Court Opinion

ID: 9735540
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:22:14.777021+00
Date Added: 2024-06-11T18:26:59.720296
License: Public Domain

Mr. Justice Joslin,
with whom Chief Justice Roberts joins,
dissenting. I am unable to agree. A brief recapitulation of the essential facts should be helpful in furnishing a frame of reference for my reasons.
Negligence actions were commenced in this state and in the state of New York by different plaintiffs against the *652defendant’s1 insureds for damages resulting from a single automobile collision. Jury verdicts for the claimants were rendered in the New York proceedings on June 9, 1965, and in those in this state on June 30, 1965. In New York, written judgments were filed on June 16, 1965, and under the laws of that state executions, although issuable upon entry of those judgments, would have been automatically stayed had appeals been claimed on or before July 16, 1965; in the Rhode Island cases judgments under the law then in effect2 entered on the expiration of the appeal period, viz., July 16, 1965 as of June 30, 1965, and only thereafter would executions have been available. Appeals, the taking of which would have operated as stays in both states, were claimed in neither.
On July 16, 1965, the day of the expiration of the appeal period in each of the states, only $11,000 was available under the policy to satisfy both the New York judgments of $10,000 and those in this state of approximately $18,000. While the parties agree that the principle “first in time, first in right” applies when, as here, policy limits are not sufficient to satisfy multiple judgments, they disagree on the time when the suits in the respective states were finally determined. The defendant has paid the New York judgments and now has only $1,000 available under the policy with which to satisfy those entered in the courts of this state. It contends that the New York judgments were first in point of time, that they are entitled to priority in payment, and that plaintiffs’ recovery should be limited to *653$1,000. The plaintiffs, on the other hand, argue that the suits in both New York and Rhode Island were finally determined on July 16, 1965, that no preference in payment should be given to the New York judgments, and that the $11,000 available on July 16, 1965, should have been apportioned among the judgment creditors.
Which of the two contentions should be adopted depends on the provisions and stipulations of the insurance policy. It establishes the nature and extent of the respective rights and liabilities and fixes the time when they arise; it places an injured person in the shoes of the insured and permits him to sue the insurer directly; it requires as a precondition to any such suit that “* * * the insured’s obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.” (italics ours)
The provision which allows direct action by an injured party against the insurer is commonly referred to as a “no-action clause.” In substantially identical form it has several times and in different circumstances been interpreted. There is, however, no agreement among the courts as to its meaning or what it contemplates.3 Some of the cases hold that an insured’s liability is finally determined upon entry of judgment notwithstanding that it may be appealed; others that there can be no final determination, even though a judgment may have entered, until either the appeal period has expired or the appeal, if taken, has been determined. The parties agree that New York law controls in the interpretation of this policy, but there is disagreement in the court on whether there is a clear New York mandate.
I agree, as of course I must, with my Brother Kelleher that a proper respect for comity demands that absent an *654adjudication by its highest court, the pronouncements of the intermediate courts of review in New York stating its law should be heeded. Commissioner v. Bosch, 387 U. S. 456, 87 S. Ct. 1776, 18 L.Ed. 2d 886. That principle, while it applies when the pronouncements of such courts in a sister state are in harmony, is inapposite when they are in conflict and its law therefore in doubt.4 In the latter situation, instead of speculating on what the New York courts may ultimately decide, I am guided first by our own decisions and then by general law and the decisions of other states. Aetna Casualty & Surety Co. v. Osborn McMillan Elevator Co., 26 Wis. 2d 292, 132 N.W.2d 510.
The disagreement between my Brother Kelleher and me is not on the regard which is due Pape v. Red Cab Mut. Casualty Co., 128 Misc. 456, 219 N.Y.S. 135. On that we agree. Where we differ is on the holding in that case and on whether or not there are conflicting New York decisions. On those questions, my Brother Paolino and I, although otherwise at odds, are in agreement that the New York decisions are in conflict.
In Pape the court was concerned with giving meaning to an indemnity insurance policy which had been issued to a taxicab operator pursuant to the New York Highway law which required him to be insured for liability under a policy conditioned upon “* * the payment of any judgment recovered * * Interpreting a stipulation substantially identical with the one here in issue, but within the context of a statutory mandate, rather than as if it stood alone without the interpretive benefit and assistance furnished by that enactment, the court hinged its decision to the *655legislative directive and allowed the suit against the insurer even though the litigation against the taxicab operator had not been determined beyond all possibilities of appeal. Pape5 considered in the light of the statute does not unqualifiedly stand for the principle that a policy stipulation which fixes an insurer's liability upon “a final determination of the litigation after trial” must be interpreted as permitting suit against the insurer prior to the determination of the appeal period; it holds only that such a suit may be permitted where the insurer has so stipulated pursuant to a statutory mandate requiring that the policy provide that the insurer shall be liable “for the payment of any judgment recovered.”
Pape, moreover, is not the only expression by the appellate term of the supreme court concerning the true meaning of a stipulation that an insurer shall be liable upon a “final determination of the litigation after trial.” That is an expression, the Pape court said, which is synonymous with “final judgment.” The latter expression, as was made clear in Dean v. Marschall, 90 Hun 335, 35 N.Y.S. 724, means “finally settling the rights of the parties to the action beyond all appeal.” The Dean conclusion being in my judgment in conflict, Pape has neither the decisiveness nor the cogency which my Brother Kelleher claims for it, and is therefore not controlling.
