did not want to have an accident and did not intend to have one; that he did not intend to injure Eckerman; that he was exercising as much care as he could for his own and Eckerman's safety; that he later went to police court, was cited for running a red light and was fined $10; that he told the police he thought the light was green; and that it was upon the advice of the police that he pleaded guilty.

Under date of March 12, 1948, Cochrane gave a written signed statement to counsel for Eckerman in which he stated in part as follows:

'I saw the light shining red, I saw the two automobiles standing there waiting for the light when I was over half a block away from them, but I don't know why I ran the light except that I just had an argument with Ruth and I was angry at her,...