Henderson v. Rochester American Insurance Co.

ParKek, J.,

dissenting. Judge Paul found as facts in substance that defendant, as insurer, was not materially prejudiced, and suffered no detriment or injury by the false statements of plaintiff, the insured. Defendant assigns this as error, for the reason there is no evidence to support such findings of fact. I think the assignment of error No. 1 is good, and should be sustained.

In my opinion, the judge’s conclusions of law and judgment, which are assigned as errors by defendant, are erroneous.

The policy provides: “No action- shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy . . . .” Emphasis mine. One of the terms of the policy is the co-operation clause set forth in the majority opinion. This provision as to co-operation is material, and the deliberate breach thereof by plaintiff here releases the insurer from the obligations imposed by the contract of insurance, although no prejudice may have resulted. This principle of law is supported by the overwhelming weight of authority. Peeler v. Casualty Co., 197 N.C. 286, 148 S.E. 261; Muncie v. Insurance Co., 253 N.C. 74, 116 S.E. 2d 474; Houran v. Preferred Acc. Ins. Co. of New York, 109 Vt. 258, 195 A. 253, where an abundance of authority is cited in support of the rule; State Farm Mut. Auto Ins. Co. v. Cassinelli, 67 Nev. 227, 216 P. 2d 606, 18 A.L.R. 2d 431; 98 A.L.R. 1467; 18 A.L.R. 2d p. 452 — Annotation, § 5, where compliance is expressly made a condition precedent. These cases and the annotations are concerned with the insured’s failure to give timely notice, but the principle of law is the same as the principle of law applicable to the facts and the policy provisions here.

Plaintiff has no allegation in his complaint that the insurer has, by waiver or estoppel lost its right to defeat a recovery under the provisions of its policy in this case.

The greater weight of current authority and the sounder reason, I think, support the views expressed by Chief Judge Cardozo in Coleman v. New Amsterdam Casualty C'o., 247 N.Y. 271, 160 N.E. 367, 369, 72 A.L.R. 1443, where he said speaking for a unanimous Court: "The plaintiff makes the point that the default should be condoned, *335since there is no evidence that co-operation, however willing, would have defeated the claim for damages or diminished its extent. For all that appears, the insurer would be no better off if the assured had kept its covenant, and made disclosure full and free. The argument misconceives the effect of a refusal. Co-operation with the insurer is one of the conditions of the policy. When the condition was broken, the policy was at an end, if the insurer so elected. The case is not one of the breach of a mere covenant, where the consequences may vary with fluctuations of the damage. There has been a failure to fulfill a condition upon which obligation is dependent.”

In Buckner v. Buckner, 207 Wis. 303, 241 N.W. 342, 344, it is said that “co-operation” was defined almost universally as in the Coleman case, supra. It was further held: “It is quite apparent that, if the insurer is to prepare an adequate defense in cases of contested liability, or make a just settlement, it must have from the insured a complete and truthful statement of the facts made in a spirit of co-operation and helpfulness by the insured who is, in many cases at least, the only source of information available to the insurer. This is not to say that any slight error in the statement of facts or failure to disclose some collateral fact will necessarily be held to amount to a breach of the contract, but the withholding of information, the making of untruthful statements, and the concealing of necessarily relevant and material facts can have but one purpose, and that is to help the claimant rather than the insurer.”

In United States Fidelity & Guaranty Co. v. Wyer, 60 F. 2d 856, it was held: Non co-operation of insured held established as matter of law in action against insurer by person injured, where insured admittedly misrepresented to insurer facts respecting accident.

In Brogdon v. American Automobile Ins. Co., 290 Mich. 130, 287 N.W. 406, it was held: Where automobile liability insurance policy required insured to furnish truthful account of circumstances leading up to and attending accident in which automobile might be involved, and insured claimed that he was not driving the automobile when it struck pedestrian and did not disclose that he was driving the automobile at such time until one-half day of trial of pedestrian’s action against insured and insurer had elapsed, and insurer was diligent in its investigation of the facts and insured’s false statement prevented earlier knowledge of liability, insured’s conduct voided policy and absolved insurer from liability to pedestrian.

My views here have been well expressed by the statements and the reasoning of the Supreme Court of Appeals of Virginia in State Farm Mut. Automobile Ins. Co. v. Arghyris, 189 Va. 913, 55 S.E. 2d 16, a case with somewhat similar facts, where it is said: “It *336seems perfectly apparent that the conduct of Bohler was a clear violation of the conditions of the policy. The evidence discloses a willful and deliberate breach by him of a material and essential clause, whereby he repeatedly misled the insurance company over a period of many months. He not only failed to claim the protection of the policy; but denied the liability of the company to him or to any one claiming through him, and this handicapped the insurer in the consideration of its liability. The insurer was, by the acts of Bohler,- deprived of an opportunity to determine for itself, through an immediate investigation, aided by a true statement from its insured, whether it was liable and, if liable, whether it was advisable to make a settlement with the insured person without suit. There was a withholding of information, the making of untruthful statements, and the concealment of necessary, relevant, and material facts, actions not calculated to aid the insurer. There is no question of a minor variance in his testimony of unintentional or inadvertent statements, or of mere failure to disclose some collateral fact. Bohler failed to give to the company written notice of the accident of May 7th ‘as soon as practicable.’ He never gave any notice, except indirectly, until the day of the trial of the proceedings against him, that is, on December 5, 1947. His credibility was destroyed by reason of his contradictory testimony and affidavits, and whether or not he had any defense to the charge of negligence in operating the 'automobile, the conclusion is inescapable, that it could have made little difference had the company been required to rely upon his testimony. He did not merely neglect the performance of the cooperation condition, he willfully and deliberately failed to comply with it. Nothing is more mischievous or dangerous in litigation than a client who deliberately falsifies the facts in the preparation of his . case.” The Virginia case cites -voluminous authority to support its position.

In my opinion, the deliberate and wilful conduct of plaintiff, the insured, was such a refusal to co-operate as to violate the policy. If the express conditions precedent to liability could be disregarded, insurers would be helpless to defend themselves against the chicanery and covin of their insured, and would be at their mercy. The law cannot make for plaintiff here a better contract than he chose to make for himself. Whittle v. Associated Indemnity Corp., 130 N.J.L. 576, 33 A. 2d 866. By the majority opinion plaintiff here is allowed to profit -by his own deliberate and false statements, which false statements are admitted by plaintiff. I vote to reverse, and to remand the case for a judgment of nonsuit.