*656In my judgment the crux of the problem lies not in Pape, but in ascertaining what was contemplated by the policy stipulation in this case that no action may be brought unless the insured’s liability has been “finally determined * * * by judgment.’’ 'This language has a colloquial as well as a technical meaning and the two are poles apart. Pape, curiously enough, articulates the difference between the two, 128 Misc. 456 at 457, 219 N.Y.S. 135 at 136,6 as follows:
“Considering the obligation under the policy, apart from the language of the statute, the insurer was liable upon a ‘final determination of the litigation after trial of the issue.’ The expression is synonymous with final judgment. The latter, as is shown in Dean v. Marschall (90 Hun 335, 338) is susceptible of two significations: ‘One which in a strict legal sense is its true meaning, viz., a determination of the rights of the parties after a trial, whether such is the subject of review or not; and the other, its colloquial use or signification, which makes it synonymous with decisive, or a judgment that cannot be appealed from and which is perfectly conclusive upon the matter adjudicated.’ ”
Adopting the Pape distinction, and it is certainly a valid one, it is clear that the language taken in its technical sense makes the case turn on whether the judgments in New York after trial were final; it is equally clear, moreover, that if these doubtful words are given their colloquial or everyday meaning the case will hinge, not on when the New York judgments become final, but on when the litigation was conclusively disposed of and decisively settled.
It is in the area of what the policy contemplates that I find myself in basic disagreement with the majority. Equating final determination hy judgment with final judgment, they give the language its legal or technical meaning and *657they conclude that a judgment of a trial court in favor of an injured party, even though appealable, gives rise forthwith upon its entry to a claim under the policy which the insurer must pay. Since the pertinent language is susceptible to two meanings, I reject the precise or technical interpretation of the majority, Joslin v. Aetna Life Ins. Co., 67 R. I. 261, 21 A.2d 550, and give the words their plain, ordinary, usual and popular meanings. Wolf v. Prudential Ins. Co., 62 R. I. 270, 4 A.2d 897; Princess Ring Co. v. Home Ins. Co., 52 R. I. 481, 161 A. 292; Nagy v. Lumbermens Mutual Cas. Co., 100 R. I. 734, 219 A.2d 396. Viewed in this light, there can be no doubt that the policy contemplated that the insureds’ obligations on the New York judgments would not be finally determined until nothing remained open to the possibility of further dispute and until by reason of the expiration of the appeal period all matters in controversy had been finally set to rest.
Still another reason for my conclusion that the doubtful language cannot have the meaning that the majority have given it lies in the stipulation in the policy that the insurer shall pay “all premiums on appeal bonds.”7 That provision must be read contextually with the no-action clause and each, so far as possible, must be afforded a meaning and an effect. Crook v. Kalamazoo Sales & Service Inc., 82 R. I. 387, 110 A.2d 266; Brady v. Norwich Union Fire Ins. Soc’y, 47 R. I. 416, 133 A. 799; Princess Ring Co. v. Home Ins. Co., supra; Nagy v. Lumbermens Mutual Cas. Co., supra.
To give both provisions the required effect, however, is *658practically impossible if the majority’s interpretation of the no-action clause is adopted. The appeal bond provision presupposes that there will be appeals and provides that the insurer shall pay the premium on the bond without which the appeal could not be maintained, whereas the no-action clause, as interpreted by the majority, dampens the likelihood of an appeal because of its insistence that a judgment be satisfied even if appealed. The inconsistency is obvious, and in my judgment is so destructive of the meaning and purpose of the appeal bond stipulation as to provide an additional reason for rejecting the majority view.
Finally, the majority’s interpretation is unacceptable because it makes it possible for an injured party to maintain an action to recover the amount of a judgment even though that judgment may later be set aside on appeal. An interpretation which permits such a result, while not “the absurdity” which the court in Roberts v. Central Mutual Ins. Co., 285 Ill. App. 408, 2 N.E.2d 132, terms it, is so lacking in realism as to justify its rejection for that reason alone. Two cases, each relied on by the majority, will suffice to demonstrate that even the courts which accept the majority’s interpretation of the no-action clause depart from it when faced with the illogical results which its application produces.
In both Travelers Ins. Co. v. Pinkerton-Hays Lumber Co., Fla. App., 120 So.2d 448, and General Accident Fire & Life Assur. Corp. v. Harris, Fla. App., 117 So.2d 44, the factual situation concerned an injured party who obtained a summary judgment in a garnishment proceeding against the insurer following recovery of a judgment in a negligence action against an insured. Thereafter, the insurance company appealed from both judgments. When the judgment in the negligence case was reversed, the incongruity which adherence to the majority interpretation would have produced became apparent. To follow that interpretation *659would have required that the summary judgment be sustained and would have demanded that the insurer pay a judgment notwithstanding that on appeal it had been reversed. Realizing that such a result was intolerable, the court in each case, although paying lip service to the interpretation that finality attaches upon entry of judgment, reversed the earlier summary judgment. The explanation given in General Accident Fire & Life Assur. Corp. v. Harris, supra, points up what I have referred to as the “incongruity” of the majority's position. The court there said at page 45:
Higgins, Cavanagh & Cooney, Kenneth P. Borden, for plaintiffs.
Francis V. Reynolds, Bernard W. Boyer, for defendant.
“We, therefore, find ourselves in a position on these appeals in which we cannot find that the trial court committed error in entering the summary judgments in garnishment, yet we are convinced that it would amount to a grave miscarriage of justice to allow those judgments to stand under the circumstances. Inasmuch as those judgments are based wholly upon the judgments which this Court has reversed, justice under the law requires that we remand these causes to the trial court with directions forthwith to dismiss these garnishment proceedings.”
For the reasons indicated, I am unable to agree with the majority. An interpretation which ties final determination to expiration of the appeal period can be consistently applied and lies within the contemplation of the policy, whereas one which links it to entry of judgment in a trial court is incapable of consistent application and does not coincide with the intention of the parties to the insurance contract. I would, therefore, reverse and order a proration between the New York and Rhode Island judgment creditors of the fund available on July 16, 1965.

