Court Opinion

ID: 5374827
Source: CourtListenerOpinion
Date Created: 2022-01-08 08:30:30.619918+00
Date Added: 2024-06-11T08:30:03.369069
License: Public Domain

Cohn, J.
In an earlier action plaintiff recovered a judgment of $2,655.25 against the All-White Laundry Service, Inc., as damages for personal injuries sustained by plaintiff because of the negligence of the laundry in the operation of a motor vehicle. A policy of automobile liability insurance executed by defendant in favor of the laundry was in effect at the time of the accident. The judgment having remained unsatisfied at the expiration of thirty days from the service of notice of entry of the judgment upon the attorney for the laundry, and upon its insurer, plaintiff instituted this suit against defendant pursuant to the provisions of section 167 of the Insurance Law (L. 1939, ch. 882).
On April 13, 1940, the laundry’s automobile driven by its manager, Nathan Edelstein, was backed up without warning and struck plaintiff who was on a crosswalk, causing him to sustain a compound fracture of the leg. As required by the terms of its policy, the insurer proceeded to defend plaintiff’s action against the laundry but later disclaimed liability and withdrew from the litigation because of the alleged failure on the part of the assured to co-operate with defendant.
It is plaintiff’s contention that the clear liability in the negligence case prompted the insurance company to seek refuge in a disclaimer founded upon baseless complaints of nonco-operation by the assured.
The insurance company’s defense was predicated upon the claim that the assured made conflicting statements as to the circumstances of the accident and that it failed to make its *286agents and employees available to the insurance company in preparation for the trial.
In order to be relieved of liability, the insurer has the burden of establishing that there was a breach of the provisions of the policy which require a statement by the assured of the circumstances of the accident, and the assistance and co-operation of the assured in the conduct of the action (Insurance Law, § 167, par. 5). In our view, defendant did not maintain its burden of proving such failure or refusal to co-operate. Nor was there sufficient evidence of bad faith or of collusion between plaintiff and the assured. Lack of good faith by the. assured must be proved and is not to be inferred. (Roth v. National Automobile Mutual Casualty Co., 202 App. Div. 667.)
The disclaimer of defendant is based principally upon the. alleged misleading report of the accident given by Nathan Edelstein to defendant six days after the accident. This report was- given orally by Edelstein to defendant’s representative, reduced to writing by the latter, and then signed by Edelstein. It recites that while Edelstein was in the course of operating a truck he stopped it to permit another truck ahead of him to back into the curb. The report then sets forth the alleged misleading statements, as follows: “.While I was at a standstill, I felt a bang coming from, the rear of my car. I got out of my car and saw this colored man lying.on the ground.” The statement also reveals that the plaintiff, who • was the man found lying on the ground, had suffered severe personal injuries.
Defendant contends it was deceived because in the report to the Motor Vehicle Bureau made later by Edelstein himself, he described the accident differently by stating that while backing his truck he accidentally struck plaintiff with the rear of his car. It is asserted by defendant that it was persuaded by Edelstein’s report to believe that at the time of the accident his truck was standing still.
As there is no explanation in the record or in the brief, of defendant showing how it could entertain such a belief in the face of the other.details of the accident furnished in Edelstein’s report, defendant’s claim that it was misled, is incredible. Defendant certainly knew that a truck standing still could not strike a pedestrian, throw him to the ground and cause him to sustain a double fracture of the tibia and fibula. It knew, or at least should have known, that the vehicle must have been in motion. The two statements of Edelstein are not incapable of reconciliation. A mere variance does not constitute lack of co-operation..
*287The conduct of the assured in furnishing an incorrect, though not intentionally false, statement to the company at the time .of the accident, which tended to absolve him from blame, and with which his testimony at the trial was in substantial conflict, the latter constituting virtually a confession of negligence on his part, would not furnish a defense to the insurer in the absence of evidence that the testimony given at the trial was false. (Guerin v. Indemnity Ins. Co., 107 Conn. 649.)
Moreover, the trial court erroneously received in evidence over plaintiff’s objections and exception (1) an affidavit of one B. Goldstein, an attorney, and (2) testimony furnished by Nathan Edelstein before the State Motor Vehicle Commissioner and proof of omission by the assured to inform defendant of the fact that he was required to appear there.
(1) The affidavit of B. Goldstein was offered to show that defendant had made efforts to communicate with the insured and that the insured did not respond to such calls. This attorney, who represented defendant, was present in court during the trial and could have been called by defendant as a witness. The failure to do so deprived plaintiff of the right to cross-examine upon the issue as to whether the insured, the All-White Laundry Service, Inc., had co-operated with defendant. (Stephens v. Vroman, 16 N. Y. 381, 384.)
(2) There was no duty imposed on the assured to apprise defendant of the fact that Nathan Edelstein, an officer of the assured, had been notified to attend at a hearing before the Motor Vehicle Commissioner, and proof of failure to advise defendant should not have been received as evidence of lack of co-operation. The sole purpose of the hearing was to determine whether Edelstein’s automobile operator’s license should be revoked. There, Edelstein was acting for himself and not for,his corporate employer. (Young v. Grant Lunch Corp., 254 App. Div. 174,176.) His testimony given at such a hearing was not an act of- the corporate assured and was improperly received in evidence to show lack of co-operation. Declarations of an agent or of an officer of a corporation are not evidence against the principal, except when made in the course of his agency or in the discharge of his official duties. (Cobb v. United Engineering, etc., Co., 191 N. Y. 475, 480; First Nat. Bank v. Ocean Nat. Bank, 60 N. Y. 278; Kraus v. Fifth Avenue Coach Co., 233 App. Div. 357.)
For the foregoing reasons, the judgment should be reversed and a new trial ordered, with costs to appellant to abide the event.