Summary
In Shallock a notice of accident was given, but there was a failure for 23 months to forward a notice of the suit and the court held there was no liability. Likewise, in American Ins. Co. v. Rural Mut. Casualty Ins. Co. (1960), 11 Wis.2d 405, 105 N.W.2d 798, it was held that a timely notice of a claim or of suit was a condition precedent and breach thereof excused liability although a notice of accident was given.
Summary of this case from Allen v. RossOpinion
February 4, 1954 —
March 2, 1954.
APPEAL from two judgments of the circuit court for Milwaukee county: WILLIAM I. O'NEILL, Circuit Judge. Modified and, as modified, affirmed.
For the appellant there were briefs and oral argument by Irving A. Puchner of Milwaukee.
For the respondent there was a brief by Shaw, Muskat Paulsen, attorneys, and F. H. Prosser and John F. Zimmermann of counsel, all of Milwaukee, and oral argument by Mr. Zimmermann and Mr. Prosser.
Actions by Al Shallock, Inc., against Zurich General Accident Liability Insurance Company, Ltd., seeking a determination of the rights and duties of the plaintiff and of the defendant under a liability policy with respect to an accident involving Stanley Cesarz and Hugo Holfert, both of whom have made claim against the plaintiff. The actions are based upon the same or a similar set of facts and have been considered together.
The plaintiff and the defendant moved for summary judgment. The facts are undisputed. Findings of fact and conclusions of law were made below, from which it appears that the plaintiff, on October 14, 1950, sold and delivered a used car to Cesarz. Cesarz was accompanied by Holfert when an accident alleged to have been caused by a defective tire occurred. Shortly thereafter plaintiff was notified of the accident by the wife of Cesarz, and on October 20, 1950, plaintiff received the following letter from Cesarz's attorney:
"October 20, 1950 "Al Shallock Inc., "797 North Jackson Street "Milwaukee 2, Wisconsin "Gentlemen:"I have been retained by Mr. Stanley Cesarz, of 527 North 54th street, Milwaukee, Wisconsin, with reference to personal injuries and property damages sustained as the result of the following circumstances:
"My client purchased from your used-car department a 1947 Ford and accepted delivery of same at approximately 3 p. m., Saturday, October 14, 1950. Within a half hour after he accepted delivery of this automobile, the front right tire and tube blew out, overturning the automobile and causing severe personal injuries to my client.
"It is my opinion that this automobile should not have been permitted to leave your used-car lot in the state of repair which existed. The right front tire was manifestly defective and the car constituted a traffic hazard.
"By permitting the car to be driven upon the highway, you committed an act of negligence which will make you liable for my client's damages.
"Yours very truly, "H. J. Scholl" No notice of this letter nor of any kind was given by plaintiff to defendant Insurance Company until September 12, 1952, twenty-three months after the matter was first called to the attention of the plaintiff. It was on September 5, 1952, that the actions by the injured persons were commenced against the plaintiff in this case. Upon receiving notice of the commencement of the actions, the Insurance Company then notified Al Shallock, Inc., as follows:"We respectfully submit that you have failed to comply with paragraphs 9 and 10 entitled `Notice of Accident' and `Notice of Claim or Suit' in that you failed to promptly notify us or our representative of this accident and claim."
The conclusions of law are:
"1. Performance of the `Conditions' of the policy as set forth in paragraphs 9, 10, and 11 thereof is a condition precedent to liability of the defendant.
"2. The defendant has not waived any of the provisions of its policy relating to the conditions precedent to its liability and it is not estopped from asserting the defenses available to it under the policy.
"3. The plaintiff by failing to give defendant notice of the accident until September 12, 1952, after suit was started, inexcusably failed to perform and comply with the requirements of paragraph 9 and paragraph 11 of the defendant's policy.
"4. The defendant was thereby prejudiced as a matter of law.
"5. Plaintiff's motion for summary judgment is denied.
"6. Defendant's motion for summary judgment is granted, with ten ($10) dollars motion costs.
"7. The defendant is entitled to judgment dismissing the plaintiff's complaint herein upon its merits and for its costs and disbursements herein.
"Let judgment be entered accordingly."
Further reference to the contract will be made in the opinion. judgment was entered in accordance with the findings of fact and the conclusions of law. Plaintiff appeals.
