Wallace v. Universal Ins. Co.
Citation | 238 N.Y.S.2d 379,18 A.D.2d 121 |
Parties | Charles WALLACE, an infant over the age of 14, by Dorothy Wallace, his Guardian ad Litem, and Dorothy Wallace, Plaintiffs-Respondents, v. UNIVERSAL INSURANCE COMPANY, Inc., Defendant-Appellant. |
Decision Date | 07 March 1963 |
Court | New York Supreme Court — Appellate Division |
Harry Fass, New York City, of counsel (Weintraub & Fass, New York City, attorneys), for defendant-appellant.
Ira L. Levinson, New York City, attorney for plaintiff-respondents. Before BOTEIN, P. J., and BREITEL, VALENTE, McNALLY and NOONAN, JJ.
Prior to the commencement of this action plaintiffs had recovered a judgment against one Frank Floyd in a personal injury action. The injuries resulted from the operation of an automobile owned by Floyd, to whom defendant insurance carrier had issued a policy of insurance. In the present action plaintiffs seek to charge defendant with the amount of the judgment, pursuant to Section 167 of the Insurance Law. Defendant's contention, based on the construction of the predecessor statute to Section 167 in Coleman v. New Amsterdam Casualty Co., 247 N.Y. 271, 160 N.E. 367, 72 A.L.R. 1443, is that Floyd had breached the condition of the policy requiring cooperation in the preparation, settlement and defense of the personal injury action. After trial without a jury the court found in favor of plaintiffs in the amount of the judgment previously obtained in the personal injury action, and defendant appeals from the consequent judgment against it.
The defense of the personal injury action was undertaken by a firm of attorneys retained by defendant. The member of the firm in charge of the matter, Clark, was defendant's chief witness at the trial. From his testimony it appears unquestionably that for a time Floyd gave adequate cooperation. He furnished a written statement of facts which if believed could exculpate him, verified an answer, and discussed the case with Clark in anticipation of an examination before trial. The examination was adjourned three times at Clark's request and during this period Floyd evidently kept himself available. When it appeared that no further adjournment would be granted an effort was made to communicate with him by telephone and letter. It was unsuccessful. Thereafter further efforts to reach him were tried, but contact was never made. The attorneys sought permission from the court to withdraw their representation and, permission having been denied, 'sat mute' through the ensuing trial of the personal injury action.
The core question raised by the record is whether defendant made adequately appropriate efforts that in the circumstances could have been reasonably contemplated to locate Floyd had he been available. The insurer's responsibility in this regard has received frequent recognition. As stated in Imperiali v. Pica, 338 Mass. 494, 498, 156 N.E.2d 44, 47, (and see Shalita v. American Motorists Ins. Co., 266 App.Div 131, 41 N.Y.S.2d 507, leave to appeal denied 291 N.Y. 831, 51 N.E.2d 67 [ ]; Heimbecher v. Johnson, 258 Wis. 200, 205, 45 N.W.2d 610; Indemnity Ins. Co. of North America v. Smith, 197 Md. 160, 165, 78 A.2d 461; Gregory for use of Cusimano v. Highway Insurance Company, 24 Ill.App.2d 285, 298, 164 N.E.2d 297; Medical Protective Co. v. Light, 48 Ohio App. 508, 514, 194 N.E. 446; Finkle v. Western Automobile Ins. Co., 224 Mo.App. 285, 297, 26 S.W.2d 843; Kraynick v. Nationwide Ins. Co., 72 N.J.Super. 34, 39, 40, 178 A.2d 50; Anno.: 60 A.L.R.2d 1146, 1163, 1166).
In measuring the insurer's obligation of diligence the cooperation clause must be read with an eye to the purpose of the instrument containing it. Floyd's policy was issued in 1958. By that time the exigencies of persons injured by financially irresponsible motorists had found reflection in a compulsory insurance law (the Motor Vehicle Financial Security Act) pursuant to a legislative determination that 'it is a matter of grave concern that motorists shall be financially able to respond in damages for their negligent acts, so that innocent victims of motor vehicle accidents may be recompensed for the injury and financial loss inflicted upon them' (Vehicle and Traffic Law, § 310, in effect as § 93 when Floyd's policy was issued).
To be sure, the Financial Security Act did not impose an absolute liability in favor of the injured person. Subject to Section 167, subd. 1(b) of the Insurance Law, the insurer was still permitted to condition its liability upon the insured's compliance with the terms of the policy (see National Grange Mutual Liability Co. v. Fino, 13 A.D.2d 10, 212 N.Y.S.2d 684; General Accident Fire & Life Assur. Corp. v. Martino, 12 Misc.2d 935, 175 N.Y.S.2d 894; Codes Rules and Regulations of the State of New York, Title 11, Chapter III, subchapter B, Part 60, § 60.3(e) and (f); compare § 311, subd. 4, of the Vehicle and Traffic Law with § 345(i)(1), leaving what has been called 'a gap in the statute' (Teeter v. Allstate Insurance Company, 9 A.D.2d 176, 184, 192 N.Y.S.2d 610, affd. 9 N.Y.2d 655, 212 N.Y.S.2d 71, 173 N.E.2d 47), to which the Legislature later directed corrective attention not applicable to this case (see Insurance Law, § 167, subd. 2-a, and Article 17-A). But surely, also, the insurer's responsibility under the cooperation clause must be viewed in the frame of the State's emphasized solicitude for the victims of automobile accidents (cf. Lauritano v. American Fire Ins. Co., 3 A.D.2d 564, 567-568, 162 N.Y.S.2d 553; affd. 4 N.Y.2d 1028, 177 N.Y.S.2d 530, 152 N.E.2d 546). Such an emerging responsibility blends with the general legislative purpose, as well as with the anticipations of insurers entirely aware of that purpose; and, we may add, in no wise trespasses on the authority of Coleman v. New Amsterdam Casualty Co., supra, Circuit Judge Sobeloff has phrased the matter well:
(Pennsylvania Threshermen & Farmers' Mutual Cas. Ins. Co. v. Owens, 4 Cir., 238 F.2d 549, 550-551.)
The only testimony regarding the efforts the locate Floyd was given by Clark. When the date of Floyd's pre-trial examination...
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