Court Opinion

ID: 9540154
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:13:09.243588+00
Date Added: 2024-06-11T14:59:40.226034
License: Public Domain

HERNANDEZ, Chief Judge (dissenting). I respectfully dissent. In addition to the facts set forth in the majority opinion I think it necessary to mention the following: Pierce had never had any business dealings with Stuyvesant prior to the time that it submitted Stock’s application for insurance. The application was on a Stuyvesant form and was signed by Stock and was dated August 4, 1977. The form consisted of one printed page with spaces for the insertion of the information requested. One of the questions asked was “Years experience in this business.” The type written answer was 36 years. There were a series of boxes asking the type of coverage requested and another series listing the vehicles to be insured. There was a section entitled “Driver Information (complete for all operators)”, and the names of three drivers were listed. On an attached sheet the names of five other drivers were listed with notations as to any traffic citations they had received. Also attached to the application, on a separate sheet, was a list of the trucks to be insured and a copy of the lease form used by Stock in renting his trucks. Aside from furnishing the information requested on the form and that on the attachments Stock did not submit any questions as to the type of coverage, nor did he submit any special requests as to coverage. Stuyvesant’s first point of error is that the trial court erred in refusing to adopt the following requested findings of fact: 12. Plaintiff received the policy and on receipt, did not examine, read or review the policy but, rather, placed it in a file drawer with other insurance papers. 13. Plaintiff accepted and retained the policy without objection to its terms for a period of seven months. 14. Plaintiff did not examine, read or review the policy at any time until a loss occurred on or about March 16, 1978, when for the first time, plaintiff reviewed, examined and then read the policy- 15. Upon the reading, review and examination of the policy, Plaintiff understood the language thereof and all provisions of the policy, including the named-driver endorsement and all terms were clear and unambiguous to him. * * * * * # 21. Plaintiff was negligent in his failure to examine, read and review the policy- Stock admitted that he did not read the policy and neither did Mary Finley, the person at Pierce who received the policy from ADCO and mailed it on to Stock. Our Supreme Court in Western Farm Bureau Mutual Ins. Co. v. Barela, 79 N.M. 149, 441 P.2d 47 (1968) stated: [W]e are firmly committed to the principle that receipt and retention of the policy without objection, by one who has had an opportunity to examine it for a reasonable time, is regarded as an acceptance of its terms * * *. It is no excuse that the insured neglected to read the policy or to familiarize himself with its terms * * *. [T]he application bears the signature of the applicant and it must be presumed that he read the agreement and was aware of its contractual import. Mofrad v. New York Life Ins. Co., 206 F.2d 491 (10th Cir. 1953). It is usually considered that when the insured applies for a contract, he has a reasonable time after receipt thereof to examine its terms and to return it if unsatisfactory. Particularly is this true where the company sends a contract which is substantially different from the one applied for. 1 Appleman, Insurance Law and Practice, § 172, p. 272. The application was dated August 4, 1977. The policy was mailed to Stock in August of 1977 and the accident occurred on March 16, 1978. Stock had ample time to read the policy and to determine if it was what he had applied for. He had never bought insurance from Stuyvesant before so there can be no question of reliance on past dealings. The majority rely on Pribble v. Aetna Life Insurance Company, supra, to support their conclusion in this regard. This reliance, in my opinion, is misplaced. The factual situation in Pribble was far different than in the instant case. The corporation that Mr. Pribble worked for had a group policy with Aetna. After Mr. Pribble was injured the General Agent for Aetna, when asked, stated that the $10,000.00 hospitalization benefit would be available to Mr. Pribble. The policy which covered 50 pages had a provision that only non-occupational injuries were covered. Mr. Pribble’s injuries were work related. Mr. Pribble did not receive a copy of the policy; he and the other employees were given a certificate which stated the coverage in general terms. The certificate covered 29 pages. Aetna denied coverage and Pribble sued to recover hospital and medical expenses. The trial court granted Aetna’s motion for summary judgment and our Supreme Court reversed. The principal issue was the General Agent’s authority to waive or change a provision of the policy. Our Supreme Court held that the issue of the authority of the General Agent was one fact. Aetna