In Courtney v. Stapp, 232 Miss. 752, 100 So.2d 606 (1958), appellant Courtney's attorney had written Mrs. Stapp's insurance carrier of Courtney's claim.Summary of this case from Leader Nat. Ins. Co. v. Lindsey
February 17, 1958.
1. Insurance — automobile liability policy — default judgment against insured — failure to give notice of pendency of suit.
In action by injured automobile passenger to recover from liability insurer amount of default judgment entered against insured, evidence sustained finding that although insurer had received notice of accident and knew passenger was represented by counsel, no notice was given by insured or anyone else of pendency of suit filed by passenger.
2. Insurance — automobile liability policy — right of injured party to recover from insurer amount of default judgment taken against insured — dependent upon whether insured had complied with terms of policy with respect to cooperation with insurer.
Right of injured party to recover from automobile liability insurer for amount of default judgment taken against insured was dependent upon whether insured had complied with terms of policy respecting cooperation so as to entitle insured to protection of policy.
3. Insurance — automobile liability policy — insurer not liable to passenger for amount of default judgment procured against insured without its knowledge where insured failed to comply with policy provisions requiring forwarding of summons to insurer.
Where automobile passenger recovered default judgment against insured for personal injuries sustained but insured failed to cooperate with insurer in accordance with policy provision requiring forwarding of summons to insurer, insurer was not liable to passenger for amount of judgment procured without its knowledge.
4. Insurance — automobile liability policy — requirement that insured forward to insurer any summons received by her was a valid, reasonable and binding requirement.
Requirement of automobile liability policy that insured forward to insurer any summons received by her was a valid, reasonable and binding requirement.
5. Insurance — automobile liability policy — notice to insurer insufficient to constitute waiver of policy provisions requiring forwarding of summons by insured.
Fact that insurer denied liability to injured automobile passenger and failed to reply to her attorney's letter which gave notice that he represented passenger and would take legal action if settlement was not made, did not constitute a waiver of policy provisions requiring the forwarding of summons by insured.
Headnotes as approved by Gillespie, J.
APPEAL from the Circuit Court of Hinds County, M.M. McGOWAN, Judge.
Lee V. Prisock, Jackson, for appellant.
I. The Court erred in finding that the answer of the garnishee, Allstate Insurance Company, was correct, and that garnishee is not indebted to the defendant, Mrs. Evelyn Stapp.
II. The Court erred in finding that as a matter of fact that garnishee, Allstate Insurance Company, had no notice of the pending action against the defendant, Mrs. Evelyn Stapp. Stanley v. Stanley, 201 Miss. 545, 29 So.2d 641; First Natl. Bank of Laurel v. Johnson, 177 Miss. 634, 643, 171 So. 11; Fleming v. Travelers Ins. Co., 206 Miss. 284, 39 So.2d 885; Employers Liability Assur. Corp., Ltd. v. Jones County Lbr. Co., 111 Miss. 759, 72 So. 152; Hope Spoke Co. v. Maryland Cas. Co., 102 Ark. 1, 143 S.W. 85, 38 L.R.A. (N.S.) 62, Ann. Cas. 1914 A, 268; Lenon v. Mutual Life Ins. Co., 80 Ark. 563, 98 S.W. 117, 8 A.L.R. 193, Ann. Cas. 467; Commercial Cas. Ins. Co. v. Skinner, 190 Miss. 533, 1 So.2d 225; Southeastern Fire Cas. Co. v. Kovar, 227 Miss. 386, 86 So.2d 356.
III. The Court erred in finding that the garnishee, Allstate Insurance Company, was not guilty of conduct amounting to waiver or estoppel of asserting the defense of no notice, after Allstate had previously denied the claim of appellant on the ground that Allstate had taken a covenant not to sue from the appellant. State Farm Mut. Automobile Ins. Co. v. Cassinelli, 18 A.L.R. 431, 443; Korch v. Indemnity Ins. Co., 329 Ill. App. 96, 67 N.E.2d 298; Conrod v. Burfin, 158 Pa. Super, 305, 44 A.2d 770; American Fidelity Cas. Co. v. Northeast Arkansas Bus Lines, 201 Ark. 622, 146 S.W.2d 165; Mercer Cas. Co. v. Lewis, 41 Cal.App.2d 918, 108 P.2d 65; Kennedy v. American Fidelity Co., 97 Cal.App.2d 315, 217 P.2d 457; Coulter v. Employers Ins. Co., 333 Ill. App. 631, 76 N.E.2d 131; Lugach v. Travelers Mut. Cas. Co., 231 Iowa 534, 1 N.W.2d 131; Pustucha v. Roth, 290 Mich. 1, 287 N.W. 355; Brown v. Security Mut. Life Ins. Co., 150 Neb. 811, 36 N.W. 251; Spiewok v. United States Cas. Co., 34 N.Y.S.2d 63; Creulich v. Monnin, 142 Ohio St. 113, 50 N.E.2d 310; Utilities Ins. Co. v. Smith (Okla.), 129 F.2d 798; Slater v. General Cas. Co., 344 Pa. 410, 25 A.2d 697; Travelers' Ins. Co. v. Reed Co., 133 S.W.2d 611; Stewart v. Commerce Ins. Co., 198 P.2d 467; Hickey v. Wisconsin Mut. Ins. Co., 238 Wis. 433, 300 N.W. 364; Leach v. Farmers Auto Interinsurance Exch., 213 P.2d 920; Commercial Standard Ins. Co. v. Gordon's Transports (Tenn.), 154 F.2d 390; Farm Bureau Mut. Auto Ins. Co. v. Preferred Acc. Ins. Co., 78 F. Supp. 561; Rewoldt v. Cook County Farmers Mut. Ins. Co., 305 Ill. App. 93, 26 N.E.2d 903; Home Indem. Co. v. Williamson, 183 F.2d 572; Fontenct v. Lloyds Cas. Insurer, 31 So.2d 290. Wells, Thomas Wells, Jackson, for appellees.
