White v. Nationwide Mutual Insurance Company

• Decision Date: 20 July 1965
• Docket Number: Civ. A. No. 65-C-5-A,65-C-11-A.
• Citation: 245 F. Supp. 1
• Court: U.S. District Court — Western District of Virginia
• Parties: Rita S. WHITE, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Original Defendant and Third-Party Plaintiff, v. ALLSTATE INSURANCE COMPANY, Third-Party Defendant.

245 F. Supp. 1

Rita S. WHITE, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Original Defendant and Third-Party Plaintiff, v. ALLSTATE INSURANCE COMPANY, Third-Party Defendant.

Civ. A. Nos. 65-C-5-A, 65-C-11-A.

United States District Court W. D. Virginia, Abingdon Division.

July 20, 1965.

Leslie M. Mullins, and William J. Sturgill, Greear, Bowen, Mullins, Winston, Pippin & Sturgill, Norton, Va., for plaintiff.

William B. Poff, Woods, Rogers, Muse & Walker, Roanoke, Va., for Nationwide Mut. Ins. Co.

Francis W. Flannagan, Flannagan & Flannagan, Bristol, Va., and Frank Winston, Curtin, Hayes & Winston, Bristol, Tenn., for Allstate Ins. Co. DALTON, Chief Judge.

Plaintiff, Rita S. White, instituted this action to recover damages for injuries which she sustained as a result of an automobile accident. The controversy centers around Virginia's Uninsured Motorist Statute. (Va.Code Ann. § 38.1-381 (Supp.1964)). The pertinent facts are not in dispute.

On November 17, 1963, the plaintiff, Rita S. White, was a passenger in an automobile which was owned and operated by one Daisy P. Long. The accident occurred in Scott County, Virginia, when Miss Long's vehicle was struck and forced from the road by another vehicle operated by Jack L. Morrison of Blountville, Tennessee.

The vehicle driven by Morrison was covered by a policy of automobile liability insurance issued in Tennessee by Allstate Insurance Company, hereinafter referred to as Allstate. The limits of that policy were $10,000 per person and $40,000 per accident. On December 11, 1963, a proof of insurance form (SR-21) was filed by Allstate with the Virginia Commissioner of Motor Vehicles in an effort to comply with Va.Code Ann. § 46.1-451. The form indicated Morrison had limits of liability insurance at least equal to those required by the Virginia Financial Responsibility law ($15,000 per person, $30,000 per accident).

Miss Long after the accident notified her insurer, Nationwide Mutual Insurance Company, hereinafter referred to as Nationwide. An investigation ensued and certain medical expenses of plaintiff were paid under Miss Long's policy.

The facts show that plaintiff was at the time of the accident residing at the home of her father, Add D. Sizemore in Dickenson County, Virginia. The facts also show that Nationwide had issued an automobile liability insurance policy to Mr. Sizemore which was in effect at the time of the accident. It was under the uninsured motorist endorsement of this policy which plaintiff was to later make claim.

On May 5, 1964 plaintiff, alleging serious and permanent injuries, filed a motion for judgment in the Circuit Court of Dickenson County, Virginia, against Morrison as tortfeasor. Learning later that the liability insurance on Morrison's vehicle was not equal to that required by Virginia law, plaintiff on June 18, 1964 sent Nationwide an affidavit that she was relying on the uninsured motorist provision of her father's policy. A copy of the notice of motion for judgment was served on Nationwide June 25, 1964.

Trial of the case of White v. Morrison was begun on October 20, 1964. A judgment was recovered by plaintiff on October 21, 1964 in an amount of $22,000 with interest at the rate of six per cent per annum to run from the date of judgment, with costs in an amount of $121.50.

When Miss White was unable to collect on her judgment against Morrison, she brought two actions in the Circuit Court of Dickenson County on January 1, 1965. One action was instituted against Allstate to recover $22,121.50 plus interest from the date of judgment and another was brought against Nationwide to recover $15,121.50 with interest.

After removal by Nationwide and Allstate to this Court, the cases were consolidated for trial. Nationwide was permitted by leave of Court to file a third-party complaint against Allstate.

