Court Opinion

ID: 9650439
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:37:12.34185+00
Date Added: 2024-06-11T18:12:21.641700
License: Public Domain

MeDERMOTT, Circuit Judge
(dissenting).
The majority opinion holds that if the insured makes a materially false statement to the insurer, the co-operation clause has been breached as a matter of law. 1 agree that an insured should always state the facts truthfully to his insurer, as to every one else. A false statement is evidence of a lack of eo-operation; the court holds it is conclusive evidence thereof. With that, I do not agree. The question before us is this: Considering all the evidence, is the trial court’s special finding of co-operation sustained by substantial evidence?
Buffalo slated to the company that he was not in the car when the accident happened. He gave the company’s adjuster leads as to witnesses. He employed counsel to aid counsel employed by the company. He and his chauffeur testified at the trial that he was not in the car. Buffalo, at this trial, still insists he was not in the car. The attorney and adjuster for the company testified at this trial as follows: “From the investigation that I made after talking to divers and sundry persons I was rather under the impression that neither Willie Buffalo nor O. V. Jolley were in that ear. My leads as to witnesses came from them. I talked to other witnesses and that was the position I took at the trial. I am not certain whether I was present when Mr. Buffalo and Mr. Jolley testified at the trial of the case in the District Court, but I know that they testified to the some state of facts that they gave me in that statement. They have maintained that statement ever since the accident. I have never found that Willie Buffalo was in any man*860ner colluding with the plaintiff in the action, nor did I, as the agent and the adjuster of the United States Fidelity & Guaranty Company, ever ask Willie Buffalo or his attorneys- to do anything in assisting in the defense of that action that they didn’t do. The co-operation was 100%.”
Mr. Commons, the attorney employed by Buffalo, and a witness called by the defendant, testified: ¿‘The Court: There was no complaint by Mr. MeNaughton [attorney for surety company at the trial] that you and Willie Buffalo were not assisting in the defense, co-operating and trying to defeat liability were they? A. No, sir.”
Whether or not there has been eo-operation is a conclusion • to be drawn from the evidentiary facts. If reasonable men may differ as to the conclusion to be drawn, then it is for the trier o.f the facts to determine. The majority brush aside the testimony of the attorney and adjuster of the company, admitted without objection, that Buffalo’s “co-operation was 100%” as a conclusion. It is a conclusion; but it is one drawn by a skilled witness after stating the facts on which the conclusion is based; and such a conclusion is .generally excepted from the ban. Wigmore on Evidence, §§ 1922, 1923. But laying aside that evidence,' we have the evidentiary facts that Buffalo aided in securing evidence, employed counsel to assist in the defense, and testified there, as he testifies here, to a state of facts disclosing no liability. Is a jury or a trial court at liberty to conclude from this evidence that there was co-operation? The majority hold not; with that holding I am not in accord. We do not need to infer that the surety company colluded with Buffalo to beat this claim by false evidence, as appellee suggests, although that inference is not foreclosed. It is enough to suggest that an insurer has a right to defend on the basis of the insured’s statement. Even though its investigation sheds doubt on the accuracy of insured’s version, as the adjuster here indicated, the company has a right to let the insured tell his story to the jury. Gordon v. Mass. Bonding & Ins. Co., 229 N. Y. 424, 128 N. E. 204; Hermance v. Globe Indemnity Co., 221 App. Div. 394, 223 N. Y. S. 93. The trial court might well, conclude that that is what happened here; that the company, with nothing to lose and much to gain, took the position that the jury should hear the conflicting stories and determine the fact; whether the company believed or did not believe Buffalo’s story, his testimony aided in defending the suit.
Furthermore, the company should prove that it relied upon the statement of the insured — not that it need be prejudiced by reliance, but that it did believe and rely thereon. For example, if a company should concede that it knew at the outset that the insured’s statement was false, and that it did not' rely thereon, but nevertheless encouraged the insured to stick to his story for its benefit, there could be no claim of lack of co-operation, The defense made is an affirmative-one. Is there proof of reliance? The majority find it in the payment by “the company” of $500 on a burglary policy. But it .was another company — the Maryland Insurance Company — and not appellant. That company’s insurance against burglary and! appellant’s insurance against liability, were incorporated in the same policy, but the appellant cannot on that account avail itself of another company’s loss. But even if it were the same company, the fact that it believed the story when the burglary policy was paid is not conclusive evidence that it believed it when the damage suit was tried, months later. It is suggested that the company might have settled the case, except for insured’s statement. But such surmise finds no support in the record, for there is no intimation of any opportunity to settle for less than the verdict, or the face of the policy. The only evidence in the record of reliance is the significant circumstance that while the adjuster interviewed other witnesses from leads given by Buffalo, he failed to testify as to what he learned from them; and the very weak statement by the adjuster that “I was rather under the impression” that Buffalo was not in the car. I think therefore that the trial court was justified in finding that the company failed to establish that it relied upon Buffalo’s statement.
The frequently quoted excerpt from the opinion of Judge Cardozo, in Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271, 160 N. E. 367, 72 A. L. R. 1443, relied upon by the majority, should be read in connection with the case before that court. No question of an untrue statement was there involved. The insured in that case refused to give any information, or sign an answer, unless the company would pay him for the information. The Court of Appeals of New York does not consider the Coleman Case as holding that a false statement amounts to a breach of the co-operation clause as a mat*861ter of law. In the later ease of Seltzer v. Indemnity Ins. Co., 252 N. Y. 330, 169 N. E. 403, it appeared that the insured made a statement to the insurer which exculpated him from liability; at the trial he declined to testify in accordance with the statement. The trial court was reversed because it did not submit the question of co-operation to the jury.
Where the evidence is uncontradicted, and where only one conclusion can reasonably be drawn therefrom, whether the co-operation clause has been breached is a question of law. This was held, and properly so, in the Coleman and Rohlf Cases, cited in the majority opinion, where the insured refused any information, or declined to sign an answer or attend the trial. Where the evidence conflicts, or where different conclusions may he drawn, the question is for the jury. Seltzer v. Indemnity Ins. Co., supra; Metropolitan Casualty Co. v. Blue, 219 Ala. 37, 121 So. 25; and cases cited in note, 72 A. L. R. 1454. The majority opinion holds that hut one conclusion may he drawn from this record. It seems to me that where an insured denies responsibility for the accident, aids in securing witnesses, employs counsel to assist in the defense, and does everything the company requests to assist in defeating the claim, there is support for a finding that the condition was not breached.
The protection of liability insurance has been quite generally extended, either by statute or contract, to third persons injured by the insured. It seems to me that this decision seriously impairs that protection, for it appears that the insurer will escape liability to the public whenever the insured makes a statement of facts to the insurer disclosing that he was not at fault; if the jury believes him, there is no judgment and no liability; if the jury does not believe him, and a judgment follows, the insurer escapes liability by alleging that the insured made an untrue statement, which the third party plaintiff must admit if he is to be consistent with his testimony at the first trial. If an untrue statement is conclusive proof of a lack of cooperation, this unfortunate result may he deplored, but it cannot change the contract. But the company did not condition the liability upon the accuracy of the statements made to it by the insured, but upon his cooperation in defense. Believing that there is support in the record for the trial court’s finding of fact, I think the judgment should be affirmed.