Employers Mutual Casualty Co. v. Ainsworth

*827Rodgers, J.,

dissenting:

For several reasons which I shall now discuss, I cannot agree with the majority opinion in this case. In the outset, we have recognized the rule that the question as to whether or not an insured, or a person protected hy the contract, failed to cooperate with the insurer in compliance with the cooperation clause of the policy is an affirmative defense and the burden of establishing it is with the insurer, and that it is a question of fact for the determination of the jury. I pause here to point out this rule is so well-established that it may be considered universal.1

A jury in the instant case has passed upon the question as to whether or not the person protected by the policy, namely Mrs. J. W. McCraw, has failed to carry out one of the conditions of the policy, that is to say, the "cooperation clause.” The jury determined under proper instructions, that the insurer was liable. The Employers Mutual Casualty Company (hereinafter called Insurance Company) based its claim upon the allegation that the person protected by the policy did not cooperate with the Insurance Company because Mrs. J. W. McCraw told an agent of the Insurance Company shortly after the accident that she was not to blame for the accident, and gave the adjuster a signed statement of facts indicating that the accident was brought about by the negligence of an unknown truck driver. Later, however, Mrs. McG-raw testified that she attempted to tell the attorneys for the Insurance Company that the statement she gave to the adjuster was incorrect, and pointed out instances wherein the statement was incorrect. The witness testified that instead of determining wherein the statement was incorrect, the attorneys broke off the interrogation and terminated the interview. The attorneys were at the time acting in a dual capacity. They not only represented the In*828suran.ce Company, they also represented the person protected by the policy. The contractual right to conduct the defense of an insured, or a person protected by the policy, is a valuable right to an insurance company, but this right, as in this case, is accompanied by a correlative requirement that the insurer defend the insured against all actions brought against her on the allegation of facts and circumstances covered by the policy, even though such suit may be groundless, false, or fraudulent. 29A, Am. Jur., Insurance, §1448, p. 562. Moreover, the dual capacity of attorneys representing persons covered by insurance policies does not mean that an attorney can be diligent in favor of one client to the detriment of another. It therefore appears to me that since the attorneys were told that the statement taken by .the adjuster was incorrect, they might have determined at that time wherein it was incorrect, to the end that they could have at that time advised Mrs. J. W. McCraw that she should employ attorneys, and they could have released her so that she might have done so, rather than retain the right to handle the case and continue to represent her until after the jury was impanelled and she was confronted with a sudden demand to make a decision in court, after having been cross-examined by her own attorneys.

The defense of the Insurance Company in this case is, that the person protected by the insurance policy did not cooperate with them in the defense of the suit against her, in that she did not tell them the truth as to how the accident occurred. As a general rule, misstatements by the insured, (or person covered by the policy), seasonably corrected or withdrawn prior to the trial of the action against the insured, do not constitute a violation or breach of a cooperation clause of a liability policy, even where the misstatement is persisted in until shortly before the trial of the action *829against the insured. See 29A, Am. Jur., Insurance, §1477, p. 587.

This rule has been established in many cases, some of which are here cited. In the case of General Accident Fire & Life Assurance Corporation v. Rinnert, (U. S. 5th Cir. Ct. of Appeals, 1948), 170 F. 2d 440, insured’s daughter falsely stated to insured’s attorney and adjuster that she was driving insured’s automobile at the time of the accident, when in fact she had permitted a friend to drive. Five days after the accident, she stated the true facts to the attorney for the insurance company. The Court, following the Alabama law, held that “To deny recovery in this case as a matter of law is to disregard the question of fact presented by the evidence as to whether Virginia Woodson’s false statement, quickly corrected, did, as a matter of law, constitute material non-cooperation. * * * Furthermore, after a lapse of only five days, a correction was made. The misstatement was corrected long prior to the trial of the causes which resulted in the judgments; the insurance company had the facts and was in position to settle if it saw fit to settle, to defend if it saw fit to defend, as it did.” The Court then said “we agree with the lower court that there was cooperation within the terms of the policy”.

In Lindsey v. Gulf Insurance Company, 7 So. 2d 757 (La. App.) the defense of non-cooperation was disallowed when an initial deliberate misstatement was corrected in advance of trial so as not to prejudice the defense of the cause.

