Summary
In American Fidelity Co. v. Schemel, 103 N.H. 190, a patron was injured in a swimming pool in a park operated by the insured as a commercial venture.
Summary of this case from Pawtucket Mut. Ins. Co. v. LebrechtOpinion
No. 4886.
Argued December 6, 1960.
Decided March 7, 1961.
1. A liability policy requirement that written notice of the occurrence of an accident shall be given by the insured to the insurer as soon as practicable requires that notice be given as soon as is reasonably possible under the circumstances of the case.
2. The question whether a liability policy requirement that notice of an accident be given to the insurer as soon as practicable has been satisfied is ordinarily one of fact but under certain circumstances it may be determined as a matter of law.
3. In the absence of fraud on the part of the insurer or its agents an insured is presumed to have knowledge of the conditions imposed in the policy.
4. The fact that an insured believed that a policy of liability insurance afforded him protection if he was at fault without the giving of notice of the occurrence of an accident to the insurer or its agents as soon as practicable as required by a condition contained in the policy does not excuse nonperformance of such condition.
5. The fact that the insurer's agent failed to inform the insured in accordance with a general custom that the liability insurance policy contained a condition that the insurer be given notice of the occurrence of an accident was held as a matter of law not to constitute an extenuating circumstance excusing nonperformance of the condition where the insured did not rely on this custom and his misconception of that policy provision was not caused by statements or acts of the insurer.
6. Where a liability insurance policyholder had knowledge that a person on his commercial premises suffered a serious accident and was informed of his name and address and knew other persons were present at the time of the accident but failed without reasonable justification to give notice thereof to the insurer or its agents for twelve and a half months such failure constituted a breach of a condition contained in the policy that notice of accident and relevant information be given to the insurer or its agent as soon as practicable.
PETITION, for declaratory judgment (RSA 491:22) by the plaintiff insurance company seeking determination of the rights and obligations of the parties with respect to a policy of liability insurance issued by it to the defendant Georges Schemel covering premises owned by him in Loudon known as Cascade Park.
On June 15, 1957, Jeffery P. Lowery, a defendant, suffered personal injuries in a swimming pool on the Schemel property and suit therefor was instituted against Schemel by defendant Samuel Lowery for himself and on behalf of his son, Jeffery, a minor. The total damages claimed are in the amount of $525,000.
Plaintiff's policy on the Schemel premises, effective from June 22, 1956 to June 22, 1957, provided coverage limited to $5,000 for injuries sustained by one person in an accident. It was a renewal of a previous policy both of which were issued by Gale's Insurance Agency of Tilton of which Frank Yudickey was the manager.
The policy contained the following provision under "Conditions": "8. 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."
By letter dated November 6, 1958 the law firm of Orr and Reno wrote Schemel notifying him that they represented the parents of said Jeffery "who is wholly and permanently disabled as a result of injuries received while a patron at Cascade Park in June of 1957. The injuries which Jeffrey Lowery incurred were caused by your failure to maintain a safe swimming area for your patrons." This letter was sent to Gale's Insurance Agency by Schemel with an accompanying letter dated November 10, 1958.
On July 1, 1958 however Frank Yudickey manager of Gale's and an agent of the plaintiff called at Schemel's premises at the latter's request to make sure that a newly erected building was covered by the policy. Yudickey testified that Schemel mentioned to him at that time that there had been an accident in the pool.
After hearing, the Trial Court (Morris, J.) made the following findings of fact and rulings of law:
"Georges Schemel was born in Paris, France, and at the time of the hearing was sixty-one years of age. He came to the United States in 1929, and had gone through the eighth grade in school. He taught himself so that he could read English in three or four years after he came over to the United States. He was in business in New York for about ten months. At one time, for two or three months, he was a salesman for Singer Sewing Machines, and he was familiar with Singer Sewing Machine Contracts, and had signed them as a salesman . . . Later he sold coffee and novelties in New Hampshire . . . .
"He has owned an automobile for twenty-five years but has had no automobile liability insurance . . . He has made two claims for losses under fire insurance policies. One of them was when wind took part of the roof . . . .
