Opinion
November 28, 1962 —
January 8, 1963.
APPEAL from an order of the circuit court for St. Croix county: ROBERT G. VARNUM, Circuit Judge. Reversed, with directions.
For the appellant there was a brief by Gwin Fetzner of Hudson, and oral argument by John W. Fetzner.
For the respondents there was a brief by Robert R. Gavic of Spring Valley for David Buss and others, and by C. L. Gaylord of River Fails for James Clements, and oral argument by Mr. Gaylord.
Action for damages for personal injuries. The alleged tort-feasor was insured by appellant, Northwestern National Insurance Company. The Insurance Company moved the lower court to grant summary judgment in its favor and dismiss the complaint against it on the ground the insured tort-feasor failed to report the alleged accident as soon as practicable. The motion was denied, and the Insurance Company appeals.
Appellant Insurance Company wrote a policy insuring defendants James Clements and his employee, Barry Timm, against liability for damages caused by the operation of Clements' truck. The policy contained the following provisions:
"1. NOTICE OF ACCIDENT — COVERAGES H, I, AND J: When an accident 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 accident, the names and addresses of the injured and of available witnesses.
"7. ACTION AGAINST COMPANY — COVERAGES H AND I: 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, . . .
"8. ACTION AGAINST COMPANY — COVERAGE J: No action shall lie against the company unless, as a condition precedent thereto, there shall have been full compliance with all the terms of this policy, nor until thirty days after the required proofs of claim have been filed with the company."
The pleadings and affidavits allege:
On August 12, 1958, Barry Timm, while backing the truck on the premises of Clements, allegedly struck an object described as a board, which in turn allegedly struck David Buss, plaintiff-respondent. Buss, who was standing to the rear of the truck, alleges he was struck in the face and sustained personal injuries. Clements did not report the accident to his Insurance Company.
Some months after the accident James Clements reported the incident to Western Casualty Surety Company, insurers under another form of farm liability policy. Clements was later contacted by a Mr. O'Reilley, presumably from Western Casualty, relative to this occurrence. Appellant's affidavit in support of summary judgment reveals that appellant knows that Clements reported the accident to Western Casualty. It shows nothing of the contents of the report nor when such information became known to appellant. Appellant denies it had any knowledge of the accident until three years later when it was served with a summons and complaint on August 3, 1961, which made a claim for injuries on behalf of David Buss.
After the action was started, counsel for appellant obtained nonwaiver agreements from James Clements and Barry Timm. A statement was obtained from Timm in which he said he did not recall when or how the accident happened, only that it occurred in an afternoon in 1958. A statement was also obtained from Clements that he had no knowledge of the accident and that he never reported it to appellant.
No answer was interposed by James Clements setting up a cross issue against appellant but affidavits o f James Clements and plaintiffs-respondents Howard Buss and David Buss were submitted on behalf of Clements opposing the motion for summary judgment. An affidavit was filed by counsel for David and Howard Buss alleging that they did not have sufficient information to form a belief as to when James Clements made a report of the accident to appellant, that they did not have sufficient information to form a belief as to whether the notice given by James Clements was timely, and that these questions were to be passed upon by a jury.
After having read the pleadings and affidavits the court denied the motion for summary judgment. Defendant Insurance Company then appealed.
Further facts will be given in the opinion.
The appeal presents two issues:
(1) Whether upon the search of the whole record it shows as a matter of law that James Clements failed to comply with his obligation to report the accident to the Insurance Company as soon as practicable.
(2) If such failure was found, whether upon the examination of the entire record it shows as a matter of law no issue remains that appellant was prejudiced.
The trial court denied appellant's motion for summary judgment after hearing counsel for both sides and after reading the record, pleadings, and affidavits, for the reason it considered there were substantial issues remaining in the case.
Sec. 204.34(3), Stats., provides that:
"No policy of insurance, agreement of indemnity, or bond as provided in sub. (1) shall limit the time for the giving of notice of any accident or casualty covered thereby to a period less than that provided in sub. (1) of sec. 204.29. Failure to give such notice shall not bar liability under such policy of insurance, agreement of indemnity, or bond as provided in sub. (1) if the insurer was not prejudiced or damaged by such failure, but the burden of proof to so show shall be upon the person claiming such liability."
Sec. 204.29(1), Stats., contains the following provisions relative to the limit of time for service of notice:
"No licensed accident or casualty insurance company in Wisconsin shall limit the time for the service of any notice of injury to less than twenty days, except as provided in sec. 204.31."
The purpose of sec. 204.34(3), Stats., is to give the insurer a reasonable opportunity to investigate while witnesses are available and memories fresh. See Underwood Veneer Co. v. London Guarantee Accident Co. (1898), 100 Wis. 378, 75 N.W. 996. The failure to give proper notice might affect reasonable settlements by the insurance company and result in collusive claims against it.
The failure of the insured to give proper notice does not bar liability of the insurer unless this failure is prejudicial or damaging to the insurer. Sec. 204.34(3), Stats., makes this lack of timely notice by the insured a presumption of prejudice or damage by putting the burden of proof to rebut this presumption upon the persons claiming liability of the insurer. Calhoun v. Western Casualty Surety Co. (1951), 260 Wis. 34, 36, 49 N.W.2d 911; Parrish v. Phillips (1938), 229 Wis. 439, 445, 282 N.W. 551.
Appellant supported its motion for summary judgment with several affidavits. Affidavits in opposition to this motion were filed by the insured James Clements and by David and Howard Buss. None of them deny that Clements did not send notice or report the accident to his insurer.
