Court Opinion

ID: 7838716
Source: CourtListenerOpinion
Date Created: 2022-09-08 16:54:50.296232+00
Date Added: 2024-06-11T15:56:52.988111
License: Public Domain

Bogdanski, J.
(dissenting). The parties are in agreement that an accident did not take place. The question is whether there was a “continuous or repeated exposure to conditions which resulted in . . . property damage neither expected nor intended from the standpoint of the insured.” The leakage of water through the Plasticrete outer wall was continuous and repeated. Although the plaintiff states that it contemplated that water would enter into the cavity between the outer and inner wall, it did not expect or intend any resulting property damage to the interior of the buildings. The conclusion is inescapable that this continuous water damage was an “occurrence” and that the trial court’s conclusion that there was no “occurrence” is unsupported by the subordinate facts found and *240cannot stand.1 Conclusions are tested by the finding. Hutensky v. Avon, 163 Conn. 433, 437, 311 A.2d 92 (1972); Cedo Bros., Inc. v. Feldmann, 161 Conn. 265, 271, 287 A. 2d 374 (1971); Johnston Jewels, Ltd. v. Leonard, 156 Conn. 75, 78-79, 239 A.2d 500 (1968); Brockett v. Jensen, 154 Conn. 328, 331, 225 A.2d 190 (1966). A conclusion cannot stand if it is legally or logically inconsistent with the facts found. Hutensky v. Avon, supra; Schnier v. Ives, 162 Conn. 171, 177, 293 A.2d 1 (1972); Craig v. Dunleavy, 154 Conn. 100, 105, 221 A.2d 855 (1966); Yale University v. Benneson, 147 Conn. 254, 255, 159 A.2d 169 (1960). The trial court made a finding that, “[t]he water seepage through the Plastierete block into the interior of the building was a condition that was neither expected nor intended from the standpoint of the insured because of the cavity wall construction.” “A finding is to be read to uphold the judgment. Every reasonable presumption will be indulged in to support it. It is read so as to be consistent and implications seemingly inconsistent with the main facts are to be brought into harmony with them.” Maltbie, Conn. App. Proc. § 135; see Horton v. Meshill, 172 Conn. 615, 639, 376 A.2d 359 (1977). Although the plaintiff has not attacked the court’s conclusion that there was no occurrence, this court has the discretion to consider issues which were not briefed. See Wendland v. Ridgefield Construction Services, Inc., 184 Conn. 173, 439 A.2d 954 (1981); Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 439 A.2d 314 (1981).
The next question arises: at what point must the insured provide notice of the occurrence to the defendant? Silver v. Indemnity Ins. Co., 137 Conn. *241525, 528, 79 A.2d 355 (1951), holds that the words “as soon as practicable” mean “ ‘as soon as can reasonably be expected under the circumstances. . . . The duty to give notice does not arise unless and until facts develop which would suggest to a person of ordinary and reasonable prudence that liability may have been incurred, and is complied with if notice is given within a reasonable time after the situation so assumes an aspect suggestive of a possible claim for damages.’ ”
The subordinate facts reveal that the plaintiff conducted negotiations in 1974 and made an offer of settlement. It was at this point that the plaintiff should have known that liability might have been incurred. The discussions with the general contractor had gone beyond the stages of a routine customer complaint. The large amount of money involved, and the plaintiff’s status as a corporation, in business for fifty years, are further reasons why the plaintiff should have known of a possible lawsuit and should have given notice of the occurrence.
The trial court determined that the defendant must show prejudice to itself from the late notice in order to be relieved of its responsibility under the policy. The question of whether prejudice must be shown has been the subject of much controversy in recent years.2
A forfeiture of insurance coverage because of a delay in giving notice when there is no harm to the carrier is an unnecessarily harsh result. Many jurisdictions hold that prejudice can be *242considered by the trier of fact. See, e.g., Joyce v. United Ins. Co., 202 Cal. App. 2d 654, 21 Cal. Rptr. 361 (1962); Falcon Steel Co. v. Maryland Casualty Co., 366 A.2d 512 (Del. Super. 1976); O’Neal v. Southern Farm Bureau Ins. Co., 325 So. 2d 887 (La. App. 1976); Lumbermens Mutual Casualty Co. v. Oliver, 115 N.H. 141, 335 A.2d 666 (1975); Cooper v. Government Employees Ins. Co., 51 N.J. 86, 237 A.2d 870 (1968); Brakeman v. Potomac Ins. Co., 472 Pa. 66, 371 A.2d 193 (1977); Spangler v. Ins. Co. of North America, 17 Wash. App. 121, 562 P.2d 635 (1977).
As the court in Brakeman stated: “The rationale underlying the strict contractual approach ... is that courts should not presume to interfere with the freedom of private contracts and redraft insurance policy provisions where the intent of the parties is expressed by clear and unambiguous language. We are of the opinion, however, that this argument, based on the view that insurance policies are private contracts in the traditional sense, is no longer persuasive. Such a position fails to recognize the true nature of the relationship between insurance companies and their insureds. An insurance contract is not a negotiated agreement; rather its conditions are by and large dictated by the insurance company to the insured. ... A strict contractual approach is also inappropriate here because what we are concerned with is a forfeiture. The insurance company in the instant case accepted the premiums paid by the insured for insurance coverage and now seeks to deny that coverage on the ground of late notice. . . .