"At the time of the injury Georges Schemel was at the entrance to the park. Someone came to tell him that there had been an accident, and asked him to call an ambulance. He went to the scene and the injured boy was on the beach of the river. There were twenty to thirty people there, and one man from the Concord Lumber Company that Georges Schemel knew . . . .
"Georges Schemel knew the ambulance took the boy away and a Dr. Eberhart later told him that the boy was badly injured. He had not talked with the parents about the accident. The Orr Reno letter . . . was the first he knew about any claim. He took the letter to an acquaintance, an insurance man, and he told him to send it to his insurance company, and he wrote a letter . . . and sent the Orr Reno letter . . . to Mr. Yudickey.
"Georges Schemel reads English but testified that he doesn't understand the insurance policy. He had never read the clause about notice, and understood that he was to report an accident only if he was at fault . . . .
"Georges Schemel testified that he had read the clause about notice many times after receiving the Orr Reno letter, but that he had never read it before that time, and it had never been explained to him, and that his understanding was that he was to give notice only if he was to blame, and that he had never given written notice to this date.
"Mr. Yudickey testified that it was the custom generally with insurance agents, and that it was his custom to go over the policy when it was sold with the insured and explain it to the insured and tell them to let the company handle claims. He also testified that the first he knew of the Lowery claim was when he got the Orr Reno letter from the defendant Schemel . . .
"On all the evidence the Court is of the opinion that had Petitioner's agents at the time the original policy was sold followed the general custom of going over the policy with the insured, notice would have been given as required by Condition 8 of the policy. The Court is also of the opinion that had Mr. Yudickey followed the general custom, and his custom, on July 1, 1958, at the time the higher limits were arranged for, the notice required by Condition 8 would have been given at that time. Mr. Yudickey apparently even after he had been told by the insured that there had been an accident did nothing towards informing the insured that the protection afforded him under the policy was conditioned upon his complying with the terms of the policy.
"These facts, together with the availability of witnesses to the accident, the doctors being available, and the fact that a settlement could not have been made within the policy limits, constitute the extenuating circumstances which should excuse the insured's failure to give the notice required by Condition 8 of the policy."
The Court decreed that plaintiff has a duty to defend these actions and to satisfy any judgment obtained to the applicable limits of liability under the policy.
Plaintiff's exceptions to the admission and exclusion of evidence, to the findings and rulings made, to the denial of certain of its requests for findings and rulings and to the denial of its motion to set aside the decree were reserved and transferred.
Wiggin, Nourie, Sundeen, Nassikas Pingree and Dort S. Bigg (Mr. Bigg orally), for the plaintiff.
Upton, Sanders Upton (Mr. Gilbert Upton orally), for defendants Georges and Elizabeth Schemel.
Orr Reno and Henry T. Dunker (Mr. Dunker orally), for defendants Jeffery and Samuel R. Lowery.
Condition 8 of the policy issued by the plaintiff to defendant Schemel provided that "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 a policy requirement "is commonly considered to require notice as soon as is reasonably possible under the circumstances of the case." American Employers Ins. Co. v. Sterling, 101 N.H. 434, 437. Whether this requirement has been satisfied is ordinarily a question of fact (Farm Bureau Ins. Co. v. Manson, 94 N.H. 389, 394) but under certain circumstances it can become one of law. American Employers Ins. Co. v. Sterling, supra.
The Trial Court has found that the failure of plaintiff's agents to follow the general custom among agents to go through the policy with the purchaser at the time of sale and on July 1, 1958 when Yudickey, plaintiff's agent, was told that an accident had occurred, together "with the availability of witnesses to the accident, the doctors being available, and the fact that a settlement could not have been made within the policy limits, constitute the extenuating circumstances which should excuse the insured's failure to give" the required notice.
Plaintiff properly takes the position that its liability under the policy is conditional on the insured's performance of his obligation under the contract in this respect. It maintains that the practical effect of the Trial Court's decision is to materially increase Schemel's substantive rights under the insurance contract by virtue of a custom of which he had no knowledge at the time he entered said contract. The plaintiff further contends that in any event failure to comply with said custom would not constitute, as a matter of law, an extenuating circumstance excusing Schemel's failure to comply with the policy condition as to notice.
