Opinion ID: 1124661
Heading Depth: 1
Heading Rank: 2

Heading: Insurer's Admission

Text: In addition to its finding that there was implied permission for the use of the motor vehicle here involved, the district court also found that the insurance company was estopped to deny its liability because of its defense of the original suit against the defendant Ernest O. McClure. The appellant, Phoenix Assurance Company, complains (1) that estoppel was not pleaded; (2) that it was not raised at the pretrial conference; and (3) that estoppel in any case cannot be claimed by the Lattas who were not parties or privies to the contract of insurance. Attorneys for the Lattas on the other hand point out that this is a garnishment proceeding with no pleadings being filed, except for an answer of the garnishee. They also claim that the estoppel is in favor of McClure and not the Lattas, but in any event that Lattas are third-party beneficiaries of the liability policy. No explanation or justification was made, however, for their failure to raise the issue of estoppel at pretrial conference. Doubtless it should have been raised at that time, if it was to be relied upon. See 1A Barron and Holtzoff, Federal Practice and Procedure, § 473, p. 853 (1960). We do not consider it necessary for us to decide the case on the basis of estoppel, and we will not therefore attempt to pass upon the relative merits of the conflicting views which have been raised concerning the doctrine of estoppel. This does not prevent us, however, from ascribing proper weight to all the evidence bearing upon the issue as stated in the pretrial order. That issue was: Did the insurance agreement between Phoenix Assurance Company of New York and George Acuff Drilling Company include the defendant Ernest McClure within the definition of insured? In 31 C.J.S. Estoppel § 1, p. 192, it is said that estoppels differ from evidence in that estoppels are received as conclusive and preclude all inquiry into the merits, while evidence is merely the medium of establishing facts which do exist or have existed. Therefore, without invoking the doctrine of estoppel, we must nevertheless review all of the evidence and facts which were before the trial court pertaining to the question as to whether McClure was an insured. Certainly the actions and statements of the garnishee and of George Acuff Drilling Company may be helpful in determining that pertinent issue. During the pendency of the damage action, the insurance company wrote to McClure advising him that the company had selected the law office of Murane & Bostwick to defend him and George Acuff Drilling Company in the litigation. McClure was at liberty, according to the letter, to employ a personal attorney although this was not required. The letter then stated that it was to be understood, however, that the firm of Murane & Bostwick will be in control of and responsible for the defense of the litigation. This notification was signed in the name of Phoenix Assurance Company of New York by Edward E. Murane, Wyoming counsel. The writer of the letter, Mr. Murane, was also attorney for the George Acuff Drilling Company. His firm did in fact handle and control the defense for Ernest O. McClure and for the George Acuff Drilling Company. It also handled the previous appeal in this court. McClure testified that he paid none of the attorney fees or costs for either the defense or appeal. At the hearing on the garnishment proceedings, McClure testified that he had been told by attorney Murane that Murane would defend him as long as he cooperated. He also said that he was warned to stay away from the Lattas, or the insurance company would call it collusion. There was no evidence that the company required any writing or took any action to reserve its right to deny liability under the terms of the policy. Thus it appears that the insurance company and the drilling company as well, both of which were represented by Mr. Murane, admitted by their actions and statements that McClure was insured. The admission may not be conclusive, but it was additional evidence which the trial court was entitled to consider. In dealing with a similar problem, the appellate court in Horn v. Commonwealth Casualty Company, 105 N.J.L. 616, 147 A. 483, said: It is now too late for it [the insurance company] to say that there is no proof of the permission by the named assured   . The defendant company by its very act has solemnly and in a court of law admitted the point. Its conduct is proof of the fact and the trial court could not have found otherwise. The judgment against the garnishee is amply supported by evidence and must be affirmed. Affirmed. BLUME, C.J., not participating.