Wolverine Ins. Co. v. Sorrough

• Decision Date: 02 October 1970
• Docket Number: No. 45477,No. 2,45477,2
• Citation: 122 Ga.App. 556,177 S.E.2d 819
• Parties: WOLVERINE INSURANCE COMPANY v. Joseph SORROUGH
• Court: Georgia Court of Appeals

Page 819

177 S.E.2d 819

122 Ga.App. 556

WOLVERINE INSURANCE COMPANY v. Joseph SORROUGH.

No. 45477.

Court of Appeals of Georgia, Division No. 2.

Oct. 2, 1970.

Erwin, Epting, Gibson & Chilivis, Eugene A. Epting, Athens, for apppellant.

Scott & Alexander, Guy B. Scott, Jr., Athens, for appellee.

Syllabus Opinion by the Court

EBERHARDT, Judge.

1. (a) 'The co-operation clause in a liability insurance policy is a material condition of liability, and a breach of it by one who is insured or who claims the benefit of insurance under the policy relieves the insurer of any obligation to defend a damage action against the insured, which it is otherwise required to defend, or to pay any claim or judgment against him. A judgment creditor who sues on a policy indemnifying the insured against claims for damages stands in the shoes of the insured, and a breach of the co-operation clause by the insured relieves the insurer of any obligation to pay the judgment. Usually, whether there has been a breach of the co-operation clause is a fact question. The insurer has the burden of showing, prima facie, a violation of the agreement by the insured and that it has been diligent and acted in good faith in seeking to obtain the insured's co-operation. The breach, once prima facie shown, shifts the burden to him who seeks to enforce a claim under the policy to show justification or excuse therefor. The insurer is not required to anticipate or negate all excuses or reasons that might justify it. A breach of the clause is prima facie shown when it appears that counsel employed to defend on behalf of the insured made reasonable effort to obtain the insured's co-operation. If the asserted breach is the insured's failure to attend the trial of a case, a showing of reasonable effort to notify him of the time and place of the trial, as scheduled by the court, and a request for his attendance is sufficient. If the facts as stipulated, or as shown by evidence, demand a finding of a breach of the clause by the insured, a verdict should be directed or judgment entered for the defendant, absent a counter-showing of justification for the breach.' H. Y. Akers & Sons, Inc. v. St. Louis Fire & Marine Ins. Co., 120 Ga.App. 800(1-5), 172 S.E.2d 355. See also State Farm Mut. Auto. Ins. Co. v. Wendler, 115 Ga.App. 452, 154 S.E.2d 772; Sims T.V., Inc. v. Fireman's Fund Ins. Co., 108 Ga.App. 41(1), 131 S.E.2d 790.

(b) An additional insured under the policy is bound by its terms, including all provisions of the co-operation clause. Ericson v. Hill, 109 Ga.App. 759(1b), 137 S.E.2d 374; Cotton States Mut. Ins. Co. v. Martin, 110 Ga.App. 309, 138 S.E.2d 433; State Farm Mut. Auto. Ins. Co. v. Burden, 115 Ga.App. 611, 155 S.E.2d 426. One who obtains a judgment against the insured and then seeks to enforce it against the insurer occupies a like status; he derives his rights under the policy through the insured, as does an additional insured, and he is entitled to recover under the policy only if it appears that all conditions precedent have been complied with.

2. (a) But we have held in H. Y. Akers & Sons, Inc. v. St. Louis Fire & Marine Ins. Co., 120 Ga.App. 800, 172 S.E.2d 355, supra, that nevertheless the insurer must make a reasonable effort to obtain the insured's co-operation before it is fully relieved. In the instant case the insurance company experienced difficulty in obtaining any co-operation of the insured, and finally, in an effort to get it, sent him a registered letter, reciting the unsuccessful attempts to obtain his co-operation in the investigation of the collision, and requesting his assistance and co-operation in accordance with the terms of the policy. The letter further stated: 'Please be advised that you should contact this office in person or by letter immediately upon receipt of this letter advising us as to where you might be located for the purpose of obtaining investigation information from you for, in the absence of your affording this co-operation and assistance, as is set forth as a condition of your insurance coverage with us, we shall have no alternatrive except to disclaim all coverage to you under the provisions of your policy carried with us for your failure to give us your co-operation and assistance in the investigation of this matter in your behalf.' Cf. State Farm Mut. Auto. Ins. Co. v. Burden, 115 Ga.App. 611, 616, 155 S.E.2d 426, supra.

