Court Opinion

ID: 5374828
Source: CourtListenerOpinion
Date Created: 2022-01-08 08:30:30.623794+00
Date Added: 2024-06-11T08:30:03.370399
License: Public Domain

Dore, J.
(dissenting). In a prior action for damages for personal injuries through the negligent operation of an automobile owned by the All-White Laundry Service, Inc. and driven by its manager, Nathan Edelstein, plaintiff recovered judgment for $2,655.25. The laundry was insured by defendant. Defendant had at first defended that action on behalf of the laundry but later on the eve of trial disclaimed liability and withdrew on the ground that the insured had failed to comply with the terms of the policy requiring the insured to make a fair and frank disclosure of the facts and co-operate with defendant. The trial of the action for personal injuries was adjourned until defendant procured other counsel; the judgment in plaintiff’s favor was awarded against the laundry in March, 1941. Thereafter, under section 167 of the Insurance Law, plaintiff brought this action against the insurer for improperly disclaiming liability on the policy of automobile insurance issued by defendant to the laundry. After a trial before the court without a jury the trial court directed judgment on the merits in defendant’s favor; plaintiff appeals.
The insurance policy issued by defendant to the laundry contained the following conditions: that in the event of suit the insured shall immediately forward to the insurer every demand, notice, summons or other process received; that the insured shall co-operate with the insurer; and that no action shall lie against the insurer unless as a condition precedent the insured shall have fully complied with all the terms of the policy.
Plaintiff was injured on April 13, 1940. Nathan Edelstein, the driver of the laundry’s automobile at the time of the accident, and his brother, Hyman, were general managers of the laundry and had charge of its affairs. Plaintiff lived a few doors from the laundry and Hyman had known him for some years. Nathan’s signature was the only one necessary on ehepks. Accordingly, his acts and omissions in relation to the issue of co-operation could be considered the acts and omissions of the insured.
On April 19,1940, Nathan Edelstein gave defendant a written statement in which he said that while the laundry car was stopped plaintiff walked into the rear of the car. In September, 1940, without notice to defendant, Edelstein sent a report to the Motor Vehicle Bureau in which he stated that he accidentally struck the plaintiff, a pedestrian, while backing the car out of West 97th Street and that he, the driver, did not have the right of way. On March 3, 1940, Edelstein attended a hearing before the Motor Vehicle Commission where he testified that the acci*289dent had happened while he was backing out of West 97th Street. On the trial of the original action Edelstein first said that the accident happened while the car was standing still but on cross-examination admitted that he backed up.
On the facts disclosed we think we should not say the trial court erred in concluding that the insured had violated the conditions of the policy by failing to co-operate with the insurer.
The Court of Appeals in Coleman v. New Amsterdam Casualty Co. (247 N. Y. 271, 276) states the applicable rule as follows: “ Co-operation does not mean that the assured is to combine with the insurer to present a sham defense. Co-operatian does mean that there shall be a fair and frank disclosure of information reasonably demanded by the insurer to enable it to determine whether there is a genuine defense.”
The actions of this insured through its manager Edelstein evince lack of co-operation. First he gave the insurer a written statement completely exonerating himself and the defendant from any liability. Then without notice to the insurer he placed on file with the Motor Vehicle Bureau a written report completely at variance with the story he gave the insurer and admitting responsibility for the accident. Later, and again without notice to the insurer, he testified before the Motor Vehicle Bureau to a story admitting liability.
Edelstein was bound at all times to tell the truth and the terms of the policy required that he give notice of any demand or other process received. Edelstein’s signed report to the Motor Vehicle Bureau and his testimony before the Bureau, clearly of great weight and importance on the trial of the issue of negligence, related to the essential issues presented for determination on this trial. Under all the facts and circumstances disclosed, no error was committed in receiving them in evidence. As there was no jury the receipt of the Goldstein affidavit was not prejudicial reversible error.
The arguments that the insurer would be no better off if the insured had made full and truthful disclosure, and that the company could have found out by its own investigation the facts including the contradictory admissions of liability misconceive the effect of refusal to co-operate.
Accordingly, we dissent and vote to affirm.
Untermyer and Callahan, JJ., concur with Cohn, J.; Dore, J., dissents and votes to affirm, in opinion, in which Martin, P. J., concurs.
Judgment reversed and a new trial ordered, with costs to the appellant to abide the event. Settle order on notice.