Court Opinion

ID: 9457530
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:24:35.05962+00
Date Added: 2024-06-11T17:35:23.204157
License: Public Domain

ALBERT V. BRYAN, Circuit Judge
(concurring):
An insurer should not be permitted to give its insured to understand that upon receiving word of a claim, the insurer will do what is necessary to protect the insured, and then retract protection on the ground that the insured had after-wards failed to perform some term of the policy. The majority’s decision may, I fear, suggest that the insurer can do just that.
The charge of Travelers against the insured, Rosedale, was that it had violated the insurance policy. The default pleaded was that it did not “forward” the suit papers to Travelers as outlined in condition 11 of the policy reading:
“Notice of Claim or Suit. If claim is made or suit is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.” (Accent added.)
In my interpretation the insured fully met the exaction of the policy. To begin with, by the terms in the quoted stipulation, the policy was satisfied when the insured advised Travelers of the claim. The notice was on a form provided by Travelers. Thus the insured did “forward” the “demand” and the “notice” mentioned in the policy proviso. The title to this section and its first clause equate claim and suit. The requirements fit either, for they are phrased in the disjunctive. Hence word of the claim fulfilled condition 11.
My construction — that on notice of the claim the insurer was bound to anticipate suit — is feared by the carrier lest it relieve an insured of his asserted contractual obligation to send in any suit papers. Here, however, this apprehension is academic. The company’s attorney had conferred with claimant’s lawyer towards consummating a settlement. The latter upon failure of a treaty advised Travelers that he would file suit. Furthermore, Travelers had noted upon its own file that “suit is anticipated”. Moreover, imminence of suit was predicted by the shortness of the time remaining before the statute of limitations would bar the action.
When an insured has notified the insurer of a claim which is within the policy, and the insurer has accepted the responsibility for it, I am convinced that the great percentage of policyholders are lulled into a feeling of security. It is so intended. This confidence is justified by the common representations of insurers. Unless the insured is suspicious or is a scrutinizer of policies, he believes he has no further cause for concern.
The ordinary policyholder would be amazed to know that the insurer may, without further notice to him, cease its earlier solicitude and leave the insured to maintain the lookout, at his own risk, for further assault by the claimant. He would be appalled to know that otherwise the insurer escapes, freed of liability and the insured denuded of protection. This is what Travelers attempted *980here. I think this possibility is condemnable.
The insurer’s liability is rested by the Court on the mere chance, personal call of the deputy clerk of the State Court to Travelers’ attorney. Without this happenstance, according to the opinion, Travelers would have been discharged of any obligation. For me this is a tenuous teaching of insurance law.
Unless we forthrightly deny the policy violation attributed to the insured, the impression will be gained from the opinion that, even in the present circumstances, the insured would be released of all liability if it was not handed the suit papers. I deplore any such implication. It would mean that after an insurer had received the claim, investigated it and endeavored to settle it, the insurer could, by remaining silent, escape responsibility. This possibility imposes an unjustified anxiety upon the insured.
While I join in the present decision, I regret the opinion's failure to hold Travelers on the broader ground.