In the case of State Farm Mutual Automobile Insurance Company v. Brown, 243 N.Y.S. 2d 825, the Court recognized and viewed the insurer’s defense of non-cooperation in the “frame of the State’s emphasized solicitude for the victims of automobile accidents.” It, nevertheless, pointed out the statement of the Court in the case of Wallace v. Universal Insurance *830Co., Inc., 18 A.D. 2d 121, 123, 238 N.Y.S. 2d 379, 381, wherein it is said: “Liability insurance is intended not only to indemnify the assured, but also to protect members of the public who may be injured through negligence. ’ ’ The Court held in Brown, supra, that where the insured concealed from the insurer the fact that insured was driving at the time of the accident was not a breach of the cooperation clause of the policy, where insured reported the accident fully and truthfully on the day after the accident, except to say that another person, (in fact non-existent), was driving his automobile in which the insured was a passenger.

In the case of Marley v. Bankers’ Indemnity Company, 166 A. 350 (R.I. 1933), the insured Beatrice Cohen went to the office of the insurance company’s attorney and signed a statement giving her version of an accident covered by the policy. Two days prior to the day of the trial, at the request of the defendant’s attorney, she went to his office and gave a written version of the accident which differed from the original statement signed by her. The attorney for the insurance company wrote her a letter in which he advised her that the company would defend her but reserved the right to disclaim all liability under the policy. Her testimony at the trial was different from her original statement; thereafter, when claim was instituted against the insurance company, it defended on the ground the insured did not cooperate with insurer. The Court said “The insured is not complying with the terms of the policy when he makes a false or misleading statement as to his part in the accident and then testifies in court to the contrary. But the mere fact that his testimony in court under oath and subject to cross-examination differs from his previous statement made to the insurer does not warrant the conclusion as a matter of law that the co-operative clause of his policy had been violated. * * * The trial justice having found on a *831question, of fact that there was not sufficient evidence of failure to co-operate to free the defendant from liability on its policy, his decision must stand unless from the record before us it appears it was clearly wrong. * * * An examination of the record convinces us that the trial justice was not in error.”

In the case of Standard Accident Insurance Company of Detroit, Michigan v. Vivian Winget, 34 A. L. R. 2d 250, 197 F. 2d 97, the Court said: “It is true in the instant case, the fact of the misstatement in the original deposition is undisputed. But before the deposition was released, a correction was made and the true version given. There is room in law, as in religion, for the locus penitentiae. The insured was entitled to explain the circumstances under which the change was made. And the trial court properly left it to the jury to determine whether this statement, withdrawn before it had become frozen in the record of the deposition, constituted a lack of cooperation.” The Annotation (34 A. L. R. 2d) following this case, points out on page 267 that “Even where the misstatement is persisted in until shortly before the trial of the action against the insured, no breach has been found, where the insurer failed to show that the delay in telling the truth had prejudiced it.” On page 275 of the same Annotation, it is pointed out that “Without indicating which of the insured’s statements was a misstatement, it has been held proper to allow the issue of a breach of the cooperation clause to be determined by the jury, where there were discrepancies in the insured’s statements as to the speed he was traveling prior to the accident.”

In the case of Petersen v. Preferred Accident Insurance Company of New York, 176 A. 897 (N. J. App.), the Court pointed out that the question whether insured, who, after accident, stated he had been driving, but before trial informed insurer that another had driven *832the automobile at the time of the accident, cooperated with insurer, was a question for the jury.

The foregoing authorities have convinced me, that since the question, as to whether or not the person protected by the policy cooperated with the insurance company, is not only a question of fact to be determined by the jury, but in the instant case, the fact that the insured attempted to correct the original statement is sufficient evidence on which to base a jury verdict that the insured did in fact cooperate with the insurer.

We mentioned in the majority opinion the expression in Broussard, et ux v. Broussard, 84 So. 2d 899 (La. App.), to the effect that in evaluating credibility, the fact that close family relationship tends to cause the insured to sympathize with those to whom the insured may be liable, should be taken into account. We said such tendency is a matter of common knowledge, but may be considered in determining- whether the verdict is contrary to the overwhelming- weight of the evidence. In the Broussard case, however, the Court also said: “On the other hand, the court must recognize that insurance policies protect not only the insured, but the general public, and insurers should not escape their liability except through conduct on the part of their insured which materially prejudices them.” It has been held as a general rule that a lack of good faith is not to be inferred merely from relationship between the insured and the person injured. 5A Am. Jur., Automobile Insurance, §134 at p. 137; Anno. 72 A. L. R. 1456; Anno. 139 A. L. R. 791.

