Norways Sanatorium, Inc. v. Hartford Accident & Indemnity Co.

ON PETITION FOR REHEARING. Appellee, in support of its petition for a rehearing, stresses its contention that the appellant failed in its proof of a cause of action because it failed to introduce into evidence the original complaint that was filed by William J. Day against Norways Sanatorium, Inc.

The judgment fixing the liability of appellant to Day was rendered on an amended complaint instead of the original complaint. Appellee, at the trial of the cause in the court below, in its objections to the introduction of evidence, maintained that the judgment entered upon the amended complaint was binding upon both the appellant and the appellee, and that the only issue for determination that was made by the pleadings, was whether the amended complaint upon which the judgment was rendered stated a cause of action that was covered by the terms of the contract of insurance.

The answer filed by appellee in the court below contained two paragraphs, the first being in general denial, and the second setting up, solely, as an affirmative defense, the claim of appellee that it was not required to defend the action instituted by William J. Day against Norways Sanatorium, Inc., because Day's injury resulted from the rendering or omission of professional services by a physician or nurse, and that such injuries were excluded from the policy.

In the court below appellee asserted no claim by pleading or otherwise that it did not have full knowledge *Page 251 and notice concerning the facts involved in the claim of Day against Norways Sanatorium, Inc., when it denied liability. In its letter to the Norways Sanatorium, Inc., denying liability, which was introduced into evidence, it made the following statement:

"We have carefully considered the circumstances surrounding this accident and the allegations in the complaint prepared by Mr. Day's attorney, and are of the opinion that this case is not covered by our policy of insurance No. GL-392414, but is expressly excluded from coverage."

Appellee did not refuse to defend because of the allegations of the original complaint. It refused to defend because it erroneously believed that the cause of action asserted by Day was excluded from the coverage of its policy.

By the terms of its policy the appellee agreed, "to pay any loss by liability imposed by law upon the assured." To determine the liability imposed by law upon the assured we look to 7. the policy of insurance, the amended complaint, and the judgment that was rendered thereon. The original complaint that was superseded by the amended complaint is wholly immaterial. If any prejudice resulted to appellee because of any difference between the allegations in the original and amended complaints, under conditions which gave rise to a defense, then appellee should have pleaded such facts in an affirmative paragraph of answer and supported the same by introducing the original complaint into evidence.

Appellee in support of its contention cites the following authorities: London Guarantee Accident Co. v. Shafer (1940), 35 F. Supp. 647; Lamb v. Belt Casualty Co. (1935),3 Cal.App.2d 624, *Page 252 40 P.2d 311; Cas. Ins. Co. v. Tri-State Tr. Co. (1941), 190 Miss. 560,1 So.2d 221.

We have carefully examined each of these cases. They support the rule that in determining whether there exists an obligation of a liability insurer to defend an action filed by a claimant against its insured, that we look to the insurance contract and the allegations of the complaint of the claimant; but they offer no support to appellee's contention that in determining whether it was required to defend we must consider the original complaint rather than an amended complaint upon which the judgment was rendered.

It is apparent, that in determining whether there existed an obligation of an insurer to defend an action against its insured, that we must consider the pleading upon which the judgment was rendered. This is true because such pleading shows the basis of the establishment of the liability of the insured, and whether such liability was established for reasons and under conditions and circumstances that brought the particular claim within the coverage of the policy.

It is equally apparent, that an original complaint or pleading, which had been superseded by an amended complaint or pleading upon which a judgment was rendered, would not show whether the liability of the assured was established upon a claim that was within the coverage of the policy. It seems to us wholly unreasonable and violative of every principle of fair dealing between the insurer and his insured, to permit the insurer to examine an original complaint filed against the insured, and in the event there existed some technical defect in the same, so that it did not state a cause of action within the coverage of the policy, to deny and escape liability because thereof. Appellee insists that the original complaint filed against appellant must have *Page 253 stated a cause of action within the coverage of the policy before it was obligated to defend.

We think that the obligation of the insurer to defend is to be determined from the policy and the particular complaint upon which the judgment was rendered, and that there is no duty upon the insured, in establishing a prima facie case against its insurer, to make proof of the contents of an original complaint that has been superseded by an amended complaint.

The petition for a rehearing is overruled.

NOTE. — Reported in 44 N.E.2d 192.