Allstate then paid into Court $10,215.60 claiming payment in full to the plaintiff under its policy covering Morrison, the limit of that policy being $10,000 per person. This Court ordered that amount paid to plaintiff, without prejudice, on February 16, 1965.

The Court first considers whether plaintiff was a member of her father's household so as to come under the coverage of the policy issued her father. The policy issued Sizemore by Nationwide defines "insured" thusly:

"The unqualified word `Insured' means (1) the Named Insured and, while residents of the same household, his spouse, and the relatives of either;" Plaintiff went to stay with her parents on August 15, 1963, and she remained with them until her husband, who had matriculated at East Tennessee State University, rejoined her in June of 1964. During that time plaintiff ate, slept, and lived at the home of her parents. Her relationship to her family was, she observed in testimony, the same as before she was married. She dwelled under their roof and was a member of their family. See Johnson v. State Farm Mut. Auto. Ins. Co., 252 F.2d 158 (8th Cir. 1958); Rathbun v. Aetna Cas. & Sur. Co., 144 Conn. 165, 128 A.2d 327 (1956); Lontkowski v. Ignorski, 6 Wis.2d 561, 95 N.W.2d 230 (1959). In light of the maxim that policy provisions are to be construed in favor of the insured, one might be held a member of a household within a provision extending coverage, though not for purposes of policy exclusion. See Annot., 50 A.L.R.2d 120 n. 1 (1956). The purpose of the policy provision in the case at bar was one of inclusion; the evidence is strongly in support of the conclusion that plaintiff was a member of the household of her father, and this Court so finds.

The next question presented is whether adequate or timely notice was given by plaintiff to Nationwide of her intent to rely on the uninsured motorist provision of her father's policy so as not to violate the terms of that policy calling for notice "as soon as practicable". Timely notice is a condition precedent to the right of recovery and the burden of showing such notice is on the insured. Temple v. Virginia Auto. Mut. Ins. Co., 181 Va. 561, 25 S.E.2d 268 (1943). On the other hand it is not always necessary that notice come directly from the insured, nor must it be given immediately after an accident, for the words "as soon as practicable" are broadly construed and time limits have been extended considerably in many instances. Home Indemnity Co. v. Ware, 183 F.Supp. 367 (D.Del.1960). This is especially true where prejudice to the insurer is lacking.

The purpose of the policy provision calling for prompt and timely notice is twofold: (1) It is to afford the insurer opportunity to make reasonable investigation and (2) to enable the insurer to adequately prepare a defense, if that be necessary.

The facts show that one day following the accident, Miss Long, the driver of the vehicle in which plaintiff was a passenger, notified her insurance company, Nationwide, of the accident and of the injuries sustained by plaintiff. An investigation was made by Nationwide at that time. Since, Nationwide received actual notice there was no prejudice in that regard.

Motion for judgment against defendant, Morrison, was filed on May 5, 1964. Despite reasonable diligence by counsel for plaintiff, no discovery that the limits of liability insurance of Allstate were less than required by the Virginia Financial law was made until approximately one month later. (Va.Code Ann. § 46.1-1(8)).

Within 10 days of learning this fact counsel for plaintiff notified the registered agent of Nationwide that he was relying on the uninsured motorist provision of Sizemore's policy and Nationwide received an affidavit to this effect on June 18, 1964. A copy of process was served on the registered agent of Nationwide on June 25, 1964 in the manner set forth by Va.Code Ann. § 38.1-381(e) (I). In fact, Nationwide had approximately four months in which to investigate and to prepare a defense. The case was not tried until October 20, 1964. The purpose of the policy provision was satisfied.

In the instant case, it does not appear that Nationwide was materially prejudiced, and it appears that the plaintiff acted with reasonable diligence. All the surrounding circumstances must be looked to, not the mere time lapse alone. 13 Couch on Insurance, Second Edition § 49:120. Failure to give prompt notice to vitiate a contract must be material. In this case prejudice was neither material nor substantial.

A determination must be made as to whether the filing of the SR-21 form pursuant to Va.Code Ann. § 46.1-451 by Allstate estops Allstate from asserting that its policy insured Morrison only to the extent of $10,000.

We regard to the purpose of the form, Carrico, V., stated in Virginia Farm Bureau Mut. Ins. Co. v....