“We are reluctant, therefore, to allow an insurance company to refuse to provide that which it was *243paid for unless a sound reason exists for doing so. The purpose of a policy provision requiring notice of an accident or loss to be given within a certain time is to give the insurer an opportunity to acquire, through an adequate investigation, full information about the circumstances of the case, on the basis of which, it can proceed to disposition, either through settlement or defense of the claim. . . . Where the insurance company’s interests have not been harmed by a late notice, even in the absence of extenuating circumstances to excuse the tardiness, the reason behind the notice condition in the policy is lacking, and it follows neither logic nor fairness to relieve the insurance company of its obligations under the policy in such a situation.” Brakeman v. Potomac Ins. Co., supra, 72-75.
The rule that prejudice to the insurer is immaterial is based on the theory that breach of the notice requirement raises a conclusive presumption that the insurer is prejudiced, regardless of whether the insurer is in fact prejudiced. 8 Appleman, Insurance Law & Practice §4732 (1962). There is no sound reason, in logic or equity, why the insurer should have the benefit of a conclusive presumption. Such an artificial rule has no basis in reality. A mere showing of late notice should not automatically relieve the insurer of its obligations under the policy.3
The trial court correctly placed the burden of persuasion of showing prejudice on the insurance company. This is consistent with the clear trend of the law. E.g., State Farm Mutual Ins. Co. v. Murnion, 439 F.2d 945 (9th Cir. 1971); Powell v. Home *244Indemnity Co., 343 F.2d 856 (8th Cir. 1965); Young v. Travelers Ins. Co., 119 F.2d 877 (5th Cir. 1941); Lindus v. Northern Ins. Co. of New York, 103 Ariz. 160, 438 P.2d 311 (1968); State Farm Mutual Automobile Ins. Co. v. Johnson, 320 A.2d 345 (Del. 1974); Cooper v. Government Employees Ins. Co., 51 N.J. 86, 237 A.2d 870 (1968); Brakeman v. Potomac Ins. Co., supra; comment, “The Materiality of Prejudice to the Insurer as a Result of the Insured’s Failure to Give Timely Notice,” 74 Dick. L. Rev. 260 (1970).
Undeniably, it would be difficult for the policyholder to prove a lack of prejudice to the insurer. Normally, the burden is on the party having the affirmative, since a party is generally not required to disprove a negative. Tait & LaPlante, Handbook of Connecticut Evidence §4.2. Burdens are allocated on considerations of fairness and convenience. Id. Since the insurer chooses to disclaim liability, it is proper to place the burden of persuasion on it.
The trial judge found that the defendant had not sustained its burden of showing prejudice. The court expressly found that the defendant produced no witnesses at the time of trial, nor was there any testimony of any kind as to how and why the defendant would be prejudiced in defending the lawsuit brought against the plaintiff because it had not been given timely notice of the difficulties with the general contractor.
The defendant next contends that the plaintiff breached its duty to cooperate4 by communicating *245with. DeMatteis both orally and in writing on several occasions prior to the institution of the suit. I agree with the trial court that this conduct by the plaintiff does not show a breach of the duty to cooperate. A reading of paragraph 4 of the policy indicates that the duty to cooperate does not arise until the insurer is notified of an occurrence, claim, or suit. Arton v. Liberty Mutual Ins. Co., 163 Conn. 127, 302 A.2d 284 (1972); Rochon v. Preferred Accident Ins. Co., 118 Conn. 190, 171 A. 429 (1934). Paragraph 4 (a) expressly provides that notice be given in the event of an “occurrence.” Paragraph 4 (b) provides that process must be forwarded to the insurer when a “claim is made or suit is brought.” Paragraph 4 (c) does not expressly state when the duty to cooperate arises. A reading of paragraph 4 (c) leads to the conclusion that it applies to conduct of the insured in connection with proceedings subsequent to notice to the insurer of an occurrence, claim or suit. The defendant did not receive notice of the occurrence until suit was brought against the plaintiff. The defendant does *246not take issue with the plaintiff’s conduct after it received notice. Thus, there can be no breach of the duty to cooperate.
I would affirm.
In this opinion Armentano, J., concurred.

 The finding was filed February 20, 1979.

 See generally comment, “The Materiality of Prejudice to the Insurer as a Result of the Insured’s Failure to Give Timely Notice,” 74 Dick. L. Rev. 260 (1970); 8 Appleman, Insurance Law & Practice § 4732 (1962); 13 Couch, Insurance (2d Ed. 1965) § 49.88; 44 Am. Jur. 2d, Insurance § 1463; annot., 18 A.L.R.2d 443.

 This rationale becomes even more forceful when applied to the field of automobile liability insurance, since the state has an interest in protecting parties injured in motor vehicle accidents.

 The duty to cooperate provision in the policy provided: “4. insured's duties in the event oe occurrence, claim or suit:
“(a) In the event of an occurrence, written notice containing particulars sufficient to identify the insured and also reasonably obtain*245able information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable.
“(b) 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.
“(e) The insured shall cooperate with the company and, upon the company’s request, assist in making settlements, in the conduct of suits and in enforcing any right of contribution or indemnity against any person or organization who may be liable to the insured because of injury or damage with respect to which insurance is afforded under this policy; and the insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for first aid to others at the time of accident.”