Western Farm Bureau Mut. Ins. Co. v. Lee
| Decision Date | 26 June 1957 |
| Docket Number | No. 6198,6198 |
| Parties | WESTERN FARM BUREAU MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, v. D. L. LEE, Sr., Defendant-Appellee. |
| Court | New Mexico Supreme Court |
Bean, Osborn & Snead, Roswell, for appellee.
This case raised the question of the liability of an insurance company under an automobile insurance policy issued to defendant which provided the company would defend any suit brought against the insured and discharge any judgment rendered against him to the limit of its liability under the policy.
The insurance company brought an action for a declaratory judgment against the insured. The lower court held a general insurance broker and agent for the insurer had waived compliance by the insured with a provision in the automobile insurance policy that if a claim was made or suit brought against the insured, he would immediately forward to the insurer every demand, notice, summons or other process received by him or his representative. This provision was designated a 'condition' in the policy and a further provision declared: 'No action shall lie against the Company, unless as a condition precedent thereto, there shall have been full compliance with all the terms of this policy.'
On appeal the insurer challenges the sufficiency of the evidence to support the court's finding of waiver and the accordant judgment against insurer for $577.02, to reimburse the insured for a judgment he had paid to one Fair for damages arising out of a collision with the insured vehicle, and for attorney's fees for the defense of Fair's claim, initiated by a counterclaim to an action for damages brought by the insured against Fair. The insurer objects that there is no evidence in support of the award of attorney fees, $250.
The insurance policy contained a provision that its terms could not be waived or changed, except by endorsement issued to form a part of the policy signed by an executive officer of the company. The insurer recognizes the general rule that after loss has occurred, provisions of a policy relating to the giving of notice or forwarding of process by the insured may be waived by someone having authority to bind the company (76 A.L.R. 23, at page 137; 123 A.L.R. 950, at page 972; 18 A.L.R.2d 443, at page 489) but urges the insured has not established that the agent had such authority.
Viewing the testimony in the light most favorable to the insured, as appellee, the facts are hereafter narrated.
The insured was in the business of selling alfalfa hay. He operated two trucks and a pickup which were insured by the plaintiff company through a local insurance agent, Carl Caruthers, who had been the agent for the insurer since 1948. The insured had obtained other insurance from Caruthers besides the policy in question and in the past had made claims by orally notifying Caruthers of the loss and the claims had been paid without any difficulty. The agent testified that ordinarily claims and notice of suit were reported to him orally and then he wrote the company. The insurer was familiar with the practices carried on in the area between insurance clients and agents. The insured had not read his policy of insurance and had not been subjected to liability by suit or counterclaim in connection with any of his insured property prior to Fair's obtaining his judgment.
On April 27, 1953, a collision occurred between the insured's pickup truck and Fair's automobile. The insured went to Caruthers' office and orally notified him of the occurrence, making claim for the damages to his pickup. Caruthers prepared a written notice of the accident which he mailed to the insurer. The claims manager for the insurer received this notice and made no objection to its form or to the fact it had been sent by the agent. The claim was not paid, however, for the reason, communicated by the insurer to the agent, that the insurance policy did not provide collision coverage. The denial of the claim was not disputed by the insured who then made an effort to recover his damages from Fair. In this connection, several letters were written for the insured to Fair by the agent. When Fair did not accede to the demand made, the insured decided to bring suit against him and wrote a letter...
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