We have often stated that summary-judgment procedure is not to be a trial on affidavits. A party opposing summary judgment defeats the motion if he shows by affidavits or other proof that there are substantial issues of fact or reasonable inferences which can be drawn from the evidence. The court does not try the issues but decides on summary judgment whether there is a substantial issue to be tried. Trczyniewski v. Milwaukee (1961), 15 Wis.2d 236, 238, 112 N.W.2d 725.
Respondents propose that the substantial issues to be tried are whether notice was given by the insured to the insurer as soon as practicable, and whether the insurer was prejudiced by the failure to give notice.
After an examination of the affidavits, it is our opinion no substantial issue remains with respect to whether respondent-insured, James Clements, gave notice to appellant as soon as practicable. There is no dispute of fact that Clements knew soon after the accident that it had occurred, that it involved his vehicle and that David Buss was injured, and that Clements made no report. A trial on this issue could serve no useful purpose and could only result in judgment of noncompliance with requirement of notice as a matter of law. Hafemann v. Korinek (1954), 266 Wis. 450, 63 N.W.2d 835. The alleged accident occurred on August 12, 1958. No notice was given appellant until it was served with the summons and complaint on August 3, 1961, virtually three years later.
In support of its motion for summary judgment appellant by one of its attorneys, John W. Fetzner, stated in its affidavit that James Clements reported the incident to Western Casualty Surety Company, insurer under another form of farm liability policy at Eau Claire, Wisconsin, and that he was contacted by a Mr. O'Reilley of that company. This averment is not disputed by Clements and is further proof that he had knowledge of the accident and could report it. By Clements' affidavit in support of his objections to summary judgment he states that on or about August 12, 1958, when he returned to the machine shed on his farm after working someplace else on his farm, he noticed David Buss was holding his nose, which was bleeding. David answered him saying he had fallen on the corn and struck his nose. "Deponent did not inquire further except that after awhile both Barry Timm and David Buss admitted that a board flew up and struck David Buss on the nose. Further that the back wheel of the truck had struck the board." Appellant's affidavits show Clements' knowledge of the facts of the accident and a failure to report the same to the Insurance Company for about three years, and Clements' own affidavit setting forth particulars with respect to the accident are sufficient for the trial court to hold there is no substantial issue relative to whether notice was given as soon as practicable.
The remaining question is whether upon the examination of the entire record it shows as a matter of law no issue remains that appellant was prejudiced.
Sec. 204.34(3), Stats., puts the burden on the insured person to prove that the insurer was not prejudiced by insured's failure to give the notice required by the policy. For lack of such proof the failure is deemed to be prejudicial and will bar liability under the policy.
The affidavits in support of the motion for summary judgment and those opposing it demonstrate as a matter of law that the required notice was not given by the insured to the insurer "as soon as practicable." Then comes the question of whether the delay in receiving notice was prejudicial to the insurer. Sec. 204.34(3), Stats., presumes that it was. When the insurer moved for summary judgment and by affidavit proved the insured's failure to give notice of the accident as soon as practicable a prima facie case was made which called for a summary judgment of dismissal unless the insured or those united in interest with him by affidavit set forth evidentiary facts which shall show that his denials or defenses are sufficient to defeat the motion by showing that at least there are issues of fact to be tried respecting the question of prejudice to the insurer.
None of the affidavits opposing the Insurance Company's motion are directed to the question of the lack of prejudice caused by the delay. To defeat appellant's motion it was necessary for respondents to set forth evidentiary facts tending to rebut the presumption that the delay was prejudicial and thus entitling them to a trial. Respondents' affidavits fail to carry that burden. The facts which they contain apply only to respondents' contention that the notice was timely, a contention which, as we have said, must be rejected.
Respondents now argue that appellant's affidavit shows that Clements, the insured, had given notice and a report of the accident to another insurance company and, therefore, they reason that by inquiry to that company the appellant might have found out whatever it needed to know and, thereby, was not prejudiced by no notice being sent directly to appellant. The contents of such report or notice and its availability to appellant is entirely speculative. The affidavits give no facts concerning it, and the favorable inference which respondents seek to draw from its existence are conclusions only. They do not meet the requirement of being evidentiary facts even tending to show that appellant had not been prejudiced. We conclude that since there is no showing in the affidavits of any evidentiary facts applicable to the contention that appellant had not been prejudiced, the respondents, who have the burden of proof, have failed to carry that burden. The failure of the insured to give notice, as demanded by the policy, created a bar to liability under the policy which bar remains effective when the person claiming such liability has not shown that the insurer was not prejudiced or damaged by such failure. Sec. 204.34(3), Stats.
By granting appellant's motion for summary judgment we are not holding that the lapse of time was prejudicial as a matter of law. See Vlasis v. Cheese Makers Mut. Casualty Co. (1955), 268 Wis. 389, 68 N.W.2d 23. The presumptions of prejudice arose because Clements failed to give notice as soon as practicable. This presumption could have been rebutted by respondents, if the facts warranted, if they had set forth sufficient evidentiary facts in their affidavits opposing the motion to raise the fact issue that no prejudice was caused to appellant by the delay.
We conclude, therefore, that the affidavits present no issues of fact for trial, and appellant's motion for summary judgment should have been granted.
By the Court. — Order reversed. Cause remanded with directions to enter judgment dismissing the action against Northwestern National Insurance Company.