The contract entered into by appellant with respondent provides certain conditions under which liability was to attach to respondent but which relieved respondent from liability in the event of failure by appellant to comply with the terms of the condition.
The insurance contract was not an absolute one, and the conditions imposed and agreed to were conditions precedent which must be met before either party became bound by the contract.
Paragraphs 9 to 13 of the garage liability policy issued by the respondent Insurance Company to the appellant corporation provide as follows:
Paragraph 9. "Notice of Accident. When an accident occurs written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the insured, and also reasonably obtainable information respecting the time, place, and circumstances of the accident, the names and addresses of the injured and of available witnesses."
Paragraph 10. "Notice of Claim or Suit. . . . If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons, or other process received by him or his representative."
Paragraph 11. "Assistance and Co-operation of the Insured. . . . The insured shall co-operate with the company. . . ."
Paragraph 13. "Action Against Company. . . . No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, . . ."
Sec. 204.34(3), Stats., specifies that:
". . . Failure to give such notice shall not bar liability under such policy of insurance, agreement of indemnity, or bond, as provided in subsection (1) if the insurer was not prejudiced or damaged by such failure, but the burden of proof to so show shall be upon the person claiming such liability."
The respondent Insurance Company advances the following two contentions:
(1) That the failure of the appellant to forward immediately to the respondent the letter of Attorney H. J. Scholl dated October 20, 1950, constituted a violation of paragraph 10 of the garage liability policy and prevents appellant from recovering on either cause of action.
(2) That failure of the appellant to give notice of the accident until twenty-three months had elapsed constituted prejudice as a matter of law and left no fact question to be determined with respect thereto.
With respect to the first contention: Upon the basis of the following authorities, we are of the opinion that Scholl's letter clearly constituted a "claim" within the provisions of paragraph 10 of the policy. Will of Heinemann (1930), 201 Wis. 484, 489, 230 N.W. 698; Prigg v. Commonwealth of Pennsylvania (1842), 41 U.S. (16 Peters) 539, 10 L. Ed. 1060, 1089; Black's Law Dictionary (4th ed.), p. 313; Wheeler v. Equitable Life Assur. Society (1942), 211 Minn. 474, 1 N.W.2d 593. Scholl's letter set forth the facts of the accident and stated that he had been retained by Cesarz with reference to personal injuries and property damages sustained by Cesarz in the accident. It further asserted that the appellant was guilty of negligence which made it liable for Cesarz's damages. There, therefore, would seem to be no question but what appellant's failure to forward immediately Attorney Scholl's letter to the respondent Insurance Company prevents appellant from asserting any liability on the policy against the respondent with respect to any damages Cesarz will be entitled to recover growing out of the accident.
There is also presented the question as to the claim of the passenger Holfert. However, Holfert was injured in the same accident, and if Attorney Scholl's letter had been forwarded promptly, respondent would have soon ascertained such fact. We, therefore, conclude that the respondent has a complete defense on its policy as to Holfert's damages as well as those of Cesarz.
This conclusion makes it unnecessary for us to decide the question of whether mere lapse of time in giving the notice required under paragraph 9 of the policy would alone establish prejudice under the provisions of sec. 204.34(3), Stats., as a matter of law or whether in each case a fact question is raised as to whether there has been no prejudice, the burden of proof to establish which is on the insured.
There is a motion by respondent to review the taxation of costs, and it insists upon an allowance of costs of $100 in each case. This allowance should be granted. Sec. 271.04(1), Stats., provides that "When the amount recovered or the value of the property involved is $1,000 or over, the costs (exclusive of disbursements) shall be $100; . . ." See also French v. Continental Assur. Co. (1938), 227 Wis. 203, 278 N.W. 388. A valuable contract right involving a heavy liability is involved. The claim as set forth far exceeds $1,000. Costs should follow in favor of the prevailing party. While the matter in this court carries but a single allowance of costs and printing, still in the court below there were two separate actions differing sufficiently to warrant the allowance of $100 costs in each case. Respondent's motion to review the judgment with relation to costs is modified accordingly.
By the Court. — Judgments modified and, as modified, affirmed. Causes remanded with directions to enter judgments not inconsistent with this opinion.