Edwards v. Fidelity & Casualty Co.

Bell, Chief Judge.

The plaintiff-insurer sought a declaratory judgment to the effect that the provisions pertaining to notice to the insurer in the liability policy had not been complied with which resulted in no coverage and no duty to defend the defendant against any suit brought against him. Plaintiffs motion for summary judgment was granted. It is undisputed that the defendant was the owner and operator of an apartment building; that on May 10, 1971, the defendant was notified in writing by the resident manager of the apartment that a third person had reportedly fallen from a fire escape connected to the apartment building; that a short time thereafter an individual was observed in and about the apartment taking pictures of the fire escape. Defendant then consulted with his own lawyer and upon advice of his counsel made no report of this incident to the plaintiff. In October, 1971 the defendant then gave written notice of this accident to plaintiff. It was also shown that the individual who fell from the fire escape died within a few days.

The policy which was in effect at the time of the incident provided in substance that the insured had the duty in the event of an *307"occurrence” to give written notice to the insurer "as soon as practicable.” Held:

1. The defendant argues that under the facts of this case the insured had no duty to commence an investigation or to make a report to the plaintiff until October 18, 1971 because the earlier information he had received was based on hearsay; that the report of this fall by this individual, who also was reportedly drunk, was of a trivial nature that did not require him to do anything further to ascertain whether there was any substance to the report he had received. It is unnecessary for us to decide whether an insured has no duty to report an accident if he does not know that an accident has occurred, or if he knows or has received some information of an occurrence that is so trivial in nature that no reasonable person would conclude that a claim would arise against him. That is not the case we have here. True, the source of the report to the defendant was hearsay in nature, however, the source of the information is not germane to the inquiry. We must consider the totality of the factual nature of these reports, i.e., that someone had fallen from the second floor from the fire escape and that shortly thereafter someone was observed on the premises taking photographs. Based upon this knowledge, it is obvious that a reasonable person would be required to act and make positive inquiry as to the truthfulness of the report. This the defendant chose not to do. While ordinarily a jury issue would be present as to whether the report was trivial and whether it is reasonable or unreasonable for an insured to take some action, under the facts here defendant’s action was as a matter of law unreasonable for he had notice of a dangerous occurrence and failed to give notice "as soon as practicable.” See State Farm Mut. Auto. Ins. Co. v. Coleman, 441 F2d 329 and Paris v. State Farm Mut. Auto. Ins. Co., 391 F2d 595. Norfolk &c. Fire Ins. Co. v. Cumbaa, 128 Ga. App. 196 (196 SE2d 167) is distinguishable on the facts. In that case the first substantial notice of a claim came to the attention of the insured some 19 months after the incident. He immediately notified the insurer. This authorized a jury finding that the delay in reporting was reasonable.

2. After the written notice was finally given to the insurer in October, 1971, the company referred the matter to its adjuster. The adjuster conducted a preliminary investigation on November 2, 1971. On the day following the insured was furnished a reservation of rights letter. It is argued that this *308investigation which preceded the reservation of rights letter operates as a waiver of the defense that the insurer relies on. This has no merit. There was no waiver. Prior to the report of the accident some five months after it occurred, the plaintiff-insurance company had no knowledge of it. Therefore, the insurer was entitled to a reasonable time in which to investigate the facts. If during this period of reasonable time, the insurer learned of facts which could constitute a policy breach and a defense, and immediately gave notice of its intent to avail itself of the defense, no waiver or estoppel could arise. Home Indemnity Co. v. Godley, 122 Ga. App. 356 (177 SE2d 105). The grant of summary judgment was proper.

Argued March 5, 1973 Decided June 27, 1973. Huie & Harland, Harry L. Cashin, Jr., for appellant. Swift, Currie, McGhee & Hiers, Victor A. Cavanaugh, for appellee.

Judgment affirmed.

Hall, P. J., Eberhardt, P. J., Pannell, Quillian, Clark and Stolz, JJ., concur. Been and Evans, JJ., dissent.