I. The rights of an injured party against an insurer are derived from the insured, and are no greater than the rights of the insured. Downing v. Home Indemnity Co. of N.Y., 169 Miss. 13, 152 So. 841; Travelers Indemnity Co. v. Holiman, 174 Miss. 220, 164 So. 38; Sec. 8285-01, et seq., Code 1942.
II. Appellant failed to show that Mrs. Stapp gave notice to appellee of the filing or existence of the suit, as required by the policy in question; and, therefore, appellee is relieved of liability. Grenada Bank v. Seligman, 164 Miss. 168, 143 So. 474; Heller v. Standard Acc. Ins. Co. (Ohio), 160 N.E. 707; Decker v. Kolleda, 57 Ohio App. 442, 14 N.E.2d 417; Hopson v. Shelby Mut. Cas. Co., 203 F.2d 434; Rodenkirk v. State Farm Mut. Auto Ins. Co., 325 Ill. App. 421, 60 N.E.2d 269; Gergely v. Pioneer Mut. Cas. Co., 74 N.E.2d 432; Continental Ins. Co. of City of N.Y. v. Patton-Tully Transp. Co., 212 F.2d 543; Scales v. Home Life Ins. Co., 89 F.2d 580; New Jersey Fidelity Plate Glass Ins. Co. v. Love, 43 F.2d 82; Stanley v. Stanley, 29 So.2d 641; Fleming v. Travelers Ins. Co., 206 Miss. 284, 39 So.2d 885; Employers Liability Assur. Corp., Ltd. v. Jones County Lbr. Co., 72 So. 152; Commercial Cas. Ins. Co. v. Skinner, 190 Miss. 53, 1 So.2d 225; Southwestern Fire Cas. Co. v. Kovar, 227 Miss. 386, 86 So.2d 356; Donlon v. American Motorists Ins. Co. (Mo.), 147 S.W.2d 176, 149 S.W.2d 378; State Mut. Ins. Co. v. Watkins, 181 Miss. 859, 180 So. 78; Aetna Life Ins. Co. v. Walley, 174 Miss. 365, 164 So. 16; Vol. VIII, Couch on Insurance, p. 7210; Vol. VIII, Appleman on Insurance Law Practice, pp. 126, 145.
III. Appellee was not guilty of any conduct amounting to waiver or estoppel. American Life Ins. Co. v. Barnett (Miss.), 51 So.2d 227; Potter v. Great American Indemnity Co. of N.Y. (Mass.), 55 N.E.2d 198; Nevil v. Wahl (Mo.), 65 S.W.2d 123; Wilkerson v. Maryland Cas. Co., 119 F. Supp. 383, 210 F.2d 245; Royal Indemnity Co. v. Watson, 61 F.2d 614; Korch v. Indemnity Ins. Co., 329 Ill. App. 96, 67 N.E.2d 298; Conrod v. Duffin, 158 Pa. Super. 305, 44 A.2d 770; Vol. VIII, Couch on Insurance, p. 7281.
On May 6, 1955, appellant sustained personal injuries in a collision between an automobile driven by Mrs. Evelyn Stapp, appellant's sister-in-law, and in whose vehicle appellant was riding as a guest, and another vehicle owned by Roy P. Collins and driven by Catherine Ann Collins. Mrs. Stapp was covered by an automobile liability policy issued by appellee, Allstate Insurance Company, to Mrs. Stapp's husband on the automobile driven by Mrs. Stapp at the time of the collision. The accident was promptly reported to appellee, who referred the matter to Crawford Company, adjusters, to handle for appellee, and on May 12, 1955, appellant executed a covenant not to sue Mrs. Stapp for a consideration of $10.00. On June 20, 1955, appellant's attorney wrote appellee, stating he represented appellant, and that if he did not hear from appellee within a reasonable time legal action would be taken against Mrs. Stapp to enforce appellant's claim.
