Case Title: Davenport v. Travelers Indemnity Company

Citation: 195 S.E.2d 529, 283 N.C. 234

Docket Number: 

State: north-carolina

Court: North Carolina Supreme Court

Date: 1973-04-11T00:00:00Z

Document:
195 S.E.2d 529 (1973)
283 N.C. 234
Catherine H. DAVENPORT
v.
The TRAVELERS INDEMNITY COMPANY.
No. 29.

Supreme Court of North Carolina.
April 11, 1973.
*532 Don Davis, Charlotte, for plaintiff appellee.
Boyle, Alexander & Hord, by Robert C. Hord, Jr., Charlotte, for defendant appellant.
BRANCH, Justice.
The Court of Appeals held that defendant's "broadside exceptions to the findings of fact, conclusions of law and judgment entered thereon" would not bring up for review the findings of fact or the evidence on which they were based, but presented the record proper for review upon the question of whether error of law appears on the face of the record. We agree. Such a review presents the question of whether the facts found support the judgment and whether the judgment is regular in form. Fishing Pier v. Town of Carolina Beach, 274 N.C. 362, 163 S.E.2d 363; In Re Appeal of Broadcasting Corp., 273 N.C. 571, 160 S.E.2d 728.
The pleadings, issues and judgment are necessary parts of the record proper. Williams v. Contracting Company, 259 N. C. 232, 130 S.E.2d 340; Campbell v. Campbell, 226 N.C. 653, 39 S.E.2d 812; 1 Strong's N.C. Index 2d Appeal and Error § 40.
The judgment here is regular in form; we must, therefore, consider whether the Court of Appeals erred in holding that the "facts found by the court support the conclusions of law in the judgment." The crucial question is whether the facts found support the conclusion that defendant waived the contract provision pleaded by defendant.
The policy provision that "If claim is made or suit is brought against the insured he shall immediately forward to the company every demand, notice, summons or other process received by him or his representative" is a valid stipulation, and unless the insured or his judgment creditor can show compliance with the requirement, the insurer is relieved of liability. Moreover, an injured party who obtains judgment against the insured has no greater rights against the insurer than the insured. Clemmons v. Insurance Co., 267 N.C. 495, 148 S.E.2d 640; Woodruff v. Insurance Co., 260 N.C. 723, 133 S.E.2d 704; Henderson v. Insurance Co., 254 N.C. 329, 118 S.E.2d 885; Muncie v. Insurance Co., 253 N.C. 74, 116 S.E.2d 474.
However, failure to give notice or immediately forward summons or other process received by the insured may be waived by denial of liability on other grounds. The rationale of this rule is that denial of liability on other grounds is generally regarded as saying that payment would not have been made had the policy provisions been complied with, and that the law will not require a vain thing. Gardner v. Insurance Co., 230 N.C. 750, 55 S.E.2d 694; Felts v. Insurance Co., 221 N.C. 148, 19 S.E.2d 259; Gorham v. Insurance Co., 214 N.C. 526, 200 S.E. 5; Gerringer v. Insurance Co., 133 N.C. 407, 45 S.E. 773.
Consistent with this rule is the rule recognized in most jurisdictions that the unjustified refusal of the insurer to defend an action against the insured on the ground that the claim on which the action *533 is based is outside the policy coverage deprives the insurer of its right to insist upon compliance with a policy provision requiring forwarding of summons or other process received by the insured. Clemmons v. Insurance Co., supra; Lowe v. Fidelity and Casualty Co., 170 N.C. 445, 87 S.E. 250; Annot., 49 A.L.R.2d 694; § 30; 8 Appleman, Insurance Law and Practice § 4731 et seq. See Nixon v. Insurance Co., 255 N.C. 106, 120 S.E.2d 430.
The sine qua non of the rule of waiver by denial of liability, however, is that the insurer has notice that a claim of loss is being asserted against it. Turpentine & Rosin Factors v. Travelers Ins. Co., 45 F. Supp. 310 (D.C.S.D.Ga.1942); Peeler v. Casualty Company, 197 N.C. 286, 148 S.E. 261; Annot., 6 A.L.R.2d 661; 8 Appleman, Insurance Law and Practice §§ 4732, 4740.
The courts have noted different rules in determining liability between insurers who refuse to defend and those who commence a defense and abandon it. See 14 Couch on Insurance 2d §§ 51, 124; 44 Am.Jur.2d Insurance §§ 1544-1546, 1557-1559. However, the facts of this case do not require consideration of this question.
In Clemmons v. Insurance Co., supra, Bobbitt, J. (now C.J.), in discussing waiver of an insurance contract provision, stated:
We think that Campbell v. Continental Casualty Co. of Chicago, 170 F.2d 669, 6 A.L.R.2d 655 (8th Cir. 1948), sheds light upon the question before us. We quote from the decision of the 8th Circuit Court of Appeals:
Cf. Kershaw v. Maryland Casualty Co., 172 Cal. App. 2d 248, 342 P.2d 72; Jameson v. Farmers Mutual Automobile Ins. Co., 181 Kan. 120, 309 P.2d 394; General Ins. Corp. v. Harris, 327 S.W.2d 651 (Tex.Civ. App.1959).
The only action in which defendant denied coverage was the action seeking to enforce a claim against Thomas Mills, t/a Mills Grocery. Manifestly, the terms of the policy issued by defendant to Thomas and Ralph Mills, d/b/a Mills Motor Company afforded no coverage to Thomas Mills, t/a Mills Grocery; defendant's refusal to defend the action against Mills Grocery was therefore justified.
The written contract is conclusively presumed to express the agreement between the parties until it is reformed or set aside because of fraud or mutual mistake. Peirson v. Insurance Co., 248 N.C. 215, 102 S.E.2d 800; Floars v. Insurance Co., 144 N.C. 232, 56 S.E. 915. See Clark v. Ice Cream Co., 261 N.C. 234, 134 S.E.2d 354. Here plaintiff did not seek to reform the insurance contract or offer any evidence to show coverage of Thomas Mills, t/a Mills Grocery but elected to amend so as to add defendant's named insured as a party to this action.
There was no claim asserted against the named insured in the policy issued by defendant until the court allowed the amendment on 18 November 1965 making Thomas Mills and Ralph Mills, d/b/a Mills Motor Company an additional party to the action. Defendant had no notice of the claim of loss against its named insured and could not have knowingly and intentionally waived the policy provision upon which it now relies.
We hold that the facts found by the trial judge do not support his conclusions of law that "when the insurance company denied coverage of the defendant Thomas Mills they waived the condition of the policy that all summonses and other papers be forwarded to them."
The decision of the Court of Appeals is reversed and this cause is remanded to the Court of Appeals with direction that it be certified to the District Court Division of the General Court of Justice of Mecklenburg County for entry of judgment in accordance with this opinion.
Reversed.