The insured received the letter, signed the return receipt for it, and thereafter by telephone made an appointment with the company's adjuster, agreeing to meet the adjuster at his office. He went to the adjuster's office, but the adjuster was out. He was asked to call back and make another appointment, but he did not. The adjuster tried to call the insured on the telephone at his home, but he was away at work. However, the insured's wife, who answered the telephone, told the adjuster where and for whom the insured was working. The adjuster tried to reach him on the telephone by calling the employers office, but could not. He was told, however, when the insured would get off from work and where he was working. For some reason the insured and the adjuster simply never got together, and the company never got the desired details of the accident.

The insured testified that he lived at the same address for three or four years, then went out to Texas on a job. He admitted that he had experienced a drinking problem all along, but denied that he had ever hidden out or tried to evade the adjuster. When the damage suit was filed against him he was confined to the Clarke County jail.

We regard these facts as being sufficient to raise a factual issue as to whether the company had made a reasonable effort to get the insured's co-operation. St. Paul Fire & Marine Ins. Co. v. Gordon, 116 Ga.App. 658, 158 S.E.2d 278; National Surety Corp. v. Dunaway, 100 Ga.App. 842 (6), 112 S.E.2d 331.

(b) One of the requirements of the policy is that written notice of the accident be given, containing 'reasonably obtainable information respecting the time, place and circumstances of the accident and the names and addresses of the injured and any available witnesses, by or on behalf of the insured.' While the insured did not give written notice of the accident, it appears that oral notice was given the company's agent, who passed it along to the company and that the company acted upon it by having its adjuster get in touch with the insured while he was confined to the hospital with injuries, when some information relative to the accident was obtained, and that the adjuster further followed up with efforts to effect an interview and obtain a full report. Thus it appears that the company had actual notice. Interstate Like & Accident Co. v. Wilson, 52 Ga.App. 171, 178, 183 S.E. 672. And in acting upon the oral notice there was at least a jury question as to whether there was a waiver of the written notice requirement. Assurance Co. of America v. Bell, 108 Ga.App. 766(1), 134 S.E.2d 540. But compare Cooper v. Glens Falls Indemnity Co., 93 Ga.App. 127, 91 S.E.2d 120.

3. Error is enumerated upon charges to the jury that, inter alia, if it should appear from the evidence that the insured did breach one or more of his obligations under the contract, such as the company's request to give written sworn statements, or the giving of written notice of the accident as soon thereafter as practicable and giving particulars sufficient to indentify the insured and reasonably obtainable information respecting the time, place, and circumstances of the accident or occurrence, with the names and addresses of the injured and any available witnesses, and in the event of suit against the insured, the immediate forwarding to the company of every demand, notice, summons or other process served upon the insured or his representative, but that if it should appear that from such a breach or such breaches no prejudice resulted to the rights of the company in defending the claim against the insured, the breach or breaches of his obligations by the insured should be disregarded.

It is the contention of appellant that the absence of prejudice is immaterial, the obligations of the insured being made conditions precedent by terms of the contract.

The policy provided that 'with respect to coverages A and B (bodily injury and property damage), no action shall lie against the company unless as a condition precedent thereto, the insured or his legal representative shall have fully complied with all the terms of this policy.' (Emphasis supplied.) Thus, the obligations of the insured, to which the court referred, are specifically and expressly made conditions precedent to the arising of any right of action against the company.

A condition precedent is one which must be performed before any right to be created thereby accrues. It requires performance by one party before performance by the other. Winn v....