On August 10, 1955, appellant filed suit in the Circuit Court of Hinds County against Mrs. Stapp, Roy P. Collins, and Catherine Ann Collins. Mrs. Stapp was served with summons returnable the first Monday in September, 1955. On August 15, 1955, five days after suit had been filed, appellant wrote appellee returning therewith the $10.00 draft and requesting the return of the release. No mention was made that suit had been filed. Appellee answered this letter on August 22, 1955, declining to return the covenant not to sue and returning the draft to appellee. The case was settled as between appellant and Roy P. and Catherine Ann Collins, and the suit was dismissed as to the last named parties on November 14. It remained a pending case against Mrs. Stapp. On December 12, 1955, a default judgment was entered in favor of appellant against Mrs. Evelyn Stapp. The term of court adjourned on December 16, 1955. On January 3, 1956, an execution was issued on the judgment and returned "nulla bona" on February 8, 1956.
On February 15, 1956, upon suggestion being filed by appellant, a writ of garnishment was issued and served on appellee. The answer of appellee denied any indebtedness to Mrs. Stapp, and then set forth the fact of the existence of the automobile liability policy to Mrs. Stapp's husband, and the happening of the accident on May 6, 1955, the subsequent suit by appellant, the requirement that Mrs. Stapp give notice to appellee of the suit in order for Mrs. Stapp to avail herself of the protection of said automobile liability policy; that no notice of any kind was given to appellee, or any one connected with appellee, of appellant's suit. Appellant contested appellee's answer and issue was joined on the question of Mrs. Stapp's compliance with the provisions of the policy with reference to forwarding the summons to appellee.
(Hn 1) The issues were tried by the circuit judge without a jury. He found that while appellee received notice of the accident, and knew appellant was represented by counsel, no actual notice was given appellee by Mrs. Stapp, or anyone else, of the pendency of the suit filed by appellant. This finding was supported by the overwhelming weight of the evidence. Mrs. Stapp had numerous telephone conversations with appellee's adjuster after she was served with summons in August, 1955, but she never forwarded the summons or told him that she had actually been sued and that summons had been served on her. Appellee's adjuster advised Mrs. Stapp, when she told him that she had heard through family sources that the suit might be called up without her knowledge, that she would have to be notified by summons, and that when she received such summons to let the adjuster know about it and the insurance company would furnish a lawyer to defend her. The evidence is uncontradicted that appellee stood ready to defend Mrs. Stapp if appellee received notice that suit was filed, and that the first notice appellee had that appellant had filed suit was February 8, 1956, long after appellant's judgment against Mrs. Stapp had become final.
(Hn 2) It is conceded by appellant that there was no privity between appellant, the injured party, and appellee, the insurer, and that appellant's rights, if any, are derived from the insured, and appellant's rights are no greater than those of the insured. (Hn 3) It follows that unless Mrs. Stapp complied with the terms of the policy issued by appellee so as to entitle Mrs. Stapp to the protection of the policy, appellant has no rights to the proceeds of the policy. Downing v. Home Indemnity Co. of New York, 169 Miss. 13, 152 So. 841; Travelers' Indemnity Co. v. Holiman, 174 Miss. 220, 164 So. 36.
The automobile liability policy here involved provided:
". . . 2. Notice: In the event of accident occurrence or loss, written notice containing all particulars shall be given by or for the insured to Allstate as soon as practicable, and in case of theft the insured shall also promptly notify the police. If claim is made or suit is brought against the insured, he shall immediately forward to Allstate every demand, notice or summons received by him or his representative." (Emphasis added)
"6. Action against Allstate: No action shall lie against Allstate, under any Coverage, until after full compliance with all the terms of this policy, nor, as respects Coverages A. and B., until the amount of the insured's obligation to pay shall have been finally determined by judgment against the insured, after actual trial."
(Hn 4) The failure of the insured to comply with the provisions of the policy with reference to forwarding to appellee the summons served on her in the suit filed by appellant relieved the insurer of liability to pay the judgment rendered by default and without the knowledge of the insurer. The policy imposed liability on appellant to defend all suits against Mrs. Stapp, and, within the limitations of the policy, to pay any judgment rendered against her. The policy provided that Mrs. Stapp forward to appellee any summons received by her. This latter provision was a valid, reasonable and binding requirement, and was necessary to provide appellee with notice of the suit so as to enable it to protect Mrs. Stapp and itself. State Mutual, etc., Insurance Co. v. Watkins, 181 Miss. 859, 180 So. 78; 8 Appleman, Insurance Law and Practice, 126; Donlon v. American Motorists Insurance Co., 147 S.W.2d 176 (Mo.). There was neither strict compliance, substantial compliance, nor attempt to comply, with the provisions of the policy; and appellee knew nothing of the pendency of the suit until it was too late to defend it.
(Hn 5) Appellant argues that by denying liability to appellant and in failing to reply to her attorney when he gave notice that he represented appellant and would take legal action if settlement was not made, constituted a waiver of the provisions with reference to forwarding the summons. Appellant was an adverse party, and it does not constitute a waiver of the provisions of a policy for the insured to deny liability to the person making claim against the insured. It would be another matter if the insurer had advised Mrs. Stapp that it denied coverage, but the proof conclusively shows that appellee repeatedly assured Mrs. Stapp that it was ready at all times to defend any suit filed against her by appellant. Under these circumstances there was no waiver. Appellant's authorities do not apply to the present case.
Roberds, P.J., and Kyle, Arrington and Ethridge, JJ., concur.