AU references to the defendant are to Royal Indemnity Co.

ITnder Rhode Island practice as it existed under G. L. 1965, §§9-23-3, 9-24-17, prior to their amendment by P. L. 1965, chap. 55, secs. 40 and 41 respectively (effective January 10, 1966) judgment entered seven days after a decision on a motion for new trial, provided, however, that the filing of a notice of intention to prosecute a bill of exceptions and the depositing of estimated cost of a transcript would stay the judgment. In these cases motions for new trials had been filed and were denied on July 9, 1965.

The oases are collected at 8 Blashfield, Automobile Law & Practice, Sec. 344.3, p. 405 et seq; 12 Couch, Insurance 2d 45:857, p. 731; 8 Apple-man, Insurance Law & Practice, §4854, pp. 264-69.

In Moscov v. Mutual Life Ins. Co., 387 Ill. 378, 56 N.E.2d 399, relied on by my Brother Kelleher, this exception to the general rule is recognized at p. 389, 56 N.E.2d 404, where the court says that the decision of the intermediate appellate court will be accepted “*** in the absence of any conflicting decision by another appellate court of co-ordinate jurisdiction ***.”

 Schroeder v. Columbia Casualty Co., 126 Misc. 205, 213 N.Y.S. 649, and Weiss v. New Jersey Fidelity & Plate Glass Ins. Co., 131 Misc. 836, 228 N.Y.S. 314, both decided by the trial term of the supreme court, involved policies which stipulated that the insurer would indemnify the insured against loss from “liability imposed by law.” In each case the court held that liability is imposed by law only when the expiration of the appeal period judgment has become final. The court in Pape citing Schroeder says that the holding there is not inconsistent with its own ruling, and thereby clearly recognizing its own reliance on the statute. It said, moreover, at 219 N.Y.S. 137: “We find nothing *** inconsistent with these views, because that decision [Schroeder] was under section 109 of the Insurance Law *** which imposes a liability upon the insurer radically different from that under section 282-b of the Highway Law.”

A similar distinction, between the “technical” and the “popular” meanings of what constitutes a “final judgment” within the meaning of an automobile liability policy is made in General Accident Fire & Life Assur. Corp. v. Clark, 34 F.2d 833.

Paragraph. 11(b) (1) of the policy reads:
“pay all premiums on bonds to release attachments for an amount not in excess of the applicable limit of liability of this policy, all premiums on appeal bonds required in any such defended suit, the cost of bail bonds required of the insured in the event of accident or traffic law violation during the policy period, not to exceed $100 per bail bond, but without any obligation to apply for or furnish any such bonds ***.” (italics ours)