Summary
In Foote, the mother had purchased a car for the use of her daughter, the daughter had given permission to a third party to drive and an accident occurred resulting in injuries to the plaintiff.
Summary of this case from Nordahl v. PetersonOpinion
January 4, 1966. —
February 1, 1966.
APPEAL from a judgment of the circuit court for Douglas county: ALLEN KINNEY, Circuit Judge. Affirmed.
For the appellant there was a brief by Morrow Garvey of Eau Claire, and oral argument by Frank L. Morrow.
For the respondents there was a brief by Borg, McGill Moodie of Superior, and oral argument by Douglas S. Moodie.
This is an action to recover damages for personal injuries sustained by the plaintiff, Sally Foote, as a result of a single vehicle automobile accident on December 3, 1961. In September, 1964, the above action was tried to a jury on the single issue of the coverage of the defendant Western Casualty Surety Company's insurance policy.
The automobile involved, a 1958 Plymouth, was insured by Western Casualty as a second car under a policy previously issued to Mrs. Mildred Rydberg. The Plymouth was owned by Mrs. Rydberg, the insured, and was being driven at the time of the accident by the plaintiff's sister, Carol Foote, whose permission to drive had come from Maria Rydberg, daughter of the insured. The plaintiff was a passenger in the Plymouth at the time of the accident.
The coverage provision of the insurance policy embraced the insured or anyone operating the automobile with the insured's permission under the following clause:
". . . the unqualified word `insured' includes the named insured and, if the named insured is an individual, his spouse and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or spouse or with the permission of either."
On December 8, 1961, a representative of Western Casualty obtained signed statements from Mildred and Marla Rydberg to the effect that Mrs. Rydberg had repeatedly given Marla specific instructions not to let anyone drive the car without Mrs. Rydberg's permission. During the trial these 1961 statements were repudiated, and contradictory testimony was given by Mildred and Marla Rydberg relative to the use of the automobile and instructions pertaining to letting other people drive it.
Mrs. Rydberg testified that the automobile was purchased for Marla's use and that Marla reimbursed her for the purchase price and insurance premiums. Her testimony also included the statements that title and insurance were taken in her own name for economy reasons but that the car was used exclusively by Marla and was, in effect, Maria's automobile.
Mrs. Rydberg testified that Marla never had to ask permission to use the car and that the only instruction given was at the time of the car's purchase in the spring of 1961 when she told Maria not to let "every Tom, Dick and Harry" use it. Mrs. Rydberg asserted that she had observed someone other than her daughter driving the automobile about a dozen or more times, knew that Carol Foote had previously driven the automobile, and never voiced any objection.
Regarding the 1961 statement, Mrs. Rydberg explained that she had simply skimmed over its contents and had little time to read it because she was working as sales clerk when it was taken. She stated that she had requested the insurance company's agent to conduct the investigation at her home but he insisted on questioning her at her place of employment in between her waiting on customers.
Marla Rydberg testified that certain portions of the 1961 statement were false in that the automobile was her car and also that her mother knew of and never voiced any objection to someone else's operation of the car. She asserted that while her mother had cautioned her at the time of the automobile's purchase not to let just anyone drive it, there were no subsequent restrictions placed on her use of the automobile and she did not believe she needed her mother's permission to let other people drive the car.
Marla said that she had read the statement taken while she was in the hospital but gave it faint attention as her mind was preoccupied with concern for her two friends also injured in the accident.
A special verdict was submitted to the jury, which found that Marla had implied permission from Mildred to allow Carol Foote to drive the car and that Mildred and Marla did not fail to cooperate with the defendant insurance company.
Douglas county is not a party to this appeal.
Two issues were decided adversely to the appellant by the jury. Upon this appeal, the insurer seeks to upset one or both of such answers.
Permission to Drive.
In its answer to the first question of the verdict, the jury found that there was implied permission for Carol Foote to operate the Rydberg car. The insurer urges that this answer cannot stand in view of the signed statements given to the representative of the insurer by Mrs. Rydberg and by Maria Rydberg.
In each statement there is a declaration that Mrs. Rydberg had given her daughter specific instructions not to permit anyone else to drive the car. Both the mother and the daughter subsequently disavowed their signed statements. They testified at the trial that the original statements were erroneous and explained the reason therefor.