In the case of State Auto Mutual Insurance Company v. York, 104 F. 2d 730 (writ of cert. denied 308 U. S. 591), the Court said: “A confusing element is introduced into the case by reason of the fact that the husband’s interest is almost necessarily enlisted on the side of his wife in a suit against him in which any recovery will benefit her and will be paid by the insurance company *833and not by him; bnt the company has ample means to protect itself from the danger of a situation of this sort by excluding from the coverage of its policy liability to the wife or other members of insured’s family. Where for business reasons it elects to cover a risk of this character, it cannot complain when liability is asserted, nor should it be permitted to shield itself by the argument that the ordinary friendly relationship existing between members of the family furnishes of itself evidence of fraud and collusion. In such a case where members of the family corruptly conspire and work together to secure a recovery not justified by the facts, the policy should be and is avoided; but it is not avoided merely because the sympathy of insured is with the insured members of his family rather than with the company which insured him, or because he does not suspend during the litigation ordinary friendly intercourse with his family.” Mississippi has heretofore decided to follow the common-law rule which prevents one spouse from filing a tort suit against the other. See Austin v. Austin, 136 Miss. 61, 100 So. 591, 33 A. L. R. 1388; McLaurin v. McLaurin Furniture Company, 166 Miss. 180, 146 So. 877; Scales v. Scales, 168 Miss. 439, 151 So. 551.

I believe we should not extend by inference the exemptions to sue under an insurance policy or disparage the claim of an injured member of the insured’s family simply because an insured is more interested in his family than in the insurer. I am of the opinion that the insurance company has the right, if it so desires, to cover members of a family in a liability policy, and having done so, it should not be heard to object to paying the beneficiary in accordance with its contract.

Finally, I am of the opinion that the verdict of the jury should be upheld, because, according to the testimony of the insured, which the jury had a right to believe, the attorneys for the Insurance Company knew *834that insured had changed her statement, and if they knew, they should not have continued to assert their right to control the defense of the insured under the circumstances until a time when she was brought into court and cross-examined, and her testimony refuted by the attorneys whose duty it was to represent her interest. At least, it was a question for the jury whether their alleged actions were sufficient to estop the Insurance Company from asserting that the insured failed to cooperate with the insurer. Without belaboring this point, I have set out below the authorities which have influenced my opinion.2

1 See Lindsey v. Gulf Insurance Company, 7 So. 2d 757 (La. Ct. of App.); Employers’ Liability Assurance Corporation, Ltd., of London, England v. Bodron, 65 F. 2d 539; Annis v. Annis, 84 N. W. 256; Tomlyanovich v. Tomlyanovich, 239 Minn. 250, 58 N. W. 2d 855, 50 A.L.R. 2d 108; Johnson v. Johnson, 228 Minn. 282, 37 N. W. 2d 1; Anno. 34 A.L.R. 2d 267; Bassi v. Bassi, 165 Minn. 100, 205 N. W. 947; Pacific Indemnity Company v. Ted McDonald, 107 F. 2d 446, 131 A. L. R. 208; General Casualty & Surety Company v. Kierstead, 67 F. 2d 523; United States Fidelity & Guaranty Company v. Redmond, 221 Ala. 349, 129 So. 15; 7 Am. Jur. 2d., Automobile Insurance, §176 at p. 509; Blashfield’s Cyclopedia of Automobile Law and Practice, Vol. 6, Part 2, § 4059 at p. 73; 5A, Am. Jur., Automobile Insurance, §134 at p. 138; United States Fidelity and Guaranty Company v. Snite, 106 Fla. 702, 143 So. 615; Marley v. Bankers’ Indemnity Insurance Company, 166 A. 350; Petersen v. Preferred Accident Insurance Company of New York, 176 A. 897; Employers’ Liability Assurance Corp., Ltd. of London, England v. Nosser, 70 F. 2d 516 (Miss.); Employers Insurance Company of Alabama, Inc. v. Brock, 233 Ala. 551, 172 So. 671; *835Anno. 98 A. L. R. 1468; Anno. 139 A. L. R. 777; State Farm Mutual Automobile Insurance Company v. Brown, 243 N.Y.S. 2d 825.

1 See Anno. 139 A. L. R. 802; Anno. 72 A. L. R. 1492; Anno. 98 A. L. R. 1480; 7 Am. Jur. 2d., Automobile Insurance, §§ 183, 184, pp. 520, 521; Allstate Insurance Company v. Keller, 17 Ill. App. 2d 44, 149 N. E. 2d 482, 70 A. L. R. 2d 1190; Ornellas v. Moynihan, 16 S. W. 2d 1007 (Mo. 1929); 45 C. J. S., Insurance, §934, p. 1061; Commercial Casualty Insurance Company v. Tri-State Transit Company of Louisiana, 190 Miss. 560, 1 So. 2d 221; United States Fidelity and Guaranty Company v. Yazoo Cooperage Company, 157 Miss. 27, 127 So. 579; 5A Am. Jur., Automobile Insurance, §141, p. 143; Southern Farm Bureau Casualty Insurance Company v. Logan, 238 Miss. 580, 119 So. 2d 268.

Lee, C. J., joins in this dissent.