Summary
In Employers Liability Corp. v. New Hampton School, 103 N.H. 185, a student was struck by a discus thrown by a fellow student while he was a spectator at a track meet.
Summary of this case from Pawtucket Mut. Ins. Co. v. LebrechtOpinion
No. 4877.
Argued January 3, 1961.
Decided March 7, 1961.
1. Where the first notice of an accident was not given by the policyholder to its comprehensive liability insurer or its agent until five and a half years after occurrence of the accident such notice was properly found not to have been given "as soon as practicable" within the meaning of the policy provision.
2. A comprehensive liability insurer was not estopped to disclaim liability for failure of the insured to give notice of an accident as soon as practicable by reason of the fact that the insured preparatory school was under a misapprehension of its duties with respect to reporting student accidents and that the insurer's general agent failed to advise it that the policy required that they be reported where the evidence did not warrant a finding that the insured reasonably relied upon the insurer's conduct to its prejudice.
3. In declaratory judgment proceedings to determine the liability of an insurer under a comprehensive liability policy which provided that written notice of injury or damage be given to the insurer as soon as practicable, proffered evidence on the reasonableness of the insured in failing to report student accidents to the effect that the same agency issued a similar policy to another school which did not report them and that the insurer knew that the policy provision with relation to notice was capable of misunderstanding was properly excluded in the Trial Court's discretion.
PETITION, for declaratory judgment to determine the rights and obligations of the parties under a "comprehensive liability policy" issued by the plaintiff to the defendant, the New Hampton School For Boys, through its general agent, the Ayer Insurance Agency. Among others, the policy contained the following exclusions:
"Exclusions. The Policy does not apply:
"(1) Under insuring agreement II (B) to expenses incurred by the insured for medical and surgical relief because of bodily injury, sickness or disease sustained by any pupil while engaged in directed or organized athletic activities, including physical training;
"(2) To claims on account of bodily injuries including death at any time resulting therefrom, due to or alleged to be due to the rendering of, or the failure to render:
"(A) Any Professional services by any person (such as a physician, surgeon, psychiatrist, dentist, nurse or the like) . . . ." It also contained the following conditions:
"9. Notice of Injury, Sickness, Disease or Damage. When injury, sickness, disease, death or destruction occurs, written notice shall be given by or on behalf of the Insured to the Company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the Insured and also reasonably obtainable information respecting the time, place and circumstances of the bodily injury, sickness, disease or death or injury to or destruction of property, the names and addresses of the injured and of available witnesses . . . .
"12. Action Against Company. No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all of the terms of this policy, nor until the amount of the Insured's obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company . . . ."
One of the defendants, Charles H. Birch, Jr., a student at the New Hampton School, was allegedly struck by a discus thrown by a fellow student while he was "watching the running events" during a track meet in May, 1953. The track coach at the school was aware of the accident the day it occurred, and the director of admissions at the school became aware of the accident when he visited the Birch home in August, 1953. The first notice to the plaintiff of the accident of May, 1953 was received by its agent on December 16, 1958 by means of a letter from Birch's attorney transmitted to the Agency by the school.
During the period from June 15, 1945 to June 15, 1946 the defendant carried a students' accident and health policy covering each student enrolled in the school up to a limit of three hundred dollars for medical and surgical treatment. During the life of this policy the school reported to the Ayer agency over two hundred student accidents. After the expiration of this policy, similar insurance was written by a Boston agency, with another company.
The policy in question was issued for a term of three years commencing November 19, 1952, and was a renewal of insurance first taken out on November 19, 1946. While such insurance had been in effect, many accidents to school personnel were reported, including one student accident. During this same period all student accidents were reported to the Boston agency which had taken over the students' accident and health policy. The Birch accident was reported to the Boston agency on September 16, 1953.
Trial by the Court (Sullivan, J.) which found and ruled "that the Employers' Liability Assurance Corporation, Ltd. is not obligated to assume the defense of the action brought by Charles H. Birch, Jr. against the New Hampton School . . . and is not obligated to satisfy any judgment . . . ."
The defendant's exceptions to the admission and exclusion of evidence, to the refusal of the Court to enter a decree for the defendant and to certain findings of fact and rulings of law were reserved and transferred.
Sheehan, Phinney, Bass, Green Bergevin and Richard A. Morse (Mr. Morse orally), for the plaintiff.
Harold E. Wescott (by brief and orally), for the defendant.
