Summary
In Della-Posta v. New York Cas. Co. (276 App. Div. 770, 771), the court said: "By its letter of March 12th, defendant had recognized the continued validity of its policy, and had required action by its insured which it could only require by virtue of the policy.
Summary of this case from Matter of Allstate Ins. v. FlaumenbaumOpinion
November 14, 1949.
On November 10, 1945, an automobile operated by the son of defendant's insured was involved in an accident. On March 29, 1946, defendant disclaimed liability under a policy of liability insurance because of alleged lack of co-operation by defendant's insured. In December, 1947, judgments were obtained against defendant's insured in actions for wrongful death and personal injuries arising out of the accident. This action is by the judgment creditors of defendant's insured under section 167 Ins. of the Insurance Law to recover so much of the judgments as are covered by the policy. In defense, defendant pleaded that the insured breached the insurance contract in failing to co-operate. Defendant's insured had made two statements to defendant, on November 20 and December 1, 1945, to the effect that he had not given his son permission to operate the automobile involved in the accident. Subsequently, on March 5, 1946, defendant's insured disclosed to an investigator in defendant's employ, facts from which such permission might have been inferred. Defendant claimed that on this occasion insured refused to make a written statement, and refused to give to the investigator the name of a witness whose testimony might tend to establish some of the facts stated. With knowledge of these claimed facts, defendant, on March 12, 1946, notified its insured by letter of the report which the investigator had made of his conversation with the insured, informed him of the provisions of the policy requiring co-operation, and gave him two alternatives: (1) to call at the office of defendant's attorney and make a complete statement in writing, or (2) to prepare a statement himself and send it to defendant. On March 18, 1946, the insured appeared at the office of defendant's attorney and submitted to a complete examination as to the pertinent facts. Defendant contended on trial that the statements made by the insured on November 20 and December 1, 1945, were true, but that the statement made on March 18th was false, and that such false statement was a further instance of failure on the part of the insured to co-operate with defendant. It was the claim of the plaintiffs that the defendant had waived its defense based on the claim that insured had failed to co-operate, by the writing of the letter of March 12, 1946. The trial court correctly charged the jury that defendant had the burden of proof with respect to the defense of lack of co-operation, and that the burden with respect to the assertion of waiver was imposed on the plaintiffs. The court further charged, without exception, that unless the insured made a full and complete and truthful statement on the occasion of March 18, 1946, there was no waiver. Later, in response to a request by plaintiffs' attorney, he refused to charge that the burden of establishing that the statements of the insured on that occasion were untrue was upon the defendant. Plaintiffs appeal from a judgment entered upon the jury's verdict, in favor of the defendant. Judgment reversed on the law and the facts and a new trial granted, with costs to appellants to abide the event. In our opinion the finding of lack of co-operation, implicit in the jury's verdict, is against the weight of the evidence. Furthermore, plaintiffs were entitled to have the jury charged as requested, as to the burden of proof with respect to the truthfulness of the statement of March 18, 1946. By its letter of March 12th, defendant had recognized the continued validity of its policy, and had required action by its insured which it could only require by virtue of the policy. Consequently, defendant waived any lack of co-operation by reason of the facts stated in that letter, and could disclaim liability only if its insured, thereafter, should refuse or fail to co-operate. ( Titus v. Glens Falls Ins. Co., 81 N.Y. 410, 418; Trippe v. Provident Fund Soc., 140 N.Y. 23, 28; Ellis v. Columbian Nat. Life Ins. Co., 270 App. Div. 143, 146.) Since the burden of proof with respect to lack of co-operation was on defendant, the refusal to charge as requested was erroneous. While it is doubtful that the question is saved for review, since the learned trial court charged, without exception, that there could be no waiver unless the statement of March 18th was complete and true, and apparently, in refusing the request, intended to adhere to the previous and correct charge that the burden of proving a waiver was on the plaintiffs, it is our opinion that the ruling upon the request may well have confused the jury as to the necessary proof on the issues submitted to them. Under the circumstances a new trial is required in the interest of justice.
In the statements of November 20, 1945, and December 1, 1945, defendant's insured denied giving his son express permission to drive the car. Defendant contends that those statements constituted lack of co-operation because they were intentionally false in that they concealed material facts (later disclosed), which might lead a jury to find that insured gave his son implied permission to drive the car at the time of the accident. Plaintiffs claim that, if there was lack of co-operation, the failure to co-operate was waived by the insured making a full and complete statement of all the material facts to defendant on March 18, 1946, pursuant to its demand made after it obtained knowledge of all the facts on March 5, 1946. In the statement of March 18, 1946, defendant's insured still maintained that he refused express permission to his son to drive the car, but disclosed new facts which defendant claims were intentionally concealed from the statements of November 20, 1945, and December 1, 1945, and which defendant claims might lead the jury to find implied permission. Defendant contends that the March 18, 1946, statement was not a waiver because the new facts disclosed in that statement were false. The court submitted to the jury the questions of lack of co-operation and waiver. Plaintiffs appeal from the judgment entered on the verdict in favor of defendant. In our opinion, the charge that the burden of proof was on plaintiffs to prove waiver, and in that respect to prove that the March 18, 1946, statement was true, was on plaintiffs, was correct. Had the case been presented on the theory that defendant claimed that the March 18, 1946, statement was further evidence of lack of co-operation, as the majority claim, then the burden of proving the falsity of the March 18th statement would have been on defendant. (Insurance Law, § 167, subd. 5.) But the case was not presented in that way. Rather the March 18, 1946, statement was presented by plaintiffs as evidence of waiver. Presented in that way, since plaintiffs had the burden of proving waiver, they had the burden of proving the truthfulness of the March 18, 1946, statement. ( Lynch v. Figge, 200 App. Div. 92.) However, in our opinion, judgment should be directed in favor of plaintiffs because defendant's position and the findings of the jury in its favor, based on its contentions, are inconsistent. If the new facts contained in the statement of March 18, 1946, are true, there was, under the charge of the court, to which no exception was taken, a waiver of the prior lack of co-operation. If the new facts contained in the statement of March 18, 1946, are false, then the statements of November 20, 1945, and December 1, 1945, concealed nothing and there was no lack of co-operation. Under either of these situations, there must be judgment for plaintiffs. The other facts contained in the November 20 and December 1, 1945, statements, which defendant claims are false, are with respect to immaterial matters only and would not constitute lack of co-operation. We agree with the majority that the finding of lack of co-operation is against the weight of the evidence, and are further of the opinion that the finding on the issue of waiver is also against the weight of the evidence.