Court Opinion

ID: 9601154
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:38:04.962015+00
Date Added: 2024-06-11T10:06:28.917551
License: Public Domain

PERRY, J.,
dissenting.
In my opinion the majority appear to place some confidence in the result reached by treating the case as one in equity. Whether the case is in equity or at law, the legal principles are the same where the facts are not in dispute and there are no facts from which divergent conclusions can reasonably be drawn. The facts being admitted, the result reached depends upon the principles of law applied.
The majority state that the question in the case is “whether or not the defendant insurer used due diligence to secure” the attendance of the insured at the trial. They then argue that for the insurer to show due diligence it must show that it contacted the insured personally. This is certainly an innovation in the law. The insurer has already shown that by letter it had advised the insured of the necessity of his presence at a trial at a particular time and had offered to pay all of the insured’s expenses, including loss of wages. This letter certainly meets all of the requirements of due diligence in giving notice and providing material means and inducement for the insured’s attendance at the trial. The majority, however, seem to include in the words “due diligence” the thought that the insurer must personally contact the insured and convince bim *298by oral argument that he must cooperate. No court has ever gone this far.
Due diligence under any circumstance simply means reasonable and ordinary care. See Words and Phrases, Permanent Edition 13, pages 4, 76 and 481. Due diligence certainly cannot apply to an act that can have no legal efficacy whatsoever.
The majority refer to cases from 60 ALR2d 1146, and Johnson v. Doughty, 236 Or 78, 385 P2d 760, with reference to due diligence. Basic in each of these cases is the requirement to use due and reasonable care; to give notice, and where necessary, to provide the material means which will permit an insured to cooperate with the insurer. If the majority wish to reach a result it would be more in harmony with the holdings of other courts to require an insurer to provide a motor vehicle and chauffeur to drive the insured to a trial. This would at least give material assistance to the insured.
To base a decision upon the doing of an act which cannot in any wise be relied upon to produce a result is quite strange. If this view of the majority is to be followed, then there is no reason why in addition to requiring a personal call to show due diligence, the court should not require that a telephone call be made one week before the trial, and a telegram sent a day before trial. The majority also view with alarm “the temptation and the opportunity to the insurer to create a defense to what otherwise would be an indefensible claim, * * There is no evidence of that situation in this case. Neither is there any evidence that the injured party induced the defendant not to appear for the purpose of enabling the plaintiff to recover his judgment and later collect that judgment against the *299insurer. This is a reasonable possibility, and has happened. See, Bassi v. Bassi, 165 Minn 100, 205 NW 947; Rohlf v. Great American Mut. Indem. Co., 27 Ohio App 208, 161 NE 232; Tomlinson v. Goldberg, 121 Pa Super 125, 182 A 765; Horton v. Employers’ Liability Assur. Corp., 25 Tenn App 593, 164 SW2d 1011, cert den 179 Tenn 220, 164 SW2d 1016; Eakle v. Hayes, 185 Wash 520, 55 P2d 1072.
I think this court ought not to speculate that there may be fraud or collusion in a case. The presumption is that people are generally honest. If fraud or collusion are to be relied upon, either as sword or a shield, there should be some evidence to that effect.
In my opinion, the principal question presented is whether the evidence is sufficient to establish a breach of the cooperation clause of the insurance contract by Ratzlaff.
This court has held that where cooperation with the insurer by the insured is a condition of the policy, failure to cooperate voids the duty of an insurer to pay an insured’s loss; this by reason of the fact that the rights of a third party who would claim against an insurer are subrogated to the rights of the insured to demand protection. Therefore, if the insured cannot recover under his contract to be indemnified because of his breach, neither may the injured third person. Allegretto v. Or. Auto Ins. Co., 140 Or 538, 13 P2d 647.
The sole claim by defendant of lack of cooperation under the policy is the failure of Ratzlaff to appear at the time of trial.
Some courts have held that the cooperation clause in a liability policy is to be strictly construed and a showing made that the insured was requested to attend and provisions made for insured’s expenses where *300required, then insured’s failure to attend is sufficient to sustain lack of cooperation, as failure to appear is prejudicial per se. Glens Falls Indemnity Co. v. Keliher, 88 NH 253, 187 A 473; Shalita v. American Motorists Ins. Co., 266 App Div 131, 41 NYS2d 507, rehearing and appeal denied, 266 App Div 885, 44 NYS2d 101; Potomac Insurance Co., v. Stanley, 281 F2d 775 (CA 7th); Anno: 60 ALR2d Liability Insurance-Cooperation, 1148.
Other courts have held that the failure of the insured to appear at the trial when requested to do so is not prejudicial per se, but the insurer must present facts from which the conclusion may be drawn that insurer was in fact prejudiced. Roberts v. Commercial Standard Ins. Co., 138 F Supp 363; Curran v. Connecticut Indem. Co., 127 Conn 692, 20 A2d 87; Schneider v. Autoist Mut. Ins. Co., 346 Ill 137, 178 NE 466; Eakle v. Hayes, 185 Wash 520, 55 P2d 1072; Anno: 60 ALR2d, Liability Insurance-Cooperation, 1148, supra. In my opinion this latter rule is more just.
A showing of prejudice does not require proof that the result of the trial would have been different, but only that the insurance company may be handicapped in the presentation of its insured’s defense. Allegretto v. Or. Auto Ins. Co., supra.
The record in this ease discloses that Itatzlaff was operating his motor vehicle at the time of the collision with the motor vehicle of the plaintiff Sjolund. It therefore appears the insurance company could not properly present all of the facts in issue without the testimony of the eyewitness, defendant Ratzlaff. In my opinion prejudice was established by defendant if the evidence is sufficient to establish Ratzlaff was duly notified by his insurer.
*301Since the plaintiffs stand in the shoes of Ratzlaff, and may recover from defendant insurer only if Ratzlaff could recover from the defendant, it is necessary to consider the rights of Ratzlaff under the evidence in the record.
Ratzlaff was served in the original action at Eureka, California, and advised his insurer his address in that city was 732 5th Street. He also agreed in writing, apart from the policy, to “fully cooperate in his defense of said action.” It is admitted by the parties that Ratzlaff was asked, and he expressly agreed, to notify his insurer of any change in address. There is no evidence in the record of Ratzlaff having changed his address, therefore, the presumption obtains that the letters duly directed and mailed to him at Eureka, California were received by him. ORS 41.360; Alpha Phi of Sigma Kappa v. Kinkaid, 180 Or 568, 178 P2d 156; First National Bank v. Connolly, 172 Or 434, 138 P2d 613, 143 P2d 243; Coffey v. Northwestern Hospital Assn., 96 Or 100, 183 P 762, 189 P 407; Williams v. Culver, 39 Or 337, 64 P 763. In the absence of any evidence to the contrary, the presumption must prevail.
A number of jurisdictions excuse the failure of an insured to appear at a trial when good cause is shown. See Annotation, 60 ALR2d 1171. No attempt was made by either party to explain Ratzlaff’s absence.
Since the law presumes Ratzlaff received due notice, then, in the absence of evidence to the contrary, it must be assumed his failure to appear was voluntary and nonexcusable.
I would reverse the judgment of the trial court, with instructions to enter judgment for the defendant.
Mr. Chief Justice McAllister and Mr. Justice Rossman join in this dissent.