The accident to Jeffery P. Lowery took place on June 15, 1957 on the Schemel premises known as Cascade Park. Schemel was at the entrance to the park at that time. Notified of the happening, he went to the scene and saw the injured boy on the beach of the river which flows through the property and is part of the park. He knew an ambulance took the victim away and when he saw Dr. Eberhart afterwards and inquired about the boy he was told that he was badly hurt.
There is no doubt on the evidence that Schemel knew on the day of the accident that a boy had been hurt on the premises and was taken in an ambulance to a hospital. The record is also clear that on that day or shortly thereafter Schemel knew the name and address of the victim and that he was badly injured. He also knew people who were present in the park at the time of the accident. Thus Schemel then had sufficient information to give the plaintiff the notice of accident required by the policy to be given "as soon as practicable" and which is to 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."
Nevertheless Schemel never filed a written report of the accident. Yudickey, an agent of plaintiff, testified that on July 1, 1958, when he was inspecting Cascade Park at Schemel's request for another purpose, the latter said to him as they were approaching the swimming pool "An accident happened here a year ago" without mentioning "any names or anything." "I just listened. It was more or less a casual conversation, and that is where it stopped." On November 10, 1958 Schemel sent to said Yudickey, with an accompanying letter, the letter of claim for damages received by him from Orr and Reno attorneys for the Lowerys. For the purpose of determining the issues presented, we assume, without so deciding, that the conversation which took place between Schemel and Yudickey on July 1, 1958 was notice to the plaintiff of the happening of this accident.
The reasons advanced by Schemel to excuse this delay of one year and fifteen days in notifying the plaintiff are in substance the following. He did not know that by a clause contained in these policies his insurance against liability was upon the condition that he give notice of any accident resulting in personal injury to the insurance company, or its authorized agent, as soon as practicable. He understood that liability insurance would provide him with "protection" if he had "done something wrong." The plaintiff's agents in selling him liability insurance ought reasonably to have informed him in accordance with the general custom that the liability policy contained such a condition. Finally the plaintiff has suffered no prejudice as a result of Schemel's delay in giving notice.
The law is well established that in the absence of fraud by the company or its agents, of which there is no proof in this case, the insured is presumed to have had knowledge of the conditions imposed in the policy. Malloy v. Head, 90 N.H. 58, 60; Fitch Company v. Insurance Company, 99 N.H. 1. The insured's incapacity to read English would not excuse him from the obligation to ascertain what the provisions of his policy were. Lauze v. Insurance Co., 74 N.H. 334, 338. In this connection the Trial Court has found that Schemel can read, write and typewrite in the English language and has been able to do so for at least ten years and was fully able to read the terms and conditions of the insurance policy. Schemel's erroneous belief that contrary to its terms, the policy protected him if he was at fault and that "the insurance would take care of that" without a notice of accident would not excuse his nonperformance of the policy condition requiring that notice of an accident be given by the insured to the company "as soon as practicable."
We consider next the contention that plaintiff's agents in selling Schemel liability insurance ought reasonably to have informed him in accordance with the general custom that the liability policy contained a condition as to the giving of notice of an accident. Schemel knew nothing about this custom and consequently did not rely on it. This case differs from the cases like Brunel v. Association, 95 N.H. 391, cited by Schemel where the plaintiffs relied completely on the defendant's performance of a certain undertaking. Furthermore there was no evidence that Schemel's misconception of the policy provision as to notice was the result of incorrect or misleading statements or acts of the insurance company. 3 Pomeroy, Equity Jurisprudence (5th ed.), s. 847, p. 304. We hold therefore that the fact that plaintiff's agents did not go over the policy with the insured is insufficient, as a matter of law, to constitute an extenuating circumstance excusing Schemel's failure to comply with the policy requirements as to notice. American Employers Ins. Co. v. Sterling, 101 N.H. 434, 437.
There being no extenuating circumstances justifying a delay of at least one year and fifteen days, we hold that there was no evidence to support a finding that the notice was given as soon as practicable as required by the policy. It follows that the plaintiff is not required to defend under the policy nor to indemnify the insured for any judgment obtained by the Lowerys. The findings of the Trial Court to the contrary as well as its decree are therefore set aside. Hull v. Insurance Company, 100 N.H. 387, 391.
Judgment for the plaintiff.
All concurred.