argued that Mr. Pribble was charged with a duty to read the policy and thereby become chargeable with notice of its content upon his acceptance and retention. It was in this context, that our Supreme Court stated the following: We will not simply mechanically charge Mr. Pribble with the duty of reading and understanding the policy and certificate and then bar him from recovery by a literal application of its terms and provisions. Rather, based on the facts before us, we hold that Mr. Pribble, himself or through his authorized representatives was only bound to make such examination of such documents as would be reasonable for him to do under the circumstances; that he will only be held to that which he would be thereby alerted; and if the language is such that a layman would not understand its full impact were he to attempt to plow through it, the documents will yield the maximum protection consistent with their language and the reasonable expectation of Mr. Pribble. The Stuyvesant policy consisted of three pages and three half pages one of which was the Named Driver Endorsement which reads as follows: Named Driver Endorsement It is understood and agreed that while the vehicle(s) are being operated, coverage only applies when being operated by a driver listed herein, or any new driver hired subsequent to the effective date of this policy subject to the name of such driver being reported to the Company or its agent prior to his date of employment. The acceptance of new drivers shall be evidenced by the issuance of an endorsement naming such drivers. The non-acceptance of any new driver or any drivers listed herein, will also be evidenced by the issuance of an endorsement excluding such drivers granting ten days advance notice. a Name of Driver I also take issue with the following statement made by the majority: “The policy as issued was not what was quoted to Pierce.” The person in the Pierce Agency who obtained the quotation from ADCO and who filled out the application furnished by Stuyvesant was Mary Finley, and her testimony in this regard was as follows: Q. Is there any reason why you didn’t take Mr. Stock’s application and policies through one of the other general agents other than— A. We had received the cheapest quotation from ADCO. Q. So you were just seeking to find him the cheapest deal; is that right? A. Yes. Q. Now, so as to obtain the insurance from Stuyvesant through ADCO, did you fill out an application form for Mr. Stock? A. Yes, sir. Q. Where did that come from? A. From ADCO in Denver. ****** Q. As I understand it, during the time you were involved with this particular policy you had no direct contact with Stuyvesant; is that right? A. This is correct. Q. All your dealings were with— A. —ADCO. ****** Q. I take it when you were discussing with ADCO the quote that they were going to give you, or did give you, that there was no conversation pertaining to a Named Driver Endorsement? •A. No, there was not. The only part of the application relating to coverage was the following: Coverage Limits of Liability Premium Unit 1 etc. Comprehensive ACVor$ Less? Ded Collision or Upset ACV or $4000. Less $1000 Ded. Theft, CAC Downtime Mobile Equipment Total Premium An application for insurance is a mere offer which does not ripen into a contract until accepted by the insurance company. If the company issues a policy materially different from that applied for, in the eyes of the law, the policy is a rejection of the offer and is a counter-offer which becomes a binding contract only when accepted by the original offeror — the would-be insured. Life Insurance Company of Georgia v. Miller, 292 Ala. 525, 296 So.2d 900 (1974). It is a well recognized rule that, where one applies for a policy of insurance, he is presumed to apply for the form of policy in use by the company and that the parties so contract. When the policy was issued, the rights of the parties became fixed by it and its definite contents and meaning are controlling. Dawson v. Metropolitan Life Ins. Co., 9 So.2d 252 (La.Ct.App. 1942). In my opinion Stuyvesant’s first point of error is well taken. Stuyvesant’s second point of error is that the trial court erred in finding that Pierce acted as agent-broker for Stuyvesant. I agree. An insurance broker, like other brokers, is primarily the agent of the first person who employs him, and is therefore ordinarily the agent of the insured .... Ill Couch On Insurance 2d, § 25:94, p. 405. One who procures another to obtain insurance for him thereby makes such person his agent and assumes full responsibility for his acts performed pursuant to the agency thus created. Adams v. Manchester Insurance & Indemnity Company, 385 S.W.2d 359 (Mo.Ct.App. 1964). In my opinion, under the facts of this case Pierce was the agent of Stock. Pierce placed the order for the insurance policy for Stock and had the duty to inspect it to see that it was what Stock wanted. Butler v. Scott, 417 F.2d 471 (10th Cir. 1969). Mr. White, the general manager of the Pierce Agency, testified in part as follows: Q. Had