The first notice which the plaintiff received of the accident of May, 1953 was from counsel for defendant Birch on December 16, 1958, over five years after the accident. The evidence supported the finding below "that notice of the accident of May, 1953, was not given to the plaintiff as soon as reasonably practicable under all the facts and circumstances." American Employers Ins. Co. v. Sterling, 101 N.H. 434, and cases cited.
The defendant, in justification of its failure to sooner notify the plaintiff, contends that because of the failure of plaintiff's general agent to advise it that it was necessary under the policy to report student accidents the plaintiff is now estopped from asserting lack of prompt notice as required by the policy. The defendant's position, as set forth in its brief, is that "it is apparent on all the facts that the New Hampton School was laboring under misapprehension of its duties with respect to notifying the Ayer Agency of student accidents, and it continued to misapprehend its obligation in this regard until 1959. During all this period of time, no inquiry was made by the Ayer Insurance Agency to ascertain the reason why the school was not reporting these accidents, although Ayer did on occasion speak to other insureds about reporting accidents." The defendant concedes that it was aware of the accident of May, 1953 and reported it to the carrier of its students' accident and health policy on September 16, 1953, but the defendant further contends that it did not recognize the duty to notify the plaintiff of the Birch accident because there was no reason to believe a further claim might be made and in so doing the school acted as a reasonably prudent person would under the same circumstances.
The school was not unfamiliar with the duty to report accidents. During the period of 1945 to 1946 during the life of the students' accident and health policy issued by the plaintiff it reported over two hundred accidents. Since the policy in issue was taken out, numerous accidents to school personnel and one student accident were reported to the plaintiff. It is argued that because more student accidents were not reported the Ayer agency was under the duty to inquire into this because they should have known that such accidents are a frequent occurrence in such schools.
The fact that reports of student accidents practically ceased under the general liability policy is understandable since this policy specifically excluded coverage for "bodily injury, sickness or disease sustained by any pupil while engaged in directed or organized athletic activities, including physical training," whereas under the students' accident and health policy in force during 1945 to 1946 coverage was provided up to three hundred dollars for each student enrolled at the school for bodily injury from accidental means, including hospital and surgical expenses.
"The question of whether the [plaintiff] is estopped to assert its defense . . . depends . . . on whether the insured reasonably relied upon the company's conduct to his prejudice." Fitch Company v. Insurance Company, 99 N.H. 1, 4. See also, Bowen v. Casualty Company, 99 N.H. 107.
The plaintiff was under no duty to inquire of the insured if student accidents were occurring, and there was no evidence to warrant a finding that the insurer was put on notice of the accident in question and thus owed a duty to the insured to investigate. Margolis v. Insurance Company, 100 N.H. 303, 308. If, as the school contends, it did rely upon the plaintiff to inform it of the conditions of the policy, such reliance was not reasonable. Fitch Company v. Insurance Company, supra. The ruling that the plaintiff is not estopped to assert its defense of violation of the conditions of the policy was warranted by the evidence. There was no evidence that it accepted renewal premiums with knowledge of any failure to report student accidents which might come within the limited coverage for such accidents afforded by this policy.
The defendant offered to prove that for fifteen years the Ayer agency had written a comprehensive liability policy covering another school, the Holderness School, and that during all this period the school did not report student accidents. As stated by defendant's counsel ". . . this evidence is offered for the specific purpose to show that both of these schools were not construing the policy of liability insurance as perhaps it should have been construed . . . that the insurance company knew that the provisions of the policy in regard to notice, under the circumstances of this case, was subject to a misunderstanding, not only on the part of the New Hampton School but also on the part of Holderness School. The evidence is also offered on the reasonableness of the behavior of the New Hampton School in failing to report student accidents under this comprehensive liability insurance policy."
The offer of proof was rejected subject to the defendant's exception. This involved a preliminary determination by the Court as to whether such conduct on the part of others occurred under substantially similar circumstances and whether this would lead to a confusion of collateral issues. Moulton v. Company, 100 N.H. 92, 95. Why the Holderness School failed to report student accidents, if such there were, is not disclosed. The fact that the Holderness School, even for justifiable reasons, did not comply with the conditions of its policy did not excuse the defendant in following a similar course of action. In any event, the admission of such evidence was discretionary with the Court, and we find no abuse of such discretion.
Finally, the defendant contends that the Court's findings of fact Nos. 13 and 15 are clearly erroneous. In No. 13 the Court found that the evidence did not warrant a finding that the Ayer Insurance Agency knew that student accidents were occurring at the school and that such accidents were not being reported. In No. 15 the Court found that the evidence did not warrant a finding that the plaintiff or its agent should have inquired if all student accidents were being reported.
The findings are sustainable on the record.
Exceptions overruled.
All concurred.