The position of Mrs. Rydberg and her daughter is that the original statements were erroneously prepared because of the circumstances under which they were taken. Under oath they categorically denied that there was in fact a prohibition on Marla's letting other persons drive. Indeed, Mrs. Rydberg testified that she had observed others driving the car "a dozen or more times."
The Rydbergs also explained that the car was registered in the mother's name but that the real owner was Marla and that it was purchased for Marla's use. There is applicable the language of the court in Krebsbach v. Miller (1963), 22 Wis.2d 171, 177, 125 N.W.2d 408, 4 A.L.R.3d 1:
"Also, where for all practical purposes the first permittee is the real owner of the car but title has been taken in the name of the named insured for reasons of convenience, the general control and custody of the first permittee is such that, when he grants permission to a third person to operate the insured vehicle, such operation is held to be with the implied permission of the named insured."
See also Schimke v. Mutual Automobile Ins. Co. (1954), 266 Wis. 517, 64 N.W.2d 195.
We believe that this was an issue of fact for the jury and that there is credible evidence to support its finding. Schneck v. Mutual Service Casualty Ins. Co. (1964), 23 Wis.2d 649, 653, 128 N.W.2d 50.
The jury's finding of implied permission in Carol Foote to drive satisfies the policy's provision concerning permissive use under sec. 204.30(3), Stats. Foryan v. Firemen's Fund Ins. Co. (1965), 27 Wis.2d 133, 141, 133 N.W.2d 724; Pavelski v. Roginski (1957), 1 Wis.2d 345, 84 N.W.2d 84; Note, The Case for a Liberal Initial Permission Rule Under the Omnibus Coverage Statute, 1966 Wisconsin Law Review, 191; Anno. 4 A.L.R. 3d 10.
Failure to Cooperate.
By its answer to the second question, the jury determined that the Rydbergs did not fail to cooperate with the appellant "in the investigation and handling of this case." The insurer points to the Rydbergs' complete flip-flop on the issue of permission to drive and urges that this constituted noncooperation under Hunt v. Dollar (1937), 224 Wis. 48, 55, 271 N.W. 405. However, in Schneck v. Mutual Service Casualty Ins. Co. (1963), 18 Wis.2d 566, 576, 119 N.W.2d 342, this court ruled that for a contradiction on the part of the insured to constitute lack of cooperation the carrier is obliged to show that it was harmed thereby.
In the case at bar, the insurer offered no proof to show how it was harmed by the Rydbergs' change in their stories. We must acknowledge that this was no mere gentle deflection on the part of the Rydbergs; it was a head-over-heels somersault.
The insurer insists that the totality of the reversal of position on the part of Mrs. Rydberg and Maria Rydberg must necessarily have been detrimental to the carrier. The writer of this opinion, when a circuit judge, was impressed with this type of argument in a related type of case; as reflected in Stippich v. Morrison (1961), 12 Wis.2d 331, 107 N.W.2d 125, that fell considerably short of being a brilliant impression. But cf. Heimlich v. Kees Appliance Co. (1950), 256 Wis. 356, 41 N.W.2d 359 .
The rationale which resulted in a reversal of Stippich v. Morrison and which governs the case at bar is to be found in Kurz v. Collins (1959), 6 Wis.2d 538, 549, 95 N.W.2d 365, where it was stated that
". . . where the rights of an injured third party have intervened subsequent to the issuance of the contract of insurance, the insurer should not be freed from liability to such third party, on the ground of non-cooperation of the insured in having made a false statement, unless the insurer has been harmed thereby."
Thus, even though there is a possibility of prejudice to the insurer, it will not be sufficient to require a finding of noncooperation as a matter of law when the rights of an injured third party have arisen; actual prejudice must be shown by the insurance company.
Western Casualty learned of the altered stand of its insured approximately four months before the trial. The trial judge determined that this occurred when Mrs. Rydberg was adversely examined by counsel for the insurer in May, 1964. Although the adverse examination was not introduced into evidence, there is adequate support in the record for the trial judge's declaration on this point. Accordingly, it appears that the insurer knew well in advance of the trial the extent of its insured's deviation. Under such circumstances, the trial court was justified in accepting the jury's determination that there was no failure to cooperate. The existence of prejudice to the carrier was not established.
By the Court. — Judgment affirmed.