you at any time prior to August of 1977 dealt with or written any insurance through the Stuyvesant Insurance Company? A. No, sir. ****** Q. Do you as an agency contract with those companies to write their insurance for them? A. Well, we broker policies. Q. Was the business which was written with Stuyvesant the kind that you would enter into a contract with or broker through someone else? A. That would be a brokered business. ****** Q. Were you an agent? A. For Stuyvesant? Q. For Stuyvesant in this particular instant. A. No, sir, not a licensed agent for them, no. ****** Q. After writing a policy, and assuming its (sic) delivered to the insured, do you consider your job as an agent over? A. No, sir. Q. Do you consider yourself a continuing representative for that insured? A. Yes, sir, I do. Stuyvesant’s fifth point of error is that the trial court erred in imposing upon it a duty to warn. This point has reference to the two following findings made by the trial court: 2. Issuing an insurance policy covering vehicles which contains a “named driver endorsement” is such a departure from the usual provisions of policies and is so restrictive that a warning or flag should have been used to call attention to the “named driver endorsement,” not only to alert or warn the insured, but to warn the insured’s agent of the restrictive endorsement. 4. The policy as issued was not what was quoted to the Defendant, the Pierce Agency, Inc., nor was it what the insured reasonably expected from the quotation. It did not conform to the policy issued by Canal Insurance Company. Such a variance should have been called to the attention of The Pierce Agency, Inc., or Floyd Stock, by ADCO General Corporation or Stuyvesant Insurance Company. In my opinion, the assertion in finding No. 2 that “a warning or flag should have been used to call attention to the named driver endorsement, not only to alert or warn the insured, but to warn the insured’s agent of the restrictive endorsement” constitutes a conclusion of law and not an averment of fact. A declaration of a right or duty arising from certain facts is a conclusion of law. As a conclusion of law it is subject to independent review by this court. In the absence of a statutory requirement regulating the size and other characteristics of the type employed to state the policy contract or prescribing the col- or of the printing, an insurance policy or application may be printed in any size of type or color of printing. Southern Guaranty Insurance Company v. Gipson, 275 Ala. 538, 156 So.2d 630 (1963). Section 59-16-14(A), N.M.S.A. 1978, provides: On and after the effective date of this act no policy of life, annuity, casualty, fidelity, surety, fire, marine, vehicle and title guaranty shall be delivered or issued for delivery in this state, nor shall any endorsement, rider or application which becomes a part of any such policy be used, until a copy of the form and the classification of risks pertaining thereto have been filed with the superintendent of insurance. This section was enacted in 1961. The record shows that Stuyvesant’s “named driver endorsement” was approved by the Superintendent of Insurance for the State of New Mexico on February 22, 1977. The only duty imposed by an insurer as to the language, form and arrangement that a policy of insurance should' take, absent some statutory requirement, is that: The policy should be read as a layman would read it and not as it might be analyzed by an attorney or an insurance expert. [Citations omitted.] An exclusionary clause must be conspicuous, plain and clear [Citations omitted] and must be construed strictly against the insurer and liberally in favor of the insured. Crane v. State Farm Fire and Casualty Company, 5 Cal.3d 112, 485 P.2d 1129, 95 Cal.Rptr. 513 (1971). “Insurance contracts have been characterized as adhesion contracts whose terms often are unintelligible to the insured. [Citations omitted.] Insurance companies have a duty to make policy provisions plain and prominent, especially those relating to coverage.” Wells v. Wilbur B. Driver Company, 121 N.J.Super. 185, 296 A.2d 352 (Law Div. 1972). Mr. Stock admitted, that if he had read the policy, he would have readily understood the driver endorsement provision. The fact that Stuyvesant had prepared red warning stickers to be attached to a policy when the named driver endorsement was incorporated did not enlarge the duty imposed upon them by the citations quoted above or create a new duty. Consequently, ADCO’s failure to attach* this sticker to Stock’s policy was without legal consequence. As to the trial court’s finding No. 4, I have previously discussed it and find it completely without evidentiary support in the record. For all of these various reasons I would reverse the judgment of the trial court entered on June 23, 1980, and remand this cause with instructions to vacate said judgment and to enter judgment in favor of ADCO and Stuyvesant, both as to the claim of Stock and the cross-claim of Pierce and that costs be assessed against Pierce.