Opinion
No. 4728.
Argued May 5, 1959.
Decided June 2, 1959.
1. Reformation of a comprehensive liability insurance policy so as to include the names of the plaintiffs as insureds in addition to the named insured, who occupied one half, and the plaintiffs the other half, of a duplex house owned by the plaintiffs and the named insured as tenants in common, was properly denied where the evidence warranted the finding that there was no mutual mistake of fact.
2. The fact that the insurer's agent had regularly written fire insurance on the duplex tenement house in the names of all the owner-occupants and was aware of the true state of the ownership of the premises did not entitle the plaintiffs to reformation of the liability policy where the Trial Court justifiably found that there was no misrepresentation on the part of the insurer and an absence of reliance by the plaintiff upon the conduct of the insurer or its agent.
3. Mere failure to read a policy of insurance is not decisive of the right to reformation.
BILL IN EQUITY, for reformation, on the ground of mutual mistake, of a liability insurance policy known as a comprehensive personal liability policy, purporting to cover certain premises at 253-255 Main Street, in Nashua. Trial by the Court resulting in a decree denying reformation, to which the plaintiffs excepted. During the trial, both parties excepted to the admission and exclusion of evidence and the plaintiffs excepted to the denial of certain of their requests for findings of fact and rulings of law.
It appears the premises consisted of a two-apartment duplex house, the plaintiffs, Maurice D. and Hannah G. Shapiro, occupying the apartment at No. 253 and Dr. Pearl Goodman Gribetz, sister of Mrs. Shapiro, and her husband, Daniel Gribetz, occupying the apartment at No. 255. Dr. Gribetz had her office in her residence and the policy included coverage for the business use the premises as "physician's office."
Dr. Gribetz and her husband, as joint tenants with a right of survivorship, owned an undivided one-half as tenants in common with Mr. and Mrs. Shapiro, the plaintiffs, each of whom, in turn, owned a one-half interest in the remaining undivided half. Dr. Gribetz purchased the entire property early in 1943. During that year she took out the original liability policy, which was renewed from time to time in her own name. In the summer of the same year she sold an undivided half to her sister, Mrs. Shapiro. At a later date she established her office in the premises.
In March, 1948, Dr. Gribetz conveyed to herself and husband as joint tenants her half, and Mrs. Shapiro conveyed half of her interest to Mr. Shapiro in November, 1954.
On April 5, 1956, Dr. Gribetz was injured while in the Shapiro apartment and she and her husband sued both Shapiros for damages caused by the accident. The named assured in the policy in question and on similar policies issued by the Sadler Insurance Agency which handled the defendant's business, from 1943 on, was Dr. Pearl Goodman Gribetz. The policy also covered her husband and residents of her household under the definition of "Insured." Neither of the Shapiros was a named insured, nor were they members of the Gribetz household. The Sadler Agency had written fire insurance policies on the premises at 253-255 Main Street for many years prior to the accident insuring the four owners and the agency was aware of the true state of the ownership.
The Court found the following facts: That neither the plaintiffs nor the Gribetzes ever read the liability policy or asked the insurance agency or the defendant for any advice concerning it or requested the agency or the defendant to issue a policy or endorsement which would cover the Shapiros. Neither the defendant nor the agency knew or had reason to believe that the Shapiros did not carry liability insurance in another agency or had any reason to issue a liability policy to the Shapiros. No one in the agency nor anyone on behalf of the defendant represented to the plaintiffs that they were covered; the actions of the agency were reasonable; any mistake relative to the policy was made solely by the plaintiffs, and there was no mutual mistake of fact.
Other facts appear in the opinion. Transferred by Morris, J.
Maurice D. Stein (by brief and orally), for the plaintiffs.
H. Thorton Lorimer and G. Wells Anderson (Mr. Anderson orally), for the defendant.
The issue presented is whether there was evidence to support the conclusion of the Trial Court that there was no mutual mistake of fact to warrant reformation of a comprehensive liability policy issued to Dr. Pearl Goodman Gribetz. We agree with the contention of the plaintiffs, Maurice D. and Hannah G. Shapiro, that their failure, and that of the Gribetzes, to read the policy is not decisive of their right to reformation. Hould v. Company, 83 N.H. 474, 475. The record is plain that the Court, in denying the petition, did not base its decree on this ground, but because, among other reasons, it found that there was no mutual mistake of fact. It has been consistently held here "that to warrant a decree for reformation the `mistake must be made out in the most clear and decided manner, and to the entire satisfaction of the court, and especially, must the proofs be clear and convincing, when the mistake is denied in the answer.'" Gagnon v. Pronovost, 97 N.H. 58, 60, and cases cited. The Court's finding, in the light of this principle on the record before us was amply supported by the evidence, and it follows that the plaintiffs cannot prevail upon this ground. McLane v. Robinson Co., 95 N.H. 447.
They further placed reliance upon the claim that where, through the insurer's fault, the policy does not include the intended coverage, it may be reformed, citing 7 Appleman, Insurance Law and Practice, s. 4256, p. 12, and Barrette v. Company, 79 N.H. 59, 61. We have no quarrel with these authorities, but they do not appear applicable here in the face of the Court's findings. In the Barrette case there was evidence that the company's agent misrepresented to the insured the contents of the policy. The court so found and allowed recovery. In the present situation, the Court has concluded that there was no misrepresentation on the part of the defendant and no justifiable reliance by the plaintiffs upon any conduct of it or its agent. Cf. Hould v. Company, 83 N.H. 474, 476. If it could be argued that the agency was not as alert as might be desired in caring for its customers' interests, a finding by the Court that it negligently or even innocently induced a mistake on the part of the insured (cf. Rickle v. Mills, 93 N.H. 191) was not compelled as a matter of law. The plaintiffs' contention therefore fails. McLane v. Robinson Co., 95 N.H. 447; see Margolis v. Insurance Company, 100 N.H. 303, 308. An examination of the record discloses no other exceptions of merit and the order is